Almost exactly four years ago, amid an energy crunch triggered by Russia’s invasion of Ukraine, my colleague Alfredo Carrillo Obregon and I argued that Puerto Rico was overpaying for energy because the Jones Act restricted its access to American energy supplies. The evidence at the time was indirect but compelling, based on a comparison of Puerto Rico’s fuel imports to those of the nearby, Jones Act–unconstrained Dominican Republic.
The US, we found, accounted for a meager 0.02 percent of Puerto Rico’s LNG imports in 2019 versus 10.8 percent of the Dominican Republic’s, and by 2021 the Dominican Republic’s share had risen to 96.4 percent while Puerto Rico’s had fallen to 0.002 percent. Propane and fuel oil also showed a stark divergence. The logical conclusion, based on sourcing decisions by market participants, was that Puerto Rico was almost certainly overpaying for energy it could have bought more cheaply from the country it’s part of—if not for the Jones Act.
Four years on, that inference should now be regarded as overwhelmingly confirmed.
Waiver Reveals the Scale of What Was Being Missed
Since a Jones Act waiver was issued in mid-March for shipments of energy and fertilizer products, Puerto Rico has received over 5 million barrels of fuel from the US mainland. In less than five months, those shipments exceeded every annual total of mainland petroleum shipments recorded from 2015 through 2024 and are on pace to surpass 2025’s full-year haul within a week or two. That’s a 134 percent increase on top of whatever shipments Puerto Rico would have expected to receive from the Jones Act fleet.
The significance of that surge becomes even clearer in the historical context. For approximately a decade, shipments of petroleum products from the US mainland to Puerto Rico fluctuated between roughly 300,000 and 5.16 million barrels annually, with the latter recorded in 2025. Had that trend continued, Puerto Rico would have been on pace to receive about 3.76 million barrels during all of 2026. Instead, that figure was surpassed before August.
If there was any doubt about Puerto Rico’s appetite for American fuel—presumably because it offers a cost-effective solution to the island’s energy needs—it should now be gone. The island’s actions under the Jones Act waiver are direct evidence of its revealed preference for American fuel.
The Decade-Long Gap Looks Even Worse
A confounding variable, of course, is the disruption to global energy markets this year due to ongoing turmoil in the Persian Gulf. But step back and look at the behavior of Puerto Rico’s neighbors that do not have to contend with the Jones Act. Puerto Rico’s actions since the Jones Act waiver was issued merely align with what logic and the sourcing patterns of the US Virgin Islands and Dominican Republic tell us would happen without the law in place.
In 2025, the Dominican Republic imported roughly 34.5 million barrels of US petroleum products, and the US Virgin Islands (USVI) imported around 17.5 million barrels, compared with Puerto Rico’s 5.16 million barrels. The population gap between Puerto Rico and the Dominican Republic doesn’t explain this. While the Dominican Republic has approximately 8 million more people (11 million compared to Puerto Rico’s 3.18 million), Puerto Rico’s per-capita energy consumption is 2.25 times higher. Such figures cannot plausibly account for the Dominican Republic’s appetite for US energy exceeding that of Puerto Rico by more than a factor of six.
Meanwhile, regarding the USVI, Puerto Rico’s population is approximately 30 times larger. A confounding factor is the USVI’s role as a Caribbean refining and storage hub (which is impossible under the Jones Act), so the Dominican Republic remains the cleaner comparison. Either way, Puerto Rico trails badly. It’s not because Puerto Rico didn’t want mainland energy—the waiver has now made that clear—but because the high cost and limited supply of Jones Act-compliant ships crimped its ability to act on that demand.
Further Evidence: Jones Act Workarounds Pave the Way for US LNG
Additional evidence that the Jones Act is a barrier to US energy is provided by Puerto Rico’s growing consumption of American natural gas since our 2022 blog post. As I wrote earlier this month, the United States became Puerto Rico’s largest LNG supplier last year, accounting for roughly 35 percent of the island’s imports on a country-of-origin basis and accounting for around 59 percent once Mexican LNG made with American gas is included. It’s a stunning shift from 2021’s 0.002 percent.
But look at how it happened. One pathway runs through Mexico, with US pipeline gas being liquefied at a facility off Altamira and shipped to Puerto Rico on ordinary, internationally flagged carriers rather than a Jones Act tanker because Customs and Border Protection has ruled that liquefying gas abroad creates a legally “new and different product.”
The other pathway, meanwhile, is a single ship. Called American Energy, it’s a 32-year-old steam-turbine LNG carrier—one of the three oldest of its kind still trading anywhere in the world—that is allowed to operate under a limited Jones Act exemption for Puerto Rico that permits the operation of foreign-built gas carriers provided they are built before October 1996 and meet the Jones Act’s other conditions.
Although they take different forms, these examples of Jones Act relief prove the same point. Whenever Puerto Rico has any legal opening to buy American energy directly, the market rushes to take advantage of it. A customs ruling and a decades-old ship were enough to move LNG imports from near-zero to majority-American, and a temporary waiver was enough to make petroleum imports blow past a decade of annual totals in months.
The Verdict Four Years Later
Our 2022 conclusion that Puerto Rico was overpaying for energy didn’t rest on a novel economic theory. It was based on a straightforward inference: the Dominican Republic’s sourcing decisions revealed that American energy was the lower-cost option. Everything since has confirmed this.
When viable paths to US energy present themselves—whether a customs ruling, an old ship, or a waiver—Puerto Rico’s mainland energy imports don’t edge upward but surge. Puerto Rico didn’t lack demand for American energy but legal ways to buy it. The question is no longer whether the Jones Act suppresses those purchases, but how much longer policymakers will allow that suppression to continue.
