Yesterday the U.S. Customs and Border Protection (“CBP”) published a new ruling on Jones Act compliance in the installation of offshore wind turbines. While the ruling addresses and confirms several established compliance points in the rapidly developing U.S. wind market, CBP introduced a new wrinkle that will aid U.S. vessel owners.
First, the new development. Offshore installations are often connected by subsea pipes and cables, and at times these pipes and cables need to be protected by placing concrete mats over them after the initial installation on the seafloor. CBP’s prior rulings generally allowed these concrete mats to be loaded in a U.S. port, transported offshore, and then laid on top of the pipe/cable by non-coastwise qualified vessels (i.e., non-Jones Act vessels). While there have been some restrictions with this general CBP guidance, such as the pipe/cable’s distance from a well head or other structure that would be considered to be a U.S. coastwise point, the general rule seemed to be well established.
Yesterday’s CBP ruling reverses its position on Jones Act compliance with regard to the installation of concrete mats and determines that cable installed on the seabed is a U.S. coastwise point because it is a means of transporting resources, regardless of whether it is near another structure that would independently be considered to be a coastwise point. As a result, a U.S. flag, coastwise endorsed vessel is required to transport the mats from a U.S. port and install them on the U.S. Outer Continental Shelf.
The ruling leaves intact prior CBP guidance on the issue of the initial installation of rocks for offshore scour protection. A foreign vessel is still permitted to load rocks in the U.S., transport them offshore, and install the rocks, but only if the rocks are the first thing being added to the sea floor (i.e., no foundations, well heads, cables, pipes, mats, or even other rock installations are present).
In addition to this reversal, the CBP ruling addresses several established compliance points related to offshore wind.
Use of a foreign wind turbine installation vessel (WTIV) in constructing a U.S. offshore wind farm.
- A foreign WTIV can install foundations and tower components provided it has not transported such items from a U.S. point.
- A foreign WTIV may transport its crew members and work materials from work site to work site because the crew members are not considered “passengers” and the work materials are not considered “merchandise,” as those terms are used in the Jones Act.
- A foreign WTIV can transport foundations and components from a foreign port to U.S. waters and install those foundations and materials in a wind farm.
Cable installation for U.S. offshore wind farms.
- A foreign vessel can load cable in a U.S. port and transport it offshore.
- A foreign vessel can lay electrical cable in U.S. waters between two U.S. coastwise points.
- A foreign vessel’s use of “jet sleds,” which utilize water jets to emulsify the seabed and create a trench, to simultaneously lay and bury cable does not constitute “dredging,” and therefore does not violate the Jones Act.
From the inception of the federal offshore leasing program in the 1950s and into the 21st Century, Liskow & Lewis has been counsel in many of the landmark decisions affecting offshore energy operations. The firm regularly advises domestic and foreign clients on a host of decisions facing offshore operators and other interest owners. Liskow attorneys are well situated to handle all aspects of development for offshore wind projects and operations, from initial siting and permitting through project finance, construction, and operations. If you have any questions about this new ruling, please contact David Reisman at dreisman@liskow.com.