United States

  • Offshore wind power continues to gain momentum in the United States. How will the Jones Act affect the development, operation and maintenance of offshore wind farms?

     
    After years of planning and some unsuccessful attempts, offshore wind power developers finally have their first success in the United States. The Block Island Wind Farm, a 30-megawatt wind farm located just off the coast of Rhode Island, began operations in December 2016, fulfilling the goal of the project’s developer, Deepwater Wind LLC, to build America’s first offshore wind farm. The Block Island Wind Farm consists of only five wind turbines and is tiny in comparison to the large offshore wind farms operating off the coasts of Europe, but Deepwater Wind is planning larger wind farms off the coasts of New York, Massachusetts, Rhode Island, Maryland and New Jersey. Other developers are doing the same with other projects up and down the East Coast of the United States.
     
    The Jones Act and the Passenger Vessel Services Act
    Affecting how these wind farms are being planned and built is a little-known but controversial law: The Jones Act, originally enacted as part of the Merchant Marine Act of 1920, regulates the carriage of merchandise between points in the United States, commonly called “coastwise trade,” and generally requires that a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel is wholly owned by citizens of the United States and has been issued a certificate of documentation with a coastwise endorsement by the United States Coast Guard (USCG) or is exempt but would otherwise qualify for such a certificate and endorsement. A coastwise endorsement may only be issued to a United States flagged vessel that, with limited exceptions, was built in the United States. The Passenger Vessel Services Act similarly restricts the transportation of passengers between points or places in the United States to vessels built in and owned by citizens of the United States.
     
    The penalties for violating the Jones Act can be severe, including forfeiture of the merchandise transported or a monetary amount equal to the greater of the value of that merchandise or the cost of the transportation. The penalty for violating the Passenger Vessel Services Act is a fine of $300 per passenger transported and landed. The laws are otherwise similar enough that, for the purposes of the remainder of this article, they are collectively referred to as the Jones Act. United States Customs and Border Protection (USCBP) enforces the Jones Act, but relies on the USCG to determine vessel eligibility for United States coastwise trade, including whether vessels are built in and owned by citizens of the United States.
     
    So how does the Jones Act affect the development of offshore wind farms in the United States? Offshore wind farms are just that, offshore, and nothing in the Jones Act appears to restrict the transportation of merchandise or passengers between United States ports and offshore wind farms.
     
    The Territorial Sea and the Outer Continental Shelf Lands Act
    USCBP has repeatedly ruled that points in United States territorial sea are points in the United States for the purposes of the Jones Act. The territorial sea is defined as a belt, three nautical miles wide, seaward of the territorial baseline (typically the coastline) and to points located in internal waters, landward of the territorial sea baseline. Documents filed with USCBP suggest that the Block Island Wind Farm is located in the territorial sea. 
     
    But developers are planning bigger projects even further offshore, on the outer Continental Shelf of the United States (the OCS), where the winds are stronger and more constant. The Outer Continental Shelf Lands Act provides that the laws of the United States, including the Jones Act, extend to the subsoil and seabed of the OCS, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing or producing resources therefrom. As a result, the Jones Act extends to drilling rigs and platforms sitting on or attached to the seabed of the OCS for the purpose of exploring for, developing or producing oil or natural gas. It is less clear whether the Jones Act extends to a wind turbine on a tower attached to the seabed of the OCS because it is unclear whether the turbine is developing or producing natural resources from the seabed, but many developers are taking a cautious approach and assuming that it does.
     
    The Effect of the Jones Act on Offshore Wind Farms in the United States
    The Jones Act complicates the construction, operation and maintenance of offshore wind farms in the United States because it generally requires merchandise and passengers to be moved between a port in the United States and towers attached to the seabed of the territorial sea or possibly the OCS, or between these towers, using vessels built in and owned by citizens of the United States. The wind power industry in Europe has used purpose-built wind turbine installation vessels (WTIV) to build offshore wind farms for years, but few, and most likely none, of these vessels were built in the United States.
     
    Offshore wind farms can also be built using Jones Act qualified vessels built for other purposes, but these vessels may not be as efficient or reliable as purpose-built WTIVs, especially in rougher or deeper waters. A study concluded in October 2017 found that offshore wind farm development in the United States could eventually support the construction of multiple WTIVs in the United States, and plans were announced earlier in 2017 for the construction of a WTIV in the United States, but it remains uncertain whether the number of offshore wind farms needed to support a Jones Act qualified WTIV will actually be built.
     
    A Jones Act qualified WTIV could also be used in other applications, including the construction of wind farms in Europe and the decommissioning of oil and gas installations on the OCS, but the higher cost of building WTIVs in the United States may make it too expensive for use outside of the United States and it may not be as efficient in other applications as vessels built for those applications. Until a sufficient number of Jones Act qualified WTIVs are actually built and enter service, offshore wind farm developers may need to look to other possible solutions.
     
    So how can developers work around these problems? Most proposed solutions employ a combination of Jones Act qualified and non-Jones Act qualified vessels. Turbines located at a United States port could be transported to a tower on a Jones Act qualified vessel and installed by a non-Jones Act qualified specialized WTIV. This process, or something like it, may have been used at the Block Island Wind Farm.
     
    Alternatively, turbines could be shipped from outside the United States on foreign-flagged vessels scheduled to arrive directly at the wind farm just in time to be installed by a non-Jones Act qualified WTIV. In each case the process works as long as the operators of the WTIV and any foreign-flagged vessels are careful not to transport merchandise or passengers between towers, between a tower and a port or other point in the United States, or between any such ports or points. Other solutions may also be possible, but whether any solution, including any of those described above, complies with the Jones Act always depends on the facts of the situation.
     
    Until a sufficient number of Jones Act qualifying WTIVs can be built in the United States, offshore wind farm developers and operators may need to be resourceful in how they comply with the Jones Act.
     
     
    The Author
    John F. Imhof Jr. is a Partner in the New York office of Seward & Kissel LLP focusing on maritime, transportation and energy finance. John’s experience includes advising lenders to and investors in the owners of Jones Act qualified vessels and offshore wind power projects. Kristy Choi, a Law Clerk in the New York office of Seward & Kissel LLP, contributed to this article.
     
     
    (As published in the February 2018 edition of Marine News)
  • United Defense Industries has agreed to acquire closeiy held United States Marine Repair, Inc., a provider of non-nuclear ship repair, modernization, overhaul and conversion services to the United States Navy, for $316 million. Based in Norfolk, Va., United States Marine Repair serves defense and commercia

  • for the company in Hawaii, serving there since 1972. Previously, he held management positions with the firm in London, Europe, and the United States. He joined United States Lines in 1947. Mr. Rose attended Cornell University and graduated from the Merchant Marine Academy at Kings Point

  • William B. Kelly has been named vice president for sales and marketing of United States Navigation, Inc., it was announced by president Donald F. Wierda. Mr. Kelly was previously managing director-Atlantic for American President Lines in New York, and has held similar positions for APL and Matson

  • United States Cruises, Inc. (USCI), Seattle, Wash., has made the final $3-million payment for the purchase of the passenger ship United States, and received title to the vessel from the Commerce Department's Maritime Administration (MarAd). USCI presented MarAd with an irrevocable letter of credit

  • United States Cruises, Inc. (USCI) of Seattle has applied to the Maritime Administration for a Title XI guarantee to aid in financing the reconstruction and conversion of the SS United States from a trans-Atlantic liner to a luxury cruise ship. (See cover story in September 15 issue of MR/EN.

  • Capt. Edwin K. Yarborough has been named assistant marine superintendent, United States Lines. The appointment was announced by Kenneth W. Gundling, vice president-marine, at New York, N.Y. Captain Yarborough was previously safety director, marine, at the Lines' New York office. He joined United

  • to predict any tangible changes. By Regina P. Ciardiello, managing editor Basking in the limelight of its highly-publicized purchase of the S.S. United States (as seen in MR's June 2003 Yearbook edition), Norwegian Cruise Lines' (NCL's) moment was short-lived when the Norway incident occurred on May

  • on both U.S. persons engaged in shipping activities through a foreign corporation and foreign shipping companies currently doing business in the United States. The IRS is accepting written comments on the proposed regulations and there will be a public hearing that is currently scheduled for March

  • The S/S United States, fastest ocean liner ever to cross the Atlantic and the property of the Federal Government for more than five years, has been sold for $5 million to United States Cruises, Inc. of Seattle, Wash., according to an announcement by Robert J. Blackwell, Assistant Secretary of

  • Crystal Cruises has come to the rescue of the historic luxury liner SS United States, announcing plans for an exclusive purchase option agreement to begin work on returning America’s flagship to seagoing service, pending a technical feasibility study.   Launched in 1952 as the fastest, largest and safest

  • The United States effectively treats foreign seafarers more harshly than any other group that enters the country without breaking the law. The general rule is that all persons who are not U.S. nationals or permanent residents must have a visa to enter the United States.  Persons desiring to become U.S.

  • MR Nov-19#3rd Cover  INFO@KEMARINE.COM    
UNITED STATES OF AMERICA
URL: WWW)
    November 2019 - Maritime Reporter and Engineering News page: 3rd Cover

    Visit us at the International WorkBoat Show Booth # 3409 TEL: +1 904-354-6566 732 PARKER STREET FAX: +1 904-358-7862 JACKSONVILLE, FLORIDA 32202 EMAIL: INFO@KEMARINE.COM UNITED STATES OF AMERICA URL: WWW.KEMARINE.COM COV2, C3 &C4 MR NOV 2019.indd 2 10/28/2019 10:18:48 AM

  • MR Nov-19#90 ,  Plymouth, Devon PL6 6DE United Kingdom , UK , 
Info.transponde)
    November 2019 - Maritime Reporter and Engineering News page: 90

    Sensing Systems Ltd, Clittaford Road Southway, PROPULSION - HYBRIDRIVE www.jetsgroup.com tel:46 13 180000, fax:46 13 182377, Plymouth, Devon PL6 6DE United Kingdom , UK , Info.transpondertech@saabgroup.com tel:+44 (0) 1752 723330, sales@siliconsensing.com SOLUTIONS WATER JET CLEANING BAE Systems

  • MR Nov-19#84  es-
9
Southampton
JUNE
TO
2020
United Kingdom
11
Seawork is)
    November 2019 - Maritime Reporter and Engineering News page: 84

    standard undercarriages. www.senebogen.com by a 755 HP (563 kW) diesel motor or American customers next year. At an es- 9 Southampton JUNE TO 2020 United Kingdom 11 Seawork is open for business – all year Reserve now for 2020. Make the most of marketing & PR support from Seawork and our leading commercial

  • MR Nov-19#81 ,000 shipbuilders from  the United States and the ship’s sponsor)
    November 2019 - Maritime Reporter and Engineering News page: 81

    Elec- livered by Newport News in 1910. Jill Biden, the former Second Lady of Scrubber Delivered tric Boat. More than 10,000 shipbuilders from the United States and the ship’s sponsor, The very large crude oil carrier (VLCC) The submarine is the second ship to be Newport News and Electric Boat have

  • MR Nov-19#78  Shipyard of Japan Marine United Corporation for a new)
    November 2019 - Maritime Reporter and Engineering News page: 78

    hldi fh A naming ceremony was held in Kumamoto Prefecture at the The same year, Sovcom? ot was awarded ? rst prize at Ariake Shipyard of Japan Marine United Corporation for a new the International Competition of Scienti? c, Technical and VLGC (very large gas carrier) that NYK will charter under a long- Innova

  • MR Nov-19#76 M
MARITIME MEDICAL CREW CARE
Crew Care: Managing Mariner)
    November 2019 - Maritime Reporter and Engineering News page: 76

    M MARITIME MEDICAL CREW CARE Crew Care: Managing Mariner Medical Care By Joe Keefe he competent authority shall as the population on shore enjoys. But, the embarking any mariner, a trusted 2012. There are several key aspects to require that, prior to begin- that’s not always the case. In case of

  • MR Nov-19#67  
Law Association in the United States, previously  makes)
    November 2019 - Maritime Reporter and Engineering News page: 67

    in the international group In addition, Boriana is involved in the Maritime of 13, a reinsurance and pooling arrangement that Law Association in the United States, previously makes large claims – like Costa Concordia – to be serving as a board member and currently serving covered effortlessly. as Vice

  • MR Nov-19#66 , a 4th Circuit Loui-
the United States in 2001, she  siana)
    November 2019 - Maritime Reporter and Engineering News page: 66

    Boriana Farrar moved Hill, Betts & Nash LLP. But she credits from her native Bulgaria to Judge Stephen Plotkin, a 4th Circuit Loui- the United States in 2001, she siana judge and a Fulbright Scholar at the W did so to be close to family, University

  • MR Nov-19#65  in our skills and backgrounds; united in our commitment to delivering)
    November 2019 - Maritime Reporter and Engineering News page: 65

    as well signs at a much faster pace. portunities than it does risks. We are the People of Conrad Shipyard—diverse in our skills and backgrounds; united in our commitment to delivering world- class vessels; proud of our shipyard’s 70-year heritage of safety, quality, craftsmanship, integrity and service

  • MR Nov-19#56 ENVIRONMENTAL GREEN SHIP RECYCLING
Mrs. Saltkjel stated)
    November 2019 - Maritime Reporter and Engineering News page: 56

    ENVIRONMENTAL GREEN SHIP RECYCLING Mrs. Saltkjel stated, “We are careful not but choose not to follow the regulations In order to ensure that EU SSR and HKC are making procedures that ? t the actual to use the words ‘certifying’ or ‘validat- when they are not being externally moni- are adhered to

  • MR Nov-19#55 ENVIRONMENTAL GREEN SHIP RECYCLING
states when the recipient)
    November 2019 - Maritime Reporter and Engineering News page: 55

    ENVIRONMENTAL GREEN SHIP RECYCLING states when the recipient country cannot though not rati? ed by the requisite num- be required to have an initial survey to been uniquely tailored to the vessel. deal with the waste in line with the Con- ber of countries representing 40% of verify the inventory of

  • MR Nov-19#45 SHIPBUILDING USCG POLAR SECURITY CUTTER
Polar Security)
    November 2019 - Maritime Reporter and Engineering News page: 45

    SHIPBUILDING USCG POLAR SECURITY CUTTER Polar Security Cutter will provide meaningful presence in polar regions By Edward Lundquist he Coast Guard needs a ship economic zone above the Arctic Circle). ed. Protecting America’s interests in the Coast Guard leadership and presence that can do more than

  • MR Nov-19#33 , Tunis, Turkey, Turkmenistan, United Kingdom, Ukraine, Uzbekistan
ww)
    November 2019 - Maritime Reporter and Engineering News page: 33

    , Portugal, Republic of South Africa, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Tajikistan, Tunis, Turkey, Turkmenistan, United Kingdom, Ukraine, Uzbekistan www.marinelink.com 33 MR #11 (26-33).indd 33 10/29/2019 10:13:00 A

  • MR Nov-19#27 Equinor has earmarked around 15 to 20% of its total annual)
    November 2019 - Maritime Reporter and Engineering News page: 27

    Equinor has earmarked around 15 to 20% of its total annual investment for the development of new energy solution until 2030. Much of these resources are pegged for innovative projects, such as deepwater offshore wind energy farms, placed on barges. geted at clean energy projects. Present- ly, Equinor has

  • MR Nov-19#26  development in the United States and 
investments in)
    November 2019 - Maritime Reporter and Engineering News page: 26

    are in of the most attractive in the world for ing itself into a company with ample sions in its logistics chain and innovat- development in the United States and investments in solar and wind energy energy interests, producing the oil and ing by capturing and storing CO² in all Europe, in Europe

  • MR Nov-19#24  needs to start now in the 
United States.
Laura Smith, 
USA)
    November 2019 - Maritime Reporter and Engineering News page: 24

    US needs to develop a work- force from scratch,” noting that a mas- sive campaign was undertaken in the UK, something that needs to start now in the United States. Laura Smith, USA Director for Atlas Professionals from renewable energy? NJ wants to de- to the State’s economic development ported goods and

  • MR Nov-19#22 T
THOUGHT LEADERSHIP: OFFSHORE WIND
Public Of?  cials Face)
    November 2019 - Maritime Reporter and Engineering News page: 22

    T THOUGHT LEADERSHIP: OFFSHORE WIND Public Of? cials Face Detailed Decisions – needed sooner, not later… AOT is working to develop a new port, speci? cally con? gured to serve Atlantic Ocean wind projects, on 30 acres along the Arthur Kill tidal strait between Staten Island and New Jersey. Boone Davis

  • MR Nov-19#20  of the awards made 
the United States is growing  wind turbine)
    November 2019 - Maritime Reporter and Engineering News page: 20

    wind industry in tion (“GWO”), a non-pro? t founded by programs for offshore wind training and sociations. $200,000 of the awards made the United States is growing wind turbine manufacturers and opera- development programs. The Maryland by Massachusetts came from this fund. exponentially, with

  • MR Nov-19#15 I
INSIGHTS: LEGAL BEAT
tion clauses that are not drafted)
    November 2019 - Maritime Reporter and Engineering News page: 15

    I INSIGHTS: LEGAL BEAT tion clauses that are not drafted by trial the parties may not be able to contract tract at issue. However, reliance on old huge drafting error: defense and indem- attorneys, but instead by transactional around these state laws with a choice of forms will likely not provide the

  • MR Nov-19#14  from Eu-
rope to the United States. What follows 
are)
    November 2019 - Maritime Reporter and Engineering News page: 14

    . While all the par- ties to the transaction may speak the same language, the legal language (and precedent) is vastly different from Eu- rope to the United States. What follows are ? ve common mistakes I see in mari- time contracts in my practice. Mistake #1 – Not Adequately Specifying the Applicable Law The

  • MR Nov-19#6  Service Ves- energy in Brazil.
United Kingdom
Paul Barrett )
    November 2019 - Maritime Reporter and Engineering News page: 6

    in solar and wind brenda@offshore-engineer.com Switching gears for us is Barry Parker and his overview of the Offshore Service Ves- energy in Brazil. United Kingdom Paul Barrett sel market, which most of you know is not a pretty sight. Starting on page 28 Parker Hallmark House, 25 Downham Road, Ramsden

  • MN Nov-19#112 .com (607) 733-7121 39United States Marine, Inc. . . )
    November 2019 - Marine News page: 112

    . . . . . . . . . . . . . . . . www.tdw.com (504) 568-1010 77Hilliard Corp.. . . . . . . . . . . . . . . . . . . www.hilliardcorp.com (607) 733-7121 39United States Marine, Inc. . . . . . . . . www.usmi.com (228) 679-1005 44Incat Crowther. . . . . . . . . . . . . . . . . . www.incatcrowther.com 61 2 9450 0447

  • MN Nov-19#94 VESSELS
SCHOTTEL Delivers Propulsion for World’s First)
    November 2019 - Marine News page: 94

    VESSELS SCHOTTEL Delivers Propulsion for World’s First Emission-Free Pushboat eration of Maritime Systems at the Technical University of Berlin, will be equipped with rudderpropellers from SCHOTTEL. The hybrid canal push boat is powered by a combination of fuel cells, batteries and an electric motor.

  • MN Nov-19#93  by 
Metal Shark in the United States. Under a co-production)
    November 2019 - Marine News page: 93

    Industriales de la Marina (SIMA-PERU SA). The ? rst round of Peruvian Navy maritime interdiction vessels are now being built by Metal Shark in the United States. Under a co-production agreement with SIMA, Metal Shark plans to deliver mul- tiple similar vessels to Peruvian interests through training and