In late June, the U.S. House Transportation & Infrastructure Committee approved Coast Guard’s proposed changes to strengthen the Jones Act and now the House of Representatives will consider approving these upgrades too. If passed, these Jones Act changes could impact the offshore oil and gas industry, and even burgeoning offshore wind farm development.
The Jones Act regulates maritime commerce in the United States.
Defining vessel equipment
The Coast Guard asked to broaden the term vessel equipment in maritime law to include equipment used to construct oil and gas industry rigs. Therefore, foreign vessels wouldn’t be as free to transport vessel equipment to offshore oil, gas and wind production sites. These industries currently are exempt from Jones Act restrictions, but some in the gas and oil industry feel the definition of vessel equipment has become too broad.
Waivers for off-shore work
The other Jones Act provision slated to change is how foreign vessels receive waivers to perform off-shore work. It now would be required that foreign companies receive a waiver through the U.S. Secretary of Transportation, who would ensure that no U.S. vessel can complete that work. Currently, the Secretary of Transportation only grants waivers for national defense work.
Often, oil and gas offshore drilling operations use foreign vessels to help construct their offshore sites to save on costs.
Other off-shore considerations
Also in late June, the House of Representatives voted to ban expanding offshore oil drilling for one year off the coast of California and off the Atlantic and eastern Gulf of Mexico too.
How much the proposed changes to the Jones Act will affect offshore wind development is uncertain. Currently, California officials want to begin offshore wind development in Eureka, California, and eventually in Diablo Canyon, Morrow Bay and Humboldt Bay.
