With US offshore wind set for significant growth, a proposed legislative amendment would put the same Jones Act requirements on offshore renewables as US offshore oil and gas development, securing opportunities for US-flag vessels
A provision in legislation recently passed by the US House of Representatives would enforce the Jones Act requirements for all offshore renewable energy production on the US outer continental shelf, removing any ambiguity. The amendment in HR 4447, the ‘Clean Economy Jobs and Innovation Act’, was passed in September.
Sponsor of the amendment was US Representative John Garamendi, a Democrat from California, and long-time proponent of the Jones Act, which reserves domestic maritime trade to qualified US-flag vessels.
In describing his amendment, Congressman Garamendi said it “simply clarifies that all existing requirements that govern offshore oil and natural gas extraction also apply to renewables. This will enable our domestic maritime industry to support the renewable energy industry and provide a critical economic stimulus for our nation.”
An expert on the Jones Act, maritime attorney Charlie Papavizas said the amendment to HR 4447 advanced by Congressman Garamendi would remove any ambiguity and put the offshore renewable energy industry on the “same footing in terms of the application of federal law as the offshore oil and gas industry.”
Writing in his Maritime Fedwatch blog, Mr Papavizas, partner at Winston and Strawn LLP, pointed out that when the Energy Policy Act of 2005 was passed, allowing the US government to enter into leases offshore on the US OCS for renewable energy development, it was unclear as to whether all federal laws would be extended to those projects beyond US territorial limits on the US OCS.
“Developers and others have assumed the Jones Act would be applied anyway and have proceeded as if it does apply, but there remains an issue as to whether this is required by current law,” wrote Mr Papavizas. “The jurisdictional ambiguity has also impeded the process of getting Jones Act technical rulings from Customs and Border Protection which usually provides guidance on issues of Jones Act application to particular vessel movements.”
“Congress must act to ensure this burgeoning industry abides by federal laws”
The Jones Act only applies automatically, by administrative interpretation, out to three nautical miles from the US coastline. Beyond 3 nm (5.5 km), its application depends on the Outer Continental Shelf Lands Act (OCSLA), originally enacted for the offshore oil and gas industry. OCSLA extends federal laws under certain circumstances out to 200 nm (370 km) on the US OCS.
“Demand for offshore wind development in federal waters is strong, and Congress must act to ensure this burgeoning industry abides by federal laws and regulations, including the Jones Act, so we have the strongest possible labour and environmental protections,” said Congressman Garamendi in a statement.
However, there appears to be little chance of further action on the legislation this year.
Congress would have to take up the bill prior to the US Presidential Election on 3 November, or after during the lame duck session.
While the US has only one offshore windfarm in operation – the 30-MW Block Island Wind off Rhode Island – as much as 25 GW could be in developed by 2030, according to a recent Wood MacKenzie study. Among those is Coastal Virginia Offshore Wind (CVOW) off the coast of Virginia Beach, Virginia, which is nearing commercial start-up of its 12-MW, two-turbine pilot project. CVOW is the first fully permitted offshore wind project in US federal waters. Once in operation, the CVOW pilot project will provide developer Dominion Energy with valuable permitting, design, installation and operations experience to apply to its proposed 2.6 GW commercial project – the largest offshore wind project in North America – with an estimated construction start in 2024.