Mainbrace Live: U.S. Offshore Wind Industry Update

Blank Rome’s internationally recognized Maritime & International Trade practice group presents a new series of informative webinars covering hot topics in the shipping industry and key insights into 2021 and beyond. Sessions will cover:

    • Sanctions and international trade
    • Offshore wind developments
    • Shipping litigation
    • Maritime regulation
    • Ship finance
    • And more!

For the second webinar in our Mainbrace Live series, Blank Rome LLP Maritime attorneys Thomas H. Belknap, Jr.Joan M. BondareffJonathan K. WaldronDouglas J. Shoemaker, and Dana S. Merkel presented “U.S. Offshore Wind Industry Update” on Tuesday, April 27, 2021.

Tom, Joan, Jon, Douglas, and Dana discussed:

    • U.S. offshore wind development projects and infrastructure
    • Biden Administration’s commitments to expand renewable energy
    • The Jones Act’s impacts on existing and planned offshore wind installation and servicing projects
    • Pitfalls and opportunities for contractors and service providers looking to enter the industry

MODERATOR

PRESENTERS

You can read coverage of this webinar at TradeWinds here.

To watch a recording of this webinar, please go to the webinar on-demand registration page here.

Mainbrace Live: Prepare for the Biden Administration’s Maritime & Foreign Policy

Blank Rome’s internationally recognized Maritime & International Trade practice group presents a new series of informative webinars covering hot topics in the shipping industry and key insights into 2021 and beyond. Sessions will cover:

    • Sanctions and international trade
    • Offshore wind developments
    • Shipping litigation
    • Maritime regulation
    • Ship finance
    • And more! 

To open the series, on April 13, 2021, Blank Rome LLP Maritime Partners Matthew J. Thomas and Kierstan L. Carlson, along with Blank Rome Government Relations LLC Senior Advisor David S. Jansen, presented “Mainbrace Live: Prepare for the Biden Administration’s Maritime & Foreign Policy.”

Matt, Kierstan, and David discussed the outlook for maritime policymaking under the new Administration and its impacts on the global shipping industry, including:

    • Maritime outlook for the new Congress and Administration
    • International trade sanctions and foreign policy 
    • Enforcement trends

MODERATOR

PRESENTERS

To watch a recording of this webinar, please go to the webinar on-demand registration page here.

CBP Modifies First Offshore Wind Ruling

Jonathan K. Waldron, Matthew J. Thomas, Jeanne M. Grasso, and Stefanos N. Roulakis

Stakeholders in offshore wind construction projects, including vessel owners and operators, project developers, and equipment manufacturers, should ensure that their plans for offshore wind development take into consideration the implications of U.S. Customs and Border Protection’s (“CBP”) most recent Jones Act ruling. While a previous ruling issued by CBP in January 2021 changed course by ruling that “pristine sites” were subject to the Coastwise Merchandise Statute (commonly referred to as the Jones Act), CBP has modified this ruling generally in line with past precedent. Nonetheless, CBP’s modification creates some changes for Jones Act compliance in the offshore wind sector.

On January 27, 2021, CBP ignited controversy in its first Jones Act ruling on offshore wind since the passage of the 2021 National Defense Authorization Act (“NDAA”). The NDAA, through an amendment to the Outer Continental Shelf Lands Act (“OCSLA”), clarified that the Jones Act applied to renewable energy projects on the U.S. Outer Continental Shelf (“OCS”), and stakeholders expected that the same cabotage rules which have applied to mineral energy development projects would equally apply to offshore wind. Nonetheless, in HQ H309186, CBP deviated from decades of precedent by ruling that the lading of “scour protection” materials by a non-coastwise qualified vessel at a U.S. coastwise point (i.e., a port or place in the United States), and unlading of these materials at a pristine site on the OCS, would violate the Jones Act. Reversing course after comments from industry stakeholders, CBP issued a modification, which held that the “Jones Act does not apply to activity occurring at the pristine seabed on the OCS, which has been CBP’s longstanding position on the issue.” HQ H317289 (March 25, 2021). While CBP’s reversal appears to be consistent with “longstanding” precedent on pristine sites, the modification itself raises questions about the applicability of the Jones Act in certain contexts as discussed further below.

BACKGROUND

Decades after extending federal law (including the Jones Act) to the OCS for mineral-related energy development projects, Congress enacted the 2021 NDAA, which included a provision confirming that the Jones Act applies to all offshore energy development on the Outer Continental Shelf, including wind energy. While most offshore wind projects were planned with Jones Act compliance in mind, this has generally been a welcome development for all stakeholders, with the hope that it would bring needed clarity and certainty to renewable energy development projects offshore.

However, CBP’s first shot out of the gate in January missed the mark, although the agency should be lauded for issuing a correction in short order last month. In the initial ruling, Great Lakes Dredge and Dock (“Great Lakes”) proposed to transport and unlade “scour protection” materials (i.e., rocks) to protect wind turbine generator (“WTG”) foundations in conjunction with the construction of the Vineyard Wind Project located on the OCS off the southeast shore of Martha’s Vineyard. Great Lakes proposed unlading the materials at the WTG sites on the OCS in layers and at different phases of the WTG installation process using both coastwise and non-coastwise vessels under various scenarios.

Please click here for the full client alert.

BIMCO Adopts New Clauses and Contracts

Keith B. Letourneau, Matthew J. Thomas, and Zachary J. Wyatte






New Development

The Baltic and International Maritime Council’s (“BIMCO”) Documentary Committee adopted several new clauses and contracts at its recent meeting held on January 25, 2021. Included were: (1) a new charter sanctions clause, (2) a clause promoting transparency and dialogue between owners and charterers, and (3) tug, barge, and floating hotel contracts. Given the prevalence of U.S. sanctions against myriad governmental and private-party actors worldwide, the scourge of the COVID-19 pandemic, and the construction advent of new offshore wind farm structures, each of these clauses and contracts warrant consideration by maritime law practitioners and commercial operators alike.

Sanctions Clause for Container Vessel Time Charter Parties 2021

In recognizing the complexity of international sanctions regimes, coupled with the fact that they consistently change as the number of new restrictions continues to increase, BIMCO issued a sanctions clause for charter parties in the container trade in an effort to assist interested parties in complying with the worldwide sanctions regulations. This new clause was designed as part of an initiative to create a library of sanctions clauses that reflect the individual needs and characteristics of different trades and operations, as well as provide greater understanding of the responsibilities assumed by owners. It is the last step in a triad of sanctions clause updates, which comes more than a year after BIMCO’s revised standard sanctions clauses for time and voyage charters. As the various shipping subsectors possess separate risks associated with different market realities, BIMCO tailored this clause to address the characteristics of the container industry, specifically to address: (1) transactions with a “Sanctioned Party,” and (2) voyages involving a “Sanctioned Cargo.”

Please click here for the full client alert.

Note from the Editor

Thomas H. Belknap, Jr., Editor

COVID, COVID, COVID … Sometimes it feels like that is all anyone is talking about these days (especially now that the election is behind us). So, in this issue of Mainbrace, we (mostly) take a break from that topic and try to focus on some other things.

Use of new technology in the maritime industry is one subject that always interests us, and there is no shortage of pertinent topics in this space. In this issue, we present articles discussing the legal and practical issues relating to the use of facial recognition technology on cruise ships, developments in the use of blockchain in global logistics arrangements, and new regulatory developments relating to electronic recordkeeping onboard vessels.

Meanwhile, as the 116th Congress moves towards its close at the end of the year, we take a look at pending maritime-related legislation and make a few guesses as to what we might expect from the 117th Congress, which convenes in January 2021. Of particular interest to the budding offshore wind industry is a separate article looking at recent developments on proposed legislation to clarify the application of the Jones Act to offshore wind development. We also look at ongoing efforts to pass legislation to tackle the serious and expanding problem of plastics in the oceans, as well as provide an update on regulatory developments relating to the Vessel Incidental Discharge Act.

The year 2020 has become a punchline of sorts for all the things that can go wrong. There’s no question that it has been a year like no other in memory, and I am sure many of us are ready to turn a new leaf in 2021. With disruption comes opportunity, however, and it is not so difficult to envision the many ways that the hurdles of this year will jumpstart innovation and progress in the coming years. Indeed, it seems clear that we are already heading down this path. So, let this be our New Year’s wish to all our clients and friends: may you stay ahead of the curve and figure out how to turn problems into solutions. We look forward to being there to help you do just that in 2021 and beyond. Happy Holidays to all.

Maritime Legislative Update

Jonathan K. WaldronJoan M. Bondareff, and Stefanos N. Roulakis


Joan M. BondareffStefanos N. Roulakis




The end of 2020 has seen significant developments in legislation with implications for the maritime industry as we move from the Trump administration to the new Biden administration. This article provides an update on the status of several key maritime-related bills in the 116th Congress as of December 7, 2020. 

The incoming Biden administration has not developed specific bills yet, but we anticipate infrastructure being at the top of the list. This will provide a number of opportunities for the maritime industry—from expanding title XI loan guarantees to funding for port infrastructure projects, new vessels for new offshore wind projects, and an expansion of cargo preference to support the Jones Act. Of import, Biden’s campaign voiced his support for the Jones Act.

Key Maritime Bills Expected to Be Enacted in the 116th Congress

National Defense Authorization Act (“NDAA”)

The NDAA is roundly considered to be an annual “must-pass” bill, having passed every year since the Kennedy administration. In recent years, many maritime provisions have been included in the NDAA. The reason for this is that, as an essential bill that is enacted every year, the NDAA creates opportunity for the advancement of policy priorities in the maritime industry if they are included. The House and Senate have agreed to a conference report for the NDAA and the final bill will include significant maritime provisions, including U.S. Maritime Administration (“MARAD”) reauthorization, U.S. Coast Guard (“USCG”) reauthorization, extension of the Jones Act and other federal laws to offshore renewable energy, and funding for ports to address COVID-related emergencies. A few of these bills are summarized below and more details will be addressed in a follow-up maritime advisory.

Continue reading “Maritime Legislative Update”

The Impact of COVID-19 on Blockchain Advancement

Keith B. Letourneau and Vanessa DiDomenico*

Blockchain technology ensures security and transparency within transactions. The endless possibilities and solutions that blockchain can provide to a multitude of industries and consumers created a surge of interest over the past several years. Recently, the need for blockchain technology was amplified when a single microbe showed just how interconnected the world is and how fragile supply-chain networks and logistics providers are when unexpected demand for critical goods (personal protective equipment and testing kits) arose due to the COVID-19 pandemic.

Global Supply-Chain Disruption

The various levels of regulations imposed by national and local governments throughout the world because of COVID-19 concerns delayed and disrupted virtually all supply-chain networks. For example, customs clearance processes have become more laborious and many factories have converted into producers of essential equipment, resulting in the delayed assembly of integral components relied upon by other manufacturers.

Before the global pandemic, companies were racing to become as lean as possible, cutting costs and sourcing multiple components from a variety of manufacturers in different countries. Reducing the costs of making a product would allow for more profit. Producers and manufacturers used complex supply-chain networks to maximize comparative advantage strategies. Often, products would be shipped to another country merely to perform a certain task, or to simply add a singular component, and then the item would be returned to origin for sale to a consumer. Continue reading “The Impact of COVID-19 on Blockchain Advancement”

New Legislation to Apply the Jones Act to Offshore Renewables

Jonathan K. Waldron and Stefanos N. Roulakis

Stefanos N. RoulakisThe House of Representatives passed legislation, H.R. 4447, the Expanding Access to Sustainable Energy Act of 2019, on September 24, 2020, that included a provision from Representatives Garamendi and Lowenthal (“Amendment 33”) to amend the Outer Continental Shelf Lands Act (“OCSLA”) that would confirm the Jones Act applies to all offshore energy development on the Outer Continental Shelf (“OCS”), including wind energy. Passage of this provision now appears imminent, as it has been recently included in the National Defense Authorization Act (“NDAA”). From an operational standpoint, while most offshore projects are planned with Jones Act compliance in mind, enactment of this provision would be a welcome development to stakeholders and bring needed clarity to renewable energy development offshore. 


Background

The Coastwise Merchandise Statute, commonly known as the Jones Act, has evolved over time. The U.S. cabotage laws date back to the founding of the Republic and were enshrined in their current form in the Merchant Marine Act of 1920. These were originally laws that dealt with transportation issues for domestic voyages. However, as time progressed and production of marine resources became feasible, the U.S. Congress passed OCSLA, which extended federal law to installations on the OCS. 

Continue reading “New Legislation to Apply the Jones Act to Offshore Renewables”

EPA Publishes Its Long-Anticipated VIDA Proposed Rule

Jeanne M. Grasso and Dana S. Merkel

On October 26, 2020, the U.S. Environmental Protection Agency (“EPA”) formally published in the Federal Register its long-anticipated standards for discharges incidental to the normal operation of vessels pursuant to the Vessel Incidental Discharge Act (“VIDA”). Signed into law on December 4, 2018, as part of the Frank LoBiondo Coast Guard Authorization Act of 2018, VIDA established a new framework for the regulation of discharges incidental to the normal operation of vessels in an attempt to bring uniformity, consistency, and certainty to the regulation of discharges from U.S.-flag and foreign-flag vessels. Comments were due November 25, 2020, and the comment period is now closed. 

The first step in implementing VIDA requires the EPA to develop federal performance standards for “marine pollution control devices,” which includes any equipment or management practice (or combination thereof) to manage incidental discharges from vessels. The EPA’s proposal sets standards for 20 types of vessel discharges incidental to normal operations. The program implemented under VIDA will replace the EPA’s Vessel General Permit and certain U.S. Coast Guard (“USCG”) regulations for ballast water a few years from now, after the USCG finalizes regulations to implement the EPA’s standards, including compliance, monitoring, inspections, and enforcement.

Background

VIDA was the culmination of years of discussion, debate, and litigation concerning discharges incidental to the normal operation of vessels. Although back in the 1970s, the EPA initially exempted these discharges from the Clean Water Act’s National Pollutant Discharge Elimination System permitting program due to the burden of permitting every vessel entering U.S. waters, a federal court held in 2006 that the EPA must issue permits for vessel discharges. In response, the EPA developed the 2008 Vessel General Permit (“VGP”). The 2008 VGP was eventually replaced by the 2013 VGP, which contained some more stringent requirements, such as numeric limits on ballast water discharges, a requirement to use environmentally acceptable lubricants, and new monitoring requirements for ballast water, bilge water, and graywater.

Continue reading “EPA Publishes Its Long-Anticipated VIDA Proposed Rule”