The Vision Is Clearer—Offshore Wind Farms Are Appearing on the U.S. Horizon

Joan M. Bondareff

The United States is on the precipice of developing a robust offshore wind (“OSW”) industry. This article reviews recent developments on the federal and state level that have made it so.

The Trump administration, while demonstrating a clear preference for fossil fuels, has continued the past precedents of permitting offshore wind farms. To date, the Bureau of Ocean Energy Management (“BOEM”) at the Department of the Interior has approved 16 commercial wind leases, and more sales in wind energy areas (“WEAs”) along the Atlantic Coast are expected later this year. A major auction was conducted on December 14, 2018, for three leases off the coast of Massachusetts, resulting in a total auction price of $405 million. Even BOEM found this to be a “bonanza.” The winners were Equinor (former Statoil), Vineyard Wind (Copenhagen and Avangrid renewables), and Mayflower (Shell and EDP Renewables). The West Coast and Hawaii are considering floating wind platforms.

The first commercial OSW farm has been in operation for over one year in state waters without any hiccups in providing clean reliable energy to the residents of Block Island, Rhode Island. European developers are partnering with U.S. companies to share their expertise in OSW development, and the production tax credit was left intact in the 2017 tax reform legislation.

These are all positive signs for the U.S. OSW market. In addition, the price of both wind and solar is declining and becoming more competitive with natural gas. Continue reading “The Vision Is Clearer—Offshore Wind Farms Are Appearing on the U.S. Horizon”

Ballast Water Management—Latest Developments

Jeanne M. Grasso

Much has changed over the past year regarding compliance with the U.S. Coast Guard’s (“USCG”) ballast water management requirements, and the horizon has gotten a bit clearer. There are now 16 ballast water management systems (“BWMS”) with USCG type-approval and 10 more in the pipeline. As such, many companies have kicked their compliance efforts into high gear, yet ballast water management still remains challenging, largely because the United States is not party to the International Maritime Organization’s (“IMO”) Ballast Water Management Convention and regulates ballast water unilaterally under the National Invasive Species Act and the Clean Water Act. And, a new regime is on the horizon, the Vessel Incidental Discharge Act of 2018, which is discussed further on page 21 of Mainbrace.

Some shipowners have struggled to manage compliance in an efficient and effective way with both IMO and U.S. requirements because the compliance dates and type-approval regimes differ, which sometimes has resulted in the need for compliance date extensions. The USCG’s extension policy has evolved as more type-approved systems become available, and the USCG just recently came out with a new policy via Maritime Commons. This new policy addresses and clarifies what the “next scheduled drydock” means, which triggers the compliance date.

The USCG’s new interpretation sets forth a more practical approach for owners to plan for compliance. In short, it ties the anticipated compliance date to the vessel’s statutory out-of-water survey date under SOLAS rather than triggering a new date as a result of drydock slips, installation of scrubbers, or emergency drydocks, which shortened the time to comply. This new policy is a welcome change that will lead to more certainty as it maintains the vessel’s anticipated compliance date. Also, for those owners who have endeavored to comply, but ran into some challenges getting equipment on time or experienced installation hiccups or emergency drydocks, extensions are still available, but on a much more limited basis than in the past. What is imperative is a good faith, detailed plan to come into compliance, generally within a year.

Finally, to avoid problems in the United States regarding operational issues, it is important to have a contingency plan in place, which is incorporated into each vessel’s ballast water management plan. Initially, an inoperable BWMS should be reported to the USCG Captain of the Port (“COTP”) well in advance of arriving, to allow time to work through the compliance options. In making a decision, the COTP will examine how well you have prepared for operations and what steps you have taken to develop a contingency plan, such as training, maintenance, spares, and efforts to repair. Answers to these questions, as well as the vessel/company’s compliance history, will guide the COTP’s decision in terms of what he/she may allow if a BWMS is inoperable.

Surviving the VIDA Loca

Jeanne M. Grasso

On December 4, 2018, the Frank LoBiondo Coast Guard Authorization Act of 2018 (the “Act”) was signed into law. Title IX of the Act is the Vessel Incidental Discharge Act of 2018 (“VIDA”). VIDA establishes a new framework for the regulation of discharges incidental to the normal operation of vessels, adding a new Section 312(p) to the Clean Water Act, Uniform National Standards for Discharges Incidental to Normal Operation of Vessels. VIDA is the culmination of years of discussion and debate within Congress and the maritime industry to bring consistency and certainty to the regulation of discharges from U.S. and foreign-flag vessels. How and whether this consistency and certainty will occur will be seen in the next several years.

Background

VIDA was born primarily out of a lawsuit relating to the U.S. Environmental Protection Agency’s (“EPA”) exemption of vessels from the Clean Water Act’s National Pollutant Discharge Elimination System (“NPDES”) permitting program. By its terms, the NPDES permitting program, which regulates discharges of pollutants from point sources into the navigable waters of the United States (generally within three miles from shore), applies to discharges incidental to the normal operations of a vessel because a vessel is a point source when in navigable waters. Continue reading “Surviving the VIDA Loca”

MARPOL Compliance Alert: D.C. Court of Appeals Shuts the Door on APPS Relief

Gregory F. Linsin and Dana S. Merkel

Achieving sustained compliance with the requirements of Annex I of the International Convention for the Prevention of Pollution from Ships (“MARPOL”) has been a challenge for the commercial maritime industry. In far too many situations, the detection of noncompliant activity by the U.S. Coast Guard has resulted in criminal prosecutions with devastating consequences for the vessel operator, owner, and crew, and the risks for the maritime industry are only increasing as the deadlines for Annex V compliance loom. This article explains a proven system for commercial vessel owners to minimize or even eliminate these substantial enforcement risks.

APPS Violations and Angelex

The Act to Prevent Pollution from Ships (“APPS”), which implements MARPOL in the United States, authorizes the Coast Guard to detain any vessel if there is reasonable cause to believe the “ship, its owner, operator, or person in charge” may be liable for APPS violations. There have been many legal challenges over the years to the U.S. Coast Guard’s enforcement authority, including its jurisdiction over the vessels, bond amounts demanded, and non-monetary bond requirements, but all have failed. In December 2018, in the case of Angelex Ltd. v. United States, the D.C. Court of Appeals rejected the last untested avenue for potential relief for a vessel owner under APPS. Continue reading “MARPOL Compliance Alert: D.C. Court of Appeals Shuts the Door on APPS Relief”

Congress Passes Major Maritime Safety Legislation but Fails to Fund a New Icebreaker or Pass Authorization

Joan M. Bondareff, Jonathan K. Waldron, and Genevieve Cowan*

This article provides an update on the status of several maritime-related bills pending with the 115th Congress as of October 3, 2018, and reviews one major marine safety law that passed Congress and is awaiting presidential signature.

America’s Water Infrastructure Act of 2018

The latest version of “America’s Water Infrastructure Act of 2018” (S. 3021), previously referred to as WRDA, is a product of compromise. The issues that were stalling the legislation for most of the summer have been resolved, resulting in a now far broader version that includes improvements to America’s water resources infrastructure; a streamlined project acquisition process for the Army Corps of Engineers that allows them to accept funds from nonfederal sponsors to advance studies and project elements; an extension of a new Environmental Protection Agency (“EPA”) water loan program for two more years; an EPA study requirement on small water utilities that are repeatedly out of compliance; a Government Accountability Office (“GAO”) study on whether to move the Army Corps out of the Department of Defense and into a civilian agency; and enhancements to oversight and transparency when reviewing water resources development activities by Congress. For a full summary and section-by-section review of the bill, please visit the House Transportation and Infrastructure Committee’s webpage on America’s Water Infrastructure Act of 2018. Continue reading “Congress Passes Major Maritime Safety Legislation but Fails to Fund a New Icebreaker or Pass Authorization”

Significant Opportunity to Provide Comments Concerning Maritime Regulatory Reform

Jonathan K. Waldron, Matthew J. Thomas, and Emma C. Jones

On May 18, 2018, the Office of Information and Regulatory Affairs (“OIRA”), within the Office of Management and Budget (“OMB”), published a Request for Information (“RFI”) seek­ing public input as to how the federal government may best reduce burdens in the maritime sector. Comments are due on July 16, 2018.

This RFI was spurred by Executive Order 13771, published on January 30, 2017, by President Trump as one of his first initia­tives after taking office, which aims to reduce regulation and control regulatory costs, and Executive Order 13777, published shortly thereafter on February 24, 2017, which aims to enforce the regulatory reform agenda. The RFI seeks public comment to help identify existing rules affecting the maritime sector that are inefficient, redundant, obsolete, unnecessary, or otherwise not justified. Ultimately, OIRA intends to communicate any regulatory reform suggestions to the Regulatory Reform Task Force established for the maritime sector. Continue reading “Significant Opportunity to Provide Comments Concerning Maritime Regulatory Reform”

After Flurry of Hurricane Waivers, Calls for Coastwise Changes Recede

Mainbrace | March 2018 (No.1)

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

 

 

 

In September 2017, in response to Hurricanes Harvey, Irma, and Maria, the Department of Homeland Security (“DHS”) issued a series of widely publicized waivers allowing carriage of cargo by non-coastwise qualified vessels in the Gulf region and to and from Puerto Rico. Public interest in the Jones Act spiked in mid-September, and some members of Congress introduced legislation for longer-term relief, particularly for Puerto Rico. Although controversial, the waivers for the most part seemed to achieve their intended goal, allowing for additional capacity to be available to move certain critical cargoes, particularly in the energy and other bulk sectors. As discussed in more detail below, the way the waivers were granted was rel­atively unique in the context of hurricanes, and some con­troversy arose with regard to the Puerto Rico waiver. The waivers, however, expired as planned with no significant fanfare or controversy, and broader political and public interest in the Jones Act sub­sided after a flurry of activity. Continue reading “After Flurry of Hurricane Waivers, Calls for Coastwise Changes Recede”