New Visa Guidance for Crews Working on Offshore Wind Projects

Jonathan K. Waldron and Stefanos N. Roulakis

The U.S. State Department published new guidance on visas issued to crewmembers who will work aboard vessels engaged in offshore wind farm operations. Vessel owners and project managers in the offshore wind sector should examine these changes and implement internal procedures to facilitate future wind farm projects.

New Development

The State Department has updated its policy guidance in the Foreign Affairs Manual of the United States (the “FAM”) to include a visa category for offshore wind projects. Blank Rome coordinated this effort along with the relevant agencies in the U.S. government. This new guidance solves a regulatory hurdle that had been causing logistical problems for the industry by clarifying the correct type of visa that will be issued by U.S. embassies to crewmembers working on vessels on offshore wind projects.

Background

The traditional method of obtaining visas for crewmembers engaged on energy projects located on the U.S. Outer Continental Shelf (“OCS”) is to obtain a B-1 visa with an OCS annotation. Crewmembers are issued such a visa on the basis of a letter of non-applicability, which is issued by the U.S. Coast Guard (the “Coast Guard” or “USCG”) when it is determined that a vessel is owned or controlled more than 50 percent by foreign interests so that foreign citizens can crew a vessel engaged in OCS energy projects. The authority to regulate offshore wind farm energy projects was authorized pursuant to Section 388 of the Energy Policy Act of 2005, which amended the Outer Continental Shelf Lands Act. 43 U.S.C. § 1337(p)(1)(c). Nevertheless, the Coast Guard takes the position that it lacks statutory authority to regulate wind farms located on the OCS. As a result, the Coast Guard will not issue letters of non-applicability, which refusal rendered the State Department unable to issue B-1 (OCS) visas for offshore wind projects.

This has created confusion in industry as to the type of visa that an embassy will issue because crews could no longer obtain a B-1 (OCS) visa. A normal C-1/D crewman visa is not a viable option as it is only valid for 29 days. This type of visa would have provided an inadequate amount of time for the crew to conduct wind farm-related operations offshore. Such an issue could have proven to be a large impediment to the development of the nascent offshore wind sector in the United States.

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Coast Guard Issues Policy on Keel Laying Date

Jonathan K. Waldron and Dana S. Merkel

UPDATE — OCTOBER 4, 2019:

The U.S. Coast Guard issued a revised version of Determinations for a Vessel’s Keel Laid Date or Similar Stage of Construction, CVC-WI 015(2), shortly after publication of this advisory. The revised version makes no changes to the standards outlined in the guidance. However, it clarifies that the Work Instruction applies to only U.S. flag vessels.

The U.S. Coast Guard has published new guidance setting forth its interpretation of when a vessel’s keel is considered laid and building progression standards to determine what may be accepted in establishing the build date for a vessel. Shipyards and prospective shipowners and operators should be cognizant of this new guidance and its significant implications on the regulatory requirements applicable to a vessel.

New Development

The U.S. Coast Guard has issued a Work Instruction providing guidance on when a vessel’s keel is considered to be laid or the vessel is at a similar stage of construction. This guidance is intended to address law and regulations that refer to when a vessel is “new” or “existing,” “built,” or “constructed.” The Work Instruction, “Determinations for a Vessel’s Keel Laid Date or Similar Stage of Construction,” CVC-WI 015(1), was published on August 27, 2019, and is available here.

Background

U.S. law and regulation often refers to new or existing vessels or when a vessel is built or constructed to determine the applicability of newer construction, safety, and environmental standards. The definitions of these terms invariably discuss the vessels’ keel laid date or similar stage of construction. However, there has historically been scant guidance addressing when a vessel’s keel is considered laid or when a vessel can be considered at a similar stage of construction and how these terms should be applied for different regulatory purposes.

The Coast Guard has identified issues in the past with undefined structural members being placed in a shipyard without vessel construction plans in place or even intent to build a specific vessel to act as a regulatory placeholder. This is particularly a problem in the period before a newer, more stringent standard will come into effect, and shipbuilders or other companies seek to claim a keel laid date before a new standard takes effect by taking some action to start the building of a vessel with no firm planned completion date.

Please click here for the full client alert. 

Potential Impacts of Offshore Legislation on Industry

Jonathan K. Waldron and Stefanos N. Roulakis

The U.S. House of Representatives has introduced legislation that could potentially greatly alter the landscape for oil, gas, and wind installation and decommissioning activities on the U.S. Outer Continental Shelf (“OCS”). Stakeholders should examine the legislation for impacts to their operations.

New Development

The House Committee on Transportation and Infrastructure marked up and approved H.R. 3409, the Coast Guard Authorization Act of 2019 (“2019 CGAA”) on June 26, 2019. This legislation, if enacted, could have significant impacts on how oil, gas, and wind vessel activities are conducted on the OCS. Of particular note, the legislation could have an outsized effect on offshore wind in the United States, which is at a nascent stage and requires installation activities of the type contemplated in the 2019 CGAA.

Background

In January 2017, U.S. Customs and Border Protection (“CBP”) proposed to overturn decades of precedent with regard to offshore operations potentially subject to the Jones Act in its “Proposed Modification and Revocation of Ruling Letters Relating to Customs Application of the Jones Act to the Transportation of Certain Merchandise and Equipment Between Coastwise Points” (the “Notice”). The Notice, which was published in the CBP Customs Bulletin, proposed the modification of approximately 25 CBP rulings that delineated the difference between “equipment of the vessel,” the transportation of which does not implicate the Jones Act, and “merchandise,” which may only be transported by qualified vessels under the Jones Act.

Please click here for the full client alert. 

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”