U.S. Customs and Border Protection officials are poised to revise nearly 30 Jones Act related rulings dating back 40 years affecting the offshore oil and gas industry.
Maritime industry groups that have long criticized those rulings as “loopholes” that opened the Gulf of Mexico to foreign shipbuilders and workers praised the Jan. 18 notice issued by CBP under the outgoing Obama administration.
Tom Allegretti, chairman of the American Maritime Partnership, asserted the move will “rightfully restore over 3,200 American jobs to the American economy and close loopholes that gave preference to foreign workers and foreign shipbuilding.”
The agency’s move to reverse those earlier findings hinges in large part on how it translates federal law governing the coastwise transport of oilfield equipment in U.S. waters.
Starting in 1976, a series of rulings came on use of foreign-built vessels, and whether energy-related equipment counted as “vessel equipment” or “merchandise” subject to Jones Act restriction.
The 1976 case dealt with offshore construction vessel operations, and culminated in 2009 with the so-called “Christmas tree” case, when a subsea valve assembly was determined to be vessel equipment when transported by a construction vessel with the mission of installing it.
Industry groups protested the Customs ruling was too broad, and led the agency to start reconsidering. The new notice, with its public comment period open until Feb. 17, could put the issue to rest.
It comes after years of skirmishing between the U.S. maritime industry and Jones Act critics, who say the 1920 statute and associated law is obsolete and puts the U.S. economy at a disadvantage. Many maritime advocates see an ally in the new Trump administration, with its avowed aim of reviving domestic heavy industries.
“We applaud President Trump’s commitment to ‘buy American and hire American,’ and the correct and lawful interpretation of the Jones Act will ensure the preservation of American jobs and maintenance of the U.S. shipyard industrial base, both of which are critical to our economic security and national security,” Allegretti said in a statement.
Rep. Steve Scalise, R-La., the Republican majority whip in the House of Representatives, even offered a backhanded compliment to the recently departed Obama administration.
“This corrective action is the right thing to do for Louisiana workers and will also benefit the American economy,” Scalise said in a joint statement with the American Maritime Partnership. “In addition, unlike so many job-killing regulations and rules the Obama administration issued on its way out the door, this agency ruling from Customs actually reverses some of the economic damage the Obama Administration allowed to take place on its watch.”
“The Offshore Marine Service Association applauds the Administration’s strong step to restore the congressional intent of the Jones Act. This Notice opens a domestic market to U.S. mariners on U.S.-built vessels, owned by U.S. companies,” said OMSA president Aaron Smith. “The offshore service industry is ready, willing, and capable of completing this work, having recently invested $2 billion in U.S. shipyards on vessels tailored to safely completing this work.”