In May 2020, Geoquip Saentis docked in New Bedford, Mass. Built by the U.K.-headquartered Geoquip Marine Group, Saentis was designed for geological surveying. It has been chartered around the world for the preparation stages of offshore wind farms. Its mission in New Bedford was collecting information on the ground conditions for the building of Vineyard Wind 1, the 800-megawatt, 62-turbine farm planned for an area south of Martha’s Vineyard.
Two months later, Saentis headed south, with two other Geoquip-made vessels, contracted by Dominion Energy for plans for its wind farm off the Virginia coast. Saentis is flagged in Cyprus and the two other ships are registered in Taiwan and Norway, respectively.
The employment of foreign vessels in the early stages of offshore wind development has frustrated some in the U.S. maritime sector. They argue that it contradicts the offshore wind industry’s promises of jobs for American mariners while also revealing loopholes in laws meant to protect the domestic maritime industry.
“There are U.S.-flagged geotechnical vessels that are available,” Aaron Smith, president and CEO of the Offshore Marine Services Association (OMSA), told Professional Mariner. “However, we continue to see foreign-flagged vessels doing the geotechnical work, and geotechnical work is a giant part of an offshore wind project construction.”
Using these foreign ships costs less due to the higher wages American mariners earn. “To me, it’s very simple,” Smith said. “It’s cost. As we have seen, some of these projects have very narrow margins.”
Some members of Congress are pushing legislation to tighten restrictions on foreign-flagged work vessels in U.S. waters. Industry groups for offshore wind say it would stifle the growth of a nascent industry essential for meeting U.S. climate goals.
In most commercial maritime activity that does not involve foreign ports, two laws act to shield U.S. mariners from competition from foreign-flagged ships and crews. The first, the Jones Act, has for more than a century limited commerce between U.S. ports to U.S.-flagged ships. The second, the Outer Continental Shelf Lands Act (OCSLA), mandates that mariners employed on vessels owned by U.S. citizens or corporations working on the shelf be manned by U.S. citizens or legal residents.
These laws allow for some situations in which a foreign-flagged ship or foreign mariners can be hired.
The Jones Act “doesn’t apply to lots of things that happen on the [Outer Continental Shelf],” Charlie Papavizas, a maritime lawyer with the firm Winston and Strawn, told Professional Mariner. “It only applies to the transportation of merchandise, the transportation of passengers, dredging and towing.” All of these have exact definitions hammered out by courts and rulings of U.S. Customs and Border Protection, he said. This leaves a span of activities legal for foreign vessels, including surveying, drilling and the installation of equipment.
OCSLA allows some foreign-flagged vessels to work on the shelf. Ships not owned by a U.S. entity — or which a U.S. entity has a stake of less than 50 percent — may employ mariners of any nationality. The idea is to reciprocate some of the allowances made to U.S. vessels around the globe, while also preventing oil conglomerates based in the U.S. from farming out work on the shelf to foreign subsidiaries with foreign crews.
“The purpose was to prevent American oil companies from having to deal with similar local employment laws in other places in the world, Brazil, West Africa, Indonesia, the Persian Gulf, wherever,” said Papavizas. “In other words, it was designed to set up the United States as a good guy in the trade environment.”
Smith, head of OMSA, said offshore wind companies are using these legalities to break promises to U.S. mariners from an industry that — according to a 2020 report from the American Clean Power Association (ACPA) — would invest as much as $57 billion in the U.S. economy and create up to 83,000 jobs by 2030.
“What we see is that while developers will trumpet showpiece U.S. vessels and highlight U.S. training that they are doing, they continue to utilize foreign-flagged vessels and foreign mariners, even when there are U.S. options available for those positions,” Smith said.
In June of 2022, the ACPA published a survey of vessel contracting patterns, which estimated that 82 percent of marine crew hours related to work on U.S. offshore wind projects would be done by the U.S. domestic workforce.
But OMSA said that its tracking of one prominent project, Vineyard Wind 1, shows the industry is falling short. Vineyard Wind periodically releases lists of vessels working on the site. During one week last fall, only 13 percent of crew members were American, OMSA said.
This ratio fluctuates. Vineyard Wind’s most recent listing, as of this writing, included eight vessels: five from the U.S., two from the U.K. and one from Malta. Cable installation was the main activity at the site.
Offshore wind companies say the foreign-flagged vessels have specialty functions and the construction operations are supporting the U.S. maritime industry.
“To date, our fully Jones Act-compliant process has used both U.S. and specialized European flagged vessels that work together,” Andrew Doba, spokesman for Vineyard Wind, told Professional Mariner in an email. “For example, [the Italian company] Prysmian is being supported by Foss Maritime.”
In an email to Professional Mariner, Dominion Energy said it uses a mix of foreign and U.S. vessels in support of its Coastal Virginia Offshore Wind project off Virginia Beach.
“We used both foreign-flagged and Jones Act vessels to conduct various aspects of survey activities in the commercial lease area and along the export cable route,” the Dominion spokesperson said. “We support the development of a domestic offshore wind supply chain in all aspects of a project — surveying, development, construction and operations.”
He also said, “The foreign-flagged vessels that will work on the project are special built vessels.”
Dominion has also invested in the U.S. fleet of offshore wind vessels. The company’s $500 million wind turbine installation vessel, Charybdis, is expected to support numerous East Coast offshore wind projects.
Last year, several lawmakers attempted to pass the American Offshore Worker Fairness Act. It would require mariners on foreign-flagged vessels working in offshore energy in U.S. waters to be either U.S. citizens or citizens of the nation where the vessel is flagged, which would curtail foreign vessels.
The ACPA stated that the bill would delay U.S. clean energy goals “by not allowing offshore wind developers to utilize necessary construction vessels, such as wind turbine installation vessels.”
The organization did not respond to a list of questions for this story.
The House passed the provision and folded it into the National Defense Authorization Act. But it was removed through negotiations with the Senate. Sponsors have vowed to reintroduce it.
U.S. Rep. John Garamendi, a California Democrat, doubled down with another bill, the Close Agency Loopholes to the Jones Act. It would reverse many Customs and Border Protection rulings that allow foreign vessels to perform certain commercial tasks in U.S. waters, such as conducting oceanographic research and installing equipment, while staying compliant with the Jones Act.
Smith said both bills are “part of the solution.”
He believes lawmakers should strive to ensure foreign-flagged vessels meet the same wage obligations of U.S. ones, which would prevent them from undercutting the domestic industry. “I think that’s fair,” he said. “It should be the same. One side shouldn’t have a statutorily different operating expense than the other.” •