US drops plan to tighten Jones Act rules for offshore supply


(WASHINGTON) — U.S. Customs and Border Protection has withdrawn a proposal to revoke rulings that allow foreign-flag vessels to transport certain equipment from U.S. points to oil and gas rigs drilling in U.S. waters, the Houston Chronicle reported.

The proposal would have done away with decades of exemptions that allow foreign crews to perform work historically reserved for Americans under the Jones Act. But the offshore oil and gas industry warned that revoking the rulings would lead many companies to pull back from the Gulf of Mexico.

Maritime companies had spent $2 billion retrofitting ships and equipment in anticipation of getting an increased share of work in the Gulf's offshore oil and gas fields, according to the Offshore Marine Service Association.

"We call on President Trump to take immediate action and correct these damaging rulings that have continued to put foreign companies first and American companies and workers last," said Aaron Smith, president of OMSA.

Click here to read the story.

The following is the text of a news release from the Offshore Marine Service Association:

(NEW ORLEANS) — The Offshore Marine Service Association on Wednesday responded to an announcement by U.S. Customs and Border Protection (CBP) to withdraw its second proposal to modify and revoke letter rulings. This decision hurts American workers, vessel owners and U.S. shipbuilders and prevents the creation of 3,200 new American jobs.

Obliging to foreign interests, the Office of Management and Budget (OMB) recommended a regulatory review process that will significantly delay the lawful and correct enforcement of the Jones Act, which requires good moving between one U.S. port and another be moved on vessels that are U.S.-built, U.S.-owned and U.S.-crewed. This delay will only hurt American mariners and shipbuilders while continuing to benefit foreign vessels, shipbuilders and crews, domestically operating contrary to U.S. law.

"The offshore service industry is deeply disappointed in the administration's decision to delay the revocation of letter rulings that would correctly enforce the Jones Act and put American mariners first," said Aaron Smith, president and CEO of the Offshore Marine Service Association. "This decision to move to a regulatory review process is deeply damaging to the American crews, shipyards and companies who have waited more than eight years while the administration studied taking corrective action. Additionally, during this time our industry has invested more than $2 billion to ensure offshore production and exploration would not be disrupted, while foreign interests lobbied the U.S. government to promote their own economic interests through their promotion of false statements and scare tactics. We call on President Trump to take immediate action and correct these damaging rulings that have continued to put foreign companies first and American companies and workers last."

American mariners and shipbuilders are supported by industry and government leaders that understand the importance of restoring American jobs to the American economy and supporting the lawful interpretation of the Jones Act.

“We are disappointed the administration chose to indefinitely kick this job-destroying regulatory can down the road,” said Matthew Paxton, president of the Shipbuilders Council of America. “The correct interpretation and enforcement of the Jones Act is critical to the capitalization of the commercial shipbuilding and repair industry, and its industrial base, which is crucial to U.S. homeland and national security. This administration's needless delay only hurts the more than 400,000 men and women of the U.S. shipyard industry.”

“The administration’s decision today to delay the revocation of letter rulings impacting the lawful enforcement of the Jones Act in the Gulf of Mexico is extremely disappointing. This delay and move to a regulatory review process will damage our American mariners and domestic maritime industry, which is essential for U.S. economic security and job creation,” said Tom Allegretti, chairman of the American Maritime Partnership. “The domestic maritime industry calls on President Trump and his administration to take immediate action to return these jobs to our American mariners.”

Numerous congressional leaders vocalized their support for this corrective action taken by CBP, noting both the economic and national security benefits provided and the urgency for stopping foreign interests from influencing U.S. law. Letters have been submitted to Department of Homeland Security Secretary Kelly from 33 bipartisan members of the House of Representatives and 10 bipartisan senators.

OMSA continues to stand behind the facts and urges the administration to support U.S. jobs, U.S. security, and the sovereignty of the nation by taking immediate action to enforce the rule of law.

• In the Gulf Coast region alone, correct enforcement of the Jones Act would generate over 3,200 new jobs, increase wages and earnings for workers in the region by over $155 million and generate over $700 million in regional economic output.
• The domestic offshore services industry has the capacity to ensure offshore energy exploration or production would not be disrupted given the recent $2 billion investments by U.S. companies. According to IHS Petrodata Construction Vessel database, an average of 19.8 vessels were working in the Gulf Coast region over the past five years. U.S. companies have 31 new or retrofitted vessels ready to meet these needs.
• The process to modify or revoke a CBP issued letter ruling is defined by Statute 19 USC Section 1625(c) and is the lawful manner to effectively review letter rulings. Since 2009, CBP has attempted to revoke or modify these letter rulings in question, which were issued in an opaque and private manner between the requesting party and CBP. Moving to a regulatory review process will provide foreign interests substantially more “due process” than American mariners, shipyards and companies received.
• By supporting a market for Jones Act vessels, the domestic maritime industry can provide over 1,000 additional unlimited tonnage mariners for the Ready Reserve Force, ready to answer the call of the U.S. military if needed, and provide the industrial base for both commercial and military needs.

By Professional Mariner Staff