spite of the economic challenges this shipping sector
has endured over the past few years.
“OMSA applauds CBP for establishing the JADE,”
said Aaron Smith, OMSA’s president and chief executive officer. “The establishment of JADE is a recognition that there are serious violations of the Jones
Act occurring on a routine basis on the OCS and CBP
intends to correct the situation with aggressive, consistent enforcement of the law as the statute requires.”
Papavizas told Seapower that the Jones Act community, concerned about the function of foreign oil company
supply vessels in the U.S. Gulf, envisions stiff penalties on
vessels that violate the Jones Act, but that detecting the
crime can be a challenge.
“Drilling oil is not a Jones Act activity,” Papavizas said.
“Certain construction activities are not Jones Act activi-
ties, [such as] drilling, pipe-laying and cable-laying. A lot
of things are exempt by the way the law works. In term
of the Jones Act, it is transportation — something has to
be transported, either people or things.”
Using the example of a drilling company that
employs a Norwegian vessel to move anchors offshore,
Papavizas said the drilling company might then send
the same vessel to Louisiana to pick up pipes and bring
them to the work site.
“That is a violation,” he said. “The fines are actually
pretty serious if it is imposed. The fine is supposed to
be the greater of the cost of transportation — in my
example, that would be the cost of moving the pipe —
or, the cost of materials or goods that are actually trans-
ported. So, the actual cost of the pipe. It is conceivable
that the fines could run in the millions of dollars.”
Papavizas said the JADE was, arguably, established
because of concerns exclusively in the U.S. Gulf of
Mexico, but the issue has existed for a very long time.
“It goes back to when the oil industry started going
further out and drilling deeper wells and, when it did so,
the leaders in the field were not American companies,”
he said. “They tended to be Norwegian companies,
although some American companies were active as well,
and the result was that Norwegian vessels of a certain
type, like subsidy construction vessels or pipeline vessels or similar vessels, were hired to do things in the U.S.
Gulf of Mexico.
“Now, there is nothing wrong with that if they are
doing certain things, and there is something wrong with
that if they are doing other things. … And, so, [the Jones
Act community and maritime stakeholders] convinced
CBP to do something about it — in other words, to look
more carefully,” he said.
Papavizas said the JADE mission could well expand
in concert with the growing renewable energy industry.
In Rhode Island, the Block Island Wind Farm — the
nation’s first offshore wind farm three miles off the
island’s coast — is in the final stages of construction of
five turbine towers. Papavizas said the question of Jones
Act violations is something they are concerned about as
wind energy projects proliferate along the Atlantic coast.
In the United States, there are but a handful of these
projects and no offshore wind farm activity of any
significance yet, he said. But when activity picks up
in terms of the many complex aspects of construction,
such as cable-laying and connecting to an electrical
grid, and when wind farms are fully in service, the offshore industry will almost certainly furnish an array of
new jobs for U.S. maritime businesses.
“As the projects begin to kick in, there are going to
be U.S. jobs no matter what because of the O&M [oper-
ations and maintenance] — and these wind farms do
need to be maintained,” he said. “People have to go out
there once they are built over the life of the wind farm,
so there are jobs. In the installation, it is likely that most
of the people building and installing will be Americans.
The only issue is what functions can a foreign vessel do
in that process because at the moment there aren’t that
many capable, Jones Act-qualified vessels.”
Meanwhile, CBP’s JADE, working with the U.S. Coast
Guard as its offshore counterpart, is, likewise, working
with industry and regional partners in the Gulf to step
up Jones Act enforcement, and gain a clearer picture of
activity across the U.S. Gulf of Mexico.
“Enforcement is important. However, our focus is not
writing penalties, [but] rather sharing awareness and education with the maritime industry,” Stavinoha said. n
Coast Guard Chief Warrant Officer Eddie Martinezlopez
works with an employee while inspecting an oil platform
approximately 160 miles off Galveston, Texas, June 28.
Pressure to safeguard the U.S. offshore service industry
— especially vessels transporting materials that support
the drilling and production platforms in the U.S. Gulf region
— was a key aspect in making the case for establishing
the National Jones Act Division of Enforcement.