Jones Act changes batted down

US Customs and Border Protection Agency has withdrawn a plan to extend the Jones Act, mandating that cargo-carrying vessels traveling between US ports to fly US flags and be staffed by US crews.

Offshore staff

WASHINGTON, D.C. – US Customs and Border Protection Agency withdrew a previously announced plan to extend the Jones Act, mandating that cargo-carrying vessels traveling between US ports to fly US flags and be staffed by US crews. The regulations would have reversed exemptions to certain types of vessels that move equipment.

“A recent report projected that this proposal could have resulted in the loss of thousands of American jobs, reduced US oil and natural gas production, and diminished revenues for federal and state government,” said API Upstream Director Erik Milito.

The proposal, made in the final days of President Barack Obama’s administration, was immediately met with a backlash from the industry, with a chief complaint being that there would be an inadequate supply of US-flagged vessels to meet the current needs. Groups including the API andInternational Marine Contractors Association (IMCA) issued reports in April detailing the possible negative effects of the changes.

IMCA wrote that “the impact on business in the Gulf of Mexico could be catastrophic, simply because there would be no capacity to install the production facilities offshore.”

The API’s analysis found the proposal would cause workforce reductions “in the range of 30,000 industry supported jobs in 2017, with as many as 125,000 jobs lost by 2030,” with the Gulf of Mexico states standing to be the most impacted, as well as a decrease in US oil and natural gas production in the range of 23% from 2017-2030.

“By rescinding the proposal, CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively, and economically operate,” Milito continued in the API’s response to the decision.

Allen Leatt, chief executive of IMCA, also expressed that the group welcomed the decision. “Members of the International Marine Contractors Association with vessels active in US waters, together with their clients, welcome the decision by the CBP Agency to withdraw its proposed revocation of longstanding decisions made over the last 40 years concerning the Jones Act. The proposals, which would have represented a major change in maritime policy if enacted, had been forecast to result in a substantial GDP loss coupled with significant American job losses along the entire US Gulf coast.

“Now that the CBP proposal has been withdrawn, IMCA and its members, look forward to working with CBP and other regulatory and industry stakeholders to consider ways to conduct complex operations offshore under the Jones Act. This development will greatly assist in providing operators and international contractors the confidence they need to continue investing in the Gulf of Mexico, and continuing to create American jobs and prosperity.”

05/11/2017

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