CBP Expressly Applies Jones Act to Offshore Wind Projects on Outer Continental Shelf
In a ruling dated Jan. 27, 2021, U.S. Customs and Border Protection (CBP) for the first time expressly found that the Jones Act applies to transportation of merchandise from a U.S. port to a location on the outer continental shelf for the purpose of the development and production of wind energy. See HQ H309186 (Jan. 27, 2021) (the Ruling).
CBP's Ruling is the first one to be issued following the recent amendment to Section 4(a) of the Outer Continental Shelf Lands Act (OCSLA) contained in Section 9503 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395, 116th Cong. § 9503 (2021) (NDAA). As amended, OCSLA applies federal laws, such as the Jones Act, to: "(iii) installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources, including non-mineral energy resources …" NDAA 2021, Section 9503 (emphasis highlighting amendment added).
The Ruling ends a long-standing ambiguity over whether OCSLA extended the Jones Act to installations and other devices attached to the outer continental shelf (OCS) for the purpose of exploring for, developing or producing non-mineral energy resources, such as offshore wind. The Ruling was issued in response to an initial request to CBP dated Feb. 12, 2020 – almost a year ago. A number of other offshore wind-related ruling requests submitted prior to the NDAA remain pending, and it is anticipated that CBP will continue processing those pending ruling requests in the coming weeks.
Takeaways and Considerations
With a major jurisdictional ambiguity addressed, CBP, developers and contractors can proceed to the necessary work of planning and seeking interpretive rulings on important, and in some cases novel, operational questions associated with offshore wind construction and operations. Although the application of the Jones Act in Gulf of Mexico offshore oil and gas operations provides many analogs to aspects of offshore wind projects, there are significant differences that need to be addressed. Moreover, as we highlighted in a recent Holland & Knight blog post concerning CBP's "vessel equipment" ruling revocations, there are a number of previously established interpretative concepts that will now require new consideration and ruling requests. (See "All Aboard for the Biden Transition: Climate, Cabotage and Competition," Jan. 3, 2021.)
With the Biden Administration's emphasis on promoting offshore wind and President Joe Biden's recent reiteration of the Jones Act's applicability to offshore renewable energy projects following the signing of the NDAA, CBP should be well positioned to work with the offshore wind industry in its efforts to plan, construct and operate the numerous U.S. offshore wind projects that are expected to be built in the upcoming years.
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