USA - New Legislation to Apply the Jones Act to Offshore Renewables (Updated)
The House of Representatives passed legislation, H.R. 4447, the Expanding Access to Sustainable Energy Act of 2019, on September 24, 2020, that included a provision from Representatives Garamendi and Lowenthal (“Amendment 33”) to amend the Outer Continental Shelf Lands Act (“OCSLA”) that would confirm the Jones Act applies to all offshore energy development on the Outer Continental Shelf (“OCS”), including wind energy.
Passage of this provision now appears imminent, as it has been recently included in the National Defense Authorization Act (“NDAA”). From an operational standpoint, while most offshore projects are planned with Jones Act compliance in mind, enactment of this provision would be a welcome development to stakeholders and bring needed clarity to renewable energy development offshore.
The Coastwise Merchandise Statute, commonly known as the Jones Act, has evolved over time. The U.S. cabotage laws date back to the founding of the Republic and were enshrined in their current form in the Merchant Marine Act of 1920. These were originally laws that dealt with transportation issues for domestic voyages. However, as time progressed and production of marine resources became feasible, the U.S. Congress passed OCSLA, which extended federal law to installations on the OCS.
U.S. Customs and Border Protection (“CBP”) has historically interpreted OCSLA to apply the Jones Act to oil and gas-related activities on the OCS. However, there is some ambiguity about whether the Jones Act applies to offshore wind projects. Arguably, under current law, the coastwise laws should not apply to a wind farm project located on the OCS because the resource is the wind above the ocean, not from the seabed itself.