By Stefanos Roulakis and Efimia Karageorgiou
The Jones Act is a cabotage statute which restricts the transportation of merchandise between points in the U.S. to vessels built in the U.S. and owned/operated by U.S. citizens. Cabotage statutes were among the first laws of the American Republic. In its current form, the Jones Act was passed in 1920 and remains in effect (being amended approximately as often as the U.S. Constitution). The Jones Act remains one of the key laws regulating offshore construction and transportation, which creates intricacies in the application of the law given that such technology could not have been conceived of in 1920.
The U.S. Congress passed legislation a few years ago which applied the Jones Act to renewable energy projects, whereas previously law only applied it offshore oil and gas production. Congress intended the legislation to provide legal clarity as a means to help bolster investment into offshore renewables. Specifically, Congress amended the Outer Continental Shelf Lands Act (“OCSLA”) which regulates installations on the U.S. Outer Continental Shelf. In 2019, the U.S. House of Representatives passed legislation, H.R. 4447, the Expanding Access to Sustainable Energy Act of 2019, including a provision that extended federal law (including the Jones Act) to “all installations and other devices permanently or temporarily attached to the seabed [for the purposes of] . . . producing or supporting the production of energy from sources other than oil and gas.” Based on the language of “producing or supporting the production of energy from sources other than oil,” the legislation has confirmed that the Jones Act cabotage provision extends to offshore wind production.
This extension was incredibly helpful to both industry and regulators because it clearly defined that cabotage applied to U.S. offshore wind projects. Since the passage of this law, numerous U.S. offshore wind projects have developed, and the future looks bright for the industry.