There have been revolutions in energy production during the decade Scholasticus has been in practice. The U.S. has gone from prohibiting exports of oil to becoming one of the world’s key oil producers. From building liquified natural gas import terminals to using those terminals to export its own product worldwide. From having no offshore wind energy to becoming a worldwide hub for projects producing clean, sustainable energy. Much of this revolution involves the maritime sector—indeed, it is ships that have built this remarkable infrastructure and transport these energy products worldwide. The regulatory landscape in this area is arcane and ever evolving. Indeed, some of the laws that regulate it date back to the 18th century, long before humans could conceive that the wind could light homes in New York or that we would use anything besides whale fat or moving water as a source of energy. Finding ways to make antiquated legal regimes fit to groundbreaking technology is a specialty of Scholasticus Law.
Jones Act Advice
The Jones Act is one of the first laws of the American Republic, and is amended approximately as often as the Constitution. Policy relating to the Jones Act is a sensitive issue which regularly becomes political. Fines for violations of the Jones Act are severe—up to the value of the vessel or the cargo transported. Scholasticus provides guidance to its clients to ensure that its operations comply with the relevant coastwise laws. Under the
U.S.’s cabotage laws, transportation of merchandise, passengers, towing, and dredging operations are restricted to vessels built in the U.S., owned by U.S. citizens, manned by U.S. crew, and flagged in the U.S. registry. Historically, foreign flag vessels have provided the majority of offshore support services to build offshore energy infrastructure. Such vessels must develop and execute a plan in order to ensure that their U.S. operations comply with the Jones Act.
Jones Act Ruling Requests
Scholasticus has successfully counselled clients and obtained ruling letters on their behalf. U.S. Customs and Border Protection (“CBP”) is the agency responsible for regulating the Jones Act. CBP can issue letters ruling on facts presented by companies regarding their operations, especially those relating to offshore energy production.
Scholasticus can also advise on the strategy of whether obtaining a ruling letter makes sense depending on operations. For certain areas of well-settled law, receiving advice on the compliance of proposed operations may be preferable. The main disadvantage of requesting a ruling is the time required—rulings can often take well in excess of a year at the moment.
That said, obtaining a ruling letter can be advantageous for a client or may be required by counterparties. Scholasticus takes the view that while ruling letters are officially interpretations of law and policy, they are an opportunity to advocate for clients and make a case for why their proposed operations are allowed by U.S. law. Obtaining a ruling letter can provide the security needed for foreign flag vessels to safely engage in U.S. operations.
OCS Exemptions
OCS exemptions are essential tools for companies involved in U.S. energy production efforts. They allow companies to properly manage their crewing operations.
Scholasticus Law has advised dozens of companies on how to apply to the U.S. Coast Guard to use their own mariners for energy production projects. U.S. law provides that vessels engaged in OCS activities in offshore areas must use U.S. citizens as crew. However, the same law provides several exemptions to the law. First, non-U.S. flag vessels which can demonstrate majority control or ownership by foreign citizens may apply to use non-U.S. citizens as crew. Approval of this request enables crewmembers to obtain a B-1 visa specific to OCS operations.
Scholasticus works with its clients to demonstrate foreign ownership and control at every tier of ownership, up to the parent company. This demonstration must be accompanied by a letter requesting the exemption, an affidavit certifying the structure, certificates for every company in the ownership/control chain, along with relevant vessel documents and charters.
