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PESA joins trade group in response to CBP Action Restricting use of non-Jones Act Vessels

PESA joined a Joint Trade effort to voice opposition to U.S. Customs and Border Protection’s (CBP’s) action that could curtail exploration and production on the Outer Continental Shelf (OCS) and impact PESA member companies’ operations.

In the final days of the Obama Administration (January 18, 2017), CBP published a notice (not a formal Federal Register announcement) to change long-standing interpretations of rules for vessels transporting equipment used by the offshore oil and gas industry. If finalized, the notice would restrict the use of certain “non-Jones Act” vessels from performing a variety of functions (laying pipeline, well intervention, dive support, etc.). These vessels are critical to current and future exploration and development activities on the OCS.

CBP used a Notice of Proposed Modification and Revocation, rather than the standard rulemaking process, to expedite the proposed changes. Under this process, these major changes could take effect within 90 days.

CBP’s proposed action is concerning on the following fronts:

  1. if finalized, it could significantly curtail industry’s ability to explore and produce oil and natural gas on the OCS.
  2. CBP’s action circumvents the well-established rulemaking process.

API led the Joint Trade group which submitted comments on April 18 to CBP on the issue. The Trades requested:

  1. CBP withdrawal its notice.
  2. If CBP believes the proposed changes are justified, then it should follow a formal rulemaking process to ensure all interests have an equitable opportunity to participate and fully vet the implications of the proposed changes.

The comments, background information and resources, including an economic impact study are posted on API’s website. In addition, the Houston Chronicle recently ran an op-ed on the issue.

PESA will continue to monitor the situation and provide updates accordingly.

 

*Jones Act – restricts the transportation of “merchandise” in U.S. waters and the OCS to vessels built and registered in the U.S. and at least 75%-owned by U.S. citizens.

 

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