VES- 3-RR:BSTC:CCI H105415 WRB
Constantine G. Papavizas, Esq.
Winston & Strawn LLP
1700 K Street, N.W.
Washington, D.C. 20006-3817
RE: 46 U.S.C. §§ 55102, 55103; Coastwise Transportation
Dear Mr. Papavizas:
This letter is in reply to your submission of May 11, 2010 on behalf of NRG Bluewater Holdings LLC (hereinafter “Bluewater”). Our ruling on this matter is set forth below.
FACTS:
Bluewater was the first offshore developer to successfully negotiate a long-term power purchase agreement ("PPA") with a utility (Delmarva Power) and to-date has the only signed and approved offshore wind PPA in the United States. Among other projects, Bluewater is developing offshore wind parks off the coast of Delaware and New Jersey.
In furtherance of the development of these offshore wind parks, Bluewater must take certain steps, including construction of meteorological data towers (“Met Towers”) outside U.S. territorial waters off the coast of New Jersey and Delaware. A Met Tower is a marine data collection facility (“MDCF”) containing instruments to measure weather conditions and a tower with anemometers needed to provide more precise wind speed information than is otherwise obtainable. These scientific data are needed to assist in the establishment of the siting of a wind park. This request relates to installation of those Met Towers.
Bluewater has been granted two leases of submerged lands on the Outer Continental Shelf (“OCS”) from the Minerals Management Service (“MMS”) to conduct the alternative energy data collection activities. Bluewater intends to have one Met Tower constructed at each of these two lease blocks at locations that are approximately 16 and 14 nautical miles off the coast of New Jersey and Delaware, respectively. There are no man-made structures or installations of any kind on the sea bottom at these construction sites. The Met Towers will be constructed offshore from components constructed onshore. The components of the Met Tower will be collected at a port in the United States convenient to the construction of the Met Towers. Bluewater intends to have the components placed on a U.S.-flag coastwise-qualified barge which will be towed to each construction site for the construction of the tower. The barge will be towed in each instance by a U.S.-flag coastwise-qualified tug.
A foreign-flag construction vessel will arrive at the first construction site directly from foreign and will either be anchored at the site or, if it is a jack-up vessel, will place its legs on the seabed and jack up to create a stationary, stable construction platform. The only personnel onboard will be members of the crew, none of whom will disembark the vessel. The construction vessel will utilize its crane to pick up the monopile foundation from the barge and drive it into the seabed. The construction vessel will then utilize its crane to pick up a platform deck, the anemometer tower, and other components from the barge and place them on the foundation until the Met Tower is complete. When construction on the first Met Tower is complete, the vessel will proceed to the second construction site and repeat the process.
At no time will the construction vessel move with Met Tower components onboard during the construction of the Met Towers except in the case of emergency necessitated by weather conditions. In an emergency, the construction vessel may move, possibly with one or more Met Tower components onboard, although it will return to the construction site when the emergency is over to recommence the construction process.
ISSUE:
Whether the use of a foreign-flag vessel in the construction of a Met Tower as proposed constitutes a violation of 46 U.S.C. §§55102, and/or 55103.
LAW AND ANALYSIS:
Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as “coastwise-qualified.”
The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline.
The Jones Act (formerly 46 U.S.C. App. § 883 recodified as 46 U.S.C. § 55102, pursuant to P.L. 109-304 (October 6, 2006)), provides, in pertinent part, that “a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port” unless the vessel was built in and documented under the laws of the United States and owned by persons who are citizens of the United States. Title 46, United States Code § 55102(a)(2) provides that “the term ‘merchandise’ includes valueless material.”
Section 4.80b(a), Customs and Border Protection (“CBP”) Regulations (19 CFR § 4.80b(a)) provides, in pertinent part:
A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws (“coastwise point”) is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise.
The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 (formerly 46 U.S.C. App. § 289) and provides that no vessel, other than one that is coastwise-qualified, shall transport passengers between ports or places in the United States either directly or by way of a foreign port.
Section 4.50(b), CBP Regulations (19 CFR § 4.50(b)) provides as follows:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.
We have carefully considered the proposed activities and the authorities you have cited in your request.
46 U.S.C. § 55102:
CBP has long held that neither drilling nor pile driving, in and of itself, conducted by a stationary vessel, constitutes coastwise trade or coastwise transportation. See HQ 109817, dated November 14, 1988 and HQ 111412, dated November 28, 1990, respectively. The proposed activity with respect to the driving of a monopile foundation into the seabed is very similar to pile driving and is governed by the same principle. Therefore, we find that the activity of the stationary construction vessel described above, involving driving of a monopile foundation into the seabed and then adding a platform deck, anemometer tower, and other components does not constitute coastwise trade or coastwise transportation.
In summary, we find that the engagement in the proposed activity will not result in a violation of 46 U.S.C. § 55102.
46 U.S.C. § 55103:
As discussed above, the foreign-flag construction vessel will be stationary while undertaking the emplacement of the monopile foundation and other components of the Met Towers. It will not transport anyone from one port or place to another within the United States. Furthermore, the vessel will come from abroad with only its crew, none of whom will disembark or be considered a passenger, as defined in 19 CFR § 4.50b(a). Consequently, there is no violation of 46 U.S.C. § 55103.
HOLDING:
The use of a foreign-flag vessel in the construction of a Met Tower as proposed above does not constitute a violation of 46 U.S.C. §§ 55102, and/or 55103.
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers and Immigration Branch