VES-3-15/17-RR:IT:EC 114158 GEV

John V. Simon
Manager
Offshore Construction
Amerada Hess Corporation
One Allen Center
500 Dallas St.
Houston, Texas 77002

RE: Coastwise Trade; Launch Barge; Platform Jacket; Outer Continental Shelf; 46 U.S.C. App.  883; 13th Proviso

Dear Mr. Simon:

This is in response to your letter dated January 26, 1998, forwarding your letter dated November 6, 1997, to the Maritime Administration (MARAD), requesting approval to transport two sections of your company's Garden Banks 260 "A" platform jacket on the INTERMAC 650, a non-coastwise-qualified launch barge. Our ruling on this matter is set forth below.

FACTS:

Amerada Hess Corporation plans to install the jacket of its Garden Banks 260 "A" platform in March and April of 1998, over an offshore installation site (i.e., a 9-well template in Garden Banks block 260 on the Outer Continental Shelf), in a water depth of 1,648 ft. The dry launch weight of the jacket, without piling and topsides, is approximately 28,890 short tons (25,800 long tons). The jacket will be installed in two pieces, one (the tower section) having a launch weight of approximately 20,190 short tons (18,030 long tons) and the other (the base section) having a launch weight of approximately 8,700 short tons (7,770 long tons). Each section will be launched individually from the INTERMAC 650, a U.S.-flag, foreign-built launch barge that was constructed in 1980 and has a launch capacity of approximately 40,000 long tons.

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It is the position of Amerada Hess Corporation that since the weight of the tower section far exceeds the launch capacities of all coastwise-qualified barges with capacities of less than 12,000 long tons listed in MARAD's inventory of such barges published in the Federal Register on September 6, 1994 (59 FR 46081), and since the INTERMAC 650 has a launch capacity exceeding 12,000 long tons, was built on or before June 7, 1988, and is documented under the laws of the United States, the use of the INTERMAC 650 for the proposed transportation of the tower section is in compliance with the applicable statutory requirements.

With respect to the proposed transportation of the base section by the INTERMAC 650, although its weight does not exceed the listed launch capacities of all of the barges in the above-cited Federal Register notice, Amerada Hess Corporation has submitted a copy of a report from Hudson Engineering, the designers of its platform, concluding that the MWB 430, the largest coastwise-qualified barge available for the transportation and launching of the base section, is inadequate for this particular task. Furthermore, since there will be personnel of Heeremac, the installation contractor, aboard, and inside of, the barge during the launch, in addition to the risk of catastrophic loss of the jacket and barge as a result of carriage of the jacket on an inadequately-sized barge, it is also contended that there would be a significant danger to these personnel in such a situation.

ISSUE:

Whether the proposed transportation of two sections of Amerada Hess Corporation's Garden Banks 260 "A" platform jacket by the INTERMAC 650 launch barge as described above would be violative of 46 U.S.C. App.  883, as amended.

LAW AND ANALYSIS:

The coastwise law pertaining to the transportation of merchandise,  27 of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C. App.  883, often called the "Jones Act"), provides, in pertinent part, that:

No merchandise,... shall be transported by water, or by land and water, on penalty of forfeiture of the merchandise (or a monetary amount up to the value thereof as determined by the Secretary of the Treasury, or the actual cost of the transportation, whichever is greater, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person or persons so transporting or causing said merchandise to be transported), between points in the United States ...embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States...

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The coastwise laws generally apply to points in the territorial sea, 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, in cases where the baseline and the coastline differ. Furthermore,  4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (67 Stat. 462; 43 U.S.C.  1333(a)) (OCSLA), provides, in part, that the laws of the United States are extended to:

...the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom...to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction within a State.

Under this provision, Customs has ruled that the coastwise laws and other Customs and navigation laws are extended to mobile oil drilling rigs during the period they are secured to or submerged onto the seabed of the United States OCS. The same principles have been applied to drilling platforms, artificial islands, and similar structures attached to the seabed of the OCS for the purpose of resource exploration operations, including warehouse vessels anchored over the OCS when used to supply drilling rigs on the OCS.

Title 46, United States Code,  883 was amended by the Act of June 7, 1988 (Public Law 100-329; 102 Stat. 558). Among other things, Public Law 100-329 added the so-called 13th Proviso (i.e., the launch barge amendment). Under this provision,

...The transportation of any platform jacket in or on a launch barge between two points in the United States, at one of which there is an installation or other device within the meaning of [43 U.S.C. 1333(a)], shall not be deemed transportation subject to this section if the launch barge has a launch capacity of 12,000 long tons or more, was built as of June 7, 1988, and is documented under the laws of the United States, and the platform cannot be transported on and launched from a launch barge of lesser capacity that is identified by the Secretary of Transpor- tation and is available for such transportation.

At the outset, we note that Customs has had previous occasion to rule on the use of the INTERMAC 650 for the transportation of hull and deck components for a tension leg platform, in separate movements, each component weighing in excess of 12,000 long tons, from points on the U.S. Gulf Coast to a launch site on the OCS. (Customs ruling letter 110783, dated February 14, 1990 (following holdings 7 and 15 of Customs Service Decision (C.S.D.) 89-115), clarified in Customs letter 110421/110228, dated September 1, 1989) Such transportation was deemed to be in compliance with the above-cited 13th Proviso.

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In regard to the proposal currently under consideration, we have determined that approval of the contemplated transportation should be granted. As a starting point, it is clear that unless otherwise excepted by the law, the use of a coastwise-qualified launch barge would be required. In regard to this exception, we note that the INTERMAC 650 has a launch capacity exceeding 12,000 long tons, was built as of June 7, 1988, and is documented under the laws of the United States. In regard to the transportation of the tower section of the subject platform jacket, its approximate weight (18,030 long tons) far exceeds the carrying capacity of any coastwise-qualified barge identified as required under law by the Department of Transportation. Although the same cannot be said with respect to the base section (approximate weight of 7,770 long tons), it is the position of MARAD that the transportation of either section could not be accomplished safely by any known-coastwise qualified vessel. Furthermore, MARAD has concluded that these sections could not be transported by a launch barge of lesser capacity that is identified by the Secretary of Transportation and is available for such transportation.

Accordingly, the use of the INTERMAC 650 in transporting the tower and base sections of the subject platform jacket in separate movements as described above would be in compliance with the 13th Proviso to 46 U.S.C. App.  883.

HOLDING:

The proposed transportation of two sections of Amerada Hess Corporation's Garden Banks 260 "A" platform jacket by the INTERMAC 650 launch barge as described above would not be violative of 46 U.S.C. App.  883, as amended.

Sincerely,


Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch