OMSA testifies about Jones Act concerns

News - June 18, 2010

Offshore Marine Service Association (OMSA) President/CEO Ken Wells testified before the Subcommittee on Coast Guard and Maritime Transportation of the House Transportation and Infrastructure Committee earlier this week with regard to foreign vessels operating in the economic zone exclusive to American vessels.

Testifying on the activities of foreign vessels that carry cargo and do construction work at offshore energy projects in the Gulf of Mexico, Mr Wells said “our government enforcement agencies lack the tools to adequately track them or even hold them to compliance.”

OMSA members operate US flag vessels and have made a commitment to comply with the laws of the United States on safety, environmental protection and security, and to pay American-level wages and American taxes. Their vessels are built in American shipyards which must also comply with US laws and wage scales.

“All of those requirements potentially place us at a disadvantage to foreign vessels which do not have to meet those requirements,” Wells said.

Wells offered some facts from a recent economic study commissioned by OMSA: for every mariner who works on the water, there are roughly nine shoreside jobs that support vessel operations.

According to a study of the offshore vessel market, the American offshore industry is responsible for US$18 billion in annual economic activity in this country. OMSA members generate US$4.6 billion in annual wages and more than US$2 billion in taxes.

And, said Mr Wells, in the wake of the explosion of the Deepwater Horizon, it was an American crew on an American vessel that saved the lives of 115 rig workers in the tragedy.

“We have become very concerned that the Jones Act - the US maritime cabotage law - is being degraded and that the numbers of foreign vessels in the offshore energy sector is increasing," said Mr Wells.

"We find that many of these vessels are blatantly ignoring the Jones Act. Worse, we find that the agency charged with enforcing the Jones Act has failed to live up to its responsibilities to enforce the law and to interpret the law as Congress intended."

"Because of this, we are concerned that to a large extent, American vessels are being written out of the script for the future of our offshore energy policy,” Wells stated.

In looking at many of the foreign vessels operating in the Gulf, Mr Wells testified that there are safety concerns, Jones Act violations non-compliance of tax laws.

Mr Wells claimed that OMSA’s members "developed the boats that work offshore and then they shared their knowledge with the world," a comment which many North Sea vessel operators/designers/shipbuilders and equipment suppliers may not necessarily agree with.

He then said that the US "still has the largest fleet of offshore energy vessels in the world, but … our leading role and our future is threatened."

Mr Wells did not, apparently, refer to the key role that many non-American designed or built/operated vessels are playing in the oil spill clean-up effort in the Gulf of Mexico; or provide the Committee with any data comparing the capabilities of US-built vessels with the highly sophisticated tonnage designed and built outside the US, vessels which are routinely contracted for work in the Gulf of Mexico by US oil companies and taken on charter by US vessel operators.