Considerations on the Use of Offshore Wind Vessels for U.S. Operations
As the offshore wind industry is growing in the United States, there is an influx of vessels that are considering operating on the U.S. outer continental shelf (“OCS”), both foreign- and U.S.-flag Jones Act-qualified vessels. An important consideration in planning for operations on the U.S. OCS is how the vessel must be crewed for such operations, which is often overlooked or misunderstood.
The U.S. Outer Continental Shelf Lands Act (“OCSLA”) generally requires all vessels that are engaged in “OCS activities” to crew the vessels with U.S. citizens. The U.S. Coast Guard defines “OCS Activity” as “any offshore activity associated with exploration for, or development or production of, the minerals of the Outer Continental Shelf.” There is an exception to this rule that allows foreign-flag vessels that are over 50-percent foreign owned or controlled by foreign citizens to engage in U.S. OCS activities using foreign-citizen crewmembers. To use this exception, a formal application to the U.S. Coast Guard is required, which if validated by the U.S. Coast Guard, results in the issuance of a letter of non-applicability stating that the U.S. manning requirements do not apply to the vessel.
With respect to offshore wind farm work, the U.S. Coast Guard has taken the position that such work is not an OCS activity subject to this OCSLA requirement and the U.S. crew requirement does not apply. However, OCSLA was amended on January 1, 2021, to expressly clarify that U.S. laws, including the Jones Act, apply to offshore wind farm work in the same manner as they do to oil and gas work. The U.S. Coast Guard is now reviewing this change and, ultimately, we expect the Coast Guard to change its position on OCS activities and begin applying the U.S. citizen crew requirements to vessels engaged in offshore wind farm work.
Absent limited exceptions, strict citizenship requirements apply to U.S.-flag vessels. All the officers must be U.S. citizens. Each unlicensed seaman must be a citizen of the United States, an alien lawfully admitted to the United States for permanent residence, or a foreign national who is enrolled in the United States Merchant Marine Academy. However, not more than 25 percent of the total number of unlicensed seamen on the vessel may be aliens lawfully admitted to the United States for permanent residence. Although the U.S. Coast Guard has the authority to waive the citizenship requirements, other than for the master, if it is determined that qualified U.S. citizens are not available, it has not promulgated regulations to make such a determination, and has refused to date to use that authority to waive citizenship requirements.
The term “seaman” for the purposes of applying the U.S. citizenship requirements is very broad as interpreted by the Coast Guard. It was not uncommon in the past for companies to place persons aboard a U.S.-flag vessel to perform special operations, particularly those that perform the industrial functions of the vessel, often referred to as back deck personnel. However, in 2017, the U.S. Coast Guard broadened its interpretation of the term “seaman” in relevant guidance and began strictly enforcing the requirements. Under the new guidance, the term "seaman" is interpreted broadly to mean any individual engaged or employed in the business of a vessel or a person whose efforts contribute to accomplishing the vessel's business, regardless of whether that person is involved with operation of the vessel itself. For example, waiters, entertainers, industrial personnel, oil recovery workers, riding, maintenance crews, and others employed in the business of the vessel are considered seamen to which the citizenship requirements apply. Accordingly, this interpretation will severely limit the ability of the wind industry to use foreign-citizen specialty personnel aboard a vessel engaged in offshore wind activities.
The Coast Guard does not consider a person who is briefly visiting the vessel in a consulting capacity (e.g., a vendor's technical representative) or shoreside personnel who come on board vessels while they are not underway to load or unload cargo or to perform services, such as maintenance of shipboard equipment, to be a crewmember. However, in general, individuals being compensated for performing their jobs while the vessel is underway are considered seamen for the purpose of applying citizenship requirements.
Visas for Offshore Work
For some time now, foreign nationals bound for vessels working on the U.S. OCS would obtain B-1 (OCS) visas. To support their application for this visa type, they would have to provide the embassy with their vessel’s U.S. Coast Guard letter stating that the U.S. citizenship requirements do not apply to that vessel. For crewmembers headed to vessels engaged in offshore wind work, this created a problem because the U.S. Coast Guard interpreted the citizenship requirement as not applying to offshore wind and these crewmembers would not have a letter to present to the embassy in support of a B-1 (OCS) application. Thus, their visa applications were being rejected.
In 2019, the State Department revised its Foreign Affairs Manual to provide a new B-1 visa annotation for offshore wind farm vessel crewmembers that allows them to obtain a B-1 visa without an exemption letter from the Coast Guard. These visas are annotated “B-1 for transit or travel to the OCS for wind activities; not OCS activity.” As mentioned above, however, since the change to OCSLA earlier this year, we will likely see a change in the Coast Guard’s view of OCS activities and application of U.S. manning requirements to offshore wind farm work, which will then likely require another update on visas for crewmembers on offshore wind vessels.
The offshore wind industry in the United States is small, but growing rapidly. There is a lot of emphasis on training and being prepared with adequately training personnel as the industry grows. Federal and state grants, combined with private contributions, have been dedicated to creation of shore-based training programs. With respect to training onboard newly built U.S.-flag vessels, however, it is more difficult due to the U.S. citizenship requirements that apply, as those individuals needed to facilitate onboard training often are not allowed to work onboard the U.S. vessels. It is critical that companies plan well in advance for crew training and be creative about how to prepare the crew for operations before vessel construction is complete and the vessel goes into operation. Such training can take place shoreside, in the shipyard, on similar foreign vessels, or even virtually, if practical.
U.S. crewing requirements are an important consideration when planning work on the U.S. OCS, both for foreign-flag and U.S.-flag vessels. Ample planning is required to ensure that the vessel can, and will, meet applicable manning requirements, obtain visas as needed for crew, and plan for training, if needed.
This article is one in a series of articles written for Blank Rome's MAINBRACE: May 2021 edition.