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HQ 114268

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March 16, 1998

VES-3-15/17-RR:IT:EC 114268 GEV

CATEGORY: CARRIER

Jeanne M. Grasso, Esq.
Dyer Ellis & Joseph
Watergate, Suite 1000
600 New Hampshire Ave., N.W.
Washington, D.C. 20037

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

Dear Ms. Grasso:

This is in response to your letter dated February 25, 1998, on behalf of your client, Heerema Marine Contractors v.o.f. ("Heerema"), requesting a ruling approving the use of the INTERMAC 650 to transport and launch the Shell Spirit A' jacket structure in the Gulf of Mexico. Our ruling on this matter is set forth below.

FACTS:

The Shell Spirit A' jacket is being designed and engineered by the Shell design group. The jacket is currently under construction by Aker Gulf Marine and will be installed by Heerema in the Gulf of Mexico in Viosca Knoll Block 780 A in 722 feet of water. The jacket will be installed over a pre-drilled well on top of four pre-installed leveling piles. The dry launch weight of the Shell Spirit A' jacket is 9,358 short tons (8,355 long tons). The jacket has an overall height of 745 feet. The base dimensions are 237 feet x 231 feet; the top dimensions are 80 feet x 45 feet. Due to the overall dimensions, the jacket has an overhang of 237 feet on the stern and 33 feet on the sideshell of the INTERMAC 650.

The INTERMAC 650 is a U.S.-flag, foreign-built launch barge that was built as of June 7, 1980 and has a launch capacity of approximately 40,000 long tons. Heerema wants to use the INTERMAC 650 to transport the Shell Spirit A' jacket to the installation site because the coast-wise-qualified launch barges listed in the inventory of the Maritime Administration (MARAD) are alleged by Heerema not to be capable of safely transporting a platform jacket the size of the Shell Spirit A' jacket structure. (See the Federal Register of September 6, 1994 (59 FR 46081))

With respect to the proposed transportation of the Shell Spirit A' jacket, although its weight does not exceed the listed launch capacities of all of the barges in the above-cited Federal Register notice, Heerema notes that the Shell Spirit A' jacket structure is larger and heavier than a structure Customs previously permitted to be transported aboard the INTERMAC 650 (See Customs ruling letter 114158, dated February 13, 1998). Further in this regard, Heerema prepared a feasibility study comparing the aforementioned structure with the Shell Spirit A' jacket. This comparison indicates that the MWB 430, the largest coastwise-qualified barge in the U.S. fleet, is not suitable for transporting the Shell Spirit A' jacket structure. Attached for our review is the comparison entitled, "Feasibility SOI Spirit Jacket on MWB 403" and a Plan Lay-Out for the Shell Spirit A' jacket on the INTERMAC 650.

ISSUE:

Whether the proposed transportation of the Shell Spirit A' jacket structure 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...

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.

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 Shell Spirit A' jacket, although its weight (8,355 long tons) does not exceed the carrying capacity of all of the coastwise-qualified barges identified as required under law by the Department of Transportation, it is the position of MARAD that "...the project could not be accomplished safely by any known coastwise qualified vessel." Furthermore, after contacting the known operators in the launch barge industry, MARAD has determined that the Shell Spirit A' jacket "...cannot be transported on and launched from 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 Shell Spirit A' jacket structure as described above would be in compliance with the 13th Proviso to 46 U.S.C. App.

HOLDING:

The proposed transportation of the Shell Spirit A' jacket structure 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

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