HQ 115881 - Coastwise Trade; Launch Barge; Platform Jacket; Outer Continental Shelf; 46 U.S.C. App. §883; 13th Proviso; Maritime Transportation Security Act; Outer Continental Shelf Lands Act; 43 U.S.C. §1333(a) - United States International Trade Commision Rulings

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HQ 115881

April 21, 2003

VES-3-15/17-RR:IT:EC 115881 LLO

CATEGORY: CARRIER

Jonathan K. Waldron, Esq.
Blank Rome, LLP
Watergate
600 New Hampshire Avenue, N.W.
Washington, D.C. 20037

RE: Coastwise Trade; Launch Barge; Platform Jacket; Outer Continental Shelf; 46 U.S.C. App. §883; 13th Proviso; Maritime Transportation Security Act; Outer Continental Shelf Lands Act; 43 U.S.C. §1333(a)

Dear Mr. Waldron:

This is in response to your letters dated December 18, 2002 and March 24, 2003, with enclosures, on behalf of your client, Hereema Marine Contractors Nederland B.V. (HMC), requesting a ruling that a foreign-built barge may be used in the short distance transport of a truss section. Three additional options are outlined in your March 24, 2003 supplemental letter, with a request that they also be considered in our ruling. As you know, per your request we also met with you, your client, and representatives of the Maritime Administration (MARAD) on March 17, 2003, to discuss this matter. Our ruling is set forth below.

FACTS:

Gulf Marine Fabricators in Ingleside, Texas, is fabricating the truss section of a Truss Spar Platform that will be installed in the Gulf of Mexico at British Petroleum’s (BP) Holstein petroleum reserve site located in Green Canyon, Blocks 664 and 665, in 4,344 feet of water approximately 300 nautical miles from shore. A Truss Spar Platform is a deep draft, single-hull floating column caisson. The Truss Spar Platform that will be installed at the Holstein site, which is one of the major deepwater oil and gas fields discovered in the Gulf of Mexico in 1999 where 15 wells have been drilled to date, will be the world’s largest Spar-type Platform.

A Truss Spar Platform consists of a “topside” (i.e., the deck module with drilling and production equipment) and a “hull” that is moored using a taut caternary system of lines anchored to the seabed. The hull consists of a cylindrical section called the “hard tank” and a “truss section” attached below the hard tank. The hard tank is approximately 300 feet long with a diameter of approximately 175 feet. The truss section is made up of a truss and a square tank, called a “soft tank,” attached below the truss. The truss section is approximately 430 feet long with a diameter that is approximately the same size as that of the hard tank and weighs just under 12,000 long tons. The Truss Spar Platform design represents one of the latest technological deepwater platform developments that substitutes the lower portion of the conventional cylindrical hull shell of a Spar Platform with a truss and heave plates to achieve the same motion characteristics, while using less steel and having lower weight.

Option 1

Once construction of the truss section is completed at Ingleside Texas, the truss section must be launched (i.e. unloaded) into the water so that it can be mated with a hard tank to complete the hull structure. Due to the weight and size of the truss section, a water depth of at least 75 to 80 feet is required for its launch. The water at the quayside of the fabrication site in Ingleside, however, is not deep enough to launch the truss section. Thus the truss section must be transported to a deep water pit located approximately 200 yards from the quayside. Gulf Marine Fabricators desires to use HMC’s H-627, a foreign-built, foreign-flag launch barge, to accomplish this. The H-627 will only be used for the transportation of the truss section from the fabrication site to the deep-water pit. The launch barge will not be involved in any of the wet towing operations related to the ultimate transportation of the hull to the installation site. Subsequent to the loading of the truss section and, upon being positioned at the deep-water pit by coastwise qualified tugboats, the launch barge will be stern ballasted and the truss section, supported by loadout skid shoes and a temporary buoyancy tank (“mating tank”), will be launched with the assistance of shore based winches. Once launched, the truss section is capable of floating horizontally, supported by the buoyancy provided by the soft tank and the mating tank (used to assist in the wet mating operation by maintaining the upper part of the truss afloat). After launch, the truss section will be wet towed by coastwise-qualified vessels the short distance back to the quayside for welding and mating with the hard tank.

Option 2

The design of the H-627 provides for loading and launching of the truss section onto and off of the barge at the stern only (see Option 2, Step 1). After the truss section is loaded onto the H-627, it would be towed by coastwise-qualified tugs into the harbor to a location with sufficient room (still within territorial waters) to allow the H-627 to be rotated 180 degrees. The H-627 would then be lowered to exactly the same point where the truss section was loaded, though the bow rather than the stern would be facing the dock (see Option 2, Step 2). The truss section would then be launched into the deep water pit from the stern of H-627. This scenario would require additional dredging of the deep water pit to allow for the launch of the truss section with the H-627 positioned in exactly the same footprint where it was docked when the truss section was loaded because the water depth directly astern of the launch barge in this position will not accommodate the launching of the truss section to the full extent of its length (Option 2, Step 3).

Option 3

Option 3 is identical to Option 2 except that before launching the truss section, mooring lines at a fixed length would be attached to the port stern corner of the barge to secure that corner of the barge over its original footprint. The bow of the barge would then be rotated approximately 10-30 degrees on the axis created by the mooring lines to create a launch angle at which the deep water pit, in its current shape and size, would accommodate the full length of the truss section when lauched. An alternate mooring line configuration and/or coastwise-qualified tugs may be used to ensure that the port stern corner of the launch barge remains over its original position. Once the barge is rotated on its axis to a favorable angle, the truss section would be launched into the deep-water pit (Option 3 Steps 3 and 4).

Option 4

This option would require modifications to the H-627 to allow the on-loading of the truss section at the bow. Prior to loading, a spacer barge would be placed between the dock and the H-627 (Option 4, Step 1). Under Option 4, the truss section would be skidded across the spacer barge and the bow of the H-627, positioning the truss section at the stern for launch (Option 4, Step 2). Then, mooring lines at a fixed length would be attached to the port stern corner of the H-627, as in Option 3, to secure that corner of the barge over its original footprint (Option 4, Step 3). The spacer barge would then be moved, and the H-627 would be rotated approximately 10-30 degrees on the axis created by the mooring lines to create a launch angle at which the deep water pit, in its current shape and size, would accommodate the full length of the truss section when launched (Option 4, Step 4). As with Option 3, an alternate mooring line configuration and/or coastwise-qualified tugs may be used to ensure that the port stern corner of the launch barge remains over its original position. Once the H-627 is pivoted to a favorable angle, the truss section would be launched into the deep-water pit from the stern of the barge (Option 4, Step 5).

ISSUE:

Whether the various proposals for the transportation of a truss section of a Truss Spar Platform by the foreign-built, foreign- flagged H-627 launch barge as described above would violate 46 U.S.C. App. §883 and §213 of the Maritime Transportation Security Act of 2002.

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 merchandiseshall 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 Treasury, or the actual cost of the transportation whichever is greater, to be recovered from any consignor, seller, owner, importer, consignee, agent or other persons so transporting or causing said merchandise to be transported), between points in the United Statesembraced with in 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 U.S. are extended to:
the subsoil and seabed of the OCS 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 therefromto the same extent as if the OCS were an area of exclusive Federal jurisdiction within a State.

Under this provision, Customs has ruled that the coastwise trade 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 Appendix, section 883 (46 U.S.C. App. §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 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.

Furthermore, §213 of the Maritime Transportation Security Act of 2002 (MTSA) enacted on November 25, 2002, authorizes the use of certain non-qualified vessels, including the H-627, in the coastwise trade of the United States to transport platform jackets from ports in the Gulf of Mexico to sites on the OCS for completion of certain projects, including the Holstein project, notwithstanding 46 U.S.C. App. §883, or any other provision of law restricting the operation of a foreign-built vessel in the coastwise trade of the U.S. so long as a U.S. built and flagged vessel with sufficient capacity is not available.

At the outset we note that neither the 13th Proviso nor §213 of the MTSA are applicable to any of the options under consideration. Both of these statutory provisions pertain to transportation from one coastwise point to another point on the OCS. The transportation at issue is merely 200 yards from the quayside. Consequently, these four options proffered for our review are to be analyzed in light of the provisions of 46 U.S.C. App. §883 without regard to either the 13th Proviso or the MTSA.

The facts in Option 1 clearly indicate that the transportation of the truss section by the non-coastwise-qualified H-627 would be to a deep water pit, 200 yards from the quayside. Consequently, the transportation as described above would be a violation of 46 U.S.C App. §883.

Option 2

Under the facts provided in Option 2, after the truss section is loaded onto the H-627, it would be towed by coastwise-qualified tugs into the harbor with sufficient room to allow the H-627 to be rotated 180 degrees. The H-627 would then be towed to exactly the same point where the truss section was loaded though the bow, rather than the stern, would be facing the dock. The truss section would then be launched into the deep-water pit from the stern of the H-627. It is clear that a coastwise violation will occur in view of the fact that the points where the truss section will be laden and unladen will be different (see 19 C.F.R. 4.80b). Although the H-627 will be returned to the same location, the truss section will have been transported between coastwise points through the non-incidental movement of the non-coastwise qualified H-627. Consequently, Option 2 would violate 46 U.S.C. App. §883.

Option 3

According to the facts provided, this option is identical to the one outlined above, except before launching the truss section, mooring lines at a fixed length would be attached to the port stern corner of the barge to secure that corner of the barge over its original footprint. The bow of the barge would then be rotated approximately 10 - 30 degrees on the axis created by the mooring lines to create a launch angle at which the deep water pit could accommodate the full length of the truss section when launched. Once the barge is rotated on its axis to a favorable angle, the truss section would be launched into the deep water pit. When this process is broken down, it is clear that an illegal coastwise movement will occur as discussed below.

The steps described herein would constitute a violation of the coastwise laws because the 10-30 degree rotation that will be made to move the truss to a more beneficial angle from which to launch the truss section, will be accomplished through rotation on a fulcrum point as opposed to a rotation that will occur on an axis. A rotation that occurs on a fulcrum as opposed to an axis inherently involves the movement, self-propelled or not, of the barge while an axis allows for the barge to remain stationary while rotating in a pivoting (as opposed to swinging) motion while remaining in one spot. The permissible use of crane barges that pivot involves bases/barges that remain stationary while pivoting. The H-627 launch barge in Option 3 will swing on the fulcrum point created by the mooring lines attached to the port stern corner of the barge. It will swing a 10-30 degree angle and then launch the truss section into the deepwater pit. Again, since the truss section will be laden and unladen at different points, such transportation effected by H-627 is a violation of 46 U.S.C. App. §883.

Option 4

The facts provided under this option are identical to the facts provided in the preceding option, except that modifications would be made to the H-627 that would allow the truss section to be loaded at the bow. The truss section would then be skidded across the spacer barge and bow of the H-627 positioning the truss section at the stern of the H-627. Then, as in Option 3, mooring lines at a fixed length would be attached to the port stern corner of the H-627 to secure that corner of the barge over its original footprint. The spacer barge would then be moved and the H-627 would be rotated approximately 10-30 degrees by the mooring lines to create a launch angle at which the deep water pit would accommodate the full length of the truss section when launched. The steps described herein would constitute a violation of 46 U.S.C. App. §883 for the same reasons outlined in Option 3.

HOLDING:

The use of a non-coastwise-qualified launch barge as described in the above scenarios is in contravention of 46 U.S.C. App. 883, as discussed in the Law and Analysis portion of this ruling.

Sincerely,

Glen E. Vereb
Chief

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