HQ 115985 - Coastwise Trade; Launch Barge; Truss Spar Platform; 46 U.S.C. App. §883 - United States International Trade Commision Rulings

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HQ 115985

May 21, 2003

VES-3-15/17-RR:IT:EC 115985 CK

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; Truss Spar Platform; 46 U.S.C. App. §883

Dear Mr. Waldron:

This is in response to your letter dated May 7, 2003 which was a supplement to your letters dated December 18, 2002 and March 24, 2003 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. In response to your December 18, 2002 and March 24, 2003 letters we issued HQ 115881, dated April 21, 2003 which held that the use of a non-coastwise-qualified launch barge as described in the five scenarios you set forth is in contravention of 46 U.S.C. App. 883. Your May 7, 2003 letter proposed three more scenarios. On May 9, 2003 you partially withdrew your ruling request with respect to Options 5 and 6, and seek only our decision with respect to Option 7. 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.

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 to effect the relocation 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.

Option 7:

This option (similar to Option 4, discussed in HQ 115881) 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 7, Step 1). Under Option 7, 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 7, Step 2). Then, mooring lines at a fixed length would be attached to the geometric center, or central axis, of the barge (Option 7, Step 3). The spacer barge would then be moved, and the H-627 would be rotated approximately 10-30 degrees on its central 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 7, Step 4). There would be no other movement of the barge associated with the launching of the truss section.

ISSUE:

Whether the above-described proposal for the relocation of a truss section of a Truss Spar Platform by the foreign-built, foreign- flagged H-627 launch barge would violate 46 U.S.C. App. §883.

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 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”

At the outset we note that as discussed in HQ 115881, neither the 13th Proviso to the Jones Act nor §213 of the Maritime Transportation Security Act of 2002 (MTSA) are applicable to Option 7. Both of these statutory provisions pertain to transportation from one coastwise point to another point on the Outer Continental Shelf. The movement at issue is merely 200 yards from the quayside. Consequently, the option proffered for our review is to be analyzed in light of 46 U.S.C. App. §883 without regard to either the 13th Proviso or the MTSA.

The facts in Option 7 indicate that there would not be transportation of the truss section by the non-coastwise-qualified H-627. Consequently, the transportation as described in the FACTS portion of this ruling would not be a violation of 46 U.S.C. App. §883.

First, the facts in Option 7 clearly indicate that the barge would be rotated on its central axis, as opposed to a “fulcrum” point, which was found to be a violation of §883 in both Options 3 and 4 (See, HQ 115881). A rotation that occurs on a “fulcrum” as opposed to an axis inherently involves the non-incidental 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. The permissible use of barges that remain stationary has arisen mostly in the context of barges with pivoting cranes. The Bureau of Customs and Border Protection (CBP) has long held that the use of a non-coastwise-qualified crane vessel to load and unload cargo or construct or dismantle a marine structure is not coastwise trade and does not violate the coastwise laws, provided, that any movement of merchandise is effected exclusively by the operation of the crane and not by movement of the vessel between coastwise points, except for necessary movement which is incidental to a lifting operation while it is taking place. (See, CBP ruling letters VES-3-CO:R:P:C 106351 PH, dated November 1, 1983; VES-3/VES-10-01 CO:R:P:C 108213 PH, dated March 6, 1986; and VES-3-24-RR:IT:EC 115630 GEV, dated March 25, 2002).

The facts in Option 7 indicate that there would be stationary rotation of the H-627 on its central axis, a permissible movement, rather than its movement between two coastwise points. The rotation of the H-627 would not constitute coastwise transportation of the truss section. Consequently, the use of the vessel as described above would not be a violation of 46 U.S.C. App. §883.

HOLDING:

The use of a non-coastwise-qualified launch barge as described in the above scenario is not 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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