HQ 116394 - Coastwise laws; Outer Continental Shelf; Abandoned Oil Well; 46 U.S.C. App. 883; 43 U.S.C. 1333 - United States International Trade Commision Rulings

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HQ 116394

February 8, 2005

VES-3-15-RR:IT:EC 116394 GOB

CATEGORY: CARRIER

Richard B. Fairbanks
President
Titan Maritime, LLC
P.O. Box 350465
Fort Lauderdale, FL 33335

RE: Coastwise laws; Outer Continental Shelf; Abandoned Oil Well; 46 U.S.C. App. 883; 43 U.S.C. 1333

Dear Mr. Fairbanks:

This letter is in reply to your letter of December 1, 2004, which this office received on January 25, 2005.

FACTS:

You describe the pertinent facts as follows:

We have been contracted to remove the wreckage of the ENSCO 64 Mobile Offshore Drilling Unit from the sea bed in the Gulf of Mexico. After lifting the wreckage we would like to use a foreign flag barge to transport the wreckage to a “wet storage site” where the wreckage can be placed back on the seabed. We then plan to re-lift the wreckage and then transport the wreckage to a U.S. shore side facility.

The wreck site is at 29 degrees 16’ 25.691” N latitude and 88 degrees 12’ 05.831” W longitude. This is in block Main Pass 280, an oil lease controlled by Dominion Exploration & Production, Inc. The ENSCO 64 was drilling an oil well for Dominion when it was forced to stop and shut down for Hurricane Ivan. The well was not completed. The hurricane caused the ENSUE 64 to be very badly damaged and caused the well to be abandoned.

The wreck site is approximately 40 miles from land . . .

You also state that the “wet storage site” is one and one-half miles off the shore of Pensacola.

ISSUE:

The applicability of the coastwise merchandise statute (46 U.S.C. App. 883) to the above facts.

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel built in, documented under the laws of, and owned by citizens of the United States is said to be “coastwise-qualified.” The owner of such a vessel may obtain a coastwise endorsement from the U.S. Coast Guard.

Title 46, United States Code Appendix, section 883 (46 U.S.C. App. 883), the coastwise merchandise statute often called the "Jones Act," provides in part that no merchandise shall 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 vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States.

The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landlord of the territorial sea baseline.

Section 4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (43 U.S.C. 1333(a); "OSCLA"), 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."

The statute was substantively amended by the Act of September 18, 1978 (Pub. L. 95-372, Title II, § 203, 92 State. 635), to add, among other things, the language concerning temporary attachment to the seabed. The legislative history associated with this amendment is telling, wherein it is stated that:

...It is thus clear that Federal law is to be applicable to all activities or all devices in contact with the seabed for exploration, development, and production. The committee intends that Federal law is, therefore, to be applicable to activities on drilling rigs, and other watercraft, when they are connected to the seabed by drillstring, pipes, or other appurtenances, on the OCS for exploration, development, or production purposes. [House Report 95-590 on the OCSLA Amendment of 1978, page 128, reproduced at 1978 U.S.C.C.A.N. 1450, 1534.]

Under the foregoing provision, we have 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 outer Continental Shelf ("OCS"). See T.D.’s 54281(1), 71-179(1), and 78-225 and C.S.D. 85-54. We have applied that principle to drilling platforms, artificial islands, and similar structures, as well as to devices attached to the seabed of the outer Continental Shelf for the purpose of resource exploration operations, including warehouse vessels anchored over the OCS when used to supply drilling rigs on the OCS. See C.S.D.’s 81-214 and 83-52 and HQ 107579 dated May 9, 1985.

As an example, the use of a non-coastwise-qualified vessel (e.g., a foreign-flag vessel) to install mooring component materials on the OCS would violate 46 U.S.C. App. 883 if the materials were laden aboard the vessel at a coastwise (U.S.) point and were unladen at a second coastwise point. A pre-existing installation on the OCS constitutes a coastwise point. Further, if workmen board a non-coastwise-qualified vessel at a U.S. point and leave the vessel at a second coastwise point, such transportation is violative of 46 U.S.C. App. 289.

The wet storage site is a coastwise point as it is within U.S. territorial waters. The key inquiry here is whether the abandoned oil well is a coastwise point.

We have ruled, and it is our position, “that the plugging and permanent abandonment of a well on the OCS results in the well no longer being considered a coastwise point by virtue of the OCSLA.” [Emphasis supplied.] See, for example, HQ 110959 dated August 9, 1990; C.S.D. 83-13; and HQ 106910 dated July 9, 1984. In order to be permanently abandoned, the well must be plugged and abandoned in accordance with the requirements of the Department of the Interior. We have ruled, and it is our position, that a temporarily abandoned oil well on the OCS is a coastwise point. See HQ 113113 dated June 28, 1994.

Therefore, we determine that if the oil well has been permanently abandoned, the transportation of the wreckage from that site to the wet storage site is not a coastwise movement. Accordingly, that movement may be accomplished by a non-coastwise-qualified vessel.

In contrast, if the oil well is merely temporarily abandoned, it remains a coastwise point. In that situation, the transportation of the wreckage from that site to the wet storage site is a coastwise movement which must be accomplished by a coastwise-qualified vessel.

As you point out in your letter, the subsequent transportation of the wreckage from the wet storage site to a facility in Pensacola is a coastwise movement which must be accomplished by a coastwise-qualified vessel.

HOLDINGS:

If the oil well has been permanently abandoned, the transportation of the wreckage from that site to the wet storage site is not a coastwise movement. Therefore, that movement may be accomplished by a non-coastwise-qualified vessel.

2. If the oil well is temporarily abandoned, it remains a coastwise point. In that situation, the transportation of the wreckage from that site to the wet storage site is a coastwise movement which must be accomplished by a coastwise-qualified vessel.

3. The transportation of the wreckage from the wet storage site to a facility in Pensacola is a coastwise movement which must be accomplished by a coastwise-qualified vessel.

Sincerely,

Glen E. Vereb
Chief

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