Innovations In The Commercial Space Industry Is Impacting The Maritime Sector And Coast Guard

By Sean T. Pribyl (Holland & Knight) –

On July 21, 2021, U.S. Coast Guard Commandant Admiral Karl L. Schultz testified to Congress on a discreet budget issue that one may have been missed if not paying close attention: to stay ready, the Coast Guard must keep pace with the technological advances occurring across the maritime sphere with “increased space operations.” Such a subtle comment may have been overshadowed by recent commercial excursions into space by Jeff Bezos and Sir Richard Branson, but the Commandant’s reference to space operations is telling.

Indeed, the lines between commercial space and maritime are becoming increasingly blurred. To illustrate, Elon Musk recently announced his newest SpaceX “autonomous drone ship” (a term synonymous with “autonomous vessels” or Maritime Autonomous Surface Ships (MASS)). That drone ship represents the latest addition to the nine-vessel, bicoastal SpaceX fleet, which also includes autonomous spaceport drone ships (ASDS) Just Read the Instructions and Of Course I Still Love You. SpaceX is also converting two Liberian-flag, semi-submersible Mobile Offshore Drilling Units (MODU) as launch and landing (reentry) platforms, to be renamed Deimos and Phobus. 

Thus, the maritime industry should take heed as the commercial space and space tourism industries are slowly and gradually permeating the marine sector and bringing with them innovation and advanced autonomy. By the looks of it, they intend to stay, as a substantial amount is being invested in vessels for use as launch and reentry platforms in both domestic and international waters. But this innovation also brings legal, operational and regulatory challenges that merit attention, in particular since these operations co-exist within the current maritime industry ecosystem, and invariably place operational demands on the U.S. Coast Guard in order to support these commercial missions.

What makes these developments more intriguing is that the modern-day U.S. maritime industry is historically conservative and fragmented, with little reward for experimenting and failing as an early innovator – there is often a “race to second” with innovation. Thus, even as maritime innovation and novel uses of technologies evolve into more real-world applications, safety remains paramount. Modern day marine operations also combine safety priorities with best governance practices and social and environmental responsibility. This is all the more important as maritime operations are subject to a wide range of novel risks that, if left unmanaged or unaccounted for at early stages of operational development, can adversely affect all parties involved. 

Autonomous SpaceX droneship,
A Shortfall of Gravitas pic.twitter.com/hNZ5U7nxUg

— Elon Musk (@elonmusk) July 9, 2021

Launch and Reentry Legal Considerations

The increasing intersection of non-traditional federal and commercial entrants from the space and aviation sectors into the marine transportation system (MTS) is creating novel legal considerations. Although the Coast Guard has long been an invaluable interagency partner to federal agencies, and coordinates joint military operations on a daily basis with other military services, the jurisdictional conflicts with projected commercial space operations may present unique regulatory obstacles. 

Specifically, the Coast Guard has clear statutory responsibility to safeguard the MTS, although that responsibility is limited to its legal authority and jurisdiction for the activity in which it is engaged. The Coast Guard may coordinate space activities in the marine environment with NASA, the U.S. Air Force (USAF), U.S. Department of Defense, U.S. Space Force, and the Federal Aviation Administration (FAA), although NASA neither operates nor regulates the commercial space transportation industry. The FAA is also the federal agency responsible for facilitating and regulating commercial space launch activities, including issuing commercial licenses or permits for launch and reentry in coordination with the Coast Guard and requiring commercial launch operators to prepare a safety risk assessment. During flight and reentry, the Coast Guard continues to coordinate with federal and local stakeholders and offers standby search and rescue support. 

A key consideration in the discretionary use of Coast Guard assets, however, is the National Security Space Launch, a U.S. government program that enables acquisition of launch services, aimed at ensuring continued access to space for “critical national security missions.” Federal jurisdiction over a commercial space launch and reentry activity essentially shifts to the FAA once the rocket leaves the deck of the vessel. Purely Department of Defense launch and reentry missions are likely characterized as critical national security, though what remains unclear is whether commercial launch and reentry operations, including space tourism, can be considered national security, much less “critical.” 

The location of space operations is also critical to understanding what authorities and capabilities may be brought to bear to support commercial space operations. The Coast Guard has different jurisdictional authority in the territorial sea (12 NM), the contiguous zone (24 NM), the U.S. outer continental shelf (OCS), the U.S. exclusive economic zone (EEZ) (200 NM), and on the high seas. Coast Guard Captains of the Port (COTP) have extensive regulatory authority within their respective areas of responsibility to enforce regulations for the protection and security of vessels ports and waterways safety, among others. And generally, Coast Guard authority extends beyond 12 nautical miles to support special space activities such as launch and reentry. However, COTP authority is limited to enforcing or acting pursuant to a respective statute conveying jurisdiction over the maritime zone or zones at issue. Very generally speaking, the scope of the Coast Guard’s authority decreases as the zones get farther out to sea. This bears directly on commercial space industry’s expectations of the Coast Guard. 

The primary means by which the Coast Guard supports launch and reentry is through a Safety Zone established for safety or environmental purposes under the Ports and Waterways Safety Act (PWSA) and 33 CFR 165. A Safety Zone limits access of persons, vehicles, vessels or objects to areas around the launch and reentry platforms unless authorized, with violators subject to civil or criminal sanctions. For example, the Coast Guard has previously established temporary Safety Zones related to launches, including for a SpaceX vehicle launch. Coast Guard small boats, patrol boats and response boats are typically used to patrol and enforce Safety Zones, and thus the farther space operations move offshore, the more demand it places on Coast Guard assets. To illustrate, the Coast Guard reportedly worked with NASA and SpaceX to plan the recovery of the SpaceX Dragon crew as the Coast Guard established a Safety Zone for splashdown – only to have that same Safety Zone go largely ignored by local boaters. 

Safety Zones may also be established on the Outer Continental Shelf (OCS) under the Outer Continental Shelf Lands Act (OCSLA) but those Safety Zones may be limited to activities related to resource exploration and exploitation. Safety Zones may also be established beyond U.S. territorial limits under the authority of the Deepwater Port Act (DPA), although the DPA generally relates to transport of petroleum supplies obtained from foreign sources. Thus, as commercial operations move offshore, attempts to extend any jurisdictional and authority for Safety Zones beyond 12 nautical miles under Coast Guard existing organic statutory authority may raise key legal questions and likely merits further analysis. 

Congress has attempted to address this jurisdictional limitation in Section 8343 of the Fiscal Year 2021 National Defense Authorization Act (NDAA) by directing the Coast Guard to conduct a pilot program to address special activities (e.g., launch and reentry), then after two years, brief Congress on whether the authority to establish safety zones to address special activities in the EEZ should be extended or made permanent in the interest of safety. As such, the legislation does not alter existing law, but the final report will be worth monitoring as to whether such a jurisdictional extension would align with international law and principles of international comity. For example, an expansion of U.S. maritime jurisdiction over the EEZ or the high seas could be cited as precedent for other countries to implement navigation exclusion areas, which in turn could have the unintended consequence of running counter to the U.S. policy on high seas freedoms related to excessive maritime claims.

No Bucks, No Buck Rogers

Commercial space is touted as a job creator for future generations and is already impacting U.S. shipyards by creating work with vessel conversions and within the MTS with tug operators used to tow autonomous vessels to sea. But as commercial space operators build bigger, increase their degrees of vessel autonomy (e.g., if those same harbor tugs are removed from the equation), shift toward space “tourism” and expand operations offshore, then the demands on the Coast Guard in supporting launch and reentry missions also increases. Consequently, if the line between commercial and national security launches blur as the U.S. government increasingly relies on commercial entities to support space launches, this could divert, or even strain, vital Coast Guard resources dedicated to other safety-related operations. 

Notably, FAA regulations do not obligate the Coast Guard to provide its assets to support commercial launch and reentry activities, and Coast Guard assets deployed to support commercial space operations are generally not reimbursable since commercial operators are not interagency partners. Thus, the Coast Guard exercises discretion in supporting space launch and reentry activities. Essentially, this means that Coast Guard support in these instances falls under current budget constraints and thus raises policy questions as to the benefits in supporting the burgeoning commercial space sector, such as space tourism, as compared with the costs and resources needed support those same operations.

Nonetheless, the Coast’s Guard Fiscal Year (FY) 2022 President’s Budget states that to restore readiness, the “[n]ation needs a ready Coast Guard with the tools and support systems necessary to operate in the increasingly complex, interconnected, and technologically advanced maritime domain.” Though, it remains unclear what additional funding Congress will ultimately allocate to the Coast Guard in support of commercial space operations.  

A Ship in Harbor Is Safe, But That Isn’t What Ships Are Built For

The use of “drone ships” or autonomous vessels to support launch and recovery operations are not novel due to their nature as ships supporting the U.S. space program. Navy Reentry Ships have long been involved with launch and reentry activities. Vessels such as the R/S RocketShip, formerly M/V Delta Mariner, have for years ferried rocket boosters down the inland river system to the U.S. Gulf Coast. Rather, what is novel is the advancing levels of autonomy, and uncrewed status, of drone ships intending to navigate to, from, and at launch and reentry sites.

While regulation should not be a barrier to innovation, innovative and advanced autonomy systems on vessels still fall within a domestic and international legal framework. Indeed, in many aspects the U.S. is leading the way in innovation, including in on-the-water testing and implementation of advanced autonomy as creates precedent with international unmanned voyages through the U.S. Navy’s Ghost Fleet unmanned surface vessel (USV) Nomad, which completed a 4,421 nautical miles transit, of which 98 percent was in autonomous mode. U.S.-flag autonomous vessel Mayflower 400 is attempting a trans-Atlantic Ocean crossing from the UK. Buffalo Automation of Buffalo, New York launched Europe’s first commercial robotaxi service. U.S.-based SailPlan is developing an intelligent maritime navigation platform for scalable autonomy. Maine Maritime Academy is creating academic opportunities with smart vessel technology. The list goes on, and as the advanced autonomy market continues to develop in the U.S., it is important to note that autonomy is not the goal itself, rather proponents suggest it is meant to improve efficiency and increase safety. However, it can also be seen as part of broader sustainability and decarbonization efforts, and thus may present tangible societial benefits. 

Nonetheless, the use of uncrewed or reduced-crew vessels operating under a high degree of autonomy to support national security and commercial launch and reentry operations raises legal and regulatory compliance questions due to ongoing questions as to where “autonomous” vessels fit in current legal regimes. For years, the international legal community and regulators have analyzed whether a fully uncrewed vessel at varying degrees of autonomy can comply with international conventions, such as the Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREGs). There has been no shortage of legal, academic, and regulatory discussion the topic. The International Maritime Organization (IMO) has been assessing legal considerations with autonomous vessels with the assistance of the Comite Maritime International. Domestically, the Coast Guard has undertaken an autonomous vessel Request for Information and established an unmanned systems cross functional working group based on recommendations from a National Academies of Sciences study report. In addition, the U.S. Maritime Law Association recently established the Maritime Autonomous Surface Ship (MASS) subcommittee dedicated to assessing legal issues with autonomous vessels and systems, the only one of its kind in the U.S. The American Bureau of Shipping just published a Guide for Autonomous and Remote Control Functions, and BIMCO is developing the first standard agreement for the autonomous vessel market. By no means are the legal questions resolved, although the legal acumen in this space has developed markedly in certain circles, and commercial space operations will likely attract additional attention by legal academics, practitioners, and regulators alike. 

Relevant here, drone ships present novel technological and engineering designs and purport to operate within existing legal regimes. Approval for such vessels is generally reserved to Officers in Charge, Marine Inspection (OCMI). The OCMI has statutory and regulatory oversight of the vessel’s construction and engineering approval process, including the issuance of the Certificate of Inspection (COI), and in cases of novel designs, as part of a “design basis agreement.” The OCMI’s jurisdiction includes inspection of vessels in order to determine that they comply with the applicable laws, rules and regulations relating to safe construction, equipment, manning and operation, and that they are in a seaworthy condition for the services in which they are operated. Given the novel designs and engineering employed, the OCMI may seek input from appropriate Coast Guard Headquarters program offices as well. In novel use cases, the Coast Guard relies on exceptions, exclusions and exemptions – along with soft law and policy interests – to fit autonomy in existing legal frameworks. Ultimately though and for all practical purposes, the approval process begins and ends with the OCMI. 

Anyone Can Hold the Helm When the Sea Is Calm

Both the defense and commercial sectors have been testing the viability of autonomous maritime platforms for years. As commercial space industry looks farther to the horizon, questions abound whether commercial space and advanced autonomy technology can be effectively deployed, as well as whether new and non-traditional entrants to the MTS adequately understand the unique risks and regulatory framework of the marine environment. To this end, there are several safety-related and pragmatic considerations worth exploring for new advance autonomy maritime entrants. 

Ships generally do not go to sea without insurance. As autonomous ships grows in size, so will the need for insurance underwriters to assess the unique risk profiles of autonomous ships, a topic of note within the International Group of P&I Clubs. Adequate insurance from specialist marine providers also better streamlines claims and incident responses. 

It will also be worth monitoring whether novel Jones Act issues will emerge related to recovery of rocket modules and other activities involving autonomous vessel landing sites as related to the coastwise trade and prior U.S. Customs and Border Protection (CBP) interpretive rulings on the same. As space tourism evolves into the maritime domain, stakeholders should be aware of the requirements of the Jones Act and the Passenger Vessel Services Act, for example, as vessels may become involved with ferrying materials and passengers to and from launch sites. 

Lastly, due diligence in determining seaworthiness of autonomous vessels will remain vital for both regulatory compliance but also for liability considerations. Risk mitigation is all the more important for drone ships in terms of pollution liability and incident response when there is no crew onboard with which to respond. And since drone ships are new and novel, it bears further scrutiny as to what a reasonably prudent ship owner must do to conduct a careful inspection of the vessel to meet legal standards. The fact that a drone ship may be “in class” may be insufficient to demonstrate that that an owner has exercised due diligence to a standard required under U.S. law and jurisprudence. 

Such issues are all the more important in collision cases if the Pennsylvania Rule applies – a rule under maritime law that essentially provides if a ship is in violation of a navigation statute (e.g., COLREGs requirement for a lookout) at the time of a collision, she is presumed to be at fault. Although there is no direct precedent on incidents involving fully autonomous vessels, such maritime liability discussions will progress in parallel with development of artificial intelligence and autonomy in other transportation sectors such as road and aviation. As former U.S. Deputy Attorney General Paul McNulty once noted, “if you think compliance is expensive, try non-compliance.” 

Conclusions

The increase in current and projected space launch and reentry activities bring unique risks and present novel challenges for the Coast Guard in its governance of the marine environment, as do non-traditional government and commercial space operators who are becoming new maritime stakeholders. In principle, the same marine environment safeguards and procedures the Coast Guard applies to other maritime stakeholders should also apply to space launch and reentry activities, although that concept is being tested by emerging commercial demands.

Things are only impossible until they are not, and there are significant economic incentives and political backing in the Beltway for the U.S. to maintain a leading role in space. The ultimate question is how commercial space operators will fit within the marine sector since the maritime industry has always valued experience in guiding risk management decisions, and innovation should progress without sacrificing safety. 

Given the regulatory gaps and hurdles that could hinder seamless integration of commercial space and autonomy safely into the MTS without stifling innovation, legal and policy discussions should remain at the forefront to ensure safety and that Congress allocates adequate resources for the Coast Guard to meet statutory missions combined with emerging demands. The future is here, and if guided correctly, so are the opportunities. 

More insight from Holland & Knight’s Transportation & Infrastructure Industry Sector Group can be found here.