OMSA Fires Back at ‘Erroneous’ and ‘Misguided’ Report on Jones Act Changes

Mike Schuler
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April 7, 2017

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The Offshore Marine Service Association (OMSA) has issued a statement in response to what it calls “erroneous claims and misguided research” by the American Petroleum Institute in relation to the Customs and Border Protection Agency’s (CBP) proposed modifications to rulings related to the use of Jones Act vessels in the offshore oil and natural gas market.

“This study is a desperate attempt by companies promoting foreign workers to distort facts to enable them to continue to skirt U.S. law,” said Aaron Smith, President and CEO, Offshore Marine Service Association. “The only relevant economic impact is the adverse impact that CBP’s erroneous rulings have had for decades on U.S. ship owners, mariners and shipyards. CBP’s course correction ensures that more ships will be built in U.S. shipyards employing U.S. citizens. This is why 33 members of Congress signed a letter to U.S. Homeland Security Secretary Kelly urging him to support the CBP and affirm the Congressional intent of the Jones Act, which supports national and economic security and puts American mariners first.”

As gCaptain reported Thursday, the API, the largest U.S. trade association representing interests in the oil and gas industry, said the CBP’s proposed modifications and revocation of ruling letters, if implemented, will lead to “significant and damaging impacts” to the American economy, jobs, and energy production. You can find our story on the API’s research HERE

The CBP’s proposed modification and revocation of ruling letters would change its application of the Jones Act and prevent foreign flag offshore construction vessels from operating in the deepwater Gulf of Mexico.

Following the January 18, 2017 notice published in the Customs Bulletin, numerous Congressional and industry leaders have voiced support for the corrective action taken by CBP, noting both the economic and national security benefits provided by the lawful interpretation of the Jones Act, and the urgency for stopping foreign interests from influencing U.S. law for the sole benefit of foreign shipbuilders and operators.

The OMSA also points out that on March 30, 2017, 33 bipartisan members of the House of Representatives signed onto a letter to Secretary Kelly of the U.S. Department of Homeland Security to express their support for CBP to quickly bring to a close the implementation of the revocation and modification of what they argue are “flawed” letter rulings. A copy of the letter can be found here.  

Recent studies, according to OMSA, have also concluded the following:

REVOCATION WILL BENEFIT AMERICAN MARINER: In the Gulf Coast region alone, the recent CBP notice will generate over 3,200 new jobs, increase wages and earnings for workers in the region by over $155 million and generate over $700 million in regional economic output. [SEE: Level Playing Field Economic Analysis]

REVOCATION WILL NOT DISRUPT PRODUCTION: This ruling will not impede offshore energy exploration or production given the recent $2 billion investments by U.S. companies. According to IHS Petrodata Construction Vessel database, an average of 19.8 vessels were working in the Gulf Coast region over the past 5 years. U.S. companies have 31 new or retrofitted vessels ready to meet these needs. [SEE: Analysis of Vessel Availability and Impacts of Recent CBP Notice]

REVOCATION SUPPORTS U.S. NATIONAL AND HOMELAND SECURITY: By supporting a market for Jones Act vessels, including the $2 billion investment following the 2009 CBP notice, the domestic maritime industry can provide over 1,000 additional unlimited tonnage mariners for the Ready Reserve Force, ready to answer the call of the U.S. military if needed, and provide the industrial base for both commercial and military needs. [SEE: Subsea to Sealift]

“Foreign interests, at the expense of U.S. workers, shipyards, and ship owners, are seeking to take advantage of the U.S. government’s non-enforcement over the past eight years,” said the OMSA said in press released. “Standing behind U.S. jobs, U.S. security, and the sovereignty of the nation is the very backbone of the nation. CBP has taken the correct and essential step to ensure that U.S. workers and taxpaying companies perform domestic maritime operations as required by the Jones Act.”

The CBP has extended the comment period on the notice of proposed modification and revocation of ruling letters until April 18, 2017.

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