Coast Guard Issues Determination on U.S. Built Vessels for Wind Farms
The emergence of the offshore wind energy generation industry in the United States is expected to all fuel a surge in shipbuilding to meet the needs for the installation as well as the servicing of the wind farms. Already orders have been placed for the construction of vessels required both for the installation process as well as for the ongoing servicing, but with these orders, a host of questions are emerging about how U.S. cabotage regulations will be applied to the industry.
Helping to drive the shipbuilding orders is the U.S. decision to enforce the Jones Act for offshore wind farms in a similar fashion to the offshore oil and gas business. The developers of the wind farms will be required to use U.S. vessels both in the installation of the wind farms and for the ongoing tasks such as crew transfer for maintenance operations.
These specialized types of vessels will have to meet the requirements of the Jones Act as enforced by the U.S. Coast Guard’s National Vessel Documentation Center (NVDC). Under the now 100-year-old legislation, to be considered built in the United States a vessel must meet two basic criteria. First, all the major components of its hull and superstructure must be fabricated domestically, and secondly, the vessel must be assembled entirely in the United States. In recent years, NDVC has permitted some exceptions such as the use of foreign steel for vessels provided the fabrication of the components from the foreign-made steel is done in the U.S.
The law firm of Winston & Strawn representing Blount Boats sought a determination from NVDC as it relates to specialized aluminum components that the shipyard plans to use in the construction of crew transfer vessels that would be used both during the construction and later maintenance of offshore wind farms.
The questions centered on the ability to use foreign manufactured aluminum planks. A mill in Norway is producing these planks that are extruded and then joining them together using “friction stir welding,” to create panels used in the hull of the CTVs. The law firm reports that there are no mills that can produce these panels using the process. While no U.S. shipyard can do that welding, they did say that there are U.S. fabrication shops that can do that welding.
“This is the first guidance issued on the construction of many offshore support vessels expected to be needed to construct and maintain thousands of power generating wind turbines intended to be installed eventually off all US coasts," partners Charlie Papavizas and Bryant Gardner at Winston & Strawn reported in a summary of the case.
In its letter outlining its decision, the U.S. Coast Guard found that “extruded aluminum planks produced at the mill in Norway closely fit the description of standard stock,” and as such would be permitted in the construction if they were received at the shipyard “without having been further worked.”
The second portion of the review looked at the issue of fabrication even though they would not be a custom fabrication to a particular vessel. NVDC after a further review found because the panels would be an integral part of the hull of the vessels that their use would violate the criteria for a hull assembled entirely in the United States.
While it seems technical, it illustrates the challenges ahead as U.S. shipbuilders seek to meet the needs of the offshore wind industry.