VES-3/VES-3-02/VES-3-15/VES-10-03-R:IT:C 113439 GOB
Andrew Podolnick, Esq.
Senior Counsel
Law Department
Chevron U.S.A. Production Co.
935 Gravier Street
New Orleans, LA 70112
RE: 46 U.S.C. App. 289, 316(a), 883; Coastwise transportation; Towing; Outer continental shelf
Dear Mr. Podolnick:
This is in response to your letter dated May 5, 1995.
FACTS:
You state as follows:
Chevron U.S.A. Production Company is exploring the possibility of using a modified semisubmersible drilling vessel operating under foreign flag in its offshore drilling and producing operations. The unit would be used under the following conditions:
1. The non-self-propelled unit will be towed to a surface location at the Outer Continental Shelf.
2. The unit will be anchored at that location where it will drill approximately 12 wells.
3. The unit will not be used for drilling or producing operations at any other location.
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4. Upon completion of drilling operations, commercial wells will be produced from the unit. Oil and gas, or both, produced from these wells will be transported to locations in the United States by regulated pipeline.
You stated telephonically that there is no structure or fixture of any kind at the
location on the outer continental shelf. You further stated that the semisubmersible
drilling vessel ("the vessel") will not transport any materials other than its equipment.
Additionally, the vessel will not transport any individuals other than crewmembers or
individuals associated with the work of the vessel.
You also asked telephonically that we address the situation of the vessel moving
to another surface location on the outer continental shelf after it has completed its work
at the first location.
ISSUE:
Whether the proposed activity may be accomplished in compliance with the
coastwise laws.
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.
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, landward of the territorial sea baseline.
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 law applicable to the carriage of passengers is found in 46 U.S.C.
App. 289 and provides that:
No foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.
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Section 4.50(b), Customs Regulations (19 CFR 4.50(b)) states as follows:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.
46 U.S.C. App. 316(a) prohibits the use of a non-coastwise-qualified vessel to
tow any vessel, other than a vessel in distress, between ports or places in the United
States embraced within the coastwise laws, either directly or by way of a foreign port,
or to do any part of such towing, or to tow any such vessel between points in a harbor
of the United States.
Section 4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (43
U.S.C. 1333(a); "OCSLA"), 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."
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"). 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.
After a consideration of this matter we make the following determinations based
on the facts presented.
The vessel is not engaged in the transportation of merchandise between
coastwise points. Vessel equipment of the transporting vessel is not considered
merchandise within the meaning of 46 U.S.C. App. 883. We note, however, that after
the vessel is anchored on the outer continental shelf, the vessel itself becomes a
coastwise point. Accordingly, any merchandise, including equipment for the anchored
vessel, which is transported from a coastwise point to the anchored vessel (also a
coastwise point), must be transported on a coastwise-qualified vessel.
The vessel is not engaged in the transportation of passengers between
coastwise points. The facts indicate that no individuals other than those individuals
connected with the operation, ownership, navigation, or business of the vessel are
being transported. We note, however, that inasmuch as the vessel itself becomes a
coastwise point after it is anchored on the outer continental shelf, any passengers
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transported from a coastwise point to the anchored vessel (also a coastwise point)
must be transported on a coastwise-qualified vessel. Individuals who are to be
crewmembers or workers on the anchored vessel, who are not connected with the
operation, navigation, ownership, or business of the transporting vessel, would be
considered passengers on the transporting vessel.
The drilling and producing operations are not an engagement in coastwise trade.
The transportation of oil and gas by regulated pipeline is not coastwise trade.
Inasmuch as there are no structures of any kind at the surface location, such
location is not a coastwise point until the vessel is anchored at that location.
Accordingly, 46 U.S.C. App. 316(a) does not apply to the towing of the vessel from a
U.S. point to the surface location on the outer continental shelf.
There is no prohibition in the coastwise laws with respect to the movement of the
vessel from the first location to a second surface location on the outer continental shelf
provided that (a) no merchandise or passengers are transported on the vessel; or (b)
there is no structure of any kind at the second location.
HOLDING:
As detailed supra, and based on the facts and conditions set forth supra, the
proposed activity may be accomplished in compliance with the coastwise laws.
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch