Domestic ship operators question offshore wind project’s use of foreign ship

By: - November 19, 2021 12:02 am

Dominion Energy installed two test turbines to generate power 27 miles off the coast of Virginia Beach as a precursor what the company hopes will be the largest offshore wind project in the United States. (Dominion Energy)

A group of American ship operators filed a complaint this week against a foreign vessel working on Virginia’s new offshore wind development project — a move motivated by  concern, it says, that the offshore wind industry might not stay true to its promise to buoy American workers. 

The Offshore Marine Service Association, a trade group, sent a formal complaint Monday to the U.S. Coast Guard and U.S. Customs and Border Protection, alleging that a survey vessel, Geoquip Saentis, violated the federal Jones Act and U.S. labor and environmental regulations when it operated in the offshore wind fields of Virginia in 2020 and 2021. 

The Jones Act is a 100-year-old law that states that only U.S. built and operated ships can move goods between U.S. ports and locations. Geoquip Saentis is registered in the Bahamas and has a foreign crew.

The trade association is concerned that companies can easily find loopholes to the Jones Act when working offshore and use less expensive and less regulated foreign ships and crew. 

The group has previously filed complaints against foreign ships involved in offshore oil and gas development in the Gulf of Mexico and has a related lawsuit pending against Customs and Border Patrol. Now it is scrutinizing the burgeoning industry of offshore wind development. 

“We are seeing these same issues walking straight north to the Eastern Seaboard with offshore wind,” said Aaron Smith, president and CEO of the Offshore Marine Service Association. The group represents more than 140 member companies, including American firms that own and operate service vessels that work on offshore energy. 

 “We are in the very early stages of this industry and we are seeing the developers choose foreign vessels and their cost advantages over U.S. vessels,” Smith said. 

The Coast Guard and Customs and Border Patrol did not immediately respond to requests to comment. 

U.S. Rep. Elaine Luria, D- Norfolk, whose Hampton Roads district could see new jobs and development from Dominion’s offshore project, said she is looking into the issue. Luria created a Congressional Offshore Wind Caucus earlier this year. 

 “I am a strong supporter of the Jones Act and will continue to work to close loopholes that ensure offshore wind projects are supported by American workers and U.S. flagged-vessels. I will carefully review this study and incorporate it into my ongoing efforts to strengthen our maritime industry,” Luria told the Mercury in an email. 

‘That is not the same as carrying goods to U.S. ports’

The 19-page complaint from the offshore trade group says the Geoquip Saentis, a Chinese-built, foreign-crewed, and Bahamian-flagged vessel, violated the Jones Act when it transported goods back and forth to U.S. ports in support of Virginia’s offshore wind project. 

The group says the vessel employed an Eastern European crew at wages below what most American crews demand and without following U.S. labor laws. The complaint also accuses the vessel of not complying with some U.S. pollution prevention laws.

Geoquip Marine, the company that operates the vessel, defended its use. The company said it competed for the contract from Dominion to do geotechnical survey work and employed a qualified crew that followed best practices. Dominion contracted Geoquip Marine to do the laboratory testing and geotechnical reporting for the main least area and export cable route in the Coastal Virginia Offshore Wind project. Geoquip deployed three different vessels to complete the project.

The vessel’s task in Virginia waters was to collect seabed data to help set the geotechnical parameters for the project. As part of that research, the vessel carried samples from offshore to ports, but Geoquip Marine argues that is not the same as carrying goods to U.S. ports, the original focus of the Jones Act.

“Geoquip Marine has historically relied upon the longstanding position that research work of the type that it is specifically focused on analysing the characteristics of the seabed is not covered by the provisions of the Jones Act,” the company said in a statement.

A spokesman for Dominion Energy said the company is contracting with many domestic vessels and crews for the project. For example, Dominion contracted two vessels from Louisiana for survey work, local fishing vessels from Virginia Beach as scouts, barges from Cape Henry to haul equipment and a vessel from Crofton Industries in Portsmouth that took divers to perform underwater work for the pilot project. 

Dominion announced earlier this month that it would use Jones Act-compliant vessels to transport components from Portsmouth Marine Terminal to the construction site for the next phase of the project.

Under the Jones Act, any group can file a complaint, but there is no legal requirement for the government to respond to it. The Offshore Marine Service Association filed a similar complaint in August against a ship involved in oil and gas development in the Gulf of Mexico and has not had an official response from federal authorities yet.

A challenge for the industry

The issue highlights the potential challenge for the offshore wind industry of the Jones Act, legislation enacted after the First World War to boost American shipping and maritime workers. The nascent U.S. offshore wind industry trails far behind Europe and Asia.

There are currently no U.S. ships that can carry out some functions, like installing wind turbines. As a result, Dominion Energy is building a $500 million vessel in Texas that is expected to be the first Jones Act-compliant offshore wind vessel in the United States.

A report last summer from industry analysts IHS Markit said that to meet targets for offshore wind from the Biden administration, the country must either allow more foreign-built vessels or build new ones promptly.

The Biden administration set an ambitious goal earlier this year to generate 30 gigawatts of offshore wind power by the end of the decade, enough to power more than 10 million homes and cut 78 million metric tons of carbon dioxide emissions. 

Dominion Energy, Virginia’s largest utility, plans to install nearly 200 more ocean turbines east of Cape Henry over the next five years. The project is a key cornerstone of the utility’s efforts to decarbonize its electric fleet — the goal of the 2020 Virginia Clean Economy Act as well as Dominion’s own net-zero pledge.

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Allison Winter
Allison Winter

Allison Winter is a Washington D.C. correspondent for States Newsroom, a network of state-based nonprofit news outlets that includes the Virginia Mercury.