IMCA report indicates proposed Jones Act changes could damage U.S. GOM deepwater industry

LONDON -- The International Marine Contractors Association (IMCA) has issued a report about the potential impact of the Jones Act proposals published by the U.S. Customs and Border Protection agency (CBP) on Jan. 18.

IMCA has conducted a detailed analysis of the technical requirements of conducting various operations in deep water (>1,000 m or 3,280 ft) cross-matched to the vessels active in the Gulf of Mexico in late 2016. The results confirm the practical reality that the US coast-wise fleet is unable, on its own, to support activities in the deepwater market, according to IMCA. For instance: there are no coast-wise qualified deepwater pipelay vessels, and there are no coast-wise approved deepwater heavy lift vessels, IMCA's report states.

The marine construction industry has relied upon long-standing CBP rulings which permit a small market for non-coast-wise qualified (foreign flagged) vessels engaged in specific niche activities other than transport. The proposed revocations and modifications to the Jones Act could effectively stop deepwater developments because there would be no domestic capacity to install the facilities, reports IMCA.

The limited number, but high-investment, deepwater developments have been an engine of growth in the Gulf of Mexico for many years, and the potential implications for the oil and gas industry in effectively stopping these investments are huge, the report says. The resulting impact on businesses and jobs would be very significant both offshore and onshore, according to IMCA.

The report is available on IMCA’s website.