Archives for July 2009

Press Release: NOIA Lauds Court Decision on 5-Year Oil and Gas Lease Plan

July 29, 2009 by Justin Williams

For Immediate Release: Wednesday, July 29, 2009

Contact: Nicolette Nye (202) 347-6900

NOIA Lauds Court Decision on 5-Year Oil and Gas Lease Plan

WASHINGTON, DC – Yesterday, the DC Circuit Court of Appeals clarified its April 17 decision regarding the 5-Year Oil and Gas Lease Plan. The court has established that the Minerals Management Service must properly consider the relative environmental sensitivity and marine productivity of different areas of the OCS under Section 18(a)(2)(G), and strike a proper balance incorporating environmental and coastal zone factors under Section 18 (a)(3) for Alaska only, specifically leasing in the Chukchi, Beaufort and Bering Seas.

In effect, the Court has upheld the 5-Year Oil and Gas Leasing Plan for areas outside Alaska, which provides welcomed certainty for operations and lease sales in the Gulf of Mexico.

As for the Alaska OCS, the court has ordered the Department of the Interior to notify the court when it completes the required analysis and to file status reports with the court within 60 days and every 60 days thereafter in the interim. After the completion of the analyses, the litigants will have 30 days to file motions which will determine the future of the litigation.

“The decision allows the government to promptly complete its analysis of the Alaska OCS, which NOIA strongly encourages so that hopefully the same certainty granted to Gulf operations and leasing by this decision can be granted to the Alaska OCS,” said Tom Fry, President of the National Ocean Industries Association.

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NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf. The NOIA membership comprises more than 300 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.

Customs Proposes Changes to Jones Act Interpretation

July 22, 2009 by Justin Williams

In a notice published July 17, U.S. Customs and Border Protection (CBP) proposes to modify and revoke ruling letters relating to the application of the Jones Act and transportation of certain merchandise and equipment between coastwise points. These changes could affect OCS operations.

The Jones Act restricts the activities of foreign-flagged vessels carrying merchandise between United States ports. The Outer Continental Shelf Lands Act extends the Jones Act to the outer Continental Shelf and any permanent or temporary installations thereon, including oil production platforms. As a result, vessels that transport merchandise to or between U.S. ports and OCS offshore platforms or anchored vessels must be United States-built, owned, and properly documented for coastwise trade.

In its July 17 notice, CBP announced it will no longer exempt the installation of “pipeline connectors” from a foreign-flagged vessel, based on its ruling that such machinery is “not incidental to the laying of pipeline.” In addition, CBP stated it intends to limit its interpretation of the term vessel “equipment,” which is exempt from the Jones Act, to exclude machinery and goods that are not needed to navigate, operate or maintain the vessel itself.

The penalties for a violation are severe and include forfeiture of the merchandise or forfeiture of a monetary amount of the value of the merchandise.

Historically, NOIA members have been of divergent views on issues related to the Jones Act. Therefore, individual NOIA members who have an interest in this matter are encouraged to make their specific views heard.

Currently, CBP is accepting comments on the matter through August 16, 2009. There have also been several requests to extend the comment period by 60 days. Under existing law, CBP must render a decision within 30 days of the end of the comment period and the decision must go into effect 60 days later.

Click here for the full CBP announcement and commenting instructions.

We will continue to keep you informed as further developments arise.

Statement of NOIA President Tom Fry On Anniversary of Lifting of the Executive Ban on OCS Drilling

July 14, 2009 by Justin Williams

For Immediate Release: Contact: Nicolette Nye

Tuesday, July 14, 2009 (202) 347-6900

Statement of NOIA President Tom Fry

On Anniversary of Lifting of the Executive Ban on OCS Drilling

WASHINGTON, DC - “As we mark the one year anniversary of the lifting of the Executive branch ban on oil and gas drilling on the majority of the Outer Continental Shelf (OCS), it is important to note there is still much work to be done,” said Tom Fry, President of the National Ocean Industries Association.

“Although 18 years of poor public policy, spanning multiple administrations, was reversed a year ago, today a mere 13 percent of the OCS is available for leasing under the current 5-year leasing plan,” said Fry.

“As the new administration considers the next 5-year leasing plan, the offshore energy industry supports and encourages an expanded approach, which includes new areas consistent with sound science and emerging technologies.”

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