Monthly Archives: February 2021

In a ruling dated Jan. 27, 2021, U.S. Customs and Border Protection (CBP) for the first time expressly found that the Jones Act applies to transportation of merchandise from a U.S. port to a location on the outer continental shelf for the purpose of the development and production of wind energy. See HQ H309186(Jan. 27, 2021) (the Ruling).

CBP's Ruling is the first one to be issued following the recent amendment to Section 4(a) of the Outer Continental Shelf Lands Act (OCSLA) contained in Section 9503 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395, 116th Cong. 9503 (2021) (NDAA). As amended, OCSLA applies federal laws, such as the Jones Act, to: "(iii) 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, including non-mineral energy resources " NDAA 2021, Section 9503 (emphasis highlighting amendment added).

The Ruling ends a long-standing ambiguity over whether OCSLA extended the Jones Act to installations and other devices attached to the outer continental shelf (OCS) for the purpose of exploring for, developing or producing non-mineral energy resources, such as offshore wind. The Ruling was issued in response to an initial request to CBP dated Feb. 12, 2020 almost a year ago. A number of other offshore wind-related ruling requests submitted prior to the NDAA remain pending, and it is anticipated that CBP will continue processing those pending ruling requests in the coming weeks.

With a major jurisdictional ambiguity addressed, CBP, developers and contractors can proceed to the necessary work of planning and seeking interpretive rulings on important, and in some cases novel, operational questions associated with offshore wind construction and operations. Although the application of the Jones Act in Gulf of Mexico offshore oil and gas operations provides many analogs to aspects of offshore wind projects, there are significant differences that need to be addressed. Moreover, as we highlighted in a recent Holland & Knight blog post concerning CBP's "vessel equipment" ruling revocations, there are a number of previously established interpretative concepts that will now require new consideration and ruling requests. (See "All Aboard for the Biden Transition: Climate, Cabotage and Competition," Jan. 3, 2021.)

With the Biden Administration's emphasis on promoting offshore wind and President Joe Biden's recent reiteration of the Jones Act's applicability to offshore renewable energy projects following the signing of the NDAA, CBP should be well positioned to work with the offshore wind industry in its efforts to plan, construct and operate the numerous U.S. offshore wind projects that are expected to be built in the upcoming years.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

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CBP Expressly Applies Jones Act to Offshore Wind Projects on Outer Continental Shelf - JD Supra

Photo courtesy of MHI

By The Maritime Executive 02-02-2021 04:12:57

Japans leading companies are continuing to develop operations focused on the emerging offshore energy market. The efforts are in response to the governments calls to make offshore wind power a key component of the countrys renewable energy strategy.

Mitsubishi Heavy Industries became the latest to announce initiatives in the sector. MHI is seeking to expand its wind turbine business by launchinga new joint venture with Denmarks Vestas Wind Systems. Known as MHI Vestas Japan, the new company which launched operations on February 1, will focus on the marketing of onshore and offshore wind turbines. It will be 70 percent owned by MHI and 30 percent by Vestas.

With the establishment of the new joint venture, MHI and Vestas look to build on the technologies, experience, and trust established through the operations of MHI Vestas Offshore Wind. In addition to helping expand the use of onshore and offshore wind power, the new JV will integrate the technological capabilities and experience of its two parent partners, thereby accelerating global-scale initiatives toward decarbonization.

Citing data from the Wood Mackenzie Global Wind Power Market Outlook, MHI said that the global market for wind energy systems is expected to double over the next 10 years. Excluding China, they projected that Asia, which accounts for half of that demand, would have a cumulative mean growth rate of near 10 percent.

The Japanese Government is calling for offshore wind energy to become a major source of power as the country pursues the use of renewable energies toward realizing a decarbonized society by 2050. On December 15, 2020, at a public-private council, with representatives from the private sector tasked with strengthening Japan's offshore wind power industry, the government and industry agreed on the targets for the offshore wind power industry. Japan will deploy offshore wind farms to produce 10 gigawatts by 2030, and between 30 and 45 gigawatts by 2040.

MHIs efforts to expand its position in the wind power sector followed similar efforts by shipping lime Mitsui O.S.K. Detailing plans for a restructuring of its operations, MOL highlighted goals to establish businesses not limited to transportation and to strengthen investments in the offshore business. In April 2021, MOL will establish its new Wind Power Energy Business Division, specializing in offshore wind power and its related business. MOL set as one of its business goals expanding and accelerating activities in energy and offshore power.

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Mitsubishi and MOL Building Efforts in Offshore Wind Business - The Maritime Executive

Jacqueline Savitz, Opinion contributor Published 8:00 a.m. ET Feb. 2, 2021

Permanently ending new offshore oil and gas leasing in U.S. waters would prevent the release of catastrophic greenhouse gas emissions, which drive ever larger wildfires, hurricanes and floods.

President Joe Biden hit the ground sprinting on his first day of office. On day one he rejoined the Paris Agreement, and now he has announced a pause on offshore oil and gas leasing. Its exciting to hear the presidents plan to return science to policy decision-making, even advancing his science adviser to a cabinet-level position. These encouraging moves will certainly translate to more effective action on climate.

Oil and gas are killing us. Burning fossil fuels is driving climate change, which is causing a wave of extinction and disasters that devastate property and the environment, and cost human lives. But President Biden has committed to aggressively address the climate crisis, which gives me great hope that we can work together to permanently protect our climate and coasts from offshore oil and gas.

Permanently ending new offshore oil and gas leasing in U.S. waters would prevent the release of a catastrophic amount of greenhouse gas emissions, which are driving ever larger and more intense wildfires, hurricanes and floods. A new report from Oceana estimates that permanent protection against offshore drilling would prevent 19 billion tons of greenhouse gas emissions and $720 billion in damages to people, property and the environment.

In addition to the climate impacts, offshore drilling also leads to oil spills. We saw what a spill can do to coastal economies when the BP Deepwater Horizon spewed hundreds of millions of gallons into the Gulf of Mexico in 2010. Today, the likelihood of another catastrophic spill is even greater than it was in 2010. Not only is the industry drilling in deeper waters, but the Trump administration also weakened the too-few safety rules put in place after the BP disaster.

The oil rig Deepwater Horizon on April 21, 2010, in the Gulf of Mexico off the coast of Louisiana.(Photo: U.S. Coast Guard via Getty Images)

While protecting us from offshore oil and gas drilling, President Biden can also restore and strengthen the drilling safety rules that were weakened by former President Trump, ensuring that any existing drilling operations be subject to robust safety protocols, oversight and financial assurances. Combining this with movement toward clean energy, like environmentally responsible offshore wind, would set us up for success in the journey toward a renewable energy future.

Climate change: On climate change, government-centric approach will hurt USA with unintended consequences

These are big first steps, but even more will be needed. One of the most powerful tools we have to help head off the worst effects of the unfolding climate catastrophe is a clean, diverse, and abundant ocean. In addition to permanent drilling protections, we will also need measures to protect habitat for ocean wildlife, and responsible, science-based management of our fisheries to restore them to their previous bounty. This will strengthen our economy and provide additional food security, compliments of a healthy ocean.

A healthy ocean explodes with life billions of carbon-based plants and animals cycle and store tons of carbon. And all that sea life can provide a nutritious source of protein that doesnt require us to trade away arable land, healthy forests or fresh water. If we take care of our fisheries, our oceans could dramatically offset the contribution to the climate crisis that comes from land-based agriculture.

Mitigating the climate disaster will take an all-hands, multisector approach. No one solution will solve this massive problem, but every tool is vital, and the oceans are perhaps more essential than any other.

Offshore drilling fuels the climate crisis and threatens our lives and livelihoods. Ending offshore drilling permanently and shifting to clean energy would be good for our economy, improve the health of our ocean and bolster our fight against climate change. We owe it to future generations to reverse our assault on the natural world and restore its bounty.

COVID and climate change: On COVID-19 and climate change, denialism is deadly

President Biden should be commended for starting strong right out of the gate. A pause is a great first step. But climate change is a threat to every American today and will still be a threat a year from now, and even 10 years from now. Hopefully, this is just the promising beginning of the end. Now is the time to stop the expansion of offshore drilling, forever.

By Jacqueline Savitz, Chief Policy Officer at Oceana, the largest international organization dedicated solely to ocean conservation.

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A pause on offshore drilling is a good first step. Lets make it permanent. - USA TODAY

Offshore EPC investment outlook ($billions)

(Source: Westwood Analysis)

Offshore staff

LONDON Total investments in new offshore field developments last year were the lowest for over three decades, according to Westwood Global Energy Group.

World events led to E&P companies trimming on average 30% from planned 2020 capex and postponing or halting $54 billion of offshore EPC contracts.

In the event, $12.3 billion of EPC contracts were awarded for 32 sanctioned projects, down from $40.3 billion for 80 projects the previous year.

According to Thom Payne, head of Offshore Energy Services at Westwood, five E&P companies accounted for 75% of the award value in 23 projects. The five largest projects, contributing 57% of the overall value, were Woodsides Sangomar off Senegal, ExxonMobils Payara off Guyana, Equinors Breidablikk in the North Sea, CNOOCs Lufeng 14-1/4/8 offshore China, and Petrobras Mero III in Brazils Santos basin.

This year the spending plans of certain players such as Petrobras, Shell, and Woodside could lead to a resurgence in offshore EPC awards. Based on an average Brent price of $50/bbl, Westwood forecasts firm and already awarded contracts of around $29 billion, with a further $12 billion of probable and $4 billion of possible awards in prospect.

Some of these relate to projects deferred last year and which had pre-FID commitment, such as Shells Whale, Equinors Bacalhau and Qatar Petroleums North Field, all of which had started partial construction of long-lead items such as FPSOs or wellhead platforms.

These projects account for $7.7 billion of projected EPC value for 2021. Another $4.6 billion comes from awards concerning backfilling of LNG trains or supporting existing gas sales agreements such as Woodsides Scarborough, Shells Crux and Santos Barossa, all offshore Australia.

NOCs account for 62% of potential awards in 2021 and supermajors 10%, compared with 59% and 20% respectively in 2019.

Payne expected Petrobras to contribute around $6.5 billion of EPC awards in 2021 for its Bzios 5, 6, 7 and 8, Mero 4, Itapu and Marlim Revitalization projects.

02/02/2021

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Offshore engineering, procurement, and construction awards set for revival in 2021 - Offshore Oil and Gas Magazine

Highlights

Storage solution to power price risk: Cooley

Green H2 premium 'can be levied on power price'

Aiming for Eur0.5 million per MW installed

London The UK needs a contracts for difference mechanism for green hydrogen that is harmonized with the existing CFD for offshore wind, ITM Power CEO Graham Cooley told S&P Global Platts Feb. 2.

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Linking the two would offer vital synergies as part of a well-defined net zero policy, Cooley said.

"The fourth CFD round later this year is seeking around 12 GW [likely to be mainly offshore wind]. There is no protection in that auction against negative pricing. If you join the dots you see that energy storage is your instrument for dealing with that risk," Cooley said.

"The way the CFDs work for offshore wind and hydrogen need to be harmonized so one provides the solution for the other. That mechanism is key to a green H2 strategy in the UK."

For hydrogen, the contracts would act to bridge the cost gap between conventional (grey) and green hydrogen "so we can replace its use in industry", the electrolysis manufacturer said.

"The difference between grey and green can be levied on the electricity price," Cooley said.

In December, the government announced a 10-point climate plan, which included a 5 GW target for low carbon hydrogen by 2030 - without specifying production pathways.

UK funding to date, however, has tended towards support of large blue hydrogen projects based on natural gas-based reforming with carbon capture and storage, such as HyNet North West and H2H Saltend.

The Gigastack project on Humberside (Orsted, Phillips 66 and ITM Power) is a rare example of a UK-supported, large-scale green hydrogen project.

A more detailed UK hydrogen strategy is due in the first half of this year, government officials said in January.

"There needs to be a well-articulated difference in the incentives for blue and green hydrogen," Cooley said.

"Green hydrogen is net zero, blue is not. I think you will find that any deployment of blue hydrogen will be towards the end of the 2020s. By that time green hydrogen will be lower-cost and blue hydrogen will be a stranded asset," he said.

While the bulk of green hydrogen production costs related to the cost of renewable energy, Cooley had a positive message on capital costs.

"For 10 MW and above, we are now lower than Eur0.8 million per MW ($960,000/MW)," he said, referring to the all-in cost of an electrolyzer, including systems for power, gas, water and controls.

By 2023-2024, when ITM Power expects to be supplying up to 100 MW systems, the cost will have fallen to around Eur0.5 million a MW, he said.

The company's new manufacturing facility at Bessemer Park, Sheffield has just opened. It will have an annual capacity of 300 MW per annum from opening, expanding to 1 GW per annum by 2024.

"A decision on a second factory will be event-driven," Cooley said. "When we get to 60% capacity in the existing factory, we pull the trigger on a second factory."

Analysts expect ITM Power to be cash positive around 2024.

The company's tender opportunity pipeline currently stands at GBP434 million ($592 million), up 34% since October 2020.

The figure refers to the total number of commercial tenders for which ITM Power has submitted firm bids for turnkey electrolysis projects, including balance of plant, over the last 12 months.

Of the GBP434 million value, GBP284 million is attributable to ITM Power, representing 423 MW of potential awards. The residual value relates to engineering, procurement and construction services provided by ITM's partner, Linde, which has a 17.3% stake in the UK company.

On Jan. 13 Linde said it would build, own and operate a 24 MW ITM Power-supplied PEM electrolysis plant at its Leuna chemical complex in Germany. Production at the unit, the largest in the world to date, is due to start in the second half of 2022.

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UK green hydrogen, offshore wind CFDs 'should be harmonized': ITM Power - S&P Global

Offshore staff

IJMUIDEN, the Netherlands Aker Solutions has contracted Strohm to deliver two gas lift jumpers for an unnamed deepwater project off Sabah, Malaysia.

The company will supply two 150-m (492-ft) long thermoplastic composite pipe (TCP) Jumpers through its Jumper on Demand concept. Launched in 2019, long lengths of its TCP Jumpers are manufactured and held in stock together with a number of end-fitting sets, to support an improved turnaround time for pipe supply, termination and installation in any location around the world.

The Jumper on Demand concept provides operators and installation contractors with lowest installed cost, flexibility of supply, ability to cut to length when needed and schedule de-risking, the company said.

TCP is a non-conductive, non-corrosive flexible pipe that is 80% lighter in weight compared to its metallic equivalents. Its manufacturing process also produces 50% lower CO2 levels compared to that of carbon steel pipe, the company claimed.

02/02/2021

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Strohm to provide thermoplastic composite pipe jumpers for project offshore Malaysia - Offshore Oil and Gas Magazine

OPC rendering courtesy of Eastern Shipbuilding Group

The U.S. Coast Guard has launched a full and open competition for follow-on projects to design and build up to 11 offshore patrol cutters to complement the maritime law enforcement service's national security and fast response cutters.

USCG said Monday it will accept responses to the new OPC solicitation through May 28 and aims to name the winning contractor in the second quarter of fiscal 2022.

Panama City, Florida-based Eastern Shipbuilding Group won a $110.3 million contract in September 2016 to complete lead OPC detailed design work. The company was awarded options two years later to begin the construction project and obtain lead-long time materials for a second OPC. According to ESG, the contract includes options to manufacture up to four vessels.

The follow-on contract will have a fixed-price-incentive-firm structure and covers logistics, training and life cycle engineering services, USCG noted in the request for proposals.

OPCs will account for 70 percent of the branch's offshore cutter fleet once the new vessels reach operational status and will support maritime security operations farther than 12 nautical miles.

The service intends to procure a total of 25 OPCs.

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Coast Guard Solicits Bids for Follow-On Offshore Patrol Cutter Contract - Executive Mosaic Media

Offshore staff

KUALA LUMPUR, Malaysia Petronas Resak platform offshore Kertih, Terengganu, will be Malaysias first platform remotely controlled from land, the company revealed in its Activity Outlook 2021-23.

The currently manned facility is undergoing conversion for remote operations via implementation of automation, robotics, and AI measures. It will transition from full board offshore manning to lean manning and eventually to fully unmanned operation.

To aid the process, staff required to operate both offshore and onshore sites are receiving technical upskilling. Petronas aims to duplicate the transformation process at other platforms, as part of a commitment to bring in remote and autonomous operations throughout its facilities.

(Courtesy Petronas)

The company also listed some of the robotics technologies it has been collaborating on with various developers for integration with its daily operations, toward building Facilities of the Future.

Once these are tested, the company hopes these and other similar technologies will be adopted by vendors when performing tasks at Petronas facilities. Developments include:

Petronas is intensifying efforts to reduce carbon emissions from its operations. It is currently embarking on its first full carbon capture, utilization and sequestration (CCUS) project through implementation of offshore carbon capture and sequestration (CCS).

Its first CCS scheme is due to be completed in 2025, and will be the worlds largest offshore CCSproject to date, the company claimed.

Another target is offshore floating wind turbines that can provide green electricity for platforms, despite Malaysias typically low wind speed. The company has entered various collaborations to develop a cost-effective wind turbine system specifically for low-wind speed regions, and expects to initiate a pilot on one of its fields later this year.

02/02/2021

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Petronas converting offshore Resak platform for remote operations - Offshore Oil and Gas Magazine

by Barby MacGowan 2 Feb 08:09 PST August 19-21, 2021

The 17th edition of the Ida Lewis Distance Race starts Thursday, August 19, 2021 and will keep its expanded format from last year to give competitors more options while the country continues to deal with changes brought about by the COVID 19 Pandemic.

The schedule consists of:

The start for the Offshore Races will be in the East Passage of Narragansett Bay on Friday, August 20th with the first Warning Signal scheduled for 1100. The start for the IN BAY Race will be in the East Passage of Narragansett Bay on Saturday, August 21st with the first Warning Signal scheduled for 1000.

Race headquarters will be located at the Ida Lewis Yacht Club, Wellington Avenue, Newport, R.I., and manned throughout the time of the races.

The offshore portion of the Ida Lewis Distance Race has become a popular late-summer racing tradition, enjoyed by veteran offshore sailors as well as those trying the "overnight sprint" for the first time. It begins off Fort Adams and ends just inside Newport Harbor where Ida Lewis volunteers can site the finish line from their clubhouse on Lime Rock before greeting each team on the water with a congratulatory bottle of Prosecco.

Unique to the Ida Lewis Distance Race, the Race Committee considers weather forecasts to decide from among four courses that range from 112 to 169 nautical miles. The goal is to get all teams back to the dock within 18-24 hours. The courses - incorporating some of the most iconic cruising grounds in New England - are named "The Montauk", "The Block Island", "The Point Judith", and "The Buzzards Bay Tower".

Classes are for boats 28 feet or longer and include IRC, PHRF, One Design, Multihull, Double-Handed, and, new for this year, Mixed Double-Handed (to debut at the 2024 Olympics). The race also Includes Youth and Collegiate Challenge categories.

The Notice of Race has been published here. For questions, contact Race Chairman Pat Kennedy,

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Ida Lewis Distance Race returns with In Bay and Offshore Races - Sail World