Latest Version is a Great Effort at Compromise While Continuing to Seek an End to the Competitive Advantage Foreign Mariners and Vessels are Provided in U.S. Offshore Energy Markets
WASHINGTON, D.C. – The Offshore Marine Service Association (OMSA) today lauded the introduction of theAmerican Offshore Worker Fairness Act (AOWFA). This important legislation provides a step forward towards providing parity between U.S.-flagged and foreign-flagged vessels operating in U.S. offshore energy markets and ensuring that U.S. energy creation means U.S. jobs. The legislation was introduced by U.S. Senator Bill Cassidy, MD (R-LA).
The legislation is an updated version of the bill Senator Cassidy introduced last Congress and Section 346 of H.R.2741, the Coast Guard Authorization Act of 2023, which passed the U.S. House Committee on Transportation and Infrastructure and is currently awaiting consideration by the full U.S. House.
AOWFA seeks to close a loophole in the Outer Continental Shelf Lands Act (OCSLA) that provides a massive cost advantage to foreign-flagged vessels operating in U.S. waters. Specifically, the law requires that U.S. owned vessels be crewed by U.S. citizens, however, the law allows foreign-owned vessels working in U.S. waters to be crewed by foreign mariners at international wage levels. As labor costs are the biggest cost drivers for vessels, this disparity creates an incentive for developers to use foreign-owned vessels for U.S. offshore energy projects.
To address this problem, AOWFA would, among other changes, require that foreign-flagged vessels working inU.S. waters be crewed by U.S. citizens or citizens of the nation where the vessel is flagged. While most view thischange as a commonsense way of ensuring U.S. workers are not disadvantaged, offshore energy developers andforeign vessel owners have objected to AOWFA claiming that Americans cannot replace the Russian, Ukrainian,Filipino, Malaysian that are found on foreign-flagged vessels working on U.S. energy projects.
About the new version of the legislation, OMSA President, Aaron Smith said, “This version of the bill doesn’t give our members everything we need to compete on a level playing field industry wide. That said, OMSA applauds Senator Cassidy and his staff for seeking a pathway forward for AOWFA that addresses claims expressed by energy interests. OMSA, Senator Cassidy, and the other AOWFA supporters would never take an action that harms U.S. energy production—an economic enabler for the very existence of our industry. While the original version of the bill only provided benefits, we recognize the need to respond to the claims made by U.S. energy and applaud Senator Cassidy for identifying compromises that does just that.”
Smith continued “Senator Cassidy has addressed the purported concerns of the energy developers and foreignvessel owners. They now have a choice, they can either join our American offshore maritime workforce in support of this legislation or admit that they never really wanted to hire Americans in the first place. The only difference between hiring professional U.S. mariners versus hiring foreign crews is the rate of pay. American mariners are simply not willing to accept $30 a day.”
Senator Cassidy’s legislation would amend the OCSLA to:
- Ensure the crew of foreign-flagged vessels conducting offshore energy work in U.S. waters are either U.S. mariners or are citizens of the nation where the vessel is flagged. However, the Senator’s legislation exempts and delays this requirement for vessels not currently found in the U.S. fleet, including: (1) pipe and cable-laying vessels, (2) drilling rigs, pipe and cable-laying vessels, and (3) heavy lift vessels, including Wind Turbine Installation Vessels (WTIVs).
- Require foreign mariners working in the U.S. offshore energy markets secure a Transportation Worker Identification Credential (TWIC). Current regulations require all U.S. mariners to secure a TWIC but make it optional for foreign mariners working in U.S. waters.
- Limit the number of visas that can be issued for each foreign vessel operating in U.S. waters and take steps to ensure that these visas are connected to the mariner’s work on that vessel.
- Require each foreign vessel in U.S. offshore energy markets to prove the ownership structure required to obtain a crewing waiver annually.
- Require the U.S. Coast Guard to annually inspect foreign-flagged vessels operating in U.S. offshore energy markets to ensure compliance with these changes.
The House version of AOWFA differs in that it does not include exemptions for any vessel classes and has a quicker implementation timeline.
When passed in 1978, OCSLA sought to promote the hiring of U.S. offshore workers in U.S. offshore energy activities, while also ensuring these workers had access to offshore energy work in foreign waters. To accomplish this feat, the law required that all those working on offshore energy projects be U.S. citizens. But the law provided a loophole for vessels that had majority foreign ownership. This loophole—while well-intentioned—has not provided reciprocal access to foreign waters for U.S. mariners or companies. Instead, it has allowed foreign companies with foreign workers from any nation to work on U.S. offshore energy projects and pay wage rates far below even the U.S. statutory minimum wage let alone the wage rates of U.S. mariners. Thus, this loophole creates a legal disparity in the operational cost of a U.S. vessel and foreign vessels.
For more information and background about the legislation, or to sign up for updates on the legislation, please click here.
About OMSA:
The Offshore Marine Service Association represents more than 140 member companies, including approximately 60 firms that own and operate marine service vessels. These sophisticated vessels, connect America with its offshore energy resources, constructing these assets and providing every pipe, wrench, computer, barrel of fuel, and gallon of drinking water to rigs, platforms, and wind turbines as well as transporting tens of thousands of workers to and from the facilities.