New AOWFA legislation aims to close offshore energy Jones Act loophole

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The Offshore Marine Service Association (OMSA) is applauding the introduction of the American Offshore Worker Fairness Act (AOWFA), saying, “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 AOWFA legislation was introduced by U.S. Senator Bill Cassidy, MD (R-La) and is an updated version of the bill that he 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.

According to Senator Cassidy’s office, the bill creates a level playing field between U.S.-flagged vessels and foreign-flagged vessels working in offshore energy activities in U.S. waters while also attempting to strike a balance between “providing the fullest possible employment for Americans in Outer Continental Shelf (OCS) activities” and ensuring the installation of offshore wind turbines and the activities of oil and gas rigs or mobile offshore drilling units are not disrupted. The changes also improve the oversight of foreign-flagged vessels and the mariners who work on these vessels.

“U.S. and Louisiana mariners and maritime companies must be able to compete on a level playing field in the Gulf of Mexico for all offshore energy activities,” said Dr. Cassidy. “We cannot continue to lose to foreign vessels who take advantage of loopholes, avoid paying taxes, and hire foreign workers. This bill finds the balance that maximizes opportunities for U.S. companies and workers and avoids project delays.”

Current law requires that all vessels, rigs, platforms, or other offshore structures be manned by U.S. citizens or lawful permanent residents. Existing law also includes an exemption from hiring Americans or lawful permanent residents for offshore activities and allows vessels that are more than 50% foreign-owned to operate in U.S. waters with foreign crews. According to the senator’s office, the exemption was included to eliminate potential retaliation by foreign nations against American workers in foreign offshore activities. In practice, the exemption has not provided reciprocal access to foreign waters for U.S. mariners.

At the expense of U.S. mariners, the exemption has allowed foreign vessels from some of the wealthiest countries to work in U.S. waters and employ mariners not from their home or flag nation but from other low-wage nations. Since labor is the biggest operational expenditure for a vessel operator, operators rely on foreign mariners who are often paid less than their U.S. counterparts. Because foreign mariners are not subject to U.S. tax and labor laws, foreign vessels owners are able to leverage the cost savings derived to undercut the charter rates of similar U.S. vessels.

The American Offshore Worker Fairness Act(AOFWA)

• Ensures mariners manning foreign-flagged vessels engaged in offshore energy activities in U.S. waters are either U.S. mariners (U.S. citizens or legal permanent residents) or are citizens of the nation where the vessel is flagged.
• Vessels such as oil rigs or mobile offshore drilling units or vessels performing certain offshore lifts, including offshore wind installation vessels, are exempt.
• Creates a new domestic market survey requirement for foreign vessels laying pipelines or cables on Outer Continental Shelf. This proposal would allow foreign vessels to perform this work if a U.S. flagged vessel is not available and/or capable of performing the work sought.
• Requires foreign mariners serving in U.S. waters to secure a Transportation Worker Identification Credential (TWIC) thereby improving the oversight of foreign-flagged vessels and the mariners that work on board them.
• Sunsets all current letters of OCSLA non-applicability based requires foreign vessels to reapply for a new letters based upon their current ownership, and limits future letters of OCSLA non-applicability to be valid for 12 months from the date of issue.
• Limits the number of foreign mariners that may receive a visa sponsored by a vessel’s letter of OCSLA non-applicability to 2.5 times the number of persons required by the vessel’s safe manning document.
• Creates greater transparency on enforcement for Jones Act violations.
• Increases funding and extends the authorization for Maritime Centers of Excellence

“This version of the bill doesn’t give our members everything we need to compete on a level playing field industry wide,” said OMSA President Aaron Smith. “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 do just that.”

“Sen. Cassidy has addressed the purported concerns of the energy developers and foreign vessel owners,” added Smith. “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.”

• Download a one pager on the legislation from Senator Kennedy’s office HERE