Use of foreign crews splits companies.

Use of foreign crews divides companies

A decision on the Jones Act is expected May 18.

Louisiana company Hornbeck Offshore Services has spent $615 million since 2009 building ships to help with deepwater drilling construction. But the company says that the oil bust and a federal policy that allowed foreign workers into U.S. waters has kept some of those ships from work.

Now, Hornbeck, other maritime companies and their workers are waiting for the Trump administration to review enforcement of the so-called Jones Act, a century-old maritime law that would cut out foreign competitors. And at a forum Tuesday, with the offshore industry gathered in Houston, the U.S. shipping companies pressed their case.

“Foreign competition could come in with much lower crew wages,” said Todd Hornbeck, the CEO of Hornbeck Offshore Services. “We just could not compete in that type of situation. It’s been crippling to our industry.”

As tens of thousands of executives and workers flock to the Offshore Technology Conference, the fate of the Jones Act and how it will be interpreted has become a major concern for the oil and gas industry. The Jones Act basically requires U.S. ships and crews to move cargoes and equipment in U.S. waters, but over the years, the government has granted exemptions that have allowed foreign ships and crews to do work for offshore drillers.

At issue now is whether the Trump administration will continue those exemptions or interpret the law more strictly. The American Petroleum Institute, the industry’s trade

group, recently released a study forecasting 30,000 job losses this year, mostly in the Gulf, and a 23 percent drop in U.S. oil and gas production by 2030 if foreign ships are prohibited from operating in offshore U.S. waters.

“We can’t afford those kinds of setbacks,” said Marty Durbin, the executive vice president of the API.

The Trump administration is expected make a decision on May 18.

Oil companies say they need foreign workers and that repealing exceptions to the act would shut down offshore operations. Hornbeck conceded that in 2009, when the Obama administration first began to consider ending the exceptions, there weren’t enough American vessels to respond to the industry’s needs.

But companies responded by building vessels, and on Tuesday Hornbeck said he has three crewed vessels ready and waiting for work.

Overall, the company has seven vessels that are qualified to work under the Jones Act, according to a list from the Offshore Marine Service Association, an industry trade group.

Companies like Hornbeck Offshore Services say the law was intended to make room for American companies in the Gulf.