Supreme Court To Hear OCS Case With Impacts for the Offshore Renewables Industry

by Carolyn Elefant on October 3, 2011

wind-turbineIt’s not often that the United States Supreme Court hears a case with consequences for the offshore wind and marine hydrokinetic industry. The last time I mentioned a Supreme Court case was back in April 2008, where I posted about Delaware v. New Jersey. There, the Court interceded to resolve a dispute over whether the State of Delaware could veto an LNG project that originated in New Jersey’s portion of the Delaware River (answer – it can, based on the terms of a 1905 Compact between the two states).

Whereas Delaware v. New Jersey bears on permitting offshore renewables project by clarifying that all states need to be on board, Pacific Operators Offshore LLP v. Valladolid, the case scheduled for oral argument before the Court tomorrow headline, will have a far less immediate impact. Pacific Operators raises the question of whether a worker on the Outer Continental Shelf (OCS) who is injured while on the job, but off the OCS, is eligible for compensation under the OCS Lands Act (OCSLA) which provides for compensation for “any injury occurring as a result of operations conducted on the OCS.”

Specifically, Section 1333b of the OCSLA states that:

With respect to disability or death of an employee resulting from any injury occurring as the result of operations conducted on the outer Continental Shelf for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf, compensation shall be payable under the provisions of the Longshore and Harbor Workers’ Compensation Act [33 U.S.C. 901 et seq.]

As SCOTUS Blog explains, the statutory language “as the result of operations,” gave rise to several conflicting decisions in different circuits regarding the scope of the OCSLA’s compensation provisions, thus requiring resolution by the Court. The Pacific Operators comes out of the Ninth Circuit, and involves a worker who spend 98 percent of his time on an oil rig on the OCS was injured while processing oil at a land-based facility inland from the coastline. The Ninth Circuit agreed with the Third Circuit that an offsite injury could qualify for compensation under the OCSLA so long as there is a substantial relationship between the the offsite and OCSLA activities. The Ninth Circuit found that the lower court had not made determined if there was a relationship between the OCS and offsite activities and therefore sent the case back for additional findings.

Of course, the outcome of Pacific Operations may not matter much to offshore renewables largely because there’s not much actual activity, let alone operations, taking place on the OCS — although hopefully that’s bound to change soon. Deepwater Wind has gotten necessary approvals and is moving ahead with surveys. (Cape Wind, once again is stalled for the time by more litigation). In addition, the Bureau of Ocean Energy Management ( BOEM and BSEE as of today ) recently launched a study of safety issues in connection with offshore renewables operations.

However, it’s not clear whether the Longshoreman’s Act compensation provisions of the OCSLA apply to offshore renewable workers. Section 1333b of the OCSLA speaks to operations for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the…OCSLA. The OCS references the types of extractive activities but does not discuss operations related to renewable energy development which were added as authorized uses as the result of EPAct 2005. See Section 1337b(empowering the Secretary of Interior to lease OCS lands for alternative energy production). For similar reasons, there’s been confusion for some time over whether the Jones Act provisions requiring that US flagged vessels be used for operations on the OCS carries over from the oil and gas industry to offshore renewables. Pacific Operations will draw additional attention to the compensation provisions of the OCSLA — but ultimately won’t resolve the question of whether these compensation provisions apply at all to renewables workers involved in OCS operations.

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