Dredging laws and the coastal ramifications for Louisiana.
TABLE OF CONTENTS I. Introduction II. Causes of Coastal Erosion III. Legislative History of Dredging IV. Why the Objectives of the Foreign Dredge Act and the Jones Act Are Not Appropriate for the Dredging Industry V. Louisiana Is Vital to the Nation VI. Financing Restoration A. Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act (RESTORE Act) B. Coastal Impact Assistance Program (CIAP) C. State Budget Surpluses D. Gulf of Mexico Energy and Security Act (GOMESA) E. Harbor Maintenance Trust Fund F. Tidelands Controversy VII. Environmental Concerns VIII. Proposed Solutions A. Removing Protectionist Legislation B. Bowaters Amendment C. Oceanographic Research Vessels D. Incentivizing Louisiana IX. Conclusion
It is a generally accepted economic principle that competition and innovation stimulate economic growth, and in the process bring down the costs of production, all things being equal. Take a well-known example--the automobile. Through invention of the moving assembly line (1) and use of economies of scale, Henry Ford was able to reduce the costs of producing vehicles, and thus pass on those savings to consumers. The benefit of lower costs meant increased access to Ford's products, leading to higher demand. The higher demand, in turn, invited competitors to enter the market, further feeding the cycle of innovation, cost reduction, and consumer savings.
The dredging industry should be no different. However, current legislation--including the Foreign Dredge Act of 1906 and the Merchant Marine Act of 1920 (the latter commonly known as, and hereinafter sometimes referred to, as the "Jones Act")--has placed an artificial barrier to entry on the dredging industry, with significant ramifications for coastal Louisiana. With Louisiana suffering an annual coastal land loss of approximately twenty-nine square miles annually, (2) sustainable solutions are of paramount importance to help rebuild the eroded wetlands.
This paper will examine the history of applicable legislation to the dredging industry and the effect such legislation has had on both Louisiana and the public at large--namely, taxpayers. First, an overview of the causes of coastal erosion and the legislative history behind the dredging industry will be provided. Second will be an insight into Louisiana's importance and what the regulations mean for the coast. Finally, this paper will propose possible solutions to help mitigate and remediate the current state of the wetlands to ensure Louisiana's presence for future generations will be proposed.
II. CAUSES OF COASTAL EROSION
As an initial matter, a foundation of some knowledge of the causes of Louisiana's coastal erosion is important. There is no singular factor responsible for the land loss Louisiana has experienced over the past centuries, but a combination of forces both natural and man-made have contributed to the issue. (3)
Natural forces that have shaped the Mississippi delta include the historic course changes of the Mississippi River, which have both added and taken sediment from the state's coast, (4) as well as changes in sea level due to ice age recovery and tectonic shifts. (5) The River carries sediment from upstream, depositing it at the River's base, creating marshes just above sea level capable of sustaining vegetation. (6) When the River changes course, the supply of freshwater and sediment to those areas ceases and the area effectively fades away. (7) This contraction of land, however, was offset by the addition of new marshland with the River's new course. (8)
Human forces in the past century have largely paralyzed any addition to wetlands, with the single biggest influence being the creation of levees along the banks of the Mississippi River. (9) Levees along the Mississippi and upstream dams prevent the flooding of fresh water into the marsh, which stunts replenishment of new sediment and nutrients. (10) Now, these important elements are dispersed into the Gulf of Mexico. (11) Because freshwater no longer reaches the marshes, saltwater from the Gulf of Mexico is able to intrude, rapidly converting the marshes into open water. (12) Canals that have been dredged over the last several decades have further aided this conversion into open water. (13)
Both the United States Army Corps of Engineers ("Army Corps") and the oil and gas industry have contributed to significant amounts of land loss by dredging (14) canals for Federal navigation, mineral exploration, and transportation. (15) The long-term effects of these canals, however, are much bigger than the initial land loss from their construction due to widening from vessel navigation. (16) Additionally, spoil banks alter the flow of water across wetlands, changing the hydrological influence of water on the wetlands. (17) Together, canals and spoil banks can impound portions of wetlands, which expose them to long periods of flooding and kills vegetation. (18)
One of the more obvious forms of wetland loss, and certainly not inconsequential, results from urban and agricultural development. (19) Much of this development in the past was followed by no effort to counteract the losses; (20) however, programs and permitting now attempt to mitigate the resulting wetland diminution. (21)
The causes of coastal erosion are far more complex than the scope and purpose of this comment. The preceding information is intended only to give background information for contextual purposes. (22)
III. LEGISLATIVE HISTORY OF DREDGING
The following, though not an in-depth analysis of each law pertaining to dredging, should provide a sufficient overview of those laws that have had, or still have, an effect on the state of the dredging industry. (23)
The history of what is now known to encompass modern dredging laws begins with the Supreme Court decision in Gibbons v. Ogden. (24) In Gibbons, New York state law granted Robert Fulton a navigational monopoly on all waters within the state's jurisdiction. (25) The Court held that the federal government retained the authority to regulate interstate commerce, including riverine navigation, and as such the law was repugnant to the Constitution. (26) This decision established the federal government's exclusive authority over navigable bodies of water. (27)
As a logical extension of this authority, the government subsequently passed an act that forms the basis of current dredging law--the General Survey Act of 1824 ("General Survey Act"). (28) The General Survey Act authorized the President to conduct surveys, through the Army Corps, of roads and navigable waterways for travel efficiency and safety determinations related to military and interstate commerce. (29) A month following the General Survey Act, Congress appropriated $75,000 for improvement projects, and granted authority to the Army Corps for the removal of various obstacles (snags) in the Mississippi, Ohio, and other various rivers, with the aim of improving navigation. (30)
Several decades after the General Survey Act, Congress passed 33 U.S.C. [section] 622 in 1888 directing the Army Corps to carry out dredging projects in "the manner most economical and advantageous to the United States." (31) The statute further directed the Secretary of the Army to contract out the work if it was determined that private industry could reasonably perform the work in a timely and a cost-effective manner. (32) This had the obvious goal of opening up the possibilities of private competition with government in an effort to spur industry participation.
In 1906, H.R. 395--informally the Foreign-Dredge Act--placed a prohibition on the use of foreign-built dredges under the penalty of forfeiture. (33) The protectionist objective is unambiguous and clearly articulated in the legislative comments and committee report that accompany the Act. (34)
Following the Foreign-Dredge Act in 1919, 33 U.S.C. [section] 624 implemented limitations on the scope of private contracts to the extent that government must retain its own dredging-related services if it is reasonably available to perform such services, and the price of a private contract exceeds the government estimate by twenty-five percent. (35)
In 1920 Congress enacted The Merchant Marine Act, popularly known as the Jones Act, which among its various directives promulgates cabotage (coastwise trade) law. (36) As stated in the objectives and policy of the Act, its purpose is to establish a merchant marine with the duties of providing for the national defense and development of domestic and foreign commerce. (37) Vessels that compose the merchant marine fleet must, among other regulations, be owned and operated by the United States and its citizens, as well as be constructed in the United States. (38) Additionally, if a legal entity operates a vessel engaged in coastwise trade, at least seventy-five percent interest must owned by a citizen of the United States. (39)
In 1978, Congress amended 33 U.S.C. [section] 622, establishing that only a minimum fleet be retained to carry out emergency and national defense work. (40) Also, contained in this bill was the revision that amended 33 U.S.C. [section] 624, adding language to further detail the considerations involved in determining the cost of work by the government and a private contractor. (41)
In (1992), the Oceans Act (42) included a section amending the Foreign Dredge Act. (43) This section rephrased the text of the statute to encompass the vessel requirements of then section (27) of the Jones Act. (44) The amendment went further, excepting from dredging requirements the vessels STUYVESANT, COLUMBUS, and any other vessel that was currently engaged in dredging operations, assuming the vessel met, inter alia, certain cost and flag requirements. (45)
According to the [Dredging Contractors of America], in 1992, Congress took action to ensure that the US dredging industry would be composed of US companies in accordance with American maritime laws. The Oceans Act of 1992 addressed concerns about unfair competition from foreign companies and conforms the dredging laws to meet US citizenship and control requirements. The Act included a grandfather clause that allowed a single, pre-existing foreign-controlled vessel, the Stuyvesant, and limited supporting vessels to continue to operate in the US dredging market. (46)
In 1993, the Energy and Water Development Appropriations Act required the Army Corps to request bids from private industry for a minimum of 7.5 million cubic yards of government-dredged hopper volume from the previous fiscal year. (47)
In 1996, the Water Resources Development Act placed the WHEELER in ready-reserve status, allowing its use only upon the failure of private industry to submit a "responsive and responsible bid" for work or in carrying out work contracted with the government. (48) The Act further limits any new hopper dredge work over and above the average of that assigned in the prior three fiscal years. (49) The cumulative effect of the legislation throughout the 1990s had the consequence of limiting federal hopper dredge fleet from a schedule of about 230 workdays to roughly 180. (50)
In the 2002 Energy and Water Development Appropriations Act, Congress limited the hopper dredge MCFARLAND to 85 days of work in the Delaware River. (51) In 2007, again under the Energy and Water Development Appropriations Act, MCFARLAND was placed on ready-reserve status limiting its use to routine dredging on the Delaware River and emergency work. (52) The purpose in placing the Army Corps dredges in ready-reserve is to facilitate compliance with 33 U.S.C. [section] 622. (53)
While legislative purposes have clearly explained the intent behind certain pieces of law, as a whole one can make inferences about the overall Congressional intent in effectually closing the industry to key players--primarily domestic. The various dredging statutes over the decades have the effect of eliminating foreign participation and reducing that of the government in dredging, while attempting to open the market to encourage private industry participation. This, however, has not panned out so well for the hopper dredge fleet, as it is rapidly aging and the relatively few players have pushed up dredging costs. (54) What this means for Louisiana is both a financial and procedural disadvantage to tackle the pressing coastal erosion issue.
IV. WHY THE OBJECTIVES OF THE FOREIGN DREDGE ACT AND THE JONES ACT ARE NOT APPROPRIATE FOR THE DREDGING INDUSTRY
As stated in the objectives of the Jones Act, the purpose is to establish a merchant marine with duties to provide for the national defense and development of domestic and foreign commerce; (55) essentially, it aims to ensure security, quality, and economic welfare. (56) This objective, though, can hardly stand up to the realities that the dredging vessels face. Because of certain physical characteristics of dredges, they may provide limited functionality for any purposes outside their designated roles.
Dredging vessels are ill equipped to serve the nation's security needs. (57) They are not well suited to transport either men or military equipment, not the least of the reasons being all but hopper dredges are primarily stationary in nature. (58) Moreover, small to mid-size hopper dredges (of which the American fleet is primarily composed) suffer from moving comparatively slower than that of specific military transports. (59) Without an ability to move quickly or at all, their value deteriorates as any sort of transport vehicle during an emergency. However, the utility of dredges lies in their function of maintaining waterways for efficient transportation, as they provide essential, navigational services to facilitate movement among and through the nation's key harbors and channels. (60) Is this function enough, though, to warrant citizenship requirements, when the U.S. military utilizes foreign vessels for its own use?
Assuming, arguendo, that protecting the American shipping and shipbuilding industry serves a legitimate security purpose, then one can hardly justify the fact that the Department of Defense's Military Sealift Command ("MSC") leases foreign ships, when maintaining a domestic fleet is what ensures the country's safety. (61) According to the MSC, its mission is to "[o]perate the ships which sustain our warfighting forces and deliver specialized maritime services in support of national security objectives in peacetime and war." (62) The irony of the situation is that the legislation seeking to foster a merchant marine fleet is the same legislation that makes it too expensive for American shipbuilders to compete with foreign shipbuilders. (63) Because of high material and labor costs to build ships on U.S. soil, Jones Act-compliant ships are approximately four times the cost of what South Korea and China--the industry shipbuilding leaders--are similarly able to produce. (64) Given the disparity in production costs, the MSC's reason for outsourcing is hardly arguable; (65) however, it ultimately undermines any force given to an argument in favor of the Jones Act vis-a-vis national security when it causes reliance on foreign vessels. Likewise, the intent behind the Foreign Dredge Act is hardly served if America's own military outsources its needs to foreign companies. If foreign vessels are viable for military transport and pose no threat to security, surely dredging for purposes of coastal restoration would be even more far removed.
This issue of foreign participation becomes especially relevant when taking into account Louisiana's coastal reclamation needs, since hopper dredges are best suited to tackle large-scale material excavation, (66) and foreign dredges are technologically surpassing our own. Vessel quality remains a serious concern for our dredges, significantly those belonging to the Corps. (67) With an average age of approximately thirty-three years coupled with small capacities, the American hopper fleet remains inferior to that of its foreign counterparts. (68) For instance, the most recent dredge built in the United States by Weeks Marine is the MAGDALEN, a trailing-suction hopper with an 8,500 cubic yard capacity. (69) Compare this with European and Asian companies that are building dredges boasting 25,000 cubic yards plus. (70) Considering that MAGDALEN was only a single, lower-capacity addition to an already substandard collection of hoppers, it is a small consolation for a challenged American fleet.
To illustrate how the United States fleet compares with its foreign counterparts, the following data should provide some insight into where the US falls on the dredging-capabilities spectrum. Currently, the American fleet is composed of eighteen hopper dredges. (71) Of these, the largest is the GLENN EDWARDS, with a capacity of 13,500 cubic yards. (72) Coming in at second is the STUYVESANT with a capacity of 9,870 cubic yards. (73) As of October 9, 2014, Great Lakes Dredge and Dock has announced a new build, the ELLIS Island, which will boast a 15,000 cubic yards capacity. (74) Though a welcome addition to the fleet, it pales in comparison to the capacities of foreign-built dredges.
Out of Belgium, the DEME group maintains CONGO RIVER and PEARL River, which have capacities of 39,487 cubic yards and 31,561 cubic yards, respectively. (75) The Jan De Nul Group operates the CHRISTOBAL COLON, built in 2009, which boasts a 60,000 cubic yards capacity as well as a sailing speed of eighteen knots. (76) Jan De Nul also operates a (relatively) smaller dredge, the VASCO DA GAMMA, built in 2000, which has a capacity of 43,000 cubic yards. (77) There is a very apparent disparity between the capabilities of the American fleet juxtaposed against that of European dredges. Because these larger hopper dredges are primarily used for land reclamation, re-evaluation of America's fleet is important in order to mitigate the various large-scale domestic dredging issues, as well as to address the possibility of competing in foreign markets. (78)
A cooperative study performed by the Army Corps and the Dutch after Hurricane Katrina found that replacing and elevating our barrier islands is among the most appropriate methods of preserving the Gulf Coast. (79) However, in order to effectively execute such a project, sand obtainable exclusively from remote sources several hundred kilometers from the coast would be required. (80) Unfortunately, given the type of hoppers available to American dredging projects and their limited capacity, it may be cost-prohibitive compared to that of Dutch capabilities. (81) Technological advances in European ships have reduced dredging rates that industry experts say the U.S. would be hard-pressed to match. (82)
Finally, circling back to the legislative purposes of the Foreign Dredge Act and the Jones Act, the economics of a closed market do little to protect the American people. From a principle perspective, protecting industry through barriers (either tariffs or embargos) has the effect of raising prices for consumers. (83) Although in the short-term it may indeed "protect" American jobs against foreign competition, it does so at the expense of higher construction prices and fewer contract bids due to little competition. (84) This ultimately hurts, rather than helps, the American people.
Consider recent bid awards for hopper-related dredging services between 2003 and 2012. The number of bids from 2003 to 2009 on average was 2.9 per contract, and from 2011 to 2012 the average was 2.8 per contract--hardly a sign of healthy market participation. (85) Further, Great Lakes Dredge and Dock Corporation won fifty-four percent of domestic dredge bids in 2013. (86) While a singular winner of over half of the domestic dredging bids is not by itself conclusive evidence of a competition vacuum, it certainly does little to instill confidence that price-competitive bids are flourishing. (87) Moreover, the Government Accountability Office found years ago that the Army Corps was effectively circumventing the requirements 33 U.S.C. [section] 624 by awarding dredge contracts that, at the time, were roughly $2.1 million in excess of the statutory limit, and $4.4 million in excess of the costs the Army Corps would have incurred had it done the work itself. (88) While dated, this information still shows the vulnerabilities to which the current system is exposed.
In sum, each inefficiency, whether monetary or technological, means increased obstacles for Louisiana to repair its coast. Considering the rate at which the coast is disappearing, the state cannot afford to waste any more time.
V. LOUISIANA IS VITAL TO THE NATION
To put everything in perspective, it is important to understand just what Louisiana's coast offers not just to its residents, but the rest of the United States. The coast protects the oil and gas infrastructure that produces ninety percent of the nation's outer continental shelf oil and gas. (89) Additionally, the coast sustains twenty percent of the nation's waterborne commerce, as well as twenty-six percent (by weight) of domestic commercial fisheries landings. (90) The oil and gas royalties produced by infrastructure off the Louisiana coast dwarfs that of any other region in the United States--oil currently calculated at $5,040,578,020 and gas at $596,435,850. (91) These statistics are only a small fraction of the importance of the Louisiana's coast.
The coastal region is home to over two million people, many of whom have lived there their entire lives, as well as the generations before them. (92) In addition to being rich in culture and ancestry, the coast fosters an ecosystem for numerous species of wildlife and flora, many unique to Louisiana. (93) "Nowhere in the nation is there a region that simultaneously offers globally important habitat and the breadth of economic assets found in coastal Louisiana." (94) With these figures in mind, coastal erosion clearly poses a significant threat not just to the residents, wildlife, and ecosystems, but valuable commodities and sources of income for the American people and the federal government.
Coastal erosion has claimed approximately 1,880 square miles of coast and wetlands since the 1930s, (95) translating to roughly 909,920 football fields. If the status quo is maintained, in the next fifty years, land loss projections estimate another 1,750 square miles lost. (96) Dredging constitutes a significant mechanism that can achieve the goals of restoration. (97) By way of barrier islands, marsh reclamation, and beach (re)nourishment, among other things, dredging can help stem the tide of erosion. (98) Hopper dredging is the most feasible means to effectively dredge for wetland replenishment due to the volume of materials needed and their ability to be transported, and consequently the cost benefits that flow from such economies of scale. (99)
VI. FINANCING RESTORATION
A. Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act (RESTORE Act)
As a consequence of the Deepwater Horizon oil disaster in 2010, Congress passed the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act (RESTORE Act). (100) This Act dedicates eighty percent of all civil penalties paid by responsible parties under the Clean Water Act to gulf coast restoration. (101) With the settlement that was reached between British Petroleum (BP), the United States, and the Gulf States, the civil penalties total $5.5 billion, amounting to the largest civil penalty ever exacted in environmental law history. (102)
B. Coastal Impact Assistance Program (CIAP)
The U.S. Fish and Wildlife Service (USFWS) administers the Coastal Impact Assistance program that provides federal funds from offshore leases to be used for environmental conservation and protection. (103) The USFWS administrator has allocated $497 million to nineteen of Louisiana's coastal parishes. (104) However, Louisiana will likely exhaust these funds by the end of 2016. (105)
C. State Budget Surpluses
The Louisiana legislature earmarked budget surpluses from fiscal years 2007-2009 to fund coastal restoration projects. (106) This provides the state with $790 million; however, Louisiana will likely expend these funds by fiscal year 2017. (107)
D. Gulf of Mexico Energy and Security Act (GOMESA)
The Gulf of Mexico Energy and Security Act (108) (GOMESA) is a key piece of legislation for coastal restoration initiatives, which provides Louisiana, Alabama, Mississippi, and Texas shares in 37.5 percent of offshore oil and gas revenues generated in the Outer Continental Shelf (OCS). (109) This Act has taken on two phases (Phase I and Phase II), the latter of which is expected to begin generating more significant revenues. (110) Phase I, beginning in 2007, includes revenues from two particular lease zones, while Phase II, beginning in 2017, expands lease areas, but caps revenue sharing at $500 million per year for the four states through 2055. (111)
E. Harbor Maintenance Trust Fund
The Harbor Maintenance Tax (HMT) (established by the Water Resources Act of 1986) is an ad valorem tax that was originally an assessment placed on port use associated with imports, exports, and cargo movement. (112) The proceeds are then placed in the Harbor Maintenance Trust Fund (HMTF) with disbursement by appropriation. (113) Currently, the HMTF runs annual surpluses in the realm of $7 billion (as of the end of fiscal year 2012). (114) In light of the cash-flush status of the HMTF, some policy and lawmakers are urging consideration of earmarking larger portions for Louisiana coastal projects. (115) However, inadequate appropriations have left the nation's navigational channels poorly maintained, with the Army Corps reporting that roughly 30 percent of the country's vessels are having channel-depth issues, and these issues should certainly be first priority. (116) As a broader policy point, pillaging money from a separate, unrelated fund is irresponsible spending and sets poor precedent.
F. Tidelands Controversy
Worth mentioning in Louisiana's never-ending saga of political battles is the disparate treatment it has received regarding the territorial boundary of its submerged lands. The fight Louisiana has been confronting since the 1930s, better known as the Tidelands Controversy, has placed the state on unequal footing from that of other Gulf States, depriving it of valuable resources and royalties. (117)
As early as 1812, the seaward boundary of Louisiana was recognized as three marine leagues from the coast, including all islands. (118) This recognition went unquestioned until the late 1930s, when the federal government realized the value and expanse of available natural resources in the submerged Louisiana coastal seabeds. (119) In 1945 President Truman issued a proclamation that rescinded all state interest in submerged lands. (120) While the alleged intention was establishing jurisdiction for purposes of international law, from a domestic standpoint the proclamation set into motion the legal battles that ultimately became the Tidelands Controversy. (121)
Beginning with United States v. California, (122) the Supreme Court held that federal jurisdiction extended over the submerged lands up to the state's coast. (123) Three years later, in United States v. Louisiana, (124) the federal government brought charges against Louisiana for trespass, seeking to enjoin its claim to the submerged lands. (125) In rationale that the Court analogized to United States v. California, the Supreme Court held that the U.S. was entitled to its injunction, and that Louisiana held no ownership interest in its submerged coastal lands. (126)
In 1953, there was a shift back to state interest in the submerged coastal lands with the passing of the Submerged Lands Act and the Outer Continental Shelf Lands Act. (127) The Submerged Lands Act was a response to the coastal states' opposition from the previously mentioned Supreme Court rulings. (128) The federal government quitclaimed to all states three nautical miles (3.4524 land miles) from their respective coastlines, making special accommodations for the Gulf Coast states. (129) The Gulf Coast states were allowed to prove historic boundaries up to three marine leagues (9 nautical miles; 10.357 land miles) from their shorelines, but this proof posed serious problems to determining actual boundaries. (130)
The Outer Continental Shelf Lands Act was Congress's effort to regulate the lands beyond the boundaries of the states for mineral-leasing purposes. (131) Because the precise boundary location was never determined, the leasing of submerged lands generated disputes about leasing authority and royalties. (132) Eventually, zones were established and revenue sharing was implemented to help quell the disagreements between the government and the state. (133)
In 1960, in United States v. Louisiana, Texas, Mississippi, Alabama, & Florida, the Supreme Court ultimately established a three nautical mile limit for Louisiana, Mississippi, and Alabama; and three marine leagues for Texas and Florida. (134) The extra allotment for Texas and Florida was, according to the Supreme Court, based on their entry to the United States as sovereigns. (135)
As early as the 1970s, the State of Louisiana and coastal experts acknowledged the serious problems posed by wetland loss. (136) However, it was not until 1985 that the lurking issue of coastal erosion was addressed in relation to boundary disputes. (137) To mitigate, the Outer Continental Shelf Lands Act was amended in 1985 to freeze the maritime boundaries to those determined in 1975 by the Supreme Court in United States v. Louisiana. (138)
What effect does this have regarding coastal erosion and restoration? The inequality to which Louisiana (as well as Alabama and Mississippi) has been subjected puts it at a relative disadvantage compared to that of the coastal states which boast a three marine league coastal boundary. Because Louisiana has immense mineral resources off its coast, (139) an extension of the boundary would generate even greater revenue to the state for the purposes of restoration.
VII. ENVIRONMENTAL CONCERNS
Dredging carries with it environmental concerns. Toxic materials can be exhumed in the dredging process, and impact on marine habitats and ecosystems is a crucial factor that should be a primary focus on the nature and location of dredging services. (140) As a consequence, dredging is highly regulated to mitigate any deleterious effects the process has on the surrounding environment. (141) However, in an effort to maintain focus on the particular objective of this paper, it would be more beneficial to provide resources for outside research regarding the environmental impact of dredging within the footnotes. (142)
VIII. PROPOSED SOLUTIONS
Arriving at an economically sustainable solution to Louisiana's coastal problems, and ultimately the dredging issues which represent a value in the equation, might be approached from different angles. However, the reality is some may be more realistic than others, and within this section the first and last proposal serve as practical while the others serve as theoretical.
A. Removing Protectionist Legislation
The first of the solutions proposed, in its simplest terms, is removing those pieces of legislation that protect the dredging industry from foreign competition. The most direct solution would be a repeal of the Foreign Dredge Act and exemption from the build and ownership requirements of the Jones Act. As discussed earlier, the Foreign Dredge Act ultimately hurts the economy by passing on costs to consumers. (143) Also, the build and ownership requirements of the Jones Act, and its overall intent, are little served by subjecting dredges to its regulations. (144) The policies behind both laws make building, operating, and manning vessels more expensive. (145) The more expensive an operation becomes, the greater the barrier to entry, and the shallower the pool of participants becomes--in the case of the Jones Act, vessels to compose a merchant marine for national security. Because both laws' objectives are subverted, subjecting dredges to them is inappropriate.
B. Bowaters Amendment
Another solution to the Jones Act is circumventing, rather than abrogating, the build and ownership requirements. One mechanism already in practice is known as the Bowaters Amendment. (146) This provision establishes what is known as a Bowaters corporation. (147) The purpose of this special designation is for the limited purpose of reducing ownership requirements under the Jones Act. (148) Even assuming it works, the downfall of this proposal is the Foreign Dredge Act still presents a total barrier to success. For argument's sake, this section will suppose this is a hurdle that can be overcome.
Under this exception, foreign corporations may qualify under the Bowaters Amendment to engage in coastwise trade if (1) the corporation is incorporated under the laws of the United States, (2) a majority of the officers and directors of the corporation are individuals who are citizens of the United States, (3) at least ninety percent of the employees of the corporation are residents of the United States, (4) the corporation is engaged primarily in a manufacturing or mineral industry in the United States, (5) the total book value of the vessels owned by the corporation is not more than ten percent of the total book value of the assets of the corporation, and (6) the corporation buys or produces in the United States at least seventy-five percent of the raw materials used or sold in its operations. (149)
Application of this exemption could enable a foreign dredging company to manufacture and own a dredging vessel, subject to the express conditions enumerated in the Bowaters corporation statute. With their technical expertise, these corporations could assist Louisiana in its efforts to restore the coast. Additionally, the increased market participation, both foreign and domestic, could lower the costs of dredging services.
The single biggest impediment to employing this exemption is the gross tonnage limitation. (150) Bowaters status is reserved to non self-propelled vessels, or those self-propelled vessels fewer than five-hundred gross tons. (151) As previously discussed, hopper dredging is the most feasible dredging-means of executing Louisiana's coastal restoration project with any degree temporal and financial efficiency. (152) The U.S. hopper dredge fleet contains no vessel that would qualify under the gross tonnage prohibition. (153)
Moreover, there is question as to whether the Bowaters foreign-flag exceptions are still applicable. A recent U.S. Customs' ruling has indicated that unless Bowaters vessels meet certain grandfather restrictions, they are barred from engaging in dredging activities. (154)
C. Oceanographic Research Vessels
This proposal, like Bowaters vessels, suffers from any chance of success based on the preclusive effect of the Foreign Dredge Act. Again, this section will suppose that hurdle may be bypassed.
Congress allows yet another exception to the Jones Act for "research vessels" under the Oceanographic Research Vessel Act (ORVA). (155) This act waives certain inspection, manning, and licensing requirements for these vessels, (156) the purpose of which waiver is to prevent obstacles to the mission of the scientific or technical personnel. (157) Among the legal characteristics of a research vessel is that it is deemed not to be engaged in coastwise trade or commerce. (158) Like research vessels, dredges are hardly engaged in coastwise trade or commerce in the sense that the Jones Act contemplates especially concerning national infrastructure.
However, it is highly doubtful that such an exemption would work for dredges in light of U.S. Customs' rulings explaining qualifications for what constitutes a "research vessel," even if one was to analogize a dredge's status to that of a research vessel. (159) In Custom's ruling HQ 214719, the Director of Border Security noted that qualification of a research vessel has been strictly construed with that of ORVA (160) (ORVA limits such vessels to those engaged in oceanography or limnology). (161) The ruling further explained that the activities of the vessels and those aboard the vessels determine whether a vessel is engaged in oceanographic research for purposes of qualification. (162) This ruling does little to support a claim of "research vessel" status for dredges.
D. Incentivizing Louisiana
The final of the alternatives--and concededly, the more politically realistic of the options--is providing economic incentives to the Louisiana dredging industry to build, operate, and maintain its own dredging fleet to step in where the current national fleet is falling short. (163) This approach would be multi-faceted, pursuing key areas where Louisiana currently has an advantage over a majority of other states in the country.
First, New Orleans is uniquely situated as one of the few cities in the United States--and the only city of the Gulf Coast states--with a university offering undergraduate and advanced degrees in naval architecture. (164) Established in 1980, (165) the University of New Orleans has a naval engineering program that gives students the opportunity to gain practical knowledge of the industry through state-of-the-art facilities contained in-house, as well as at an off-site simulation facility. (166) Focusing the state's attention on bolstering education in order to produce superior naval engineers will give Louisiana an edge in shipbuilding capabilities. As incentive to help ensure those competitive advantages stay within Louisiana, the state could offer educational tax incentives directly to students who graduate from the program and continue to live and work in the state. This is hardly a novel idea, with at least one state currently enacting such a plan, and several others proposing bills to do the same. (167) Combined with other strategic incentives to dredge builders, (168) Louisiana could begin to compete for both national and international business.
An analogous example to this proposal is Louisiana's current practice of providing tax incentives to the film and music industry, among others. (169) The state currently offers generous tax advantages to companies that are either headquartered or produce within the state, depending on the particular industry. (170) This generosity should certainly be extended to an industry that is in a position to help fix coastal erosion.
This proposition, though, is not without its detractors, and rightfully so. (171) The film tax incentives have proven to be extremely costly to taxpayers, with little to no economic benefit actually derived from them. (172) Also, in the interest of full disclosure, it does not go unnoticed that this proposal suggests the same tactic this comment argues against--protection. However, even some economists note that unlike the protectionist measures of the Jones Act, a direct subsidy to industry would create less market distortion. (173)
Though the same economic principles regarding film tax incentives for a state dredging industry would apply, by tailoring the program to ensure local retention of benefits, Louisiana potentially could achieve a net neutral economic impact, possibly even profit from the scenario by marketing its new competitive advantage to the rest of the nation and the world. Even if economic losses do occur, the broader and long-term effects of doing nothing should be balanced against the danger of losing Louisiana's coast.
There are many moving parts to Louisiana's coastal problems, and this comment mentions a mere few--but important ones. There is no easy or inexpensive solution to sustainably solve coastal erosion, and legislation poses a great many barriers to tackling the issue. Lawmakers must remediate the deleterious effects that regulations are having on restoration efforts. As stewards of the environment and champions of countless other environmental causes, fixing Louisiana's coast should be of highest priority. Providing resources for the coast consists not just of money, but also manpower and machinery that can complete the task efficiently. This machinery includes dredging vessels. Those officials in positions to effect change must remember they are accountable not only to the people of Louisiana, but every tree, fish, and other creature that calls this irreplaceable and beautiful state home.
In order to ensure southern Louisiana, its people, its commerce, its culture, and all of its unique assets survive for future generations, the time has come to change both Louisiana and the nation's position on dredging. Literally every minute wasted translates into more coast washing away into the Gulf.
(1.) Bob Casey, John and Horace Dodge, Henry Ford and Innovation, From the Curators, THE Henry Ford 5, http://www.thehenryford.org/education/erb/ HenryFordAndInnovation.pdf. In fact, Henry Ford did not invent the assembly line, rather the moving assembly line.
(2.) La. Coastal Wetlands: A Resource at Risk, USGS Fact SHEET, http://pubs.usgs.gov/fs/la-wetlands/ (last visited Sep. 30, 2015). This loss translates to roughly 14,036 football fields every year.
(3.) See EPA, Saving Louisiana's Coastal Wetlands: The Need For a Long-Term Plan of Action, Report of the Louisiana Wetland Protection Panel (1987), http://papers.risingsea.net/federal_reports/louisiana_small.pdf [hereinafter EPA] (last visited Sep. 30, 2015).
(4.) Id. at 3.
(5.) JOAN R. HAKTMANN ET AL., THE IMPACT OF FEDERAL PROGRAMS ON Wetlands, Vol. II 144 (1994) [hereinafter Impact].
(6.) EPA, supra note 3, at 3.
(8.) Id. at 4. Approximately 7,000 years ago, experts put Louisiana's gulf coast in the Slidell, Baton Rouge, Lake Charles, and Lafayette area. Id.
(9.) Id. at 5; Impact, supra note 5, at 145.
(10.) EPA, supra note 3, at 4; Impact, supra note 5, at 145. It is estimated that the Mississippi carries about sixty percent less sediment than it did in as recently as the 1950s because of upstream flood control and reservoirs. Impact, supra note 5, at 145.
(11.) EPA, supra note 3, at 4.
(12.) Id. at 3.
(13.) Id. at 5; Impact, supra note 5, at 146.
(14.) Dredging is the subaqueous or underwater excavation of soils and rock. Int'l. Ass'n. of Dredging Cos., Dredging For Development 8 (Nick Bray & Marsha Cohen eds., 10th ed. 2010), https://www.iadc- dredging.com/ul/cms/fckuploaded/documents/PDF%20Publications/dredging-for-development-2010.pdf (last visited Sep. 30, 2015).
(15.) Impact, supra note 5.
(16.) Id. Additionally, dikes to protect against tidal surges during hurricanes have contributed to wetland loss by enclosing undeveloped wetlands.
(17.) Denise J. Reed and Lee Wilson, Coast 2050: A New Approach To Restoration Of Louisiana Coastal Wetlands, 25 PHYSICAL GEOGRAPHY 4, 6 (2004), http://labs.uno.edu/restoration/Reed%20and%20Wilson%202050.pdf. The term spoil bank is sometimes analogous to a levee, but this depends on the nature of the spoil bank itself. Spoil banks generally are repositories for dredged or mined materials. See Donald R. Cahoon & Charles G. Groat, A Study of Marsh Management Practice in Coastal Louisiana, Vol. II: Technical Description 3, 6 (1990), http://www.data.boem.gOv/PI/PDFImages/ESPIS/3/3655.pdf.
(18.) Reed, supra note 17, at 7.
(19.) Impact, supra note 5, at 147-48. In 1988, the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) measured the combined effects of agricultural and urban development to be approximately thirteen percent liable for Louisiana's coastal wetland decline.
(20.) Id. at 148.
(22.) For a more technical analysis regarding the causes of Louisiana's coastal erosion, see generally Reed, supra note 17, and Impact, supra note 5.
(23.) There are numerous other laws that do affect dredging operations from various standpoints (such as environmental restrictions), but they are not included for purposes of scope and brevity.
(24.) Gibbons v. Ogden, 22 U.S. 1, 1 (1824).
(25.) Gibbons v. Ogden, 22 U.S. 1, 1 (1824).
(26.) Id. (holding that New York laws granting a shipping monopoly were "repugnant" to the Constitution of the United States under Congress's power to regulate commerce under the Commerce Clause). "It is a common principle, that arms of the sea, including navigable rivers, belong to the sovereign, so far as navigation is concerned." Id. The Court also discussed the role that the federal government plays in facilitating efficiency, especially in light of the conflicting interaction of state laws. Id. at 4-5 (stating "[i]f there were no power in the general government, to control this extreme belligerent behavior of the States, the powers of the government were essentially deficient...."). Id. at 5.
(27.) See id.
(28.) Improving Transportation, United States Army Corps of Eng'rs, http://www.usace.army.mil/About/History/BriefHistoryoftheCorps/ImprovingTran sportation.aspx (last visited Oct. 5, 2015).
(30.) Id. Interesting note: snags are trees that have fallen in the water; those that swayed with the current were named "sawyers"; those bowing in and out of the water were "preachers"; those lodged in the bed of the river were "planters"; and those that sat just below the surface of the river were called "sleepers." JOHN O. Anfinson, River of History: A Historic Resources Study of the Mississippi National River and Recreation Area, 75 (2003), http://www.nps.gov/miss/learn/ historyculture/upload/HRS-full-comp.pdf.
(31.) 33 U.S.C. [section] 622 (2007).
(32.) 33 U.S.C. [section] 622 (2007).
(33.) Act of May 28, 1906, 34 Stat. 204 (codified as amended at 46 U.S.C. [section] 55109 (2006)) (formerly 46 U.S.C. app. [section] 292).
(34.) The purpose of this legislation is the protection of the American shipyards, American shipping, and American labor against foreign competition. There is no law at the time covering the present subject, and nothing prevents foreign-built dredges from entering our harbors and engaging in work upon the payment of tonnage dues only. That this works a hardship to our American contractors who desire to sustain our shipbuilding industries and contribute to the employment of our American artisans and laborers is apparent. If contractor can have built abroad dredges of seagoing capacity and bring them here for employment then the American shipyard, which is compelled to pay advanced wages for labor and material over his foreign competitor, and the contractor who desires to encourage home industries must cease business along those lines.
H.R. Rep. No. 59-1341 (1906). Keeping in mind the urgency of Louisiana's coastal erosion, can one contend that allegedly protecting American jobs is more important than repairing the coast, without which significant value added to the national economy would not exist? See Part V, infra. The use of the word "allegedly" here is to illustrate the unseen effect of what protecting jobs through restrictive legislation inherently does--raise prices on the American consumer. In an effort to provide a balanced perspective, though, it should be conceded that the national security argument does have merit on some level, which even proponents of free trade will admit.
[I]t cannot be denied that on occasion [protectionist legislation] might justify the maintenance of otherwise uneconomical productive facilities. To go beyond this statement of possibility and establish in a specific case that a tariff or other trade restriction is justified in order to promote national security, it would be necessary to compare the cost of achieving the specific security objective in alternative ways and establish at least a prima facie case that a tariff is the least costly way. Such cost comparisons are seldom made in practice.
Milton & Rose Friedman, The Case For Free Trade, HOOVER.ORG (Thu. Oct. 30, 1997), http://www.hoover.org/research/case-free-trade (last visited Oct. 5, 2015).
(35.) 33 U.S.C. [section] 624 (2015). The original text is as follows:
That no part of the funds herein or hereafter appropriated for works of river and harbor improvement shall be used to pay for any work done by private contract if the contract price is more than 25 per centum in excess of the estimated cost of doing the work by Government plant: Provided, That in estimating the cost of doing the work by Government plant, including the cost of labor and materials, there shall also be taken into account proper charges for depreciation of plant and all supervising and overhead expenses and interest on the capital invested in the Government plant, but the rate of interest shall not exceed the maximum prevailing rate being paid by the United States on current issues of bonds or other evidences of indebtedness.
H.R. Res. 7744, 95th Cong. (1978) (enacted).
(36.) 46 U.S.C. [section][section] 50101-80509 (West 2015). The Jones Act regulates beyond just cabotage law, also encompassing seaman's personal injury claims (for which it is well known). 46 U.S.C. [section] 30104 (West 2015).
(37.) 46 U.S.C. [section] 50101 (West 2015). After the Merchant Marine Act of 1920, two further acts followed: the Merchant Marine Act of 1928, Act of May 22, 1928, and the Merchant Marine Act of 1936, An Act May 13, 1935. The Merchant Marine Act of 1928, through its brief text, reaffirmed the policy and primary purpose of the Merchant Marine Act of 1920. The Merchant Marine Act of 1936 set forth a more detailed framework for promoting development and maintenance of the U.S.'s merchant marine. See Ralph L. Dewey, The Merchant Marine Act of 1936, 27 Am. Econ. rev. 2 (1937).
(39.) 46 U.S.C. [section] 50501 (2006).
(40.) Act of April 26, 1978, Pub. L. No. 269, [section] 3, 92 Stat. 218 (1978) (amended 2006).
(41.) Act of April 26, 1978, [section] 2, 92 Stat. 218 (1978) (amended 2015).
(42.) Oceans Act of 1992, Pub. L. No. 102-587, [section] 5501, 106 Stat. 5039, 1 (1992).
(46.) DCA Asks Congress To Close Stuyvesant Loophole, DREDGING News ONLINE, http://www.sandandgravel.com/news/article.asp?vl=5797 (last visited Oct. 13, 2015).
(47.) United States Army Corps of Engineers, 109th Cong., Rep. to Cong, on Hopper Dredges, 4 (Comm. Print 2005) [hereinafter Report To Congress], http://www.aapa-ports.org/files/PDFs/reportocongress3Junefinal3nov05.pdf.
(48.) Water Resources and Development Act of 1996, Pub. L. No. 104-303, [section] 237(c)(2), 110 Stat. 3658.
(49.) Id. at [section] 237(c)(7)(B).
(50.) Report To Congress, supra note 47, at 4; see also U.S. Gov't Accountability Office, GAO-03-382, Effects of Restrictions on Corp's Hopper Dredges Should Be Comprehensively Analyzed 3 (2003) [hereinafter Effects].
(51.) H.R. 2311, 107th Cong. [section] 115 (2001), https://www.govtrack.us/congress/ bills/107/hr2311/text; EFFECTS, supra note 50, at 6.
(52.) Water Resources Development Act, Pub. L. No. 110-114, [section] 2047, 121 Stat. 1041 (2007). The Corps placed the McFarland into ready reserve status in 2009. U.S. Gov't Accountability Office, GAO-14-290, Army Corps of Engineers, Actions Needed to Further Improve Management of Hopper Dredging 8-9 (2014) [hereinafter Actions].
(53.) See USACE, Memorandum from Dir. of Civil Works to Commander, North Atlantic Division, Implementation Guidance for Section 2047 (a), Federal Hopper Dredges, of the Water Resources Development Act of 2007 (WRDA 2007) (July 9, 2008).
(54.) See Report To Congress, supra note 47. The limited number of private hopper dredges drives up prices, as there is an inverse relationship between the number of bidders and contract awards. Id. at 7-8.
(55.) See Report to Congress, supra note 47.
(56.) Constantijn Dolmans, A European View, DREDGING & PORT CONSTRUCTION, Mar. 2009, at 52 [hereinafter A European View], http://www.iadcdredging.com/ul/cms/fck- uploaded/documents/PDF%20Articles/article-a-radicalproposal.pdf.
(57.) See id.
(58.) See DEVELOPMENT, supra note 14. "The larger and most modern [cutter suction dredges], however, are generally self-propelled. They can be mobilized over long distances to a project and also readily relocated during the project." Dredging Plant & Equipment, FACTS ABOUT (Int'l Ass'n of Dredging Cos., The Hague, The Netherlands), 2011 at 5 (emphasis added), http://www.iadcdredging.com/ul/cms/fck-uploaded/ documents/PDF%20Facts%20About/factsabout-dredging-plant-and-equipment.pdf (last visited Apr. 12, 2015).
(59.) Geert Vanneste, Seminar on Dredging and Reclamation (The Netherlands), https://www.iadc-dredging.com/ul/cms/fck-uploaded/documents/ PDF%20on%20seminar/04Equipment.pdf (last visited Apr. 12, 2015). Small-capacity hoppers (<5232 cubic yards) have a top speed of about 8 knots; mid-size-capacity hoppers (<10,464 cubic yards) have top speeds of about 12 knots; and large-capacity hoppers (19,619 cubic yards) have top speeds of about 14 knots. Id.
The [Joint High Speed Vessell is designed to transport 600 short tons of military cargo 1,200 nautical miles at an average speed of 35 knots in sea state 3. The ship is capable of operating in shallow-draft ports and waterways, interfacing with roll-on/roll-off discharge facilities, and on/off-loading a combat-loaded Abrams Main Battle Tank (M1A2). The JHSV will includes a flight deck for helicopter operations and an off-load ramp that will allow vehicles to quickly drive off the ship.
Joint High Speed Vessel--JHSV, The US Navy, http://www.navy.mil/navydata/ fact_display.asp?cid=4200&tid=;1400&ct=4 (last visited Oct 1, 2015).
(60.) U.S. Gov't Accountability Office, GAO/NSIAD-83-18, Report To The Secretaries Of Defense And Transportation And Director, Federal Emergency Management Agency: Observations Concerning Plans And Programs To Assure The Continuity Of Vital Wartime Movements Through United States Ports, 16 (1983), http://www.gao.gov/assets/150/140527.pdf (last visited Apr. 12, 2015).
(61.) Ronald O'Rourke, Cong. Research Serv., RS22454, DOD Leases of Foreign-Built Ships: Background For Congress (2010), https://fas.org/sgp/crs/weapons/RS22454.pdf.
(62.) U.S. Navy's Military Sealift Command, About MSC, http://www.msc.navy.mil/mission/.
(63.) See U.S. Cabotage Protection Gets More Expensive, Drewry Maritime Research (Nov. 17, 2013) [hereinafter Drewry], http://ciw.drewry.co.uk/features/ us-cabotage-protection-gets-more-expensive/?utm_campaign=CIW%3A+ Email+18%2F11%2F13+&utm_source=emailCampaign&utm_medium=email&utm conte nt=#.VQ9d34F4rp6.
(64.) John Fritelli, Cong. Research Serv., R43653, Shipping U.S. Crude Oil By Water: Vessel Flag Requirements And Safety Issues, 11 (2014); Kyle Gordon, Jonesing For A Fix?, BBH.COM, 4 (Oct. 2014), https://www.bbh.com/wps/wcm/connect/ade1378045b2918caf15efc870621867/CMU_Stand+Alone+ Article_787_14-updated.pdf?MOD=AJPERES&CACHEID=ade1378045 b2918caf15efc870621867; see also Drewry, supra note 63.
(65.) "Unfortunately, very few commercial ships with high military utility have been constructed in U.S. shipyards in the past 20 years. Consequently, when MSC has a requirement to charter a vessel, nearly all of the offers are for foreign-built ships." O'ROURKE, supra note 61, at 3.
(66.) See infra note 75.
(67.) Report to Congress, supra note 47, at 1. "Congress faces significant future investments in the Corps hopper dredge fleet, as it is rapidly aging." Id.; see also ACTIONS, supra note 52, at 29.
(68.) MARINE Traffic, http://www.marinetraffic.com/en/. Three of the hoppers are under twenty years old. When they are removed from the equation, the average age of hoppers moves to thirty-seven years.
(69.) Press Release, Eastern Shipbuilding Group, Inc., Eastern Shipbuilding Group Announces Contract Signing With Weeks Marine, Inc. (Apr. 7, 2015), http://www.easternshipbuilding.eom/wp-content/sdaolpu/2015/04/ ESG-WMI-Contract-Signing-Press-Release-4-7-15-Final.pdf.
(70.) See A European View, supra note 56, at 52.
(71.) Status Report Corps/Industry Hopper Dredges, NAVIGATION DATA CENTER (Feb. 22, 2015), http://www.navigationdatacenter.us/dredge/pdf/dredgeloc0222.pdf (last visited Mar. 1, 2015).
(72.) ACTIONS, supra note 52, at 40. The size of a hopper is defined as the capacity of its containment area, or hopper. ACTIONS, supra note 52, at 8.
(73.) Actions, supra note 52, at 40.
(74.) Great Lakes Dredge and Dock, Great Lakes Announces Steel Cutting Ceremony on New Hopper Dredge, http://investor.gldd.com/releasedetail.cfm?releaseid=875394.
(75.) DEME GROUP, http://www.deme-group.com/technology/dpdt-congo-river; http://www.deme-group.com/technology/dpdt-pearl-river (last visited Mar. 1, 2015).
(76.) R. Randall et al, Improvements for Dredging and Dredged Material Handling 105 (2011) [hereinafter Improvements].
(78.) Id. at 105-06.
(79.) A European View, supra note 56, at 51.
(80.) A European View, supra note 56, at 51; see also Improvements, supra note 76, at 105.
(81.) See A European View, supra note 56, at 51.
(82.) Id. Advances include a one-man operated bridge, which is said to reduce misunderstandings between operators. Marc Van de Velde, One Man Operated Dredger, The Art OF DREDGING, http://www.theartofdredging.com/oneman operateddredger.htm (last visited Oct. 1, 2015).
(83.) By removing Jones Act restrictions, "[c]onsumers of shipping services gain because they pay a lower price for the quantity of services they purchase in the presence of restrictions and because they increase the quantity purchased as the price declines when the restrictions are removed." The Econ. Effects of Significant U.S. Imp. Restraints--Phase III (Servs. with a Computable Gen. Equilibrium Analysis of Significant U.S. Imp. Restraints), Inv. No. 332-262, USITC Pub. 2422 at D-3 (Sept. 1991), https://books.google.com/books?id=2o2ZAAAAIAAJ [hereinafter Restraints].
(84.) Fritelli, supra note 64, at 11; Report To Congress, supra note 47, at 7-8.
(85.) ACTIONS, supra note 52, at 25. The distinction between the two sets of dates denotes the shift in which the McFarland was placed in ready reserve status. Id. One would expect that after the Army Corps' hopper was placed in ready reserve, the average bid number would go up, but it in fact went down, while average bid prices increased. Id. at 24-25.
(86.) Susan Buchanan, US Dredging Needs Growth As Army Corps' Budget Shrinks, MARKINLINK.COM, (June 26, 2014), http://www.marinelink.com/news/ dredging-growth-budget371913.aspx (last visited Apr. 12, 2015).
(87.) Other factors play a role in the availability of the hopper fleet to perform work: environmental restrictions, vessel coordination, demand for non-federal work, and hopper capabilities. ACTIONS, supra note 52, at 25-27. Regarding nonfederal work, two hoppers were removed from the industry fleet since 2003, as the vessels were relocated to perform international work. Id. at 22. Because the costs associated with reflagging a vessel as U.S.-owned once it relocates abroad and operates under a foreign flag are so high, they are essentially removed from competition. Id. at 23 n.23.
(88.) U.S. Gov't Accountability Office, Annual Report of the Comptroller General of the United States at 29 (1970), http://www.gao.gov/assets/170/168559.pdf (last visited Apr. 12, 2015) [hereinafter COMPTROLLER].
(89.) Coastal Protection and Restoration Authority, 2012 Coastal Master Plan at 20 (2012) [hereinafter Master Plan], http://www.lacpra.org/ assets/docs/2012%20Master%20Plan/Final%20Plan/2012%20Coastal%20Master%20Plan.pdf (last visited Apr. 12, 2015).
(90.) Id. Domestic commercial fisheries landings are fish and shellfish that are landed and sold in the 50 states by U.S. fisherman (landings in U.S. territories and by foreign fisherman are not included). Commercial Landings, NOAA Office of Science and Technology, http://www.st.nmfs.noaa.gov/ commercial-fisheries/commercial-landings/index (last visited Oct. 1, 2015).
(91.) Natural Resource Revenue from U.S. Federal Lands, WWW.DOI.GOV, https://useiti.doi.gov (last visited Oct. 1, 2015). Royalties are the commissions paid to the federal government on the sales of the natural resources. Id.
(92.) MASTER Plan, supra note 89, at 20.
(95.) Id. at 14.
(96.) Id. at 14.
(97.) See id. at 46; see also EPA, Saving Louisiana's Coastal Wetlands (1985), http://papers.risingsea.net/federal_reports/louisiana_small.pdf.
(98.) See Master Plan, supra note 89, at 46.
(99.) Improvements, supra note 76.
(100.) RESTORE Act, Coastal Protection and Restoration Authority, http://coastal.la.gov/oil-spill-content/oil-spill-overview/restore-act/ (last visited Apr. 12, 2015).
(101.) Id. "The Secretary of the Treasury shall deposit in the Trust Fund an amount equal to 80 percent of all administrative and civil penalties paid by responsible parties after the date of enactment of this Act in connection with the explosion on, and sinking of, the mobile offshore drilling unit Deepwater Horizon pursuant to a court order, negotiated settlement, or other instrument in accordance with section 311 of the Federal Water Pollution Control Act (33 U.S.C. 1321)." Moving Ahead for Progress in the 21st Century Act, Pub. L. No. 112-141, 126 Stat. 405 (codified as amended at 23 U.S.C. [section] 1602 (2012)).
(102.) Notice for Lodging of Proposed Partial Consent Decree and Request That the Court Take No Action Until a Motion for Entry is Filed at 18, In Re: Deepwater Horizon, 753 F.3d 509 (2014) (No. 2179), http://www.ag.state.la.us/ Shared/ViewDoc.aspx?Type=3&Doc=502 (last visited Jan. 20, 2016); see also http://www.ag.state.la.us/Article.aspx?articleID=1115&catID=;5 (last visited Jan. 20, 2016); see also http://www.justice.gov/opa/pr/ us-and-five-gulf-states-reachhistoric-settlement-bp-resolve- civil-lawsuit-over-deepwater (last visited Jan. 20, 2016).
(103.) WSFR National Coastal Wetlands Grant Program, U.S. Fish AND Wildlife Service, http://wsfrprograms.fws.gov/Subpages/GrantPrograms/CIAP/ CIAP.htm (last visited April 11, 2015 8:01p.m.). The source of funds originates from the Outer Continental Shelf Lands Act, 31. U.S.C. [section][section] 6301-05. Id.
(104.) Integrated Ecosystem Restoration & Hurricane Protection in Louisiana: Fiscal Year 2015 Annual Plan, COASTAL PROTECTION AND RESTORATION AUTHORITY, at 61, http://sonris-www.dnr.state.la.us/dnrservices/redirectUrl.jsp?dID=4892104.
(108.) Gulf of Mexico Energy Security Act of 2006, Pub. L. No. 109-432, 120 Stat. 3000 [hereinafter GOMESA].
(109.) Id.; see also Gulf of Mexico Energy Security Act, BUREAU OF OCEAN Energy Management, http://www.boem.gov/Revenue-Sharing/ (last visited Apr. 11, 2015) [hereinafter BOEM], The Outer Continental Shelf is the submerged land lying between a continent and deep ocean. Outer Continental Shelf, Institute for Energy Research, http://instituteforenergyresearch.org/topics/policy/ocs/ (last visited Apr. 11, 2015 9:08 p.m.). The Federal Government administers those lands lying between the states furthest seaward jurisdiction and federal jurisdiction; Outer Continental Shelf, BUREAU OF Ocean Energy MANAGEMENT, http://www.boem.gov/Outer-Continental-Shelf/ (last visited Apr. 11, 2015 9:09 p.m.).
(110.) See GOM Revenue Sharing 2 GOMESA Phase II Revenues Impacted by Several Factors, 113 Oil & Gas JOURNAL 4 (2015), http://www.ogj.com/articles/ print/volume-113/issue-4/drilling-production/ gom-revenue-sharing-2-gomesaphase-ii-revenues-impacted-by-several-factors.html (last visited Apr. 11, 2015).
(111.) GOMESA, supra note 108; see also BOEM, supra note 109.
(112.) Harbor Maintenance Fees, CBP.GOV, https://help.cbp.gov/app/answers/ detail/a_id/283/~/harbor-maintenance-fees-%28hmf%29 (last visited Apr. 12, 2015) [hereinafter CBP\. However, taxes on exports were carved out as an unconstitutional in 1998 under the Export Clause of the United States Constitution: "[W]e must hold that the HMT violates the Export Clause as applied to exports." United States v. U.S. Shoe Corp., 523 U.S. 360, 370 (1998); U.S. Const., art. I, [section] 9, cl. 5.
(113.) CBP, supra note 112.
(114.) Harbor Maintenance Trust Fund Fairness Coalition, REALIZE AMERICA'S Maritime Promise, http://www.ramphmtf.org/ (last visited Apr. 12, 2015).
(115.) See Press Release, U.S. Senator David Vitter, Vitter: Harbor Maintenance Trust Fund Fix in Final Water Resources Bill (May 12, 2014), http://www.vitter.senate.gov/newsroom/press/ vitter-harbor-maintenance-trust-fund-fix-in-final-water-resources-bill%20. The 2012 Coastal Master Plan also addresses this issue. As of 2009, State regulations mandate that private applicants who dredge more than 25,000 cubic yards of sediment place the material into a coastal restoration project or pay a fee. However, the Army Corps--the single largest dredging entity in Louisiana (excavating 58 million cubic yards annually)--is exempt from the regulations due to authorization and budgetary constraints. The Master Plan contends that the HMTF surplus funds be used to help solve the budgetary constraints.
(117.) See John A. Lovett et al, Louisiana Property Law (2014) 84-87 [hereinafter LOVETT ET AL]; see also Gregory Blaine Miller, Louisiana's Tidelands Controversy: The United States of America v. State of Louisiana Maritime Boundary Cases, 38 LOUISIANA HIST., 203, 205 (1997) [hereinafter Tidelands],
(118.) Tidelands, supra note 117, at 205. Three nautical miles would be approximately 3.4524 statute (land) miles. The nautical mile is approximately 1.1508 statute miles (land miles), and there are about three nautical miles in a marine league. Univ. OF N.C., A Dictionary of Units of Measurement, https://www.unc.edU/~rowlett/units/dictN.html#nautical_mile.
(119.) Tidelands, supra note 117, at 205; see also LOVETT ET AL, supra note 117, at 85.
(120.) Lovett ET al, supra note 117, at 85; Tidelands, supra note 117, at 206.
(121.) Tidelands, supra note 117, at 206.
(122.) 332 U.S. 19 (1947).
(123.) Id. at 38-39 ("California is not the owner of the three-mile marginal belt along its coast, and  the Federal Government rather than the state has paramount rights in and power over that belt, an incident to which is full dominion over the resources of the soil under that water area, including oil.").
(124.) 339 U.S. 699 (1948).
(125.) Id. at 701.
(126.) Id. at 705. "The national interest in that belt is as great off the shore line of Louisiana as it is off the shore line of California. And there are no material differences in the preadmission or post-admission history of Louisiana that make her case stronger than California's." Id.
(127.) 43 U.S.C. [section][section] 1301-1315 (2012); 43 U.S.C. [section][section] 1331-1356b (2012).
(128.) Tidelands, supra note 117, at 209.
(129.) LOVETT ET AL, supra note 117, at 86; Tidelands, supra note 117, at 209.
(130.) Lovett ET AL, supra note 117, at 86; Tidelands, supra note 117, at 209.
(131.) 43 U.S.C. [section][section] 1331-1356b; Tidelands, supra note 117, at 210.
(132.) LOVETT ETAL, supra note 117, at 86; Tidelands, supra note 117, at 210.
(133.) Tidelands, supra note 117, at 210-16.
(134.) 363 U.S. 1 (1960). "We conclude, therefore, that pursuant to the Annexation Resolution of 1845, Texas' maritime boundary was established at three leagues from its coast for domestic purposes." Id. at 64; "We hold that the Submerged Lands Act grants Florida a three-marine-league belt of land under the Gulf, seaward from its coastline, as described in Florida's 1868 Constitution." 363 U.S. 121, 129 (1960); "We decide now only that Louisiana is entitled to submerged-land rights to a distance no greater than three geographical miles from its coastlines, wherever those lines may ultimately be shown to be." Louisiana, 363 U.S. at 79; "We must hold that Mississippi is not entitled to rights in submerged lands lying beyond three geographical miles from its coast." Id. at 82; "Alabama is not entitled to rights in submerged lands lying beyond three geographical miles from its coast." Id.
(135.) Louisiana, 363 U.S. at 64, 79, 82; Florida, 363 U.S. at 129.
(136.) Tidelands, supra note 117, at 216; Denise J. Reed & Lee Wilson, Coast 2050: A New Approach to Restoration of Louisiana Coastal Wetlands, 25 Physical Geography 4, 11 (2004).
(137.) LOVETT ET AL, supra note 117, at 86; Tidelands, supra note 117, at 216.
(138.) 422 U.S. 13 (1975) (establishing through supplemental decree a baseline by which to determine the seaward boundaries of Louisiana's submerged lands control).
(139.) See supra Part V.
(140.) See EPA, Evaluation of Dredged Material Proposed for Ocean Disposal, EPA 503/8-91/001 at [section] 2, http://water.epa.gov/type/oceb/oceandumping/ dredgedmaterial/upload/gbook.pdf (last visited Apr. 12, 2015).
(141.) See id.
(142.) See EPA, Section 404 Permit Program, http://www.epa.gov/cwa-404/ section-404-permit-program (last visited Jan. 20, 2016); Dredging and the environment: moving sediments in natural systems (Cent. Dredging Ass'n, Delft, The Netherlands), Dec. 2009, http://www.dredging.org/documents/ceda/ downloads/publications-ceda_informationpaper_2009-12_web.pdf (last visited Apr. 12, 2015); Dredging: the environmental facts: where to find what you need to know (Int'l Nav. Ass'n, Brussels, Belgium), 2005, https://www.iadc-dredging.com/ ul/cms/fck-uploaded/documents/PDF%20Publications/ dredging-literature-dredging-the-environmental-facts.pdf (last visited Apr. 12, 2015).
(143.) See supra Part IV.
(144.) See id.
(145.) See FRITELLI, supra note 64, at 9.
(146.) 46 U.S.C. [section] 12118 (West 2015); 46 C.F.R. [section] 221.13 (West 2015); 46 C.F.R. [section] 67.30 (West 2016).
(147.) 46 U.S.C. [section] 12118.
(148.) Statement to the Subcommittee on Merchant Marine of the House Merchant Marine and Fisheries Committee on Oversight of the Jones Act, 101st Cong. 4 (1989) (statement of Robert Silberman, Deputy Maritime Administrator), http://testimony.ost.dot.gov/test/pasttest/89test/Silbermanl.pdf (last visited Apr. 12, 2015).
(149.) 46 U.S.C. [section] 12118.
(150.) 46 U.S.C. [section] 12118(c).
(152.) See supra Part IV.
(153.) Marine Traffic, http://www.marinetraffic.com (last visited Feb 2, 2015). The following are the hopper dredges that compose the American fleet and their gross tonnages: McFarland (6,036); Wheeler (10,614); Essayons (7,248); Yaquina (1,960); Atchafalaya (1,950); Columbia (3,081); Stuyvesant (8,432); Dodge Island (2,820); Liberty Island (5,201); Padre Island (2,820); Terrapin Island (5,922); Bayport (2,296); Newport (2,519); Westport (851); Glenn Edwards (9,641); B.E. Lindholm (3,498); R.N. Weeks (3,104).
(154.) William N. Myhre, HQ 114842, 1999 WL 1706139 at *3 (Dec. 6, 1999) (holding that legal dredging activities involving Bowaters citizens and their vessels in the United States are limited to those having met the qualifying date of August 1, 1989).
(155.) 46 U.S.C. [section] 50503 (2012) (formerly cited as 46 App. U.S.C. [section] 441; 46 App. U.S.C. [section] 443; 46 App. U.S.C. [section] 444). "Oceanographic research vessel" means a vessel that the Secretary finds is being employed only in instruction in oceanography or limnology, or both, or only in oceanographic or limnological research, including studies about the sea such as seismic, gravity meter, and magnetic exploration and other marine geophysical or geological surveys, atmospheric research, and biological research.
(156.) Presley v. Caribbean Seal, 537 F. Supp. 956, 958 (S.D. Tex. 1982) (discussing H.R. Rep. No.599, reprinted in 1965 U.S.C.C.A.N., 2383, 2384).
(157.) Id. at 959.
(158.) Sennett v. Shell Oil Co., 325 F. Supp. 1, 3 (E.D. La. 1971).
(159.) See Jeffrey R. Kallstrom, HQ H214719, 2012 WL 2954336 at *4-7 (June 15, 2012).
(160.) Id. at *3-4.
(161.) [section] 50503; Limnology is the study of bodies of freshwater. http://www.merriam-webster.com/dictionary/limnology (last visited Apr. 12, 2015).
(162.) Kallstrom, 2012 WL 2934336, at *4.
(163.) It is true that this proposal indeed employs the very tactics that are argued against in the majority of this comment. However, one cannot be blind to the realities in which legislation exists. If there is to be any measure of success in restoring Louisiana's coast, all viable options must be fairly examined and considered, Louisiana-specific protectionism being no exception.
(164.) School of Naval Architecture & Marin Engineering, UNIV. OF New ORLEANS, http://www.uno.edu/coe/naval-architecture-marine-engineering/ index.aspx (last visited Apr. 11, 2015).
(166.) NAME Facilities, UNIV. OF New ORLEANS, http://www.uno.edu/coe/navalarchitecture-marine-engineering/facilities/index.aspx (last visited Apr. 11, 2015).
(167.) See Opportunity Maine, http://opportunitymaine.org (last visited Apr. 11, 2015); Clarissa Clemm, Proposed Bill to Ease Student Loan Burden, http://www.browndailyherald.com/2015/02/03/proposed-bill-ease-student-loanburden/ (last visited Apr. 11, 2015); Jonathan Oosting, Michigan 'Brain Drain' Bill Would Give Tax Credit to College Graduates who Stay in State, Pay Loans, http://www.mlive.com/politics/index.ssf/2013/04/michigan_brain_drain_bill_woul. html (last visited Apr. 11, 2015); Jimmie E. Gates, Bill Seeks to Stop the #BrainDrain in Mississippi, http://www.clarionledger.com/story/news/2015/02/24/ college-grads-tax-break-chuck-espy/23940271/ (last visited Apr. 11, 2015).
(168.) Louisiana currently provides incentives to the manufacturing industry through various programs, rebates, and tax exemptions for eligible companies. See Tailored Solutions Built to Manufacturing Specs, La. ECON. Dev., http://www.opportunitylouisiana.com/page/manufacturing (last visited Apr. 11, 2015). Further developing this concept for a Louisiana dredging industry may provide a valuable basis to attract talent and industry to the region.
(169.) See Motion Picture Investor Tax Credit, La. ECON. Dev., http://www.opportunitylouisiana.com/page/motion-picture-investor-tax-credit (last visited Apr. 11, 2015); see also Film Resources, La. Entm't, http://www.louisiana entertainment.gov/page/film-resources (last visited Apr. 11, 2015).
(170.) See Motion Picture Investor Tax Credit, supra note 169.
(171.) Gordon Russell, Giving Away Louisiana: Film Tax Incentives, The Advocate (Dec. 12, 2014), http://blogs.theadvocate.com/specialreports/2014/12/02/ giving-away-louisiana-film-tax-incentives (last visited Apr. 11, 2015).
(173.) Restraints, supra note 83, at 1-2-7.
Andrew Lifsey, J.D. Candidate 2016, Loyola University New Orleans College of Law. I would like to extend a sincere thanks to Professor Arthur Crais for his guidance, help, and insight into this comment throughout its production. Also, this paper would not have been possible without the tireless dedication of Megan Milliken Biven, whose passion for Louisiana Coastal restoration and endless knowledge were indispensible to this comment.
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|Publication:||Loyola Maritime Law Journal|
|Date:||Jan 1, 2016|
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