Delegation, DHS meet

An Alaska delegation staff member confirmed June 29 that the state’s congressional delegation met with top officials from U.S. Customs and Border Protection, part of the Department of Homeland Security, or DHS, on June 28, with the intention of resolving the Jones Act issues preventing Escopeta Oil’s jack-up rig from sailing to Cook Inlet.

“Basically, we had a meeting with Marco Lopez, chief of staff for U.S. Customs and Border Protection, Michael Yager, Customs Assistant Commissioner, and Nelson Peacock, Assistant Secretary of the Office of Legislative Affairs,” the staff member said, noting that Alaska’s two U.S. senators and one representative were in agreement with what he told Petroleum News.

“We have requested a meeting with DHS Secretary Janet Napolitano for July 11, the day she gets back in town … but we might … get the whole issue resolved before then. … We’re hopeful for a decision this week,” he said.

“The two questions we brought to the meetingwere, first, can DHS provide some legally satisfactory way of documenting what they have already said, and that is that they’re only going to fine Escopeta, not the owner of the … rig.”

On May 26, Peacock sent an email to Escopeta President Danny Davis assuring him that DHS “will not seek any enforcement action against the vessel, the rig, or any other person or entity,” other than Escopeta, but Spartan Offshore Drilling wanted something more solid.

“On that point we’ll probably be successful,” the aide said.

The second question the delegation asked was, “what will be the range of the fine? We know we’re talking about a pretty substantive fine — but the question is, will it be substantive or prohibitive.”

Customs has “statutes and guidelines on this issue. They are trying to work through those, as are attorneys for Escopeta and different attorneys for Spartan. … They’re looking at precedents for previous Jones Act violations,” the aide said.

“The big question is the range of the fine,” he said. “DHS rules call for it to be as much as 10-50 percent of the value of the transport or the value of the cargo. Obviously that would be prohibitive.”

Is DHS setting a precedent for future violations of the Jones Act?

“Nobody in their right mind would say that this has worked out really well for Escopeta; nobody would want to do it the same way,” the aide replied.

—Kay Cashman