March 10, 2025 • 68 mins
For decades, oil and gas development in the Gulf of Mexico represented a model of political and regulatory predictability for all the world – companies knew that regardless of which party held power, following the rules meant projects could move forward. Today, that certainty has vanished, with each new administration seemingly determined to reverse course on energy priorities. This volatility creates massive challenges for industries where planning horizons stretch decades beyond presidential terms.
In this episode, hosts Jim Bennett and Ian Voparil are joined by Jon Hrobski, Policy Director at Brownstein Hyatt Farber Schreck, to dive deep into how political volatility has reshaped America's energy landscape and what it means for our offshore future.
Uncertainty affects capital investment. When offshore projects require billions in upfront investment and years of development before Forst Oil or First Electron, companies must factor in political risk. This political risk was once minimal in U.S. energy markets but has become a major consideration, potentially driving investment to more predictable regions.
Come listen and see how we can keep responsible, resilient development offshore moving forward.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:11):
Well, hey everybody.
In the last few weeks we'veseen an upheaval like no other
in several decades now in thefederal approach to energy
policy.
Ocean energy and offshore windnarratives have moved to the
extremes, with the lastadministration approaching
things from a no-holds-barredstandpoint as far as renewable
is concerned and opposition toconventional energy and the
(00:35):
current administration pursuingpretty much exactly the opposite
.
Amidst these competingnarratives, it's hard to sort
out legitimate policydifferences that can be worked
on, as they are clouded byexaggeration and ambiguity.
Let's try to separate the wheatfrom the chaff and clarify what
the debate is really aboutRight now on the Offshore Energy
(00:59):
Podcast at.
Speaker 3 (01:15):
I'm Jim Bennett and I have over 40 years of
experience developing energy inthe ocean.
I'm Ian Valparo and I've spentthe last 20 years developing
offshore energy projects aroundthe world, and this is the
Offshore Energy Podcast energyprojects around the world, and
this is the Offshore EnergyPodcast.
Speaker 2 (01:36):
Hey, how you doing, Ian.
Hey, jim, good morning.
I'm doing fantastic.
How are you Good?
And we have a guest speakertoday, which we'll get to in
just a moment, but we're goingto be talking about a number of
issues with regard to offshoreenergy and the developments that
have occurred since the changein administrations Should be an
interesting discussion.
Speaker 3 (01:56):
Boy.
Jim, there is a lot going on.
We see it, and we see it in allkinds of different facets and
dimensions of it, both in policyshifts but also personnel
changes, and we can talk aboutthat all.
I'm also very lucky not to becomplaining about shoveling snow
this week, jim.
So for those of you in NewEngland, here's to spring at
(02:20):
March in like a lamb, in like alion, out like a lamb.
I hope it's true this year.
My fingers are crossed, jim,how are you, and everything good
with you.
Speaker 2 (02:29):
Everything's good.
We don't have as much of a snowissue here in Virginia.
We've had a cold winter, forsure, but it's not as bad as you
guys face up there.
But you know, if I can, I'dlike to welcome John Robski to
the podcast.
He's joined us for ourdiscussion today and I'll give a
(02:52):
brief introduction just to leteverybody know that he has very,
very extensive experience withoffshore energy, both on the
Hill and with the Hill Energy.
Both on the Hill and with theHill, he served as deputy
director with BOM's predecessorin the Minerals Management
Service.
He's been involved in andhelped shape Outer Continental
Shelf Energy policy for multipledecades now.
(03:16):
He also worked with theNational Ocean Industries
Association, noia, and he's nowthe policy director at
Brownstein, hyatt, farber andShrek.
I'd like to welcome you, john.
Speaker 1 (03:30):
Thank you very much.
Guys Appreciate being on hey.
Speaker 3 (03:32):
John, it's great to see you, and now we have two DC
folks and I'm the lone privatesector representative.
But I'm going to do my best too.
Okay, I'm here to representtoday, john.
You know we wanted your take assomeone who has worked so
closely with policy and energypolicy development over the last
couple of decades.
(03:53):
Now we're seeing these dramaticshifts, with each
administration sometimes feelinglike it's 180 degrees in the
shift of priorities and, in fact, in the shift of priorities and
in fact, in the shift ofpolicies and even the
interpretation of regulations.
To me, from the private sectorside, that's a lot of
(04:14):
uncertainty.
And how do we feel, or how doyou feel, john, that uncertainty
is affecting the development ofenergy, energy investment and
the delivery of power to movethe US forward into the future.
Speaker 1 (04:34):
Thanks, ian.
I think the point you're makingon uncertainty is the one that
I agree I find the mostbothersome.
You know, as somebody who,within energy, kind of cut my
teeth in the Gulf of America,the hallmark of dealing with
(05:00):
offshore was that you know therewere other basins that maybe
had as much potential, buteveryone knew if you did
business in the Gulf you livedby the rules, you operated
safely, you were going to beable to go forward, and that was
(05:21):
whether Democrats were incharge, republicans were in
charge, didn't matter, and soyou could attract people.
You got huge lease sales.
You know, when Jim and I wereat the agency, back when it was
the Minerals Management Service,we were there for lease sale
(05:45):
206, you know $3.6 billion inrevenue in that one lease sale.
Yeah, that was obviously greatgeology, but it also certainly
had to have been based, at leastin part, on predictability of
being able to move forward onprojects.
And so you know, and this shift,it didn't happen overnight, it
(06:10):
didn't happen with the Bidenadministration and what they
thought of offshore oil and gas,and it's not just happening now
because of the Trumpadministration and how they
think of offshore wind.
It was a slow burn andobviously Macondo, deepwater
Horizon, whatever term peoplewant to use.
That's where a lot of thisstarted and the regulatory
(06:32):
regime changed significantly,but that's really been, in my
opinion, that certainty for theentire offshore, regardless of
form of energy, that has reallyentered the equation.
I don't think the offshore windfolks had previously dealt with
uncertainty in the same waythat offshore oil and gas had,
(06:55):
and so I think that dynamicobviously is new right now, but
I think now anyone in theoffshore energy industry is
looking at the world throughthat lens and that's unfortunate
for any business planning,regardless of sector, regardless
of if it's energy, uncertaintyis obviously the enemy of being
(07:19):
able to long-term planning andstable, investment.
Speaker 2 (07:23):
John, I think that's a great point and probably the
most fundamental point goingforward amidst all the issues
that we're hearing about, and Ido think that in order to be
able.
First I want to say it'sinteresting that you brought up
the certainty associated withoil and gas in the Gulf of
(07:45):
America, as you say, becausethat certainty is something that
developed over a long period oftime and in the wind industry,
in a very short number of yearswe had auction bid prices that
exceeded some of thelongstanding oil and gas
(08:08):
activities in the Gulf of Mexico, and now we're back to a
different situation and all ofit revolves around the
uncertainty that you're talkingabout.
But to my mind, as we talkabout uncertainty and have this
discussion, one of the mostfundamental things is a common
language.
We have an awful lot ofdiscussion of things that we
(08:29):
don't really have the sameunderstanding amongst the
various parties.
Just as an example, we'rehearing about the intermittent
nature of wind and while thosepeople who are in the wind
industry or associated with itor educated about it, know that
it's not really intermittent, itdoesn't shut off completely.
(08:53):
There's certainly fluctuations,but there aren't any sort of
energy development.
But it's measurable and it canbe planned for, but the
narratives grab things like thatand just the whole concept of
transition is another exampleand we'll get to that in a
minute.
But the language becomes adifficulty for us to discuss, to
(09:20):
move forward.
Any thoughts on that?
Speaker 1 (09:38):
To move forward.
Any thoughts on that agree?
I think that, um, neither sidehas decided it's in their
interest to raise um the otherside's version of events and and
things that may matter to them,and so you end up with people
(09:59):
probably intentionally talkingpast each other.
Um, and to your point, forthose who want to have an
intellectually honest policydebate, it often feels like
there's no space for thosepeople.
Speaker 2 (10:16):
But don't we need that, don't?
We have to have that in orderto be moving forward.
Speaker 1 (10:19):
Yeah, I certainly.
You know, we get betteroutcomes as government, better
outcomes as citizens when we endup being able to be transparent
.
And you know, I think that thepoliticization of energy in
(10:40):
general is just it's at thehighest levels I can remember
general is just it's at thehighest levels I can remember.
Um, and I think that really umagain, both sides of these
competing talking points and usewhatever information they think
advances their agenda but let's, let's play this a little bit,
(11:01):
jim, what kind of politicizedlanguage have you heard?
Speaker 3 (11:05):
And we can play both sides of this, you know, because
I think it's important to showthat there are some real
fundamentals that we all shouldunderstand, respect and move
forward from.
Speaker 2 (11:18):
It is.
It is absolutely on both sides,and the one example I gave about
intermittent wind and thenature of the use of that term
to suggest that it's unreliableor not predictable is one
example.
But I think the more fundamentalconcept of an energy transition
is something that is viewedvery differently by different
participants.
Have this concept of an energytransition, of total movement
(11:45):
from conventional energy andfossil fuels we're going to flip
the switch and just be 100percent renewables.
In fact, many of the stateshave long term goals that are
based on 100 percent renewables,and I don't think that's what
the transition is, or I don'tthink that's what you're going's
what the transition is thatyou're going to see, the
(12:05):
transition is going to be acombination and we throw the
term around all the time, all ofthe above, but it's going to be
some kind of mixing of thingsthat hopefully will be to the
best advantage of the public andthe American people, and that's
another example.
Transition to me means oftensuggests replacing one with the
(12:28):
other, either in whole or inpart, and I don't think that
that's the case.
I think we're really looking atsomething more along the lines
of energy addition, given thefact that energy demand is going
to continue to increase and allsources will be needed.
Speaker 3 (12:44):
I think what we've seen, certainly through the
history of energy use in theUnited States and probably the
world too, is we've seenshifting sources over time.
And if we go back far enough,you know, wood was the number
one source right, and coal wasthe number one source in the US
until the 1950s, and thenpetroleum products and then
(13:04):
natural gas came on in the 80s,and coal was the number one
source in the US until the 1950s, and then petroleum products
and then natural gas came on inthe 80s.
And so we don't see energy dipsin consumption.
As those sources change.
We see pretty stable and infact often rising energy
consumption.
And so, jim, I think the pointaround energy addition is really
important we were all thinkingabout.
(13:25):
I know those of us in the energybusiness are thinking about
data centers, right, and thepotential Dramatic use of energy
, and that's still that is stillhappening right now.
We're in the middle of thattransition and it Projections
may or may not be right.
We'll see.
There's a lot of new technology, but we don't think our energy
use or consumption is ever goingto decrease in the United
(13:48):
States in the reasonable future.
So indeed, it's all of thesedifferent facts and that part
seems to be missed when at leastadministrations are flipping
from preferred source topreferred source.
And, john, that's, you know,that's.
How do we keep that, thatfoundation, sorry, that
(14:10):
foundational discussion, stillfront and center in the
discussion?
Speaker 1 (14:15):
That's so normal for all of us in the energy industry
.
Yeah, these are all greatpoints, I think, ian, to the
point you made, you look uphistorically and even wood you
go through that is stillconsumed at a higher rate and
used for energy purposes as ahigher rate today around the
(14:39):
world than it ever has been.
And you can keep going throughall the other materials and you
end up getting to that place.
Jim, I think transition hasbeen bastardized to the point
that you were the one who saidit that there's a good chunk of
(14:59):
people who believe the wordtransition really means
replacement and again, you guysare both saying this and I
wholeheartedly agree Energyright now.
The only way I think one can beintellectually honest about this
is that it is additive anddemand, if anyone believes.
(15:21):
You know demand forecasts inthe future and they could be
wrong, but everything we'reseeing tells us we need so much
more Energy.
(15:45):
And the Department of theInterior, respectively, both
talked about fears of futureblackouts and the inability to
be able to handle.
You know, I live in Virginia aswell, along with Jim, and this
is a part of the country wheredata centers are really active
and the governor wants to bringthem in and they're trying to
figure out how do they powerthat?
(16:07):
we don't have a lot of nuclearhere in virginia.
Maybe that's something that'sgoing to be part of the mix.
Obviously there's the hugedominion offshore wind project.
Is that part of the mix?
There's a lot going on but umuh, you know this additive
doesn't seem to be.
When you hear either side talkabout what they want going
(16:31):
forward, you don't really hearadditive on either side.
Speaker 2 (16:37):
I think that's a great point.
That's a great point and withregard to conventional energy,
notwithstanding the largerarguments about climate change
and the like but in terms ofhaving the resources in
conventional energy, we havethis longstanding presumption of
(16:57):
finite resources and we'regoing to run out.
And yet, although that has anintuitive appeal to it, my
experience has been from apractical standpoint.
I'm not sure that's the modelthat is most useful.
And when we talk about what wecan do in different portions of
the energy mix, do we have theinformation?
(17:21):
Do we really have a good handleon what the conventional energy
resources can and should beover the next couple decades?
Speaker 1 (17:32):
You know when I think about this issue, jim, there's
a crowd out there who doesn'tlike energy, doesn't want new
energy, would prefer that weconsume less, and I think we all
want efficiency.
But in terms of you know Ianmade the point earlier that's
(17:53):
not how this is going to work.
And, truthfully, for mostAmericans, they want to use
their iPads and their computersand their cell phones, etc.
And that's not changing.
I don't believe their iPads andtheir computers and their cell
phones, et cetera, and that'snot changing.
I don't believe.
I don't think we're going totell the American people, hey,
you're just going to have to useless and get used to it.
And I think where that comes is, you know, we go back to the
(18:17):
Gulf.
I think the Gulf has producedsix, seven times what the
original estimate was and isstill chugging along and looks
like it has a long life.
The history of energy is themore you look, the more you find
.
And you know, you guys bothknow the types of folks who work
at some of these companies,these engineers.
(18:39):
There's a lot of brilliantindividuals who you show them a
problem.
They eventually figure out howto get to.
Yes, you even think aboutrecovery rates and you look at
what's in the rock and you knowjust, you move that up by
percentage points and the amountof energy that somehow comes
out of the ground becomes thatmuch greater.
(19:00):
I think there's a lot oftechnology still to make its way
.
We haven't seen AI dominate thefield yet, but it sounds like
and feels like that's what'scoming next.
And so I think that from thatstandpoint, the concept that
obviously there's a finite, butI think we're so far away from
(19:21):
reaching anywhere close to wherescarcity is an issue.
And I think, politically,there's a crowd who enjoys
talking about scarcity becauseit tries to force the
conversation in anotherdirection, and I think that's
it's just inaccurate in myopinion.
But, jim, I think to's crowdsin the US who don't want us to
(19:51):
know information and and preferkind of living in this scare
tactic world.
And you know, from somebody whoreally wants to see as much
certainty and as much policyinto the decision making.
You know, the three of us havetalked previously.
(20:14):
Nobody wants to drill for oilwhere there's not oil.
This is simple, right?
That should be a pretty simpleconcept.
Should be a pretty simpleconcept.
But you know, for basicallyalmost the entire East Coast,
(20:37):
the Pacific Coast, alaska.
Most of our data is really oldand used with technology that
produced the video game Ponginstead of, you know,
playstation 5.
And that is the differencewe're dealing with, right, and
you know the seismic that wasshot was shot down to 10,000
feet or so during that time,because that's where you
explored to using really oldtechnology that, as you know,
(21:03):
jim, the BOEM folks areconstantly reprocessing and
using new computer technology totry to get better use that same
data set and get better answersout of it.
But at the end of the day, it'sonly can do so much.
And so you know, I'd love to bein a world where we were
(21:23):
talking about this place doesn'thave any, so let's quit talking
about it.
If somebody wants to take itoff limits, that's great.
Let's talk about where theenergy is, and that doesn't mean
we should go after every singledrop and every drop, every
single inch.
But you know, one of the mostfrustrating parts of my long
(21:46):
career in this space has beengeography and geology do not
match.
You know, cartographers neverdrew their maps to match the
geology, and I'm not saying theyshould, but there are a lot of
people I encounter who thinkthat when you have the three by
three square blocks in the outercontinental shelf.
(22:08):
That means that there's anequal amount of oil and gas
underneath each block, and sowe're really just making a
decision of this area.
Sounds like it's good toexplore this area.
Seems bad and, as we know,that's not how nature created
things, we can help them.
Speaker 3 (22:26):
We could do a podcast on that for sure, john.
I do want to touch on a coupleof points from a private sector
perspective too.
I think in the total mix andwe've been focusing on
conventional and mostly oil andgas resources for our discussion
you're highlighting what Ithink is exactly the problem.
Oil and gas developmentoffshore because this is the
(22:49):
Offshore Energy Podcast in anygreenfield or new basin takes
more than an administration.
There are so many differentfactors that have to be prepared
in order to potentiallysuccessfully develop a reservoir
.
In order to potentiallysuccessfully develop a reservoir
, produce oil and deliver it toa market.
It's more than four years and,as you were saying, the costs of
(23:18):
doing offshore exploration arequite significant.
And so even exploration wellsin the deep water, even in the
Gulf of Mexico, where thetechnology exists you know
there's a, there's an ecosystemthat's ready to build into are
still incredibly expensive, andputting the capital at risk.
From a private sectorperspective, to go drill an
exploration well is a prettysignificant decision.
(23:41):
I can't imagine a lot of folkswho are thinking well, now that
there's this other opportunityon a new coast, in a new green
field.
Think of it.
You could also say in a newcountry, as I used to do.
The political risk factor ismuch higher in the US than it
used to be.
(24:01):
Not even to speak of thepotential.
Ge know, the potentialgeological assessment, the
potential other technical andmarket developing factors.
This is one of those keyconundrums that I feel like
we're we're getting into as weflip, you know, every four years
.
And so where should we go tohave these?
(24:23):
You know, what I would say issubstantive discussions about
the timelines that it takes forpotential success, while also
recognizing the environmentalconcerns and addressing them
appropriately.
So we're not just flipping alight switch back and forth.
Speaker 1 (24:41):
Yeah, there's a, you know, a real practical question
of how does one move the needle,and the answer is it's really
hard, especially living in aworld of the United States
Senate and 60 votes.
Could you get a bill to look acertain way?
Obviously, that's been reallyhard to achieve.
(25:02):
Budget reconciliation, which weare going to see happen
relatively soon, I believe, isgoing to do certain things, but
it's constrained in terms of itsrevenue impacts and how they
write things, and we'll see whatthat looks like.
If I'm, you know, getting Idon't know that it's a full
(25:24):
magic wand, because I'd probablyask for different things if you
gave me the full, but ifpartial, is there a market-based
solution where Congress couldencourage seismic companies to
shoot speculative seismic andthe government get the data,
(25:45):
possibly contract for thatinformation and then use
market-based solutions to recoupthat revenue?
You know, obviously we'reliving in a world where the
government's going to be moreserious about looking at its
finance and the value ofprograms, and so, you know, in
order to move forward, you wouldthink you'd have to have
(26:06):
something that could offerreturn to taxpayer, but that
would really be.
The question is, you know, canyou shoot and obviously you pick
the most prospective areas thathave a chance.
You know, I remember during2008,.
You guys might recall thatsummer I don't remember exactly
(26:27):
what day it was, either earlyJuly or late June Oil hits $145
per barrel and you can imaginethe Bush administration was in
complete scramble mode of whatdo we do about this?
And, of course, as was Congress, and so you go up to Congress
and explain to them well, it'sgoing to take two and a half
(26:51):
years for us to write a newfive-year plan, and that's when
we can deal with this.
And your problem is now, and Ijust always, I mean with energy,
again, conventional renewable.
There's so many of these stageswhere you look back and say, if
we had just done x, we wouldn'tbe in this situation today.
And so you know, I recognizethat's always going to be the
(27:13):
case, but I would love betterinformation so that we're
actually debating about.
Speaker 2 (27:20):
I mean, so during that 2008.
Speaker 1 (27:23):
You know, the discussion we had with a number
of folks was well, look, ifyou're telling us no law exists
and just go get the energy outof the ground, well, the answer
would have been SouthernCalifornia, right, like there's
existing infrastructure and weknow there's a ridiculous amount
of oil off Southern California.
But the politics are what theyare.
(27:45):
It's not happening.
I'm not advocating to be offSouthern California today, but
the point being is, we, you know, as policymakers, we have this.
We have this fundamentalmisunderstanding maybe
intentionally in some cases ofwhere the resource is versus how
(28:06):
we actually make that happenand the laws we use to.
And so, you know, that would bea point of contention where,
boy, it would be great if welived in a world where this is
where the resource is.
So why don't we have thatdiscussion?
Speaker 3 (28:20):
We can sharpen that discussion.
Speaker 2 (28:22):
Absolutely that's it.
Speaker 3 (28:26):
John, you were mentioning potentially going and
shooting seismic to understandthe geological resource.
That actually is something thatcould be done in the period of
an administration, right, andseismic could be done in a way
and with time and withexperience that we've learned,
(28:46):
in a way that helps minimizepotential environmental impact.
Right, we all know that soundand marine mammals are always of
concern and need to be wellstudied, and that's a real topic
that's been well studied in theoil and gas industry and now
also the offshore wind industrywith a different type of sound.
So that could be done and Ithink think that could be done
successfully to update ourcurrent understanding of geology
(29:10):
.
I do want to give a shout outto DOE, to USGS, because there
is an awful lot of, and, ofcourse, to BOEM, for the
offshore part.
There is an awful lot ofinformation that we do have on
the natural resource assessmentsof the united states related to
fossil fuels and alsorenewables.
(29:30):
Right, I don't want to forgetthat part of the discussion too,
because they're they're gooddatabases out there.
There are great maps out there.
They don't always have, um, theparticular commercially
sensitive geological layers inthem.
That's more confidential andthe agencies get to understand
(29:51):
that and the private sectorscollected them do.
But I think we do have a prettygood understanding of where we
would want to look andprioritize looking for
additional oil and gas resources.
Speaker 2 (30:02):
I think the basic point there, john, is very solid
and that's about betterinformation, and it applies both
to conventional energy, in theexample that you've given there,
but of course it also appliesto renewables, and I think we're
facing the same issue as far assharing information is
(30:22):
concerned, so that we makebetter, more well-informed
decisions.
Speaker 1 (30:29):
But let's Jim on that point.
I'm sorry, go ahead If youdon't mind.
Ian brought up marine mammalsand that issue, as we know, is
only getting more significant.
In the Gulf, you've got rice aswell and everything that goes
on with that.
In the Northeast, you've gotNorth Atlantic right whale, and
(30:54):
while those species are veryserious and the conservation
efforts matter and I certainlywant to see those take place you
also do see, this is where theunfortunate, you know, one side
has one view, one has another.
One side really seems to careabout rice as well and North
Atlantic right whale.
(31:15):
Things happen and they, youknow, everyone says it's not
that big of a deal and viceversa.
And that would be another point, I think, in terms of
frustration of we've got thesetwo whale species, we've got
other things going on and yethow the interaction with the
federal government and how theindustries push various things
(31:39):
are different and you wish wehad a little bit more uniformity
there.
Speaker 2 (31:45):
Sure.
Sure dude, I think everybody isin favor of that, but let's dig
a little deeper into theeconomics and the collection of
that information that you'retalking about.
The economics of conventionalenergy and the economics of
renewable energy are really,really important in terms of I'm
(32:05):
going to use the S word heresubsidies in terms of grants, in
terms of research and the like,and what moves forward in terms
of collecting the informationthat is needed.
I want to ask, because I feellike, just like a lot of
information is hidden forproprietary reasons, there's a
(32:26):
lot of information just aboutwho's getting what.
So who's getting what in termsof subsidies, grants, et cetera,
to move either industry forwardor other industries, nuclear,
et cetera.
It just seems to me that,despite the fact that it is all
(32:48):
embedded in law, somehow wedon't know a lot about where the
subsidies are going, how muchis really being, and whether
those assistances to industry,whatever the industry is, are
appropriate for where they fitin the energy mix.
Any thoughts on that in termsof the costs that are associated
(33:10):
with developing an industry andwhat the government is
contributing?
Speaker 1 (33:16):
Yeah, I should start with the caveat that, guys, I've
spent the majority of my careerworking with the committees of
jurisdiction and the agenciesthat do the authorizing of the
activities, which means that I'mnot a tax expert, and so, as
(33:37):
I'm going to opine here, I fullyrecognize that I certainly do
not have all the information,but that, jim, I think what we
have learned over time and seenprobably to really brought a
(33:59):
magnifying glass on the matterwas the Inflation Reduction Act
and the tax version of what thatmeant, and seeing these
reconciliation bills and I thinkwe're about to see this again
in.
Whatever the Republicans end updoing or not doing and that's
(34:20):
where Congress really obviouslyhas decided to influence the
outcomes is not just we're goingto give you a lease because
we're going to leave that to theagencies.
We're going to give you an areato develop Maybe there's
private area on shore thatpeople are doing but instead
what we're going to do is we'regoing to incentivize and say
that you have, if you investinto project.
(34:44):
We're going to give you theability to write off taxes for
certain activities.
You're going to get what theycall fully refundable tax
credits, meaning you literallyget cash back from the
government for certainactivities and so clearly trying
to create a market in a worldwhere you know, for offshore
(35:05):
wind we know that was doneintentionally of these projects
are huge, they're expensive,they require long lead times and
, as we know, the profit marginson offshore wind are not great
and instead they're just longright.
Like you make up oil and gasyour profit margin, if it hits
(35:26):
you're going to do really welland you have a lot less
certainty you might drill a dryhole.
Some other factor might happenOffshore wind generally better
known in terms of the resourcesthat are out there, right,
people know the wind speedsgenerally, but that margin is
small in terms of profit.
(35:47):
But your project might operatefor 30 years and so that's the
trade.
And so Congress made adetermination to try to
accelerate getting Jim and Ithink this is one that you know
the Trump uncertainty in termsof what might happen with
(36:09):
offshore wind.
We're going to see aboutindividual projects, but if
Congress takes away some ofthose tax benefits from the
Inflation Reduction Act for theoffshore wind industry, it's
going to have, in all likelihood, as significant an effect as
some of the authorizations andapprovals that they're going to
(36:32):
be looking at as part of thisfuture review.
Speaker 3 (36:36):
And John, I wanted to get your thoughts because this
is now interesting space for menot working close to DC, so to
speak, anymore.
It seems like politically,rising costs of energy are bad.
Let me keep it super simple,right, rising costs of energy
are bad no matter where we getit from, and there's also
(37:00):
different levels of kind ofinherent cost of different types
of energy production, and somerenewables are cheaper to
produce right now for anequivalent amount of energy as
hydrocarbon resources.
All of that gets more expensive, no matter what type of energy
it is, as you move it offshore,and so our tax policy, you know
(37:21):
is, is often used to help growalso the economic benefits you
know.
So we have this complicatedarrangement here where we
generally want energy to be at apoint where it's not too
expensive, but expensive enoughto allow domestic production
(37:43):
right, because that also hasadditional economic benefits.
And it seems like the way thatwe set those for oil and gas,
for other kinds of fossil-basedfuels and for renewables is
awfully politically fraught,right, but at least we can agree
the principles.
We need to find that sweet spotof range that allows people not
(38:05):
to suffer in the amount ofmoney any of us as individuals
pay but still supports a robusteconomy to help US with domestic
socioeconomic benefit of that.
These are really complicatedissues that seem like they work
their ways through markets overa lot of time, with a lot of
other factors involved, ofcourse with oil and gas, and
(38:27):
then it's a.
There's a lot of geopoliticalpressure on costs, as we all
know we can talk about too, andwith renewables it's also the
development of an industry thathasn't yet matured.
You know, the cost of oil andgas development offshore in the
Gulf of Mexico were very high afew decades ago, and there were
similar tax policies to helpincentivize development, because
(38:51):
we wanted a national resourceand we wanted a thriving
industry that employed lots ofpeople and created wealth for
America.
I can also see that Ipersonally bought into that
vision for offshore wind too.
But clearly there's a very finepolitical line to play there
that our elected politicianshave to dance with all the time.
(39:13):
How do we get it back tofundamentals so we're back all
in the same playing field andnot just picking a side right?
We need all energy to be inthat sweet spot, not one type or
the other.
Speaker 1 (39:28):
All great points, ian .
I wholly agree.
Deep Water Royalty Relief Actyeah, I think of 1995.
You know what I'm talking aboutExactly.
Yeah, absolutely Regardless.
You know, one can look atwhatever the revenues ended up
being during that time.
But I think a lot of us wouldsay, regardless of if it was a
(39:52):
net positive or negative, thelong term implications of having
a robust Gulf has benefited allof us and, you know, has led to
great jobs, but also energysecurity and enhance that.
And so I think that's where youdo look and say to yourself,
(40:13):
financially, what's the rightanswer?
Even if there may be a shortterm that it's not the most
beneficial financially, does thelong-term benefits outweigh
that, that it's not the mostbeneficial financially?
Does the long-term benefitsoutweigh that?
And that's something that'shard getting people to discuss
when you get people running totheir corners, which is where it
(40:36):
feels like we are right now,where I wish some of this
discussion.
As you probably know, in theInflation Reduction Act there
was a mandate on some of the USterritories and, as we know, you
know, as you probably know, inthe middle of the Pacific you're
(40:56):
having to ship diesel, you'rehaving, you know, everything's
expensive.
I get offshore wind isexpensive compared to other
sources of energy today.
Maybe there's some places whereyou could find a shift to
something that's cheaper.
I acknowledge that could occur.
Some of the territories.
(41:17):
That's not possible.
Does offshore wind make a tonof sense off Guam or some other
areas that you can't getconventional resources and are
unlikely to in the future?
You know, to me I wish we werehaving more of those discussions
of okay, so we're.
You know, not everything makessense everywhere, but in all
(41:39):
likelihood it makes sensesomewhere.
Wish we were having more of thesomewhere discussion on all
types of energy.
Speaker 3 (41:47):
And I'd just like to say as a former employee of an
international energy company,those companies of that size and
scale and global reach havethose discussions around
particular countries forinvestment too, and I just
wanted to kind of circle back tothat initial point.
The US has long been a focus ofinvestment for many companies
(42:13):
because of its stability.
We have lots of naturalresource potential, we have a
strong rule of law, we have arelatively, I would say,
predictable political system,which doesn't exist in all parts
of the world, and so the US hasoften been favored as a place
for investment as opposed tosome other nation in the world
that may be less stable.
We've got to get there, we'vegot to keep that in mind and
(42:37):
make sure that we retain thatfavored investment status, and I
don't think we're necessarilygoing to lose that right away.
Speaker 1 (42:44):
But these kinds of fluxes for long-term investments
flexes every four years,everyone does recognize think
(43:11):
that at companies that havelarge capital are going to ask
themselves if I invested in anenergy project in the United
States and a different politicalparty comes in, am I going to
still be in a position where weget to move forward?
You talked about four years.
Isn't enough.
You know, president Trump isobviously term limited.
So we're going to get a newregime in 2028, election 2029
(43:31):
starting, no matter what, andyou know whether that's
Republican or Democrat, that'sgoing to be got to be a question
that all of these companies aresaying do I invest in the U S
now?
Do I invest in the U S then?
But even you know, even foroffshore wind, if you say
president Trump's an anomaly andyou know I've heard a lot of
(43:53):
companies talk about, look,we're just going to wait four
years and we'll see what happens, okay, so, so maybe you get the
regime in place that's morefavorable to you.
What happens four years fromthen?
And I think that's the realityand I don't envy anyone having
(44:14):
to make those economic decisions, because I think that goes back
to our original point oncertainty, right.
Speaker 3 (44:24):
I fully agree, John.
Those are the discussions thatoccur in major international
corporations.
Speaker 2 (44:31):
Getting back to our discussion of where government
puts its resources to moveforward in the diverse energy
all of the above strategy, Ithink we need to be very mindful
of where we're putting ourmoney, and I think one of the
areas that makes sense to me isin technology, as we've talked
(44:53):
about several times now, andthis cuts across energy sources.
I think we have demonstratedmultiple times where government
puts some seed money into anindustry, it's a very positive
thing for the long run.
I guess the problem there iswhere that gets either beyond
(45:14):
what's reasonable or in terms ofwhat the technologies are, or
beyond just exploring for newtechnology.
So I think that's one areawhere an energy industry, and in
particular the wind energyindustry, is in a good position
(45:35):
for justified subsidies, if youwill, or assistance from the
government.
Any thoughts on that, john?
Speaker 1 (45:44):
Yeah, I think this question on technology in
general is you know, you thinkabout small modular, nuclear,
(46:23):
and are we going to seesomething on that front?
Again, I think all of it endsup being additive, but and so
how do we, how do we make surethat that we can continue to
power our lifestyle that we'reall going to want and are
accustomed to?
And that really, ultimately, isthe question.
I think, Jim, Congress is goingto be dealing with the
(46:45):
inflation.
They're going to amend theInflation Reduction Act.
They may get rid of it and wemay see a completely different
mix.
Again, from an investmentstandpoint, that uncertainty
creates a lot of issues andwe're going to see where that
goes.
I think, long-term it really,you know, I don't know how this
(47:11):
ends up unfolding.
Speaker 3 (47:12):
We'll see sets up unfolding.
We'll see.
You know, Jim, one of thechallenges I've seen is that
demonstration scale projectshave all of the complexity of
regulatory and permitting, aswell as, of course, engineering
and siting and commercialagreements as larger scale
(47:33):
projects in the US, and I dofeel like there's an opportunity
somehow to focus additionalgovernment support on
demonstration scale.
I'm saying this also from avery proud perspective as a US
citizen who hopes that the UScontinues to develop the
(47:54):
technologies that change theface of energy around the world.
Okay, so I'm going to say thatvery plainly.
First, I would love to see ushelp facilitate demonstration
scale projects of a number ofdifferent types.
You know again, not necessarilypicking and choosing which type
, but that's a clear gap betweensmaller things that often can
(48:18):
receive private and or venturefunding, larger things which
require much commercial projectfinance.
Somewhere in between is a sweetspot that I think is often
referred to as the valley ofdeath in venture capital.
But making that connection moreclear and giving government
support in that space mightproduce really tangible benefits
(48:41):
.
You know, generations down theline.
Speaker 1 (48:45):
I really like that point and I think that's that's
excellent and it you know theyou know if.
If I look at offshore windpolicy in general, as you know,
if I look at offshore windpolicy in general as you know,
if one's going to look back andsay, you know, obviously there's
always mistakes everyone youknow.
(49:06):
That's not criticism, but wasthere too fast of a ramping up
and too much and notdemonstration early and dealing
with some of the issues?
And that always happens.
But I think that had we hadmore of that and scaling
probably would have led to maybea different political climate
(49:28):
than we're in today.
Speaker 2 (49:30):
Yeah, that's very, very possible.
I think that's a great point,ian, in that whether that
specifically is the criteria orthe way to go is not the point.
It's that we identify some kindof criteria.
That is the basis forjustifying the kind of
expenditures that the governmentshould be making on things.
(49:51):
No-transcript and the reason Isay that is not because it
(50:20):
doesn't exist.
It certainly does, although ournew energy secretary has
pointed out that it's probablyfifth or sixth on the list of
major public policy issues thatneeds to be addressed.
I think maybe some adjustment ofour thinking with regard to
climate change as an existentialthreat to justify anything and
(50:42):
everything that goes intoanything renewable needs to be
quite.
We need to take a look atwhether that's really a really
good justification, and I thinkwe're facing a situation,
basically, where the reallyinconvenient truth, if I can use
Al Gore's phrase, is that as asociety, both domestically and
(51:03):
globally, we are not embracingwhat needs to be done.
If the objective is to get backto carbon levels that are
pre-1970s, and in the face ofthe fact that that simply is the
case, we need to be makingdecisions based on what's going
to happen in that environment.
(51:24):
I think it's just somethingthat we need to open up our
minds to a little bit in makingdecisions about the way
resources need to be deployed tomake sure that our energy
future is sound.
Speaker 1 (51:39):
Jim, that's an awesome point, and I agree
climate change is real, it'shappening, we're seeing it, we
see the effects.
You know, from a geologicstandpoint, I just read the
other day that in the history ofthe planet, only 13% of the
time has ice existed, and so youknow there's been massive
(52:04):
changes over time, obviouslyfrom a geologic scale.
But I think the bigger deal iswhat we talked about earlier,
and I'm as guilty as anyone fromthe standpoint of I too don't
want to give up my phone, I toolike driving my car, I too like
heating my home.
We, as Americans, want theconveniences that have been
(52:27):
created and want more that wedon't even know about today, and
that's going to keep happening.
And so you know the question.
That and this is where it'sreally uncomfortable, when we
have a lot of other countries inthe world that aren't going to
take some of the same steps,there's a lot of policymakers
(52:50):
that I would tend to agree withthat say to themselves why are
Americans going to hamstringourselves if carbon is going to
continue to go at a higher levelbecause other countries are
going to do it?
You know, as you probably know,carbon levels don't change
locally.
Like you measure carbonthroughout the world.
(53:12):
It's at about the same number,no matter where you are, and so
you know if we choose here tolimit our carbon.
But other countries continuethe Chinese in particular, the
Indians continue to push waymore carbon out.
You know you have to askyourself why are we harming
ourselves economically?
(53:32):
And instead, I think you knowmy own view is adaptation is
where we're going to have to be,and whether that's awesome or
not, you know, I don't thinkanyone wants to deal with more
severe storms and some of theeffects that might be coming,
but I think that's life and Ithink economically, that's where
the Americans are going to endup, taking us from a elective
(53:56):
standpoint, and you're going tosee that over and over in
elections.
My belief.
Speaker 2 (54:01):
I think that's a practical issue that we have to
be realistic about for futuredecision-making.
Speaker 3 (54:10):
Well, that was an interesting turn, you guys.
As a former ocean scientist,I'm glad you guys both still
understand that there is achallenge with a lot of CO2 in
the atmosphere.
I agree with some of the points.
I'm not sure I wholly agreewith some of the points too.
Jim, I wasn't quite sure whatyou were saying there.
Speaker 2 (54:31):
I'm just saying we need to be practical and
realistic about what decisionswe can make and what changes we
can effect.
Speaker 3 (54:41):
I mean, I certainly agree with that.
That's nothing to disagree with.
I do think one of the things,john, that I've also experienced
in my own personal thinking isthat we also have to understand
the deployment of governmentresource, and does it make sense
to battle it on the front endor the hind end?
You know, I come from the GulfCoast.
(55:02):
I spent a lot of years there,and hurricanes, flooding,
coastal change are all realissues.
Not all of them are whollyrelated to climate, but some of
them are, you know, and there'ssome fraction of them are, and
those are big disruptive issuesthat affect everybody and can
really have catastrophic effecton people.
So, you know, I also feel likethere's.
(55:25):
We do have to have a practicalassessment of which side do we
want to spend money on the sidethat creates opportunity,
employment for the US, or theside that has to recover from
disaster?
And I do think that you know.
Hey, we've seen China move veryquickly into renewables, for
(55:47):
example.
Right, china produces solarpowers cheaper than anywhere
else in the world becausethey've gone full tilt into
producing solar panels for theworld.
That's the reason why solarproduction is the cheapest cost
of energy production in theworld.
They've also moved verystrongly into offshore wind, and
I think and I just want totease apart I'm not sure they're
necessarily doing it because ofa belief in climate change.
(56:08):
I believe they're doing it aswe ought to as well, because
there's an opportunity to leadthe world in the technologies of
the near future, and that'sjust one of the things.
I do think climate change andthe challenges of addressing all
of these issues are theeconomic opportunities of the
(56:28):
next few decades, and I surewant the US to be front and
center and have very strongeconomies built around those
that we can export as well too,not just here in the States.
Speaker 1 (56:39):
Yeah, I think, ian, on that front, just on the China
front, I also think thatthere's a national security
angle they care about, and whilethey're moving forward I mean,
china is the all of the above,and they are building more
coal-fired power plants thananywhere in the world as well,
and, to your point, I don'tbelieve any of it has to do with
(57:02):
climate.
I believe it's about trying tocreate sustainability for them
in the event that there getsinto either economic or other
hostilities, where they're notreliant on Middle East oil or
anyone else's oil, and so theywant to have resources that they
have in place in country.
(57:23):
And so, with that said, I don'tdisagree, the US should be a
leader.
You know, we have thesewonderful national labs where a
lot of great work occurs, andI'm very pro them.
But you know, I think on theclimate front to your point, and
(57:44):
hurricanes and other damagesare very serious, very real, I
agree.
Clearly, the strength intensityis something that we all need
to worry about.
The strength intensity issomething that we all need to
worry about, but, you know, Ithink the obviously there's a
lot of trade-offs with theChinese model, and so, but it's
(58:07):
a good discussion.
Speaker 3 (58:11):
I think there's fair points on a lot of sides on that
.
That'll be a great one foranother time, yeah.
Speaker 1 (58:14):
Yeah, that's right.
Speaker 2 (58:15):
Yeah, you got several podcasts.
Great one for another time.
Yeah, yeah, that's right.
Yeah, you got several podcastsright there, for sure, john.
I want to ask you one lastquestion, if we could, before we
wrap up, and that's that I'dlike you to just take the
opportunity to let us know whatyou're thinking is the most
important thing or the mostconsequential thing that is
(58:36):
going to be happening and willhave long-term effects, but it
will occur in the short tomidterm or something like that,
but just what you think is themost critical issue for the near
term.
Speaker 1 (58:50):
I think we talked about this a little bit earlier.
But we may find out thatartificial intelligence is not
as difficult to supply from anenergy standpoint.
That's certainly possible.
New technologies may come outwhere the consumption is not as
(59:14):
great as we think it's going tobe.
But if the folks who seem toknow this stuff certainly a lot
better than I do are anywhereclose to accurate, we have an
energy problem in this countryand we need more of it.
And I really fret about, youknow, the crowds of individuals.
(59:36):
Well, I don't want it here andI don't want to see this thing
and I don't want to.
I don't want to worry aboutthis.
150 miles off my beach, youknow, there's a lot of this,
that type of talk where you justthink to yourself collectively
like we have to have answers,because this is going to get
(59:57):
built and none of us want tolive in a world of blackouts,
and I just think that there'sless seriousness about what's
coming and the need to be ableto power it than we're having in
this country.
Speaker 3 (01:00:12):
so that that's probably the top one today, jim
ian, any uh, uh, wrap upthoughts that you want to.
This is a reallythought-provoking conversation.
Uh, jim, john, you guys bothbrought up interesting points
that I think were, uh wasimportant to think through.
You know we've talked aboutsome of the challenges of the
(01:00:34):
four year flips.
We've talked about the need forincreased energy in the country
to continue and that we don'tsee that abating anytime soon.
We've talked about theopportunities for national
security through domesticproduction of energy and, john,
you know you really hit thatpoint home to me and we didn't
even talk about what's happenedin Balttic pipeline subsea.
(01:00:56):
You know, over the last fewyears either, and, um, and, and
yet that somehow seemsincredibly pertinent to today's
discussion.
So, um, there's a reallyexpensive, thoughtful discussion
and I appreciate it reallyappreciate your guys time
enjoyed it.
Thank you it and jim, you know,one of the things we do every
(01:01:18):
week, just off the topic, is anylast drops in the ocean.
For this week, john, it's wherewe share any other you know
offshore energy related type ofinformation that wasn't
necessarily in our largerdiscussion.
Do you have any last dropsyou'd like to share?
This week?
As our guest, you always getthe opportunity to go first.
Speaker 1 (01:01:39):
I'm an optimist about offshore energy in this country
.
I think there's still somereally great opportunities and
some it doesn't.
You know.
For me, just as and I don'thave any economic interests,
this is just me popping offmarine hydrokinetic feels like
(01:02:01):
something that I'd love to seemore activity around.
I think that you think aboutparts of the ocean and where
currents are and Gulf Stream,etc.
And where currents are andGulfstream, et cetera.
It feels like there's someopportunities to have renewable
resources beyond just talkingabout offshore wind.
(01:02:21):
As we talk about the OCS,obviously there's tidal, there's
wave, there's other, but thehydrokinetic to me, I just think
about, you know, obviouslymaybe the currents are going to
run at different rates, but thethere's certainly.
It feels more like hydropoweras it relates to having some
(01:02:42):
consistency on that front andand um, you know, I'm sure we're
decades away and somebody elsewill come up with an idea at
some point, but that would beone that I would love to see
more attention around, because Ithink it could solve a lot of
problems again.
Speaker 3 (01:02:59):
Welcome to the club, john.
There's definitely a passionatesmall community who continues
to think very much the same way,so it's good to hear you're
coming in.
I'm going to get you yourmembership card soon, jim.
Speaker 2 (01:03:15):
Any last drops from you um, the last drops for me is
that we talk a lot about thelong-term uh things that are
needed, like informed decisionmaking, which I which I'm even
more strongly uh feel aboutafter this conversation, uh but
the more immediate stuff is, uh,uh, what's going to happen to
(01:03:38):
the projects that are right nowon the cusp?
And I think we need to pay alot of attention to that,
because all of the discussionsabout long-term information
needs and everything else aregoing to be greatly hampered if
some of the projects that we'veapproved do not move forward.
And I think we need to pay very, very close attention to the
(01:04:00):
opportunities to move theapproved projects forward.
We haven't heard anything fromthe administration specifically
about that, even though there'sthe possibility.
And if we don't and we do moveforward, I think it opens up all
of the issues that we've talkedabout today in a very
constructive way.
Speaker 3 (01:04:20):
Thanks, jim, jim and other listeners.
You may know that I'm also kindof dabbling in the blue economy
right, which is a broad term todescribe all kinds of ocean and
marine innovations, includingaround renewables but also other
sectors, and I went to a reallyinteresting forum down in
Newport, rhode Island, a fewweeks ago which was focused
(01:04:42):
largely on the blue economy witha very particular bent to it
the blue economy around navalsystems and, as many folks know,
newport is home of the NationalUndersea Warfare Center.
Many folks know Newport is homeof the National Undersea
Warfare Center All kinds ofinteresting technology being
developed by the Navy.
That includes all of the thingswe've talked about the
(01:05:02):
opportunities for autonomy,remote systems, use of AI and
other kinds of digital languageto help improve activities, and
my primary thought afterexperiencing a really
fascinating series ofpresentations was the
similarities between that worldand energy, particularly
(01:05:26):
offshore energy, are huge.
The opportunities forcollaboration and development of
technology that might be dualuse for both military and or
government as well as privatesector, is off the charts, and
so I can't wait to spend moretime exploring that space and
(01:05:47):
finding opportunities to helpmake those connections.
And my second point is one thatis more uncertain and a
reflection of the times.
We recognize that the doge isbusy at work and there are a lot
of folks in federal employeewho have recently lost roles,
(01:06:07):
been downsized.
I know folks at NOAA have beenimpacted, folks at Department of
Energy and even recently Iheard folks at the VA were
impacted.
I'm not going to go on asoapbox about this but I will
say the VA was responsible forthe last 10 years of my
(01:06:28):
stepfather's life, his medicalcare and I met an awful lot of
really compassionate folks atthe VA who helped him through
that tough time and I certainlythink all of our veterans
deserve that kind of supportinto the future.
I really hope that's notimpacted, but I'm fearful it
(01:06:48):
will be.
That's my last, last drop forthis ocean.
Speaker 2 (01:06:53):
Okay, we appreciate that, ian, and we invite you, of
course, as we always do, tosend us topics and any special
guests that you'd like to hearfrom, that you'd like to hear
from, and especially with regardto the shaping, the reshaping
(01:07:14):
of the ocean energy industry.
Speaker 3 (01:07:17):
And Jim, I think we actually do have a next episode
that we can discuss.
Yeah, you bet Alan Marks isgoing to join us.
Many of you may know him from areally illustrious career in
major energy project finance andstructuring.
He's joining us next time wherewe're going to dive into the
(01:07:38):
complexities of finance foroffshore projects.
Jim, John, great to see you.
Thank you so much.
Speaker 2 (01:07:44):
Thanks, John.
Thank you so much, John, forjoining us and the listeners for
listening in Until we meetagain on the next Offshore
Energy Podcast.
Well, hey everybody.
In the last few weeks we'veseen an upheaval like no other
in several decades now in thefederal approach to energy
policy.
Ocean energy and offshore windnarratives have moved to the
extremes, with the lastadministration approaching
things from a no-holds-barredstandpoint as far as renewable
is concerned and opposition toconventional energy and the
(00:35):
current administration pursuingpretty much exactly the opposite
.
Amidst these competingnarratives, it's hard to sort
out legitimate policydifferences that can be worked
on, as they are clouded byexaggeration and ambiguity.
Let's try to separate the wheatfrom the chaff and clarify what
the debate is really aboutRight now on the Offshore Energy
(00:59):
Podcast at.
Speaker 3 (01:15):
I'm Jim Bennett and I have over 40 years of
experience developing energy inthe ocean.
I'm Ian Valparo and I've spentthe last 20 years developing
offshore energy projects aroundthe world, and this is the
Offshore Energy Podcast energyprojects around the world, and
this is the Offshore EnergyPodcast.
Speaker 2 (01:36):
Hey, how you doing, Ian.
Hey, jim, good morning.
I'm doing fantastic.
How are you Good?
And we have a guest speakertoday, which we'll get to in
just a moment, but we're goingto be talking about a number of
issues with regard to offshoreenergy and the developments that
have occurred since the changein administrations Should be an
interesting discussion.
Speaker 3 (01:56):
Boy.
Jim, there is a lot going on.
We see it, and we see it in allkinds of different facets and
dimensions of it, both in policyshifts but also personnel
changes, and we can talk aboutthat all.
I'm also very lucky not to becomplaining about shoveling snow
this week, jim.
So for those of you in NewEngland, here's to spring at
(02:20):
March in like a lamb, in like alion, out like a lamb.
I hope it's true this year.
My fingers are crossed, jim,how are you, and everything good
with you.
Speaker 2 (02:29):
Everything's good.
We don't have as much of a snowissue here in Virginia.
We've had a cold winter, forsure, but it's not as bad as you
guys face up there.
But you know, if I can, I'dlike to welcome John Robski to
the podcast.
He's joined us for ourdiscussion today and I'll give a
(02:52):
brief introduction just to leteverybody know that he has very,
very extensive experience withoffshore energy, both on the
Hill and with the Hill Energy.
Both on the Hill and with theHill, he served as deputy
director with BOM's predecessorin the Minerals Management
Service.
He's been involved in andhelped shape Outer Continental
Shelf Energy policy for multipledecades now.
(03:16):
He also worked with theNational Ocean Industries
Association, noia, and he's nowthe policy director at
Brownstein, hyatt, farber andShrek.
I'd like to welcome you, john.
Speaker 1 (03:30):
Thank you very much.
Guys Appreciate being on hey.
Speaker 3 (03:32):
John, it's great to see you, and now we have two DC
folks and I'm the lone privatesector representative.
But I'm going to do my best too.
Okay, I'm here to representtoday, john.
You know we wanted your take assomeone who has worked so
closely with policy and energypolicy development over the last
couple of decades.
(03:53):
Now we're seeing these dramaticshifts, with each
administration sometimes feelinglike it's 180 degrees in the
shift of priorities and, in fact, in the shift of priorities and
in fact, in the shift ofpolicies and even the
interpretation of regulations.
To me, from the private sectorside, that's a lot of
(04:14):
uncertainty.
And how do we feel, or how doyou feel, john, that uncertainty
is affecting the development ofenergy, energy investment and
the delivery of power to movethe US forward into the future.
Speaker 1 (04:34):
Thanks, ian.
I think the point you're makingon uncertainty is the one that
I agree I find the mostbothersome.
You know, as somebody who,within energy, kind of cut my
teeth in the Gulf of America,the hallmark of dealing with
(05:00):
offshore was that you know therewere other basins that maybe
had as much potential, buteveryone knew if you did
business in the Gulf you livedby the rules, you operated
safely, you were going to beable to go forward, and that was
(05:21):
whether Democrats were incharge, republicans were in
charge, didn't matter, and soyou could attract people.
You got huge lease sales.
You know, when Jim and I wereat the agency, back when it was
the Minerals Management Service,we were there for lease sale
(05:45):
206, you know $3.6 billion inrevenue in that one lease sale.
Yeah, that was obviously greatgeology, but it also certainly
had to have been based, at leastin part, on predictability of
being able to move forward onprojects.
And so you know, and this shift,it didn't happen overnight, it
(06:10):
didn't happen with the Bidenadministration and what they
thought of offshore oil and gas,and it's not just happening now
because of the Trumpadministration and how they
think of offshore wind.
It was a slow burn andobviously Macondo, deepwater
Horizon, whatever term peoplewant to use.
That's where a lot of thisstarted and the regulatory
(06:32):
regime changed significantly,but that's really been, in my
opinion, that certainty for theentire offshore, regardless of
form of energy, that has reallyentered the equation.
I don't think the offshore windfolks had previously dealt with
uncertainty in the same waythat offshore oil and gas had,
(06:55):
and so I think that dynamicobviously is new right now, but
I think now anyone in theoffshore energy industry is
looking at the world throughthat lens and that's unfortunate
for any business planning,regardless of sector, regardless
of if it's energy, uncertaintyis obviously the enemy of being
(07:19):
able to long-term planning andstable, investment.
Speaker 2 (07:23):
John, I think that's a great point and probably the
most fundamental point goingforward amidst all the issues
that we're hearing about, and Ido think that in order to be
able.
First I want to say it'sinteresting that you brought up
the certainty associated withoil and gas in the Gulf of
(07:45):
America, as you say, becausethat certainty is something that
developed over a long period oftime and in the wind industry,
in a very short number of yearswe had auction bid prices that
exceeded some of thelongstanding oil and gas
(08:08):
activities in the Gulf of Mexico, and now we're back to a
different situation and all ofit revolves around the
uncertainty that you're talkingabout.
But to my mind, as we talkabout uncertainty and have this
discussion, one of the mostfundamental things is a common
language.
We have an awful lot ofdiscussion of things that we
(08:29):
don't really have the sameunderstanding amongst the
various parties.
Just as an example, we'rehearing about the intermittent
nature of wind and while thosepeople who are in the wind
industry or associated with itor educated about it, know that
it's not really intermittent, itdoesn't shut off completely.
(08:53):
There's certainly fluctuations,but there aren't any sort of
energy development.
But it's measurable and it canbe planned for, but the
narratives grab things like thatand just the whole concept of
transition is another exampleand we'll get to that in a
minute.
But the language becomes adifficulty for us to discuss, to
(09:20):
move forward.
Any thoughts on that?
Speaker 1 (09:38):
To move forward.
Any thoughts on that agree?
I think that, um, neither sidehas decided it's in their
interest to raise um the otherside's version of events and and
things that may matter to them,and so you end up with people
(09:59):
probably intentionally talkingpast each other.
Um, and to your point, forthose who want to have an
intellectually honest policydebate, it often feels like
there's no space for thosepeople.
Speaker 2 (10:16):
But don't we need that, don't?
We have to have that in orderto be moving forward.
Speaker 1 (10:19):
Yeah, I certainly.
You know, we get betteroutcomes as government, better
outcomes as citizens when we endup being able to be transparent
.
And you know, I think that thepoliticization of energy in
(10:40):
general is just it's at thehighest levels I can remember
general is just it's at thehighest levels I can remember.
Um, and I think that really umagain, both sides of these
competing talking points and usewhatever information they think
advances their agenda but let's, let's play this a little bit,
(11:01):
jim, what kind of politicizedlanguage have you heard?
Speaker 3 (11:05):
And we can play both sides of this, you know, because
I think it's important to showthat there are some real
fundamentals that we all shouldunderstand, respect and move
forward from.
Speaker 2 (11:18):
It is.
It is absolutely on both sides,and the one example I gave about
intermittent wind and thenature of the use of that term
to suggest that it's unreliableor not predictable is one
example.
But I think the more fundamentalconcept of an energy transition
is something that is viewedvery differently by different
participants.
Have this concept of an energytransition, of total movement
(11:45):
from conventional energy andfossil fuels we're going to flip
the switch and just be 100percent renewables.
In fact, many of the stateshave long term goals that are
based on 100 percent renewables,and I don't think that's what
the transition is, or I don'tthink that's what you're going's
what the transition is thatyou're going to see, the
(12:05):
transition is going to be acombination and we throw the
term around all the time, all ofthe above, but it's going to be
some kind of mixing of thingsthat hopefully will be to the
best advantage of the public andthe American people, and that's
another example.
Transition to me means oftensuggests replacing one with the
(12:28):
other, either in whole or inpart, and I don't think that
that's the case.
I think we're really looking atsomething more along the lines
of energy addition, given thefact that energy demand is going
to continue to increase and allsources will be needed.
Speaker 3 (12:44):
I think what we've seen, certainly through the
history of energy use in theUnited States and probably the
world too, is we've seenshifting sources over time.
And if we go back far enough,you know, wood was the number
one source right, and coal wasthe number one source in the US
until the 1950s, and thenpetroleum products and then
(13:04):
natural gas came on in the 80s,and coal was the number one
source in the US until the 1950s, and then petroleum products
and then natural gas came on inthe 80s.
And so we don't see energy dipsin consumption.
As those sources change.
We see pretty stable and infact often rising energy
consumption.
And so, jim, I think the pointaround energy addition is really
important we were all thinkingabout.
(13:25):
I know those of us in the energybusiness are thinking about
data centers, right, and thepotential Dramatic use of energy
, and that's still that is stillhappening right now.
We're in the middle of thattransition and it Projections
may or may not be right.
We'll see.
There's a lot of new technology, but we don't think our energy
use or consumption is ever goingto decrease in the United
(13:48):
States in the reasonable future.
So indeed, it's all of thesedifferent facts and that part
seems to be missed when at leastadministrations are flipping
from preferred source topreferred source.
And, john, that's, you know,that's.
How do we keep that, thatfoundation, sorry, that
(14:10):
foundational discussion, stillfront and center in the
discussion?
Speaker 1 (14:15):
That's so normal for all of us in the energy industry
.
Yeah, these are all greatpoints, I think, ian, to the
point you made, you look uphistorically and even wood you
go through that is stillconsumed at a higher rate and
used for energy purposes as ahigher rate today around the
(14:39):
world than it ever has been.
And you can keep going throughall the other materials and you
end up getting to that place.
Jim, I think transition hasbeen bastardized to the point
that you were the one who saidit that there's a good chunk of
(14:59):
people who believe the wordtransition really means
replacement and again, you guysare both saying this and I
wholeheartedly agree Energyright now.
The only way I think one can beintellectually honest about this
is that it is additive anddemand, if anyone believes.
(15:21):
You know demand forecasts inthe future and they could be
wrong, but everything we'reseeing tells us we need so much
more Energy.
(15:45):
And the Department of theInterior, respectively, both
talked about fears of futureblackouts and the inability to
be able to handle.
You know, I live in Virginia aswell, along with Jim, and this
is a part of the country wheredata centers are really active
and the governor wants to bringthem in and they're trying to
figure out how do they powerthat?
(16:07):
we don't have a lot of nuclearhere in virginia.
Maybe that's something that'sgoing to be part of the mix.
Obviously there's the hugedominion offshore wind project.
Is that part of the mix?
There's a lot going on but umuh, you know this additive
doesn't seem to be.
When you hear either side talkabout what they want going
(16:31):
forward, you don't really hearadditive on either side.
Speaker 2 (16:37):
I think that's a great point.
That's a great point and withregard to conventional energy,
notwithstanding the largerarguments about climate change
and the like but in terms ofhaving the resources in
conventional energy, we havethis longstanding presumption of
(16:57):
finite resources and we'regoing to run out.
And yet, although that has anintuitive appeal to it, my
experience has been from apractical standpoint.
I'm not sure that's the modelthat is most useful.
And when we talk about what wecan do in different portions of
the energy mix, do we have theinformation?
(17:21):
Do we really have a good handleon what the conventional energy
resources can and should beover the next couple decades?
Speaker 1 (17:32):
You know when I think about this issue, jim, there's
a crowd out there who doesn'tlike energy, doesn't want new
energy, would prefer that weconsume less, and I think we all
want efficiency.
But in terms of you know Ianmade the point earlier that's
(17:53):
not how this is going to work.
And, truthfully, for mostAmericans, they want to use
their iPads and their computersand their cell phones, etc.
And that's not changing.
I don't believe their iPads andtheir computers and their cell
phones, et cetera, and that'snot changing.
I don't believe.
I don't think we're going totell the American people, hey,
you're just going to have to useless and get used to it.
And I think where that comes is, you know, we go back to the
(18:17):
Gulf.
I think the Gulf has producedsix, seven times what the
original estimate was and isstill chugging along and looks
like it has a long life.
The history of energy is themore you look, the more you find
.
And you know, you guys bothknow the types of folks who work
at some of these companies,these engineers.
(18:39):
There's a lot of brilliantindividuals who you show them a
problem.
They eventually figure out howto get to.
Yes, you even think aboutrecovery rates and you look at
what's in the rock and you knowjust, you move that up by
percentage points and the amountof energy that somehow comes
out of the ground becomes thatmuch greater.
(19:00):
I think there's a lot oftechnology still to make its way
.
We haven't seen AI dominate thefield yet, but it sounds like
and feels like that's what'scoming next.
And so I think that from thatstandpoint, the concept that
obviously there's a finite, butI think we're so far away from
(19:21):
reaching anywhere close to wherescarcity is an issue.
And I think, politically,there's a crowd who enjoys
talking about scarcity becauseit tries to force the
conversation in anotherdirection, and I think that's
it's just inaccurate in myopinion.
But, jim, I think to's crowdsin the US who don't want us to
(19:51):
know information and and preferkind of living in this scare
tactic world.
And you know, from somebody whoreally wants to see as much
certainty and as much policyinto the decision making.
You know, the three of us havetalked previously.
(20:14):
Nobody wants to drill for oilwhere there's not oil.
This is simple, right?
That should be a pretty simpleconcept.
Should be a pretty simpleconcept.
But you know, for basicallyalmost the entire East Coast,
(20:37):
the Pacific Coast, alaska.
Most of our data is really oldand used with technology that
produced the video game Ponginstead of, you know,
playstation 5.
And that is the differencewe're dealing with, right, and
you know the seismic that wasshot was shot down to 10,000
feet or so during that time,because that's where you
explored to using really oldtechnology that, as you know,
(21:03):
jim, the BOEM folks areconstantly reprocessing and
using new computer technology totry to get better use that same
data set and get better answersout of it.
But at the end of the day, it'sonly can do so much.
And so you know, I'd love to bein a world where we were
(21:23):
talking about this place doesn'thave any, so let's quit talking
about it.
If somebody wants to take itoff limits, that's great.
Let's talk about where theenergy is, and that doesn't mean
we should go after every singledrop and every drop, every
single inch.
But you know, one of the mostfrustrating parts of my long
(21:46):
career in this space has beengeography and geology do not
match.
You know, cartographers neverdrew their maps to match the
geology, and I'm not saying theyshould, but there are a lot of
people I encounter who thinkthat when you have the three by
three square blocks in the outercontinental shelf.
(22:08):
That means that there's anequal amount of oil and gas
underneath each block, and sowe're really just making a
decision of this area.
Sounds like it's good toexplore this area.
Seems bad and, as we know,that's not how nature created
things, we can help them.
Speaker 3 (22:26):
We could do a podcast on that for sure, john.
I do want to touch on a coupleof points from a private sector
perspective too.
I think in the total mix andwe've been focusing on
conventional and mostly oil andgas resources for our discussion
you're highlighting what Ithink is exactly the problem.
Oil and gas developmentoffshore because this is the
(22:49):
Offshore Energy Podcast in anygreenfield or new basin takes
more than an administration.
There are so many differentfactors that have to be prepared
in order to potentiallysuccessfully develop a reservoir
.
In order to potentiallysuccessfully develop a reservoir
, produce oil and deliver it toa market.
It's more than four years and,as you were saying, the costs of
(23:18):
doing offshore exploration arequite significant.
And so even exploration wellsin the deep water, even in the
Gulf of Mexico, where thetechnology exists you know
there's a, there's an ecosystemthat's ready to build into are
still incredibly expensive, andputting the capital at risk.
From a private sectorperspective, to go drill an
exploration well is a prettysignificant decision.
(23:41):
I can't imagine a lot of folkswho are thinking well, now that
there's this other opportunityon a new coast, in a new green
field.
Think of it.
You could also say in a newcountry, as I used to do.
The political risk factor ismuch higher in the US than it
used to be.
(24:01):
Not even to speak of thepotential.
Ge know, the potentialgeological assessment, the
potential other technical andmarket developing factors.
This is one of those keyconundrums that I feel like
we're we're getting into as weflip, you know, every four years
.
And so where should we go tohave these?
(24:23):
You know, what I would say issubstantive discussions about
the timelines that it takes forpotential success, while also
recognizing the environmentalconcerns and addressing them
appropriately.
So we're not just flipping alight switch back and forth.
Speaker 1 (24:41):
Yeah, there's a, you know, a real practical question
of how does one move the needle,and the answer is it's really
hard, especially living in aworld of the United States
Senate and 60 votes.
Could you get a bill to look acertain way?
Obviously, that's been reallyhard to achieve.
(25:02):
Budget reconciliation, which weare going to see happen
relatively soon, I believe, isgoing to do certain things, but
it's constrained in terms of itsrevenue impacts and how they
write things, and we'll see whatthat looks like.
If I'm, you know, getting Idon't know that it's a full
(25:24):
magic wand, because I'd probablyask for different things if you
gave me the full, but ifpartial, is there a market-based
solution where Congress couldencourage seismic companies to
shoot speculative seismic andthe government get the data,
(25:45):
possibly contract for thatinformation and then use
market-based solutions to recoupthat revenue?
You know, obviously we'reliving in a world where the
government's going to be moreserious about looking at its
finance and the value ofprograms, and so, you know, in
order to move forward, you wouldthink you'd have to have
(26:06):
something that could offerreturn to taxpayer, but that
would really be.
The question is, you know, canyou shoot and obviously you pick
the most prospective areas thathave a chance.
You know, I remember during2008,.
You guys might recall thatsummer I don't remember exactly
(26:27):
what day it was, either earlyJuly or late June Oil hits $145
per barrel and you can imaginethe Bush administration was in
complete scramble mode of whatdo we do about this?
And, of course, as was Congress, and so you go up to Congress
and explain to them well, it'sgoing to take two and a half
(26:51):
years for us to write a newfive-year plan, and that's when
we can deal with this.
And your problem is now, and Ijust always, I mean with energy,
again, conventional renewable.
There's so many of these stageswhere you look back and say, if
we had just done x, we wouldn'tbe in this situation today.
And so you know, I recognizethat's always going to be the
(27:13):
case, but I would love betterinformation so that we're
actually debating about.
Speaker 2 (27:20):
I mean, so during that 2008.
Speaker 1 (27:23):
You know, the discussion we had with a number
of folks was well, look, ifyou're telling us no law exists
and just go get the energy outof the ground, well, the answer
would have been SouthernCalifornia, right, like there's
existing infrastructure and weknow there's a ridiculous amount
of oil off Southern California.
But the politics are what theyare.
(27:45):
It's not happening.
I'm not advocating to be offSouthern California today, but
the point being is, we, you know, as policymakers, we have this.
We have this fundamentalmisunderstanding maybe
intentionally in some cases ofwhere the resource is versus how
(28:06):
we actually make that happenand the laws we use to.
And so, you know, that would bea point of contention where,
boy, it would be great if welived in a world where this is
where the resource is.
So why don't we have thatdiscussion?
Speaker 3 (28:20):
We can sharpen that discussion.
Speaker 2 (28:22):
Absolutely that's it.
Speaker 3 (28:26):
John, you were mentioning potentially going and
shooting seismic to understandthe geological resource.
That actually is something thatcould be done in the period of
an administration, right, andseismic could be done in a way
and with time and withexperience that we've learned,
(28:46):
in a way that helps minimizepotential environmental impact.
Right, we all know that soundand marine mammals are always of
concern and need to be wellstudied, and that's a real topic
that's been well studied in theoil and gas industry and now
also the offshore wind industrywith a different type of sound.
So that could be done and Ithink think that could be done
successfully to update ourcurrent understanding of geology
(29:10):
.
I do want to give a shout outto DOE, to USGS, because there
is an awful lot of, and, ofcourse, to BOEM, for the
offshore part.
There is an awful lot ofinformation that we do have on
the natural resource assessmentsof the united states related to
fossil fuels and alsorenewables.
(29:30):
Right, I don't want to forgetthat part of the discussion too,
because they're they're gooddatabases out there.
There are great maps out there.
They don't always have, um, theparticular commercially
sensitive geological layers inthem.
That's more confidential andthe agencies get to understand
(29:51):
that and the private sectorscollected them do.
But I think we do have a prettygood understanding of where we
would want to look andprioritize looking for
additional oil and gas resources.
Speaker 2 (30:02):
I think the basic point there, john, is very solid
and that's about betterinformation, and it applies both
to conventional energy, in theexample that you've given there,
but of course it also appliesto renewables, and I think we're
facing the same issue as far assharing information is
(30:22):
concerned, so that we makebetter, more well-informed
decisions.
Speaker 1 (30:29):
But let's Jim on that point.
I'm sorry, go ahead If youdon't mind.
Ian brought up marine mammalsand that issue, as we know, is
only getting more significant.
In the Gulf, you've got rice aswell and everything that goes
on with that.
In the Northeast, you've gotNorth Atlantic right whale, and
(30:54):
while those species are veryserious and the conservation
efforts matter and I certainlywant to see those take place you
also do see, this is where theunfortunate, you know, one side
has one view, one has another.
One side really seems to careabout rice as well and North
Atlantic right whale.
(31:15):
Things happen and they, youknow, everyone says it's not
that big of a deal and viceversa.
And that would be another point, I think, in terms of
frustration of we've got thesetwo whale species, we've got
other things going on and yethow the interaction with the
federal government and how theindustries push various things
(31:39):
are different and you wish wehad a little bit more uniformity
there.
Speaker 2 (31:45):
Sure.
Sure dude, I think everybody isin favor of that, but let's dig
a little deeper into theeconomics and the collection of
that information that you'retalking about.
The economics of conventionalenergy and the economics of
renewable energy are really,really important in terms of I'm
(32:05):
going to use the S word heresubsidies in terms of grants, in
terms of research and the like,and what moves forward in terms
of collecting the informationthat is needed.
I want to ask, because I feellike, just like a lot of
information is hidden forproprietary reasons, there's a
(32:26):
lot of information just aboutwho's getting what.
So who's getting what in termsof subsidies, grants, et cetera,
to move either industry forwardor other industries, nuclear,
et cetera.
It just seems to me that,despite the fact that it is all
(32:48):
embedded in law, somehow wedon't know a lot about where the
subsidies are going, how muchis really being, and whether
those assistances to industry,whatever the industry is, are
appropriate for where they fitin the energy mix.
Any thoughts on that in termsof the costs that are associated
(33:10):
with developing an industry andwhat the government is
contributing?
Speaker 1 (33:16):
Yeah, I should start with the caveat that, guys, I've
spent the majority of my careerworking with the committees of
jurisdiction and the agenciesthat do the authorizing of the
activities, which means that I'mnot a tax expert, and so, as
(33:37):
I'm going to opine here, I fullyrecognize that I certainly do
not have all the information,but that, jim, I think what we
have learned over time and seenprobably to really brought a
(33:59):
magnifying glass on the matterwas the Inflation Reduction Act
and the tax version of what thatmeant, and seeing these
reconciliation bills and I thinkwe're about to see this again
in.
Whatever the Republicans end updoing or not doing and that's
(34:20):
where Congress really obviouslyhas decided to influence the
outcomes is not just we're goingto give you a lease because
we're going to leave that to theagencies.
We're going to give you an areato develop Maybe there's
private area on shore thatpeople are doing but instead
what we're going to do is we'regoing to incentivize and say
that you have, if you investinto project.
(34:44):
We're going to give you theability to write off taxes for
certain activities.
You're going to get what theycall fully refundable tax
credits, meaning you literallyget cash back from the
government for certainactivities and so clearly trying
to create a market in a worldwhere you know, for offshore
(35:05):
wind we know that was doneintentionally of these projects
are huge, they're expensive,they require long lead times and
, as we know, the profit marginson offshore wind are not great
and instead they're just longright.
Like you make up oil and gasyour profit margin, if it hits
(35:26):
you're going to do really welland you have a lot less
certainty you might drill a dryhole.
Some other factor might happenOffshore wind generally better
known in terms of the resourcesthat are out there, right,
people know the wind speedsgenerally, but that margin is
small in terms of profit.
(35:47):
But your project might operatefor 30 years and so that's the
trade.
And so Congress made adetermination to try to
accelerate getting Jim and Ithink this is one that you know
the Trump uncertainty in termsof what might happen with
(36:09):
offshore wind.
We're going to see aboutindividual projects, but if
Congress takes away some ofthose tax benefits from the
Inflation Reduction Act for theoffshore wind industry, it's
going to have, in all likelihood, as significant an effect as
some of the authorizations andapprovals that they're going to
(36:32):
be looking at as part of thisfuture review.
Speaker 3 (36:36):
And John, I wanted to get your thoughts because this
is now interesting space for menot working close to DC, so to
speak, anymore.
It seems like politically,rising costs of energy are bad.
Let me keep it super simple,right, rising costs of energy
are bad no matter where we getit from, and there's also
(37:00):
different levels of kind ofinherent cost of different types
of energy production, and somerenewables are cheaper to
produce right now for anequivalent amount of energy as
hydrocarbon resources.
All of that gets more expensive, no matter what type of energy
it is, as you move it offshore,and so our tax policy, you know
(37:21):
is, is often used to help growalso the economic benefits you
know.
So we have this complicatedarrangement here where we
generally want energy to be at apoint where it's not too
expensive, but expensive enoughto allow domestic production
(37:43):
right, because that also hasadditional economic benefits.
And it seems like the way thatwe set those for oil and gas,
for other kinds of fossil-basedfuels and for renewables is
awfully politically fraught,right, but at least we can agree
the principles.
We need to find that sweet spotof range that allows people not
(38:05):
to suffer in the amount ofmoney any of us as individuals
pay but still supports a robusteconomy to help US with domestic
socioeconomic benefit of that.
These are really complicatedissues that seem like they work
their ways through markets overa lot of time, with a lot of
other factors involved, ofcourse with oil and gas, and
(38:27):
then it's a.
There's a lot of geopoliticalpressure on costs, as we all
know we can talk about too, andwith renewables it's also the
development of an industry thathasn't yet matured.
You know, the cost of oil andgas development offshore in the
Gulf of Mexico were very high afew decades ago, and there were
similar tax policies to helpincentivize development, because
(38:51):
we wanted a national resourceand we wanted a thriving
industry that employed lots ofpeople and created wealth for
America.
I can also see that Ipersonally bought into that
vision for offshore wind too.
But clearly there's a very finepolitical line to play there
that our elected politicianshave to dance with all the time.
(39:13):
How do we get it back tofundamentals so we're back all
in the same playing field andnot just picking a side right?
We need all energy to be inthat sweet spot, not one type or
the other.
Speaker 1 (39:28):
All great points, ian .
I wholly agree.
Deep Water Royalty Relief Actyeah, I think of 1995.
You know what I'm talking aboutExactly.
Yeah, absolutely Regardless.
You know, one can look atwhatever the revenues ended up
being during that time.
But I think a lot of us wouldsay, regardless of if it was a
(39:52):
net positive or negative, thelong term implications of having
a robust Gulf has benefited allof us and, you know, has led to
great jobs, but also energysecurity and enhance that.
And so I think that's where youdo look and say to yourself,
(40:13):
financially, what's the rightanswer?
Even if there may be a shortterm that it's not the most
beneficial financially, does thelong-term benefits outweigh
that, that it's not the mostbeneficial financially?
Does the long-term benefitsoutweigh that?
And that's something that'shard getting people to discuss
when you get people running totheir corners, which is where it
(40:36):
feels like we are right now,where I wish some of this
discussion.
As you probably know, in theInflation Reduction Act there
was a mandate on some of the USterritories and, as we know, you
know, as you probably know, inthe middle of the Pacific you're
(40:56):
having to ship diesel, you'rehaving, you know, everything's
expensive.
I get offshore wind isexpensive compared to other
sources of energy today.
Maybe there's some places whereyou could find a shift to
something that's cheaper.
I acknowledge that could occur.
Some of the territories.
(41:17):
That's not possible.
Does offshore wind make a tonof sense off Guam or some other
areas that you can't getconventional resources and are
unlikely to in the future?
You know, to me I wish we werehaving more of those discussions
of okay, so we're.
You know, not everything makessense everywhere, but in all
(41:39):
likelihood it makes sensesomewhere.
Wish we were having more of thesomewhere discussion on all
types of energy.
Speaker 3 (41:47):
And I'd just like to say as a former employee of an
international energy company,those companies of that size and
scale and global reach havethose discussions around
particular countries forinvestment too, and I just
wanted to kind of circle back tothat initial point.
The US has long been a focus ofinvestment for many companies
(42:13):
because of its stability.
We have lots of naturalresource potential, we have a
strong rule of law, we have arelatively, I would say,
predictable political system,which doesn't exist in all parts
of the world, and so the US hasoften been favored as a place
for investment as opposed tosome other nation in the world
that may be less stable.
We've got to get there, we'vegot to keep that in mind and
(42:37):
make sure that we retain thatfavored investment status, and I
don't think we're necessarilygoing to lose that right away.
Speaker 1 (42:44):
But these kinds of fluxes for long-term investments
flexes every four years,everyone does recognize think
(43:11):
that at companies that havelarge capital are going to ask
themselves if I invested in anenergy project in the United
States and a different politicalparty comes in, am I going to
still be in a position where weget to move forward?
You talked about four years.
Isn't enough.
You know, president Trump isobviously term limited.
So we're going to get a newregime in 2028, election 2029
(43:31):
starting, no matter what, andyou know whether that's
Republican or Democrat, that'sgoing to be got to be a question
that all of these companies aresaying do I invest in the U S
now?
Do I invest in the U S then?
But even you know, even foroffshore wind, if you say
president Trump's an anomaly andyou know I've heard a lot of
(43:53):
companies talk about, look,we're just going to wait four
years and we'll see what happens, okay, so, so maybe you get the
regime in place that's morefavorable to you.
What happens four years fromthen?
And I think that's the realityand I don't envy anyone having
(44:14):
to make those economic decisions, because I think that goes back
to our original point oncertainty, right.
Speaker 3 (44:24):
I fully agree, John.
Those are the discussions thatoccur in major international
corporations.
Speaker 2 (44:31):
Getting back to our discussion of where government
puts its resources to moveforward in the diverse energy
all of the above strategy, Ithink we need to be very mindful
of where we're putting ourmoney, and I think one of the
areas that makes sense to me isin technology, as we've talked
(44:53):
about several times now, andthis cuts across energy sources.
I think we have demonstratedmultiple times where government
puts some seed money into anindustry, it's a very positive
thing for the long run.
I guess the problem there iswhere that gets either beyond
(45:14):
what's reasonable or in terms ofwhat the technologies are, or
beyond just exploring for newtechnology.
So I think that's one areawhere an energy industry, and in
particular the wind energyindustry, is in a good position
(45:35):
for justified subsidies, if youwill, or assistance from the
government.
Any thoughts on that, john?
Speaker 1 (45:44):
Yeah, I think this question on technology in
general is you know, you thinkabout small modular, nuclear,
(46:23):
and are we going to seesomething on that front?
Again, I think all of it endsup being additive, but and so
how do we, how do we make surethat that we can continue to
power our lifestyle that we'reall going to want and are
accustomed to?
And that really, ultimately, isthe question.
I think, Jim, Congress is goingto be dealing with the
(46:45):
inflation.
They're going to amend theInflation Reduction Act.
They may get rid of it and wemay see a completely different
mix.
Again, from an investmentstandpoint, that uncertainty
creates a lot of issues andwe're going to see where that
goes.
I think, long-term it really,you know, I don't know how this
(47:11):
ends up unfolding.
Speaker 3 (47:12):
We'll see sets up unfolding.
We'll see.
You know, Jim, one of thechallenges I've seen is that
demonstration scale projectshave all of the complexity of
regulatory and permitting, aswell as, of course, engineering
and siting and commercialagreements as larger scale
(47:33):
projects in the US, and I dofeel like there's an opportunity
somehow to focus additionalgovernment support on
demonstration scale.
I'm saying this also from avery proud perspective as a US
citizen who hopes that the UScontinues to develop the
(47:54):
technologies that change theface of energy around the world.
Okay, so I'm going to say thatvery plainly.
First, I would love to see ushelp facilitate demonstration
scale projects of a number ofdifferent types.
You know again, not necessarilypicking and choosing which type
, but that's a clear gap betweensmaller things that often can
(48:18):
receive private and or venturefunding, larger things which
require much commercial projectfinance.
Somewhere in between is a sweetspot that I think is often
referred to as the valley ofdeath in venture capital.
But making that connection moreclear and giving government
support in that space mightproduce really tangible benefits
(48:41):
.
You know, generations down theline.
Speaker 1 (48:45):
I really like that point and I think that's that's
excellent and it you know theyou know if.
If I look at offshore windpolicy in general, as you know,
if I look at offshore windpolicy in general as you know,
if one's going to look back andsay, you know, obviously there's
always mistakes everyone youknow.
(49:06):
That's not criticism, but wasthere too fast of a ramping up
and too much and notdemonstration early and dealing
with some of the issues?
And that always happens.
But I think that had we hadmore of that and scaling
probably would have led to maybea different political climate
(49:28):
than we're in today.
Speaker 2 (49:30):
Yeah, that's very, very possible.
I think that's a great point,ian, in that whether that
specifically is the criteria orthe way to go is not the point.
It's that we identify some kindof criteria.
That is the basis forjustifying the kind of
expenditures that the governmentshould be making on things.
(49:51):
No-transcript and the reason Isay that is not because it
(50:20):
doesn't exist.
It certainly does, although ournew energy secretary has
pointed out that it's probablyfifth or sixth on the list of
major public policy issues thatneeds to be addressed.
I think maybe some adjustment ofour thinking with regard to
climate change as an existentialthreat to justify anything and
(50:42):
everything that goes intoanything renewable needs to be
quite.
We need to take a look atwhether that's really a really
good justification, and I thinkwe're facing a situation,
basically, where the reallyinconvenient truth, if I can use
Al Gore's phrase, is that as asociety, both domestically and
(51:03):
globally, we are not embracingwhat needs to be done.
If the objective is to get backto carbon levels that are
pre-1970s, and in the face ofthe fact that that simply is the
case, we need to be makingdecisions based on what's going
to happen in that environment.
(51:24):
I think it's just somethingthat we need to open up our
minds to a little bit in makingdecisions about the way
resources need to be deployed tomake sure that our energy
future is sound.
Speaker 1 (51:39):
Jim, that's an awesome point, and I agree
climate change is real, it'shappening, we're seeing it, we
see the effects.
You know, from a geologicstandpoint, I just read the
other day that in the history ofthe planet, only 13% of the
time has ice existed, and so youknow there's been massive
(52:04):
changes over time, obviouslyfrom a geologic scale.
But I think the bigger deal iswhat we talked about earlier,
and I'm as guilty as anyone fromthe standpoint of I too don't
want to give up my phone, I toolike driving my car, I too like
heating my home.
We, as Americans, want theconveniences that have been
(52:27):
created and want more that wedon't even know about today, and
that's going to keep happening.
And so you know the question.
That and this is where it'sreally uncomfortable, when we
have a lot of other countries inthe world that aren't going to
take some of the same steps,there's a lot of policymakers
(52:50):
that I would tend to agree withthat say to themselves why are
Americans going to hamstringourselves if carbon is going to
continue to go at a higher levelbecause other countries are
going to do it?
You know, as you probably know,carbon levels don't change
locally.
Like you measure carbonthroughout the world.
(53:12):
It's at about the same number,no matter where you are, and so
you know if we choose here tolimit our carbon.
But other countries continuethe Chinese in particular, the
Indians continue to push waymore carbon out.
You know you have to askyourself why are we harming
ourselves economically?
(53:32):
And instead, I think you knowmy own view is adaptation is
where we're going to have to be,and whether that's awesome or
not, you know, I don't thinkanyone wants to deal with more
severe storms and some of theeffects that might be coming,
but I think that's life and Ithink economically, that's where
the Americans are going to endup, taking us from a elective
(53:56):
standpoint, and you're going tosee that over and over in
elections.
My belief.
Speaker 2 (54:01):
I think that's a practical issue that we have to
be realistic about for futuredecision-making.
Speaker 3 (54:10):
Well, that was an interesting turn, you guys.
As a former ocean scientist,I'm glad you guys both still
understand that there is achallenge with a lot of CO2 in
the atmosphere.
I agree with some of the points.
I'm not sure I wholly agreewith some of the points too.
Jim, I wasn't quite sure whatyou were saying there.
Speaker 2 (54:31):
I'm just saying we need to be practical and
realistic about what decisionswe can make and what changes we
can effect.
Speaker 3 (54:41):
I mean, I certainly agree with that.
That's nothing to disagree with.
I do think one of the things,john, that I've also experienced
in my own personal thinking isthat we also have to understand
the deployment of governmentresource, and does it make sense
to battle it on the front endor the hind end?
You know, I come from the GulfCoast.
(55:02):
I spent a lot of years there,and hurricanes, flooding,
coastal change are all realissues.
Not all of them are whollyrelated to climate, but some of
them are, you know, and there'ssome fraction of them are, and
those are big disruptive issuesthat affect everybody and can
really have catastrophic effecton people.
So, you know, I also feel likethere's.
(55:25):
We do have to have a practicalassessment of which side do we
want to spend money on the sidethat creates opportunity,
employment for the US, or theside that has to recover from
disaster?
And I do think that you know.
Hey, we've seen China move veryquickly into renewables, for
(55:47):
example.
Right, china produces solarpowers cheaper than anywhere
else in the world becausethey've gone full tilt into
producing solar panels for theworld.
That's the reason why solarproduction is the cheapest cost
of energy production in theworld.
They've also moved verystrongly into offshore wind, and
I think and I just want totease apart I'm not sure they're
necessarily doing it because ofa belief in climate change.
(56:08):
I believe they're doing it aswe ought to as well, because
there's an opportunity to leadthe world in the technologies of
the near future, and that'sjust one of the things.
I do think climate change andthe challenges of addressing all
of these issues are theeconomic opportunities of the
(56:28):
next few decades, and I surewant the US to be front and
center and have very strongeconomies built around those
that we can export as well too,not just here in the States.
Speaker 1 (56:39):
Yeah, I think, ian, on that front, just on the China
front, I also think thatthere's a national security
angle they care about, and whilethey're moving forward I mean,
china is the all of the above,and they are building more
coal-fired power plants thananywhere in the world as well,
and, to your point, I don'tbelieve any of it has to do with
(57:02):
climate.
I believe it's about trying tocreate sustainability for them
in the event that there getsinto either economic or other
hostilities, where they're notreliant on Middle East oil or
anyone else's oil, and so theywant to have resources that they
have in place in country.
(57:23):
And so, with that said, I don'tdisagree, the US should be a
leader.
You know, we have thesewonderful national labs where a
lot of great work occurs, andI'm very pro them.
But you know, I think on theclimate front to your point, and
(57:44):
hurricanes and other damagesare very serious, very real, I
agree.
Clearly, the strength intensityis something that we all need
to worry about.
The strength intensity issomething that we all need to
worry about, but, you know, Ithink the obviously there's a
lot of trade-offs with theChinese model, and so, but it's
(58:07):
a good discussion.
Speaker 3 (58:11):
I think there's fair points on a lot of sides on that
.
That'll be a great one foranother time, yeah.
Speaker 1 (58:14):
Yeah, that's right.
Speaker 2 (58:15):
Yeah, you got several podcasts.
Great one for another time.
Yeah, yeah, that's right.
Yeah, you got several podcastsright there, for sure, john.
I want to ask you one lastquestion, if we could, before we
wrap up, and that's that I'dlike you to just take the
opportunity to let us know whatyou're thinking is the most
important thing or the mostconsequential thing that is
(58:36):
going to be happening and willhave long-term effects, but it
will occur in the short tomidterm or something like that,
but just what you think is themost critical issue for the near
term.
Speaker 1 (58:50):
I think we talked about this a little bit earlier.
But we may find out thatartificial intelligence is not
as difficult to supply from anenergy standpoint.
That's certainly possible.
New technologies may come outwhere the consumption is not as
(59:14):
great as we think it's going tobe.
But if the folks who seem toknow this stuff certainly a lot
better than I do are anywhereclose to accurate, we have an
energy problem in this countryand we need more of it.
And I really fret about, youknow, the crowds of individuals.
(59:36):
Well, I don't want it here andI don't want to see this thing
and I don't want to.
I don't want to worry aboutthis.
150 miles off my beach, youknow, there's a lot of this,
that type of talk where you justthink to yourself collectively
like we have to have answers,because this is going to get
(59:57):
built and none of us want tolive in a world of blackouts,
and I just think that there'sless seriousness about what's
coming and the need to be ableto power it than we're having in
this country.
Speaker 3 (01:00:12):
so that that's probably the top one today, jim
ian, any uh, uh, wrap upthoughts that you want to.
This is a reallythought-provoking conversation.
Uh, jim, john, you guys bothbrought up interesting points
that I think were, uh wasimportant to think through.
You know we've talked aboutsome of the challenges of the
(01:00:34):
four year flips.
We've talked about the need forincreased energy in the country
to continue and that we don'tsee that abating anytime soon.
We've talked about theopportunities for national
security through domesticproduction of energy and, john,
you know you really hit thatpoint home to me and we didn't
even talk about what's happenedin Balttic pipeline subsea.
(01:00:56):
You know, over the last fewyears either, and, um, and, and
yet that somehow seemsincredibly pertinent to today's
discussion.
So, um, there's a reallyexpensive, thoughtful discussion
and I appreciate it reallyappreciate your guys time
enjoyed it.
Thank you it and jim, you know,one of the things we do every
(01:01:18):
week, just off the topic, is anylast drops in the ocean.
For this week, john, it's wherewe share any other you know
offshore energy related type ofinformation that wasn't
necessarily in our largerdiscussion.
Do you have any last dropsyou'd like to share?
This week?
As our guest, you always getthe opportunity to go first.
Speaker 1 (01:01:39):
I'm an optimist about offshore energy in this country
.
I think there's still somereally great opportunities and
some it doesn't.
You know.
For me, just as and I don'thave any economic interests,
this is just me popping offmarine hydrokinetic feels like
(01:02:01):
something that I'd love to seemore activity around.
I think that you think aboutparts of the ocean and where
currents are and Gulf Stream,etc.
And where currents are andGulfstream, et cetera.
It feels like there's someopportunities to have renewable
resources beyond just talkingabout offshore wind.
(01:02:21):
As we talk about the OCS,obviously there's tidal, there's
wave, there's other, but thehydrokinetic to me, I just think
about, you know, obviouslymaybe the currents are going to
run at different rates, but thethere's certainly.
It feels more like hydropoweras it relates to having some
(01:02:42):
consistency on that front andand um, you know, I'm sure we're
decades away and somebody elsewill come up with an idea at
some point, but that would beone that I would love to see
more attention around, because Ithink it could solve a lot of
problems again.
Speaker 3 (01:02:59):
Welcome to the club, john.
There's definitely a passionatesmall community who continues
to think very much the same way,so it's good to hear you're
coming in.
I'm going to get you yourmembership card soon, jim.
Speaker 2 (01:03:15):
Any last drops from you um, the last drops for me is
that we talk a lot about thelong-term uh things that are
needed, like informed decisionmaking, which I which I'm even
more strongly uh feel aboutafter this conversation, uh but
the more immediate stuff is, uh,uh, what's going to happen to
(01:03:38):
the projects that are right nowon the cusp?
And I think we need to pay alot of attention to that,
because all of the discussionsabout long-term information
needs and everything else aregoing to be greatly hampered if
some of the projects that we'veapproved do not move forward.
And I think we need to pay very, very close attention to the
(01:04:00):
opportunities to move theapproved projects forward.
We haven't heard anything fromthe administration specifically
about that, even though there'sthe possibility.
And if we don't and we do moveforward, I think it opens up all
of the issues that we've talkedabout today in a very
constructive way.
Speaker 3 (01:04:20):
Thanks, jim, jim and other listeners.
You may know that I'm also kindof dabbling in the blue economy
right, which is a broad term todescribe all kinds of ocean and
marine innovations, includingaround renewables but also other
sectors, and I went to a reallyinteresting forum down in
Newport, rhode Island, a fewweeks ago which was focused
(01:04:42):
largely on the blue economy witha very particular bent to it
the blue economy around navalsystems and, as many folks know,
newport is home of the NationalUndersea Warfare Center.
Many folks know Newport is homeof the National Undersea
Warfare Center All kinds ofinteresting technology being
developed by the Navy.
That includes all of the thingswe've talked about the
(01:05:02):
opportunities for autonomy,remote systems, use of AI and
other kinds of digital languageto help improve activities, and
my primary thought afterexperiencing a really
fascinating series ofpresentations was the
similarities between that worldand energy, particularly
(01:05:26):
offshore energy, are huge.
The opportunities forcollaboration and development of
technology that might be dualuse for both military and or
government as well as privatesector, is off the charts, and
so I can't wait to spend moretime exploring that space and
(01:05:47):
finding opportunities to helpmake those connections.
And my second point is one thatis more uncertain and a
reflection of the times.
We recognize that the doge isbusy at work and there are a lot
of folks in federal employeewho have recently lost roles,
(01:06:07):
been downsized.
I know folks at NOAA have beenimpacted, folks at Department of
Energy and even recently Iheard folks at the VA were
impacted.
I'm not going to go on asoapbox about this but I will
say the VA was responsible forthe last 10 years of my
(01:06:28):
stepfather's life, his medicalcare and I met an awful lot of
really compassionate folks atthe VA who helped him through
that tough time and I certainlythink all of our veterans
deserve that kind of supportinto the future.
I really hope that's notimpacted, but I'm fearful it
(01:06:48):
will be.
That's my last, last drop forthis ocean.
Speaker 2 (01:06:53):
Okay, we appreciate that, ian, and we invite you, of
course, as we always do, tosend us topics and any special
guests that you'd like to hearfrom, that you'd like to hear
from, and especially with regardto the shaping, the reshaping
(01:07:14):
of the ocean energy industry.
Speaker 3 (01:07:17):
And Jim, I think we actually do have a next episode
that we can discuss.
Yeah, you bet Alan Marks isgoing to join us.
Many of you may know him from areally illustrious career in
major energy project finance andstructuring.
He's joining us next time wherewe're going to dive into the
(01:07:38):
complexities of finance foroffshore projects.
Jim, John, great to see you.
Thank you so much.
Speaker 2 (01:07:44):
Thanks, John.
Thank you so much, John, forjoining us and the listeners for
listening in Until we meetagain on the next Offshore
Energy Podcast.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.