February 9, 2025 • 46 mins
In this latest episode, Jim Bennett and Ian Voparil analyze the immediate impact of Trump's executive actions on the offshore energy sector. We dive into the presidential memorandum halting wind leasing, explore the historical context behind these changes, and discuss how the industry can navigate the new economic challenges and shifting political landscape.
• Examination of Trump's executive orders and their implications
• Discussion on the temporary halt of wind leasing and its impact
• Historical parallels with previous administration actions
• Importance of balancing energy sources in the national narrative
• Role of the Secretary of the Interior in shaping future energy policy
• Calling for continued advocacy among stakeholders in the offshore energy community
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
The Trump administration has been fast out
of the gate with executiveorders, presidential memoranda
and DOGE actions.
For those of us in offshoreenergy of its different stripes,
at least five of these actionsimpacts you and our business
stripes.
At least five of these actionsimpacts you and our business.
In this episode, jim and I willdiscuss their implications on
projects in offshore wind and inoil and gas, and how the new
(00:32):
administration intends to tiltthe offshore energy sector.
Speaker 2 (00:47):
I'm Jim Bennett and I have over 40 years of
experience developing energy inthe ocean.
Speaker 1 (00:54):
I'm Ian Vilperil and I've spent the last 20 years
developing offshore energyprojects around the world, and
this is the Offshore EnergyPodcast.
Hey Jim, hey Ian, how are you?
I'm really good, jim.
Another week, another Monday,shoveling snow.
Speaker 2 (01:15):
Another examination of what the effects of the
change in administrations isgoing to be Lots of
contemplative time this morning.
More and more detail, more andmore revealings as we move
through this.
Speaker 1 (01:41):
We're going to talk about some of Trump's executive
orders, presidential memorandumand other actions as he's
delivered them to the federalgovernment and agencies, and we
want to make sure we at leasttouch on some of the big picture
issues that are coming up andalso recognize when maybe
there's more clarity still tocome.
We certainly don't have acrystal ball on all of this, but
we can take our measured andinformed perspectives and do a
little reading Sound good and doa little reading Sound good.
Speaker 2 (02:05):
Well, to start with, of course, we've been hit by a
pretty surprising directive.
A lot of people were taken bysurprise with regard to the
presidential memorandum ontemporary halt for wind, and of
course, we have to recognizefirst off that this is what he
(02:27):
said he was going to do.
I personally, and a lot ofpeople, really questioned
whether that would be the case,and it's not unusual, of course,
for a new administration tocall a halt to some things to
take a look at whether or notthey're really on track, and
(02:48):
that is clearly what he's donehere.
This has been done in the pastand it wasn't a new
administration.
But I think back to thepresidential task force on OCS
oil and gas leasing that was puttogether soon after the Exxon
Valdez spill back in late 80s,or was it 1990?
(03:11):
Well, 89, right 89, 90,something like that.
And of course, on a broaderscale, you have efforts like
Gore's reinventing government,which was a re-examination of
regulatory structure, and hiringfreezes we've dealt with a
number of times, either as anindication of policy direction
(03:33):
on both sides of the aisle orbecause of just budget
stalemates.
So these things have been donebefore.
Yeah, Um.
So that's not uncommon.
Speaker 1 (03:47):
Jim, one of the things I was thinking about is,
um, donald Trump is comingstrong out of the gate with
these presidential actions.
Uh, I'm not sure exactly, butthey're about 50 so far and
we're, you know, just a coupleof weeks into the administration
.
Looking at past presidents inthe recent past, that's not an
(04:08):
unusual number of presidentialactions coming kind of in the
first year of the presidency.
And if you look far back and I,you know, I had the good
fortune to have Google at myfingertips to take a look, you
know, at the presidencies wefind that the executive orders
really started to come aboutRight.
Speaker 2 (04:28):
Theodore Roosevelt issued a whole bunch of them.
Speaker 1 (04:31):
Yeah, Teddy Roosevelt , Woodrow Wilson, Calvin
Coolidge, Herbert Hoover,Franklin Delano Roosevelt and
listed the most presidentialactions throughout the course of
their administration, and sothat's kind of the peak and
listed the most presidentialactions throughout the course of
their administration, and sothat's kind of the peak of the
number issued by presidents asthey come into office.
And now we're kind of back downtowards something that really
(04:56):
seems, at numbers' sake, prettyregular.
As the administrations change,lots of these things are being
issued to help set thepresident's agenda on the first
day.
Now they're coming faster underDonald Trump, right.
A lot of these were day one ortwo or three.
Speaker 2 (05:15):
I'm catching up.
That was indeed the promisesthat he made, that they would be
done on day one, and so itisn't unusual for these things
to come down, and you make agood point about the various
administrations.
What is a little uncommon, ifyou will, is at least for the
(05:35):
presidential memorandum on wind,where he has called for a
temporary halt on approvals to acall for a temporary halt on
approvals, and he's calling fora review of the process and
possibly review of existingleases, all of which is
understandable from thestandpoint of what he said in
(05:57):
the past.
What's not so common, I think,is the way wind has been
targeted, if you will, and theway the executive orders include
apparent positioning of thepolicy statements that are
wishing to be made and, quitefrankly, a lot of them and this
(06:22):
doesn't apply just to wind, ofcourse but the ambiguity that's
contained in them and less thanfull vetting of it before it was
issued, and the reason I saythat is just casually looking at
them.
There's some fundamental issueshere.
(06:44):
Terms like offshore continentalshelf as opposed to outer
continental shelf, the use ofthe term windmills, the
declaration about intermittentwind these are all not that they
make a lot of difference in thelong run.
But the point is, you got towonder how much he, how well
(07:08):
he's getting advised as to whatthese orders should contain and
is it getting the attention thatit deserves?
Is it getting the attentionthat the president, the office
of the president, deserves and,uh uh, that the american people
deserve when they when, whenthey are, are faced with the
(07:32):
sweeping issues like this?
And I do think there's someinteresting things that are
contained and we should, weshould discuss let's dive in.
Speaker 1 (07:40):
and so, listeners, we're going to talk about a
couple of the presidentialactions, mostly related to
energy and offshore energy, of,of course, for Jim and I and I
think, jim, this is a perfectone to start with, the temporary
withdrawal of all areas on theouter continental shelf from all
solar wind leasing and thereview of the federal
government's leasing andpermitting program for wind, her
(08:09):
wind, and so also, listeners,in our episode notes we'll put a
list of the presidentialactions we'll talk about, as
well as links to them, becauseyou ought to take a look and
read them for yourselves as well, as Jim and I and many, many
others have been doing it,obviously.
So, jim, as we dive into thatfirst one, you know that first
section, section one, we diveinto that first one.
You know that, first section,section one temporary withdrawal
of areas.
You know the president herebywithdraws from disposition for
(08:30):
wind energy leasing all areas ofthe offshore continental shelf,
ocs potentially a typo there uh, this withdrawal shall go into
effect january 21st 2025 andremains in effect until this
presidential memorandum isrevoked.
You know, that to me seemspretty clear, right?
(08:51):
That's clear that we are won'tsee any additional leasing of
offshore areas for offshore winddevelopment that is.
Speaker 2 (09:03):
That is the long and short of it.
Indeed, let's just hold off onleasing.
Now I have to make anobservation with regard to the
first administration.
They were in there for thefirst Trump administration was
in there for a couple of yearsbefore they moved to what I
refer to as the slow roll ofslowing down and eventually
(09:26):
stopping leasing.
And the difference here, ofcourse, is that this is a day
one declaration that we'll stopleasing at this point and do a
review and we'll get into theimplications there.
And we'll get into theimplications there.
But it's a different, moreexpeditious approach, if you
(09:50):
will, and it has somecomplications.
I do think we need to point outsome of the questions,
regardless of the content andthe structure.
Regardless of the content andthe structure, I think there's
some substantive issues that thepresident has brought out, that
the new administration hasbrought out with regard to
(10:11):
offshore wind, that needaddressing, and among them are,
first, subsidies.
That's going to be a key wordin the review of these projects.
I think, quite frankly, you'vegot one side of the aisle, all
about subsidies and leasing andeverything else.
(10:32):
Any and all that could be putforward should be pursued, and
the other side of the aisle issaying no, not at all, and
that's where we are right now.
Just like a lot of issues,we're pretty much at opposite
poles of the issue with thatregard.
The other thing they've broughtup is about the reliability
(10:56):
which gets to.
How does wind get integratedinto our mix of energy?
And, of course, what you wouldtake away from the executive
order is that it's not or itshouldn't, but I'm not sure it's
that simple and we'll talk moreabout that.
Speaker 1 (11:15):
Jim, pardon me, I just wanted to comment on two
points brought up in the Miranda.
Reliability means showing upfor work on time, and renewables
generations, like offshore wind, are variable but also reliable
.
They differ in time but we canpredict that very well and
understand when they're going tobe generating a lot of power
(11:37):
Now, considering the economiccosts and cost effectiveness of
renewables.
I recognize offshore wind is inearly days in the United States
, but if we think of whathappened around the economics of
onshore solar development, wesee the path to be followed.
Back in the 70s and 80s it wasthree times more expensive to
(11:58):
develop onshore solar than itwas any other source of energy,
but now it's the cheapest sourceof energy available on the grid
.
So let's get back to yourpoints.
Speaker 2 (12:08):
Jim.
And then the third point I wantto, or the third thing I think
that he's bringing up, is heyou've already touched on it and
that's leasing.
Are we doing enough leasing?
Should we be doing more leasing?
Should we be doing less leasing?
Should we be doing no leasing?
Speaker 1 (12:25):
These are our issues that he has brought up in his
day one, and these are issuesthat I think there's legitimate
basis for constructive dialogue,uh, as opposed to just the
extremes that we're seeing andit's, I think it's important to
point out in that first sectiontoo, that this withdrawal
(12:46):
doesn't apply to leasing forother purposes, but not limited
to oil, gas, minerals andenvironmental conservation, and
there's a statement that nothingin this withdrawal affects
rights under existing leases inthe withdrawn areas.
There's a however there, yeahthere's a however there.
Speaker 2 (13:03):
Yeah, there's a big however there.
Speaker 1 (13:04):
The Attorney General, as needed, and the Secretary of
Interior will conduct acomprehensive review, you know,
and determining or amending anyexisting wind lease areas,
identifying any legal basis forsuch removal, and submit a
report with recommendations tothe President.
And so that's another milestoneor decision point, then, that
(13:27):
the president will have whetheror not they wish to pursue the
withdrawal of rights on existingleases.
That hasn't happened yet, butit looks like it could in the
future.
Pending this review and I don'tmean I'm sorry, go ahead.
Well, jim, you know, this isone of those parts where I think
your expertise is reallyimportant because, as I'm aware
(13:48):
of the leasing program, there isa comprehensive review of
ecological, economic andenvironmental necessity of the
leasing program, one of the mostrobust parts of the OCS-LISC
program for oil and gas andoffshore wind in the United
States.
That's one of the things thatmakes it so powerful.
Speaker 2 (14:11):
I think that's true and I think that's what you'd
find, certainly with anyobjective evaluation of the
process.
And the other side of that, ofcourse, is that many people
complain that it just takes toolong.
And it takes too long becausewe're very, very thorough Bureau
of Ocean Energy Management isvery, very thorough in their
(14:32):
efforts to the idea that youknow if this review or this call
for a review of existing leasesis just a mechanism for
(14:53):
selectively targeting certainleases offshore in order to, you
know, create further obstaclesor bring them to a halt, create
further obstacles or bring themto a halt, and if that is the
case, I think that's mostunfortunate, because what's
really being brought up here isan opportunity to look at the
(15:17):
process, and if the process isgood, then what are the
parameters in terms of thoseother, those several issues that
I just mentioned that wouldallow for the wind industry to
appropriately be moving forward,if indeed that is what should
be allowed, and it's a greatopportunity, and we'll talk more
(15:40):
about how that will play out,but that's a very important
point.
That process is very thorough,it's very well defined both in
law and regulation, and I thinkthat's what an objective review
of that process would find.
Speaker 1 (15:57):
And a very opportune time for the industry, the
offshore wind industryparticularly, to really advocate
for the benefits that theyprovide to the US in energy,
energy security, employmentrevenue, et cetera, et cetera.
Speaker 2 (16:15):
And the economic effects.
Another huge difference betweenthe two the first Trump
administration and the secondTrump administration is the
simple fact that the industry isa completely different thing in
2024 than it was in 2020.
And that needs to be taken intoconsideration as well, because
(16:36):
bringing to a halt which, evenif it's temporary, is going to
have effects on the industry andpretty negative economic
effects, and we should be verycognizant of that and very
thorough in our evaluation ofwhat we ought to be doing.
Speaker 1 (16:56):
Jim, that's section one.
Section two of that one rightis now the temporary cessation
and immediate review of federalwind leasing and permitting
practices.
This is now a federal review ofthe practice to ensure that
negative impacts areappropriately addressed and
(17:18):
mitigated and that the overallbalancing of costs and impacts
and benefits is appropriate, andthey call upon Secretary of
Interior, secretary ofAgriculture, secretary of Energy
, administrator of the EPA andheads of all other relevant
agencies to participate in thiscomprehensive assessment and
(17:41):
review of the federal windleasing and permitting practice.
That sounds like a large scopeof work to me.
I don't see any clarity on howlong that's going to take and
indeed, in a worst case scenario, that could take all of the
president's administration.
You know what's your experiencein government.
Speaker 2 (17:59):
Good point.
There is one experience that Iwas involved in that to me is
comparable and it's not a smallundertaking, and that was the.
That was the presidential taskforce on OCS, leasing under
under the first Bush the elderadministration, the first Bush
(18:28):
the Elder administration.
But you know, I got to notethat at the same time that we're
calling for this very thoroughreview, we're calling for this
whole halting effort to betemporary in nature.
So it's a hard struggle to seehow the two are going to be
accomplished and I do think that, by comparison, the president's
(18:50):
task force in the late 80s,early 90s did indeed take quite
a while.
I'm not sure that it changedthat much in terms of the
position of the two parties andthe administration policies that
would be going forward.
I mean, in a lot of waysoffshore wind is relatively new.
(19:14):
In the case of OCS oil and gas,that wasn't new.
That was a few decades old.
But wind is now, has had abirthing decade and a maturing
decade as well, and it's stillgot some ways to go.
(19:35):
But a lot of things have beenworked out and a lot of things
have been identified and thereview process is there and I'm
hoping that they will indeedfind that there's a good process
in place, even though it maynot accommodate everyone's
wishes all the time thepresidential action effectively
(19:57):
means is that for thosepotential offshore wind leases
that we saw in years, furtherout from 2025, those are all
effectively not there anymore.
Speaker 1 (20:09):
Right, those are?
Speaker 2 (20:10):
I'm not sure even on hold is the right word, but we,
yeah, I don't I, we don't reallyknow whether it's it's a
question of whether they're onhold or they've gone into the
ether and are no longer around.
We'll see, we'll see.
But we're not going to seeaction on those items in the
immediate future.
(20:30):
Regardless of how temporary itis, the Bureau that the federal
government pursues in terms ofleasing and in terms of site
assessment, in terms ofeverything leading up to the
construction operations plan, uhare, are we're?
We're probably not going to seea lot of that.
(20:50):
Yeah, uh, so we and things getlisted.
Speaker 1 (20:54):
What we saw in the, you know, in the previous
leasing schedule were activitiesin the next four years.
That would be returns todifferent basins a return to the
Gulf of Mexico, a return to uhfor offshore wind, leasing to
the central Atlantic, for theNew York bite, for California,
uh and the Gulf of Maine and thefirst time for considering
(21:15):
consideration of Hawaii.
So those now are definitely onhold until we see what the if
this becomes a non-temporary andbecomes revoked by the
president I, I would agree.
I don't think you can rule itout, at least in theory, but yes
, uh, you're probably not goingto be seeing a lot of activity
there and as we talk about thetimeline for a specific or an
(21:37):
individual project, from, youknow, pre-lease to lease sale,
to site assessment, toconstruction and operations
planning, to technical reviews,to the approval of that and then
potentially to construction andoperations activities and then
ongoing activities, we wouldexpect all of those to be
(22:02):
uncertain and on hold at thispoint because each of those
requires a federal action right.
To help them move forwardthrough decision gates.
There are a couple of othersections of this memorandum that
deal specifically with the LavaRidge Wind Project.
I'm not personally familiarwith that one, neither am I Okay
, so I personally familiar withthat one, neither am I.
(22:22):
Okay, so let's agree.
Sorry, listeners, we're goingto skip that part because we
don't have any particularinsight into the challenges
there.
Speaker 2 (22:31):
Let's note one thing, though that the mechanism has
been used to target that veryspecific project.
Yeah, and I think it would bereally disappointing if this
same mechanism or this reviewprocess is simply used to target
other specific projects,without answering larger
questions about how wind energyfits into the bigger picture
(22:56):
energy mix for the country.
We have an opportunity to dothat.
Speaker 1 (23:00):
And Jim, this isn't the first time we've seen an
executive order that targets aspecific energy development
project.
Right Developers tend to hatethem because they're usually not
for good reasons.
Speaker 2 (23:11):
It's not like it's the first time it's been done.
These executive orders havebeen used many times.
That get very, very specific,and I'm not saying there might
not be a legitimate reason forit in this particular case,
because I'm just not thatfamiliar with.
Speaker 1 (23:27):
I'm thinking back to and yeah, I think you have a
point there too, jim wellbalanced.
You know, especially in theoffshore energy business, where
projects take more than anindustry from inception to
delivery Sorry, more than oneadministration it is awfully
hard to deal with 180 degreeturn where each side is flipping
(23:48):
the landscape with the use ofpresidential powers and action.
Jim, that was the first one.
Anything else that we ought todiscuss around the temporary
withdrawal.
Speaker 2 (24:02):
We should note that the direct effects of this are
pretty sobering, but theindirect effects are even more
sobering, or probably even moreextensive, in terms of slowing
the industry down, which may beappropriate to do, but without
(24:22):
even having the reviewer pullingthe review team together,
there's a very clear reluctanceto be moving forward on the part
of the industry.
I do think that there'sopportunities to be moving
forward, but we need torecognize that both the direct
(24:43):
and the indirect effects ofthese efforts can be pretty
substantial, very uncertainty.
And then there's also, you know, when you look past the I guess
the initial impression would bewhen you look at the
presidential directive, you seethat, well, it looks like if
(25:08):
your project's approved, youmove forward.
So which constructionoperations plans are ready to go
?
And on the surface, yeah, thatmakes some sense.
But there's so many and let'scall it deep permitting.
There's so many permits thatare required, and this
(25:30):
particular directive calls onfederal agencies to not approve
anything.
If you've got a Corps ofEngineers permit that needs to
be approved after your COPapproval, you might have a
situation.
Speaker 1 (25:47):
For those projects that are in between, there are
still potential other activitiesto perform that don't require
federal approval, and so youcould see, while Trump's
presidential memorandum is inplace, work to mature
technologies, particularlytechnologies that may need
(26:07):
underwriting and lending right,so those approvals towards
commercial readiness anddeployment.
You can certainly see otherwork on finance strategy for
major projects, on procurementswith the states and ensuring
that those are well aligned withthe procurement principles that
will help offshore windprojects at some point in the
(26:27):
future.
Obviously, engagement withimportant stakeholders is always
important and we can't say itenough because it always is
challenging and a difficulttopic, because you can't talk
too much.
You just can't do it in majorproject delivery and other parts
of the infrastructure.
You know ports are stillcritically needed for America's
(26:50):
maritime dominance as well too.
Speaker 2 (26:53):
Well, I would agree with that.
I do think also that you know alot of the challenges that the
developers face and that we allface may be outside of specific
federal approvals.
The federal approvals are onething, but these other
challenges are not going to goaway.
There's opportunities formoving forward on those fronts.
(27:14):
What about the other executiveorders and presidential uh
directives, presidentialmemorandum that are going to
affect uh ocean energy?
Speaker 1 (27:29):
another one of the executive orders unleashing
american energy.
That was a really interestingum presidential action as well
too.
Let's talk a little bit aboutthat one, shall we?
Speaker 2 (27:46):
Sure, you want to start.
You bet, let's go with thefacts, because if you want an
opinion, I'm ready to go.
Speaker 1 (27:56):
When I first read Unleashing American Energy, so
much of it resonated verystrongly with me that there is
an opportunity and a policy ofthe United States to encourage
energy exploration andproduction on federal lands and
waters in order to meet theneeds of our citizens and
solidify our standing as aglobal energy leader long into
(28:17):
the future.
Energy leader long into thefuture to establish our position
as a leading producer andprocessor of non-fuel minerals,
including rare earth minerals,which will create jobs and
prosperity at home.
To protect the US's economicand national security and
military preparedness.
And to ensure that allregulatory requirements related
to energy are grounded inclearly applicable law.
(28:38):
And that's the first four partsof the policy described in this
presidential action Sorry, inthis executive order.
And, and frankly those resonatewith me, those sound very clear
to me and I am so happy to seethose in writing that the
president is focused this way.
(28:59):
It does turn and focus in thepolicy on some additional
specifics eliminating the EVmandate in quotes right.
Safeguarding people's ability tochoose from goods and
appliances things like lightbulbs, dishwashers, washing
machines, gas stoves, et cetera.
(29:19):
Things like light bulbs,dishwashers, washing machines,
gas stoves, etc.
Ensure that the global effectsof a rule or action be reported
separately from its domesticcosts and benefits to promote
and prioritize the interests ofthe American people.
That sounds reasonable.
To guarantee that all executivedepartments provide opportunity
for public comment and rigorous, peer-reviewed scientific
(29:40):
analysis I'm fully behind thatone.
Speaker 2 (29:43):
Kind of hard to argue with that.
Speaker 1 (29:44):
I love that one and to ensure that no federal
funding be employed in a mannercontrary to the principles
outlined in this section.
So if I read the policydescription, there's a couple of
call-outs to EVs and otherkinds of goods and appliances.
The rest of it seems very momand apple pie.
(30:05):
You know, this is all good forAmerica.
Speaker 2 (30:10):
And nothing wrong with this kind of review and
these kind of policydeclarations.
I think they fit very well.
Of course, the devil is in thedetails.
And how does that play out forall other sources of energy?
And this is where I think theproblem, or the dialogue, is
(30:36):
kind of caught up in a falsechoice between renewable energy
and oil and gas, conventionalenergy sources.
And conventional energy sourcesand renewable energy are not at
each other's throats.
They are not slices of a fixedpie.
(30:58):
Slices of a fixed pie, theywill serve to complement each
other and there is enough demandfor energy that expansion of
all of these sources of energywill be beneficial insofar as
they're economic, will bebeneficial for the American
(31:18):
people and for the nation'senergy portfolio.
And if we get away, if wepursue those policies in a way
that gets away from a tradeoffbetween wind versus conventional
, I think it would be a veryconstructive dialogue,
(31:41):
unconventional.
I think it would be a veryconstructive dialogue, even if
it's not as beneficial torenewables and wind energy as we
might like it to be.
Speaker 1 (31:48):
The devil of the details comes later in the
document, and some of thechallenges are the fact that it
revokes a number of previouspresidential and regulatory
actions, and there's quite along list of revocations.
One of them, very specifically,is the implementation of the
(32:09):
energy and infrastructureprovisions of the Inflation
Reduction Act of 2022.
And we all know that that isone that creates some incentives
for, you know, the investmentand production of renewable
power in the United States thatmany renewable power developers
rely upon, and that's not solelyfocused on offshore wind, and
(32:33):
so the the the impact and theconsequence of this is quite
broad and a little fuzzy stillin my mind.
There's also a Section 5 onunleashing energy dominance
through efficient permitting,and so there are a number of
proposals, for example,rescinding CEQ's NEPA
(32:56):
regulations found at 40 cfr,1500 at all, or at sequence uh,
sorry, I forgot my my latin, gotyour latin there.
Sorry, I was using the wronglatin.
It's not clear, then, how someof the benefits that the
(33:20):
Environmental Policy Act andsubsequent executive orders
created to try to align CEQA topromote efficient, effective
permitting of major projects,just exactly how that's going to
change if the NEPA regulationsare rescinded.
Do you have any insight?
Speaker 2 (33:39):
Well, I my insight, is based on basically going to
graduate school and having anenvironmental background that
fed directly into NEPA and NEPAhas been a key component of
everything for the last severaldecades.
Nepa is a law that is for thelast several decades.
(34:04):
Nepa is a law that is.
Yes, it's unfortunately thesource of some inefficiencies,
but it made very clear that thegovernment of the United States
was going to be communicativeand was going to be taking hard
looks at the actions that it'staken and it's been revised very
little.
There are instances, like I say, where maybe it's been abused
(34:25):
or implemented improperly, butoverall it's a fixture of the
relationship between thegovernment of the United States
and the people of the UnitedStates in a very, very big way.
In so far as it has been abused, that might be case-specific.
In so far as it is more general, as has been identified a
(34:48):
couple times in the past that itshould be corrected, that's
fine, but they're relativelysmall corrections.
Yeah, I don't foresee a removalof the basic principles behind
NEPA.
There is great opportunity tobe more efficient in its
implementation, but I do thinkit's basically a fixture at this
(35:12):
point.
Speaker 1 (35:13):
I haven't been around long enough to understand how
we might function without NEPAinvolved.
To understand how we mightfunction without NEPA involved,
and the role that it wasintended to play is this, you
know, kind of coordination ofagency activities to ensure that
these issues were addressedappropriately, and efficiently.
Speaker 2 (35:29):
That, to me, is very much up to the administration,
and examples in the past includethe ability for all of
government to be steppingforward and saying this is the
decision and this is thedirection that we are going and
we are going to make thisprocess work, and that can be a
(35:50):
very good thing.
Speaker 1 (35:53):
The weak part of it to me is where the government,
in an inability to coordinatepolicy objectives, basically
lets that process goitting andconstruction of critical energy
(36:18):
infrastructure, providinggreater certainty on the
permitting process, prioritizingenvironmental analysis, as well
as then incorporating a numberof the concerns of this
presidential administration.
So those generally seem likegood things to do.
(36:40):
Again, it's just it's not clearhow long this will take or what
happens in the interim.
So, but, jim, I did want to hitone specific section, because I
know a lot of people have beentalking about this, and it's
section seven, terminating theGreen New Deal, and it states
that all agencies sellimmediately pause the
(37:00):
disbursement of fundsappropriated through the
Inflation Reduction Act of 2022or the Infrastructure Investment
and Jobs Act, and so that's aninteresting thing to include in
an executive order, because itapparently conflicts with the
(37:21):
constitutional separation ofpowers that Congress decides how
to impose, tax and spendtaxpayers' money and a sitting
president can veto a bill, butCongress also has the power to
override that when they have thevotes.
That's.
That's a fundamental check andbalance in our system that
forces political negotiationbetween the parties.
(37:44):
I agree that that negotiationtends to lead to more durable
outcomes right when everyone isWell, if I understand you.
Speaker 2 (37:52):
If I understand your question correctly, I see it as
less of a constitutional issueand more of a policy direction,
and that's that theadministration, to me, is saying
and I'm not speaking for theadministration, of course, but
they're saying that they're notin favor of the Green New Deal.
(38:16):
They're not in favor of theGreen New Deal, they don't think
it plays out properly and isI'm going to use the climate
change word is that somethingthat is a justification for all
things renewable?
And I think what they're sayingis that, as a matter of policy,
(38:38):
we don't believe it is, and,whether you agree with that or
not, I think it's a legitimateexercise of their policy
initiatives and of theadministration's desire to set
things in a new direction therebusinesses operate upon the
(39:01):
existing paradigm, the existinglegislation, regulation, tax
policy.
Speaker 1 (39:07):
you know when that changes dramatically, that
changes business decisions.
So, yes, you know, that's,that's the reality, um, and so
we'll see how this continues toplay out, with the, I'm sure, a
lot of discussion, potentiallylitigation, around it too, as
winners and losers are kind ofselected by a new political and
(39:31):
policy landscape, jim, the otherone that I thought we ought to
take a look at is thedeclaration of a national energy
emergency, and I was at firstreally interested to read this,
because I've never heard of apresidential declaration of a
national energy emergency,although I bet one happened back
(39:55):
in at least the Carteradministration, because I
remember, when I was reallylittle, the gas crunch and
crisis.
Speaker 2 (40:01):
You know I don't remember de facto.
Yes, there was a nationalenergy emergency but, I, don't
remember a particulardeclaration and maybe listeners
can correct us there.
Speaker 1 (40:19):
Yeah, that'd be great .
Speaker 2 (40:20):
It became the key issue of the day and the
development of national energypolicy.
To address that issue wascertainly there, but I don't
know if there was a declarationof a quote-unquote emergency or
not.
Speaker 1 (40:39):
He discusses or they discuss, I should say the need
for reliable, diversified andaffordable supply of energy to
drive our nation, to drivemanufacturing, transportation,
agriculture, defense and sustainthe basics of modern life.
And military preparedness Againsounds good, right, maybe most
of us can agree on that.
(41:00):
That sounds like a good reasonto have energy in this country.
Speaker 2 (41:04):
What that points towards, ian, is you can't get
away from all of the aboveenergy strategy.
It doesn't matter whether yourobjective is energy independence
, energy sufficiency, greenenergy.
It all comes back to an all ofthe above strategy, and
(41:28):
hopefully that's what we'llarrive at after some objective
evaluations of policy.
I think there's a very keyperson in this situation, and
that's the designee for theposition of Secretary of the
Interior, doug Burgum, from theDakotas.
(41:53):
He has been aside from beingnominated to be secretary of the
interior, he's also beendesignated the energy czar.
He's also been designated thechair of the newly created White
House Energy Council these Idon't know exactly what all that
(42:15):
means, but they sure soundimportant, don't they?
And they are clearly putting theenergy task, the energy policy,
on the resource managementagency Department of the
Interior to be moving forward,not the least of which is his
(42:40):
position as just secretary byitself is huge.
He is in a very, very strongposition, and the administration
is in a very, very strongposition, to help develop a more
comprehensive energy policythat is based on these many
issues.
Comprehensive energy policythat is based on these many
(43:04):
issues and not one that willjust pick winners and losers and
continue the battle across thedifferent philosophies, but to
me, burgum is in a very uniqueposition to demonstrate
leadership and show support.
Remember, too, that he's veryrelatively speaking.
He's very popular across theaisles.
(43:27):
Both Republicans and Democratsare very supportive of him, and
insofar as he supports a policythat everybody can get behind or
at least most can get behindand demonstrate the leadership
that's associated with that, Ithink we have some great
opportunity there for thecountry.
Speaker 1 (43:50):
I don't think we've seen this many day one, two,
three presidential actionsaddressing energy in a long time
.
Speaker 2 (43:58):
That's true.
Speaker 1 (43:59):
This is front and center on President Trump's
agenda and I think, as you say,it's going to get a lot of
attention and a lot of focus.
The final part of our chats arealways any last drops in the
ocean for the week are alwaysany last drops in the ocean for
(44:21):
the week.
Speaker 2 (44:22):
Energy policy has always been very, very ambiguous
and very, very difficult tonail down, and this gives us an
opportunity to bring the poles,the extremes on both sides, back
towards the middle in a waythat's constructive for
everybody.
And how about you?
Speaker 1 (44:39):
We enjoy each other's optimism at times, and so I
think that is a reallyoptimistic view.
I know that there are some inthe offshore wind community in
specific who are feelingpessimistic about a lot of this.
My last drop for this week lastweek I went to the Louisiana
Wind Energy Week down in NewOrleans, had a fantastic time
(45:00):
catching up with colleagues andfriends and really hearing some
great discussion that's stillfocused on offshore wind
development, particularly in theGulf of Mexico.
That's its focus.
There were other folks therewho also discussed transmission
planning and interconnectionchallenges, who discussed some
onshore wind issues, and thethings that resonated with me
(45:24):
are the people of Louisiana arereally jumping in to provide the
new technologies for all kindsof different energy, including
wind, and I was really enthusedby the discussion I heard and
participated in.
Jim, for you, maybe next year,put it on your calendar.
Speaker 2 (45:43):
Okay, really interesting event.
Speaker 1 (45:46):
Thanks for listening.
We're always interested inother topics and speakers.
Reach out to us if you'd liketo chat with the Offshore Energy
Podcast.
Jim and I are always happy tomake new friends with the
Offshore Energy Podcast.
Jim and I are always happy tomake new friends, Jim it was
great seeing you this week.
You too, hope you have a goodtime.
I will get back to shovelingsome snow, and I'm glad that
(46:06):
snow has left your part of the,your neck of the woods.
Speaker 2 (46:09):
Yeah, the snow's been rained out, so we're back.
It's still cold, but we're backto a no-snow environment.
Speaker 1 (46:20):
All right, jim, it's still cold, but we're back to a
no-snow environment Until wemeet again on the next Offshore
Energy Podcast.
Speaker 2 (46:25):
Thanks, Bye, bye.
The Trump administration has been fast out
of the gate with executiveorders, presidential memoranda
and DOGE actions.
For those of us in offshoreenergy of its different stripes,
at least five of these actionsimpacts you and our business
stripes.
At least five of these actionsimpacts you and our business.
In this episode, jim and I willdiscuss their implications on
projects in offshore wind and inoil and gas, and how the new
(00:32):
administration intends to tiltthe offshore energy sector.
Speaker 2 (00:47):
I'm Jim Bennett and I have over 40 years of
experience developing energy inthe ocean.
Speaker 1 (00:54):
I'm Ian Vilperil and I've spent the last 20 years
developing offshore energyprojects around the world, and
this is the Offshore EnergyPodcast.
Hey Jim, hey Ian, how are you?
I'm really good, jim.
Another week, another Monday,shoveling snow.
Speaker 2 (01:15):
Another examination of what the effects of the
change in administrations isgoing to be Lots of
contemplative time this morning.
More and more detail, more andmore revealings as we move
through this.
Speaker 1 (01:41):
We're going to talk about some of Trump's executive
orders, presidential memorandumand other actions as he's
delivered them to the federalgovernment and agencies, and we
want to make sure we at leasttouch on some of the big picture
issues that are coming up andalso recognize when maybe
there's more clarity still tocome.
We certainly don't have acrystal ball on all of this, but
we can take our measured andinformed perspectives and do a
little reading Sound good and doa little reading Sound good.
Speaker 2 (02:05):
Well, to start with, of course, we've been hit by a
pretty surprising directive.
A lot of people were taken bysurprise with regard to the
presidential memorandum ontemporary halt for wind, and of
course, we have to recognizefirst off that this is what he
(02:27):
said he was going to do.
I personally, and a lot ofpeople, really questioned
whether that would be the case,and it's not unusual, of course,
for a new administration tocall a halt to some things to
take a look at whether or notthey're really on track, and
(02:48):
that is clearly what he's donehere.
This has been done in the pastand it wasn't a new
administration.
But I think back to thepresidential task force on OCS
oil and gas leasing that was puttogether soon after the Exxon
Valdez spill back in late 80s,or was it 1990?
(03:11):
Well, 89, right 89, 90,something like that.
And of course, on a broaderscale, you have efforts like
Gore's reinventing government,which was a re-examination of
regulatory structure, and hiringfreezes we've dealt with a
number of times, either as anindication of policy direction
(03:33):
on both sides of the aisle orbecause of just budget
stalemates.
So these things have been donebefore.
Yeah, Um.
So that's not uncommon.
Speaker 1 (03:47):
Jim, one of the things I was thinking about is,
um, donald Trump is comingstrong out of the gate with
these presidential actions.
Uh, I'm not sure exactly, butthey're about 50 so far and
we're, you know, just a coupleof weeks into the administration
.
Looking at past presidents inthe recent past, that's not an
(04:08):
unusual number of presidentialactions coming kind of in the
first year of the presidency.
And if you look far back and I,you know, I had the good
fortune to have Google at myfingertips to take a look, you
know, at the presidencies wefind that the executive orders
really started to come aboutRight.
Speaker 2 (04:28):
Theodore Roosevelt issued a whole bunch of them.
Speaker 1 (04:31):
Yeah, Teddy Roosevelt , Woodrow Wilson, Calvin
Coolidge, Herbert Hoover,Franklin Delano Roosevelt and
listed the most presidentialactions throughout the course of
their administration, and sothat's kind of the peak and
listed the most presidentialactions throughout the course of
their administration, and sothat's kind of the peak of the
number issued by presidents asthey come into office.
And now we're kind of back downtowards something that really
(04:56):
seems, at numbers' sake, prettyregular.
As the administrations change,lots of these things are being
issued to help set thepresident's agenda on the first
day.
Now they're coming faster underDonald Trump, right.
A lot of these were day one ortwo or three.
Speaker 2 (05:15):
I'm catching up.
That was indeed the promisesthat he made, that they would be
done on day one, and so itisn't unusual for these things
to come down, and you make agood point about the various
administrations.
What is a little uncommon, ifyou will, is at least for the
(05:35):
presidential memorandum on wind,where he has called for a
temporary halt on approvals to acall for a temporary halt on
approvals, and he's calling fora review of the process and
possibly review of existingleases, all of which is
understandable from thestandpoint of what he said in
(05:57):
the past.
What's not so common, I think,is the way wind has been
targeted, if you will, and theway the executive orders include
apparent positioning of thepolicy statements that are
wishing to be made and, quitefrankly, a lot of them and this
(06:22):
doesn't apply just to wind, ofcourse but the ambiguity that's
contained in them and less thanfull vetting of it before it was
issued, and the reason I saythat is just casually looking at
them.
There's some fundamental issueshere.
(06:44):
Terms like offshore continentalshelf as opposed to outer
continental shelf, the use ofthe term windmills, the
declaration about intermittentwind these are all not that they
make a lot of difference in thelong run.
But the point is, you got towonder how much he, how well
(07:08):
he's getting advised as to whatthese orders should contain and
is it getting the attention thatit deserves?
Is it getting the attentionthat the president, the office
of the president, deserves and,uh uh, that the american people
deserve when they when, whenthey are, are faced with the
(07:32):
sweeping issues like this?
And I do think there's someinteresting things that are
contained and we should, weshould discuss let's dive in.
Speaker 1 (07:40):
and so, listeners, we're going to talk about a
couple of the presidentialactions, mostly related to
energy and offshore energy, of,of course, for Jim and I and I
think, jim, this is a perfectone to start with, the temporary
withdrawal of all areas on theouter continental shelf from all
solar wind leasing and thereview of the federal
government's leasing andpermitting program for wind, her
(08:09):
wind, and so also, listeners,in our episode notes we'll put a
list of the presidentialactions we'll talk about, as
well as links to them, becauseyou ought to take a look and
read them for yourselves as well, as Jim and I and many, many
others have been doing it,obviously.
So, jim, as we dive into thatfirst one, you know that first
section, section one, we diveinto that first one.
You know that, first section,section one temporary withdrawal
of areas.
You know the president herebywithdraws from disposition for
(08:30):
wind energy leasing all areas ofthe offshore continental shelf,
ocs potentially a typo there uh, this withdrawal shall go into
effect january 21st 2025 andremains in effect until this
presidential memorandum isrevoked.
You know, that to me seemspretty clear, right?
(08:51):
That's clear that we are won'tsee any additional leasing of
offshore areas for offshore winddevelopment that is.
Speaker 2 (09:03):
That is the long and short of it.
Indeed, let's just hold off onleasing.
Now I have to make anobservation with regard to the
first administration.
They were in there for thefirst Trump administration was
in there for a couple of yearsbefore they moved to what I
refer to as the slow roll ofslowing down and eventually
(09:26):
stopping leasing.
And the difference here, ofcourse, is that this is a day
one declaration that we'll stopleasing at this point and do a
review and we'll get into theimplications there.
And we'll get into theimplications there.
But it's a different, moreexpeditious approach, if you
(09:50):
will, and it has somecomplications.
I do think we need to point outsome of the questions,
regardless of the content andthe structure.
Regardless of the content andthe structure, I think there's
some substantive issues that thepresident has brought out, that
the new administration hasbrought out with regard to
(10:11):
offshore wind, that needaddressing, and among them are,
first, subsidies.
That's going to be a key wordin the review of these projects.
I think, quite frankly, you'vegot one side of the aisle, all
about subsidies and leasing andeverything else.
(10:32):
Any and all that could be putforward should be pursued, and
the other side of the aisle issaying no, not at all, and
that's where we are right now.
Just like a lot of issues,we're pretty much at opposite
poles of the issue with thatregard.
The other thing they've broughtup is about the reliability
(10:56):
which gets to.
How does wind get integratedinto our mix of energy?
And, of course, what you wouldtake away from the executive
order is that it's not or itshouldn't, but I'm not sure it's
that simple and we'll talk moreabout that.
Speaker 1 (11:15):
Jim, pardon me, I just wanted to comment on two
points brought up in the Miranda.
Reliability means showing upfor work on time, and renewables
generations, like offshore wind, are variable but also reliable
.
They differ in time but we canpredict that very well and
understand when they're going tobe generating a lot of power
(11:37):
Now, considering the economiccosts and cost effectiveness of
renewables.
I recognize offshore wind is inearly days in the United States
, but if we think of whathappened around the economics of
onshore solar development, wesee the path to be followed.
Back in the 70s and 80s it wasthree times more expensive to
(11:58):
develop onshore solar than itwas any other source of energy,
but now it's the cheapest sourceof energy available on the grid
.
So let's get back to yourpoints.
Speaker 2 (12:08):
Jim.
And then the third point I wantto, or the third thing I think
that he's bringing up, is heyou've already touched on it and
that's leasing.
Are we doing enough leasing?
Should we be doing more leasing?
Should we be doing less leasing?
Should we be doing no leasing?
Speaker 1 (12:25):
These are our issues that he has brought up in his
day one, and these are issuesthat I think there's legitimate
basis for constructive dialogue,uh, as opposed to just the
extremes that we're seeing andit's, I think it's important to
point out in that first sectiontoo, that this withdrawal
(12:46):
doesn't apply to leasing forother purposes, but not limited
to oil, gas, minerals andenvironmental conservation, and
there's a statement that nothingin this withdrawal affects
rights under existing leases inthe withdrawn areas.
There's a however there, yeahthere's a however there.
Speaker 2 (13:03):
Yeah, there's a big however there.
Speaker 1 (13:04):
The Attorney General, as needed, and the Secretary of
Interior will conduct acomprehensive review, you know,
and determining or amending anyexisting wind lease areas,
identifying any legal basis forsuch removal, and submit a
report with recommendations tothe President.
And so that's another milestoneor decision point, then, that
(13:27):
the president will have whetheror not they wish to pursue the
withdrawal of rights on existingleases.
That hasn't happened yet, butit looks like it could in the
future.
Pending this review and I don'tmean I'm sorry, go ahead.
Well, jim, you know, this isone of those parts where I think
your expertise is reallyimportant because, as I'm aware
(13:48):
of the leasing program, there isa comprehensive review of
ecological, economic andenvironmental necessity of the
leasing program, one of the mostrobust parts of the OCS-LISC
program for oil and gas andoffshore wind in the United
States.
That's one of the things thatmakes it so powerful.
Speaker 2 (14:11):
I think that's true and I think that's what you'd
find, certainly with anyobjective evaluation of the
process.
And the other side of that, ofcourse, is that many people
complain that it just takes toolong.
And it takes too long becausewe're very, very thorough Bureau
of Ocean Energy Management isvery, very thorough in their
(14:32):
efforts to the idea that youknow if this review or this call
for a review of existing leasesis just a mechanism for
(14:53):
selectively targeting certainleases offshore in order to, you
know, create further obstaclesor bring them to a halt, create
further obstacles or bring themto a halt, and if that is the
case, I think that's mostunfortunate, because what's
really being brought up here isan opportunity to look at the
(15:17):
process, and if the process isgood, then what are the
parameters in terms of thoseother, those several issues that
I just mentioned that wouldallow for the wind industry to
appropriately be moving forward,if indeed that is what should
be allowed, and it's a greatopportunity, and we'll talk more
(15:40):
about how that will play out,but that's a very important
point.
That process is very thorough,it's very well defined both in
law and regulation, and I thinkthat's what an objective review
of that process would find.
Speaker 1 (15:57):
And a very opportune time for the industry, the
offshore wind industryparticularly, to really advocate
for the benefits that theyprovide to the US in energy,
energy security, employmentrevenue, et cetera, et cetera.
Speaker 2 (16:15):
And the economic effects.
Another huge difference betweenthe two the first Trump
administration and the secondTrump administration is the
simple fact that the industry isa completely different thing in
2024 than it was in 2020.
And that needs to be taken intoconsideration as well, because
(16:36):
bringing to a halt which, evenif it's temporary, is going to
have effects on the industry andpretty negative economic
effects, and we should be verycognizant of that and very
thorough in our evaluation ofwhat we ought to be doing.
Speaker 1 (16:56):
Jim, that's section one.
Section two of that one rightis now the temporary cessation
and immediate review of federalwind leasing and permitting
practices.
This is now a federal review ofthe practice to ensure that
negative impacts areappropriately addressed and
(17:18):
mitigated and that the overallbalancing of costs and impacts
and benefits is appropriate, andthey call upon Secretary of
Interior, secretary ofAgriculture, secretary of Energy
, administrator of the EPA andheads of all other relevant
agencies to participate in thiscomprehensive assessment and
(17:41):
review of the federal windleasing and permitting practice.
That sounds like a large scopeof work to me.
I don't see any clarity on howlong that's going to take and
indeed, in a worst case scenario, that could take all of the
president's administration.
You know what's your experiencein government.
Speaker 2 (17:59):
Good point.
There is one experience that Iwas involved in that to me is
comparable and it's not a smallundertaking, and that was the.
That was the presidential taskforce on OCS, leasing under
under the first Bush the elderadministration, the first Bush
(18:28):
the Elder administration.
But you know, I got to notethat at the same time that we're
calling for this very thoroughreview, we're calling for this
whole halting effort to betemporary in nature.
So it's a hard struggle to seehow the two are going to be
accomplished and I do think that, by comparison, the president's
(18:50):
task force in the late 80s,early 90s did indeed take quite
a while.
I'm not sure that it changedthat much in terms of the
position of the two parties andthe administration policies that
would be going forward.
I mean, in a lot of waysoffshore wind is relatively new.
(19:14):
In the case of OCS oil and gas,that wasn't new.
That was a few decades old.
But wind is now, has had abirthing decade and a maturing
decade as well, and it's stillgot some ways to go.
(19:35):
But a lot of things have beenworked out and a lot of things
have been identified and thereview process is there and I'm
hoping that they will indeedfind that there's a good process
in place, even though it maynot accommodate everyone's
wishes all the time thepresidential action effectively
(19:57):
means is that for thosepotential offshore wind leases
that we saw in years, furtherout from 2025, those are all
effectively not there anymore.
Speaker 1 (20:09):
Right, those are?
Speaker 2 (20:10):
I'm not sure even on hold is the right word, but we,
yeah, I don't I, we don't reallyknow whether it's it's a
question of whether they're onhold or they've gone into the
ether and are no longer around.
We'll see, we'll see.
But we're not going to seeaction on those items in the
immediate future.
(20:30):
Regardless of how temporary itis, the Bureau that the federal
government pursues in terms ofleasing and in terms of site
assessment, in terms ofeverything leading up to the
construction operations plan, uhare, are we're?
We're probably not going to seea lot of that.
(20:50):
Yeah, uh, so we and things getlisted.
Speaker 1 (20:54):
What we saw in the, you know, in the previous
leasing schedule were activitiesin the next four years.
That would be returns todifferent basins a return to the
Gulf of Mexico, a return to uhfor offshore wind, leasing to
the central Atlantic, for theNew York bite, for California,
uh and the Gulf of Maine and thefirst time for considering
(21:15):
consideration of Hawaii.
So those now are definitely onhold until we see what the if
this becomes a non-temporary andbecomes revoked by the
president I, I would agree.
I don't think you can rule itout, at least in theory, but yes
, uh, you're probably not goingto be seeing a lot of activity
there and as we talk about thetimeline for a specific or an
(21:37):
individual project, from, youknow, pre-lease to lease sale,
to site assessment, toconstruction and operations
planning, to technical reviews,to the approval of that and then
potentially to construction andoperations activities and then
ongoing activities, we wouldexpect all of those to be
(22:02):
uncertain and on hold at thispoint because each of those
requires a federal action right.
To help them move forwardthrough decision gates.
There are a couple of othersections of this memorandum that
deal specifically with the LavaRidge Wind Project.
I'm not personally familiarwith that one, neither am I Okay
, so I personally familiar withthat one, neither am I.
(22:22):
Okay, so let's agree.
Sorry, listeners, we're goingto skip that part because we
don't have any particularinsight into the challenges
there.
Speaker 2 (22:31):
Let's note one thing, though that the mechanism has
been used to target that veryspecific project.
Yeah, and I think it would bereally disappointing if this
same mechanism or this reviewprocess is simply used to target
other specific projects,without answering larger
questions about how wind energyfits into the bigger picture
(22:56):
energy mix for the country.
We have an opportunity to dothat.
Speaker 1 (23:00):
And Jim, this isn't the first time we've seen an
executive order that targets aspecific energy development
project.
Right Developers tend to hatethem because they're usually not
for good reasons.
Speaker 2 (23:11):
It's not like it's the first time it's been done.
These executive orders havebeen used many times.
That get very, very specific,and I'm not saying there might
not be a legitimate reason forit in this particular case,
because I'm just not thatfamiliar with.
Speaker 1 (23:27):
I'm thinking back to and yeah, I think you have a
point there too, jim wellbalanced.
You know, especially in theoffshore energy business, where
projects take more than anindustry from inception to
delivery Sorry, more than oneadministration it is awfully
hard to deal with 180 degreeturn where each side is flipping
(23:48):
the landscape with the use ofpresidential powers and action.
Jim, that was the first one.
Anything else that we ought todiscuss around the temporary
withdrawal.
Speaker 2 (24:02):
We should note that the direct effects of this are
pretty sobering, but theindirect effects are even more
sobering, or probably even moreextensive, in terms of slowing
the industry down, which may beappropriate to do, but without
(24:22):
even having the reviewer pullingthe review team together,
there's a very clear reluctanceto be moving forward on the part
of the industry.
I do think that there'sopportunities to be moving
forward, but we need torecognize that both the direct
(24:43):
and the indirect effects ofthese efforts can be pretty
substantial, very uncertainty.
And then there's also, you know, when you look past the I guess
the initial impression would bewhen you look at the
presidential directive, you seethat, well, it looks like if
(25:08):
your project's approved, youmove forward.
So which constructionoperations plans are ready to go
?
And on the surface, yeah, thatmakes some sense.
But there's so many and let'scall it deep permitting.
There's so many permits thatare required, and this
(25:30):
particular directive calls onfederal agencies to not approve
anything.
If you've got a Corps ofEngineers permit that needs to
be approved after your COPapproval, you might have a
situation.
Speaker 1 (25:47):
For those projects that are in between, there are
still potential other activitiesto perform that don't require
federal approval, and so youcould see, while Trump's
presidential memorandum is inplace, work to mature
technologies, particularlytechnologies that may need
(26:07):
underwriting and lending right,so those approvals towards
commercial readiness anddeployment.
You can certainly see otherwork on finance strategy for
major projects, on procurementswith the states and ensuring
that those are well aligned withthe procurement principles that
will help offshore windprojects at some point in the
(26:27):
future.
Obviously, engagement withimportant stakeholders is always
important and we can't say itenough because it always is
challenging and a difficulttopic, because you can't talk
too much.
You just can't do it in majorproject delivery and other parts
of the infrastructure.
You know ports are stillcritically needed for America's
(26:50):
maritime dominance as well too.
Speaker 2 (26:53):
Well, I would agree with that.
I do think also that you know alot of the challenges that the
developers face and that we allface may be outside of specific
federal approvals.
The federal approvals are onething, but these other
challenges are not going to goaway.
There's opportunities formoving forward on those fronts.
(27:14):
What about the other executiveorders and presidential uh
directives, presidentialmemorandum that are going to
affect uh ocean energy?
Speaker 1 (27:29):
another one of the executive orders unleashing
american energy.
That was a really interestingum presidential action as well
too.
Let's talk a little bit aboutthat one, shall we?
Speaker 2 (27:46):
Sure, you want to start.
You bet, let's go with thefacts, because if you want an
opinion, I'm ready to go.
Speaker 1 (27:56):
When I first read Unleashing American Energy, so
much of it resonated verystrongly with me that there is
an opportunity and a policy ofthe United States to encourage
energy exploration andproduction on federal lands and
waters in order to meet theneeds of our citizens and
solidify our standing as aglobal energy leader long into
(28:17):
the future.
Energy leader long into thefuture to establish our position
as a leading producer andprocessor of non-fuel minerals,
including rare earth minerals,which will create jobs and
prosperity at home.
To protect the US's economicand national security and
military preparedness.
And to ensure that allregulatory requirements related
to energy are grounded inclearly applicable law.
(28:38):
And that's the first four partsof the policy described in this
presidential action Sorry, inthis executive order.
And, and frankly those resonatewith me, those sound very clear
to me and I am so happy to seethose in writing that the
president is focused this way.
(28:59):
It does turn and focus in thepolicy on some additional
specifics eliminating the EVmandate in quotes right.
Safeguarding people's ability tochoose from goods and
appliances things like lightbulbs, dishwashers, washing
machines, gas stoves, et cetera.
(29:19):
Things like light bulbs,dishwashers, washing machines,
gas stoves, etc.
Ensure that the global effectsof a rule or action be reported
separately from its domesticcosts and benefits to promote
and prioritize the interests ofthe American people.
That sounds reasonable.
To guarantee that all executivedepartments provide opportunity
for public comment and rigorous, peer-reviewed scientific
(29:40):
analysis I'm fully behind thatone.
Speaker 2 (29:43):
Kind of hard to argue with that.
Speaker 1 (29:44):
I love that one and to ensure that no federal
funding be employed in a mannercontrary to the principles
outlined in this section.
So if I read the policydescription, there's a couple of
call-outs to EVs and otherkinds of goods and appliances.
The rest of it seems very momand apple pie.
(30:05):
You know, this is all good forAmerica.
Speaker 2 (30:10):
And nothing wrong with this kind of review and
these kind of policydeclarations.
I think they fit very well.
Of course, the devil is in thedetails.
And how does that play out forall other sources of energy?
And this is where I think theproblem, or the dialogue, is
(30:36):
kind of caught up in a falsechoice between renewable energy
and oil and gas, conventionalenergy sources.
And conventional energy sourcesand renewable energy are not at
each other's throats.
They are not slices of a fixedpie.
(30:58):
Slices of a fixed pie, theywill serve to complement each
other and there is enough demandfor energy that expansion of
all of these sources of energywill be beneficial insofar as
they're economic, will bebeneficial for the American
(31:18):
people and for the nation'senergy portfolio.
And if we get away, if wepursue those policies in a way
that gets away from a tradeoffbetween wind versus conventional
, I think it would be a veryconstructive dialogue,
(31:41):
unconventional.
I think it would be a veryconstructive dialogue, even if
it's not as beneficial torenewables and wind energy as we
might like it to be.
Speaker 1 (31:48):
The devil of the details comes later in the
document, and some of thechallenges are the fact that it
revokes a number of previouspresidential and regulatory
actions, and there's quite along list of revocations.
One of them, very specifically,is the implementation of the
(32:09):
energy and infrastructureprovisions of the Inflation
Reduction Act of 2022.
And we all know that that isone that creates some incentives
for, you know, the investmentand production of renewable
power in the United States thatmany renewable power developers
rely upon, and that's not solelyfocused on offshore wind, and
(32:33):
so the the the impact and theconsequence of this is quite
broad and a little fuzzy stillin my mind.
There's also a Section 5 onunleashing energy dominance
through efficient permitting,and so there are a number of
proposals, for example,rescinding CEQ's NEPA
(32:56):
regulations found at 40 cfr,1500 at all, or at sequence uh,
sorry, I forgot my my latin, gotyour latin there.
Sorry, I was using the wronglatin.
It's not clear, then, how someof the benefits that the
(33:20):
Environmental Policy Act andsubsequent executive orders
created to try to align CEQA topromote efficient, effective
permitting of major projects,just exactly how that's going to
change if the NEPA regulationsare rescinded.
Do you have any insight?
Speaker 2 (33:39):
Well, I my insight, is based on basically going to
graduate school and having anenvironmental background that
fed directly into NEPA and NEPAhas been a key component of
everything for the last severaldecades.
Nepa is a law that is for thelast several decades.
(34:04):
Nepa is a law that is.
Yes, it's unfortunately thesource of some inefficiencies,
but it made very clear that thegovernment of the United States
was going to be communicativeand was going to be taking hard
looks at the actions that it'staken and it's been revised very
little.
There are instances, like I say, where maybe it's been abused
(34:25):
or implemented improperly, butoverall it's a fixture of the
relationship between thegovernment of the United States
and the people of the UnitedStates in a very, very big way.
In so far as it has been abused, that might be case-specific.
In so far as it is more general, as has been identified a
(34:48):
couple times in the past that itshould be corrected, that's
fine, but they're relativelysmall corrections.
Yeah, I don't foresee a removalof the basic principles behind
NEPA.
There is great opportunity tobe more efficient in its
implementation, but I do thinkit's basically a fixture at this
(35:12):
point.
Speaker 1 (35:13):
I haven't been around long enough to understand how
we might function without NEPAinvolved.
To understand how we mightfunction without NEPA involved,
and the role that it wasintended to play is this, you
know, kind of coordination ofagency activities to ensure that
these issues were addressedappropriately, and efficiently.
Speaker 2 (35:29):
That, to me, is very much up to the administration,
and examples in the past includethe ability for all of
government to be steppingforward and saying this is the
decision and this is thedirection that we are going and
we are going to make thisprocess work, and that can be a
(35:50):
very good thing.
Speaker 1 (35:53):
The weak part of it to me is where the government,
in an inability to coordinatepolicy objectives, basically
lets that process goitting andconstruction of critical energy
(36:18):
infrastructure, providinggreater certainty on the
permitting process, prioritizingenvironmental analysis, as well
as then incorporating a numberof the concerns of this
presidential administration.
So those generally seem likegood things to do.
(36:40):
Again, it's just it's not clearhow long this will take or what
happens in the interim.
So, but, jim, I did want to hitone specific section, because I
know a lot of people have beentalking about this, and it's
section seven, terminating theGreen New Deal, and it states
that all agencies sellimmediately pause the
(37:00):
disbursement of fundsappropriated through the
Inflation Reduction Act of 2022or the Infrastructure Investment
and Jobs Act, and so that's aninteresting thing to include in
an executive order, because itapparently conflicts with the
(37:21):
constitutional separation ofpowers that Congress decides how
to impose, tax and spendtaxpayers' money and a sitting
president can veto a bill, butCongress also has the power to
override that when they have thevotes.
That's.
That's a fundamental check andbalance in our system that
forces political negotiationbetween the parties.
(37:44):
I agree that that negotiationtends to lead to more durable
outcomes right when everyone isWell, if I understand you.
Speaker 2 (37:52):
If I understand your question correctly, I see it as
less of a constitutional issueand more of a policy direction,
and that's that theadministration, to me, is saying
and I'm not speaking for theadministration, of course, but
they're saying that they're notin favor of the Green New Deal.
(38:16):
They're not in favor of theGreen New Deal, they don't think
it plays out properly and isI'm going to use the climate
change word is that somethingthat is a justification for all
things renewable?
And I think what they're sayingis that, as a matter of policy,
(38:38):
we don't believe it is, and,whether you agree with that or
not, I think it's a legitimateexercise of their policy
initiatives and of theadministration's desire to set
things in a new direction therebusinesses operate upon the
(39:01):
existing paradigm, the existinglegislation, regulation, tax
policy.
Speaker 1 (39:07):
you know when that changes dramatically, that
changes business decisions.
So, yes, you know, that's,that's the reality, um, and so
we'll see how this continues toplay out, with the, I'm sure, a
lot of discussion, potentiallylitigation, around it too, as
winners and losers are kind ofselected by a new political and
(39:31):
policy landscape, jim, the otherone that I thought we ought to
take a look at is thedeclaration of a national energy
emergency, and I was at firstreally interested to read this,
because I've never heard of apresidential declaration of a
national energy emergency,although I bet one happened back
(39:55):
in at least the Carteradministration, because I
remember, when I was reallylittle, the gas crunch and
crisis.
Speaker 2 (40:01):
You know I don't remember de facto.
Yes, there was a nationalenergy emergency but, I, don't
remember a particulardeclaration and maybe listeners
can correct us there.
Speaker 1 (40:19):
Yeah, that'd be great .
Speaker 2 (40:20):
It became the key issue of the day and the
development of national energypolicy.
To address that issue wascertainly there, but I don't
know if there was a declarationof a quote-unquote emergency or
not.
Speaker 1 (40:39):
He discusses or they discuss, I should say the need
for reliable, diversified andaffordable supply of energy to
drive our nation, to drivemanufacturing, transportation,
agriculture, defense and sustainthe basics of modern life.
And military preparedness Againsounds good, right, maybe most
of us can agree on that.
(41:00):
That sounds like a good reasonto have energy in this country.
Speaker 2 (41:04):
What that points towards, ian, is you can't get
away from all of the aboveenergy strategy.
It doesn't matter whether yourobjective is energy independence
, energy sufficiency, greenenergy.
It all comes back to an all ofthe above strategy, and
(41:28):
hopefully that's what we'llarrive at after some objective
evaluations of policy.
I think there's a very keyperson in this situation, and
that's the designee for theposition of Secretary of the
Interior, doug Burgum, from theDakotas.
(41:53):
He has been aside from beingnominated to be secretary of the
interior, he's also beendesignated the energy czar.
He's also been designated thechair of the newly created White
House Energy Council these Idon't know exactly what all that
(42:15):
means, but they sure soundimportant, don't they?
And they are clearly putting theenergy task, the energy policy,
on the resource managementagency Department of the
Interior to be moving forward,not the least of which is his
(42:40):
position as just secretary byitself is huge.
He is in a very, very strongposition, and the administration
is in a very, very strongposition, to help develop a more
comprehensive energy policythat is based on these many
issues.
Comprehensive energy policythat is based on these many
(43:04):
issues and not one that willjust pick winners and losers and
continue the battle across thedifferent philosophies, but to
me, burgum is in a very uniqueposition to demonstrate
leadership and show support.
Remember, too, that he's veryrelatively speaking.
He's very popular across theaisles.
(43:27):
Both Republicans and Democratsare very supportive of him, and
insofar as he supports a policythat everybody can get behind or
at least most can get behindand demonstrate the leadership
that's associated with that, Ithink we have some great
opportunity there for thecountry.
Speaker 1 (43:50):
I don't think we've seen this many day one, two,
three presidential actionsaddressing energy in a long time
.
Speaker 2 (43:58):
That's true.
Speaker 1 (43:59):
This is front and center on President Trump's
agenda and I think, as you say,it's going to get a lot of
attention and a lot of focus.
The final part of our chats arealways any last drops in the
ocean for the week are alwaysany last drops in the ocean for
(44:21):
the week.
Speaker 2 (44:22):
Energy policy has always been very, very ambiguous
and very, very difficult tonail down, and this gives us an
opportunity to bring the poles,the extremes on both sides, back
towards the middle in a waythat's constructive for
everybody.
And how about you?
Speaker 1 (44:39):
We enjoy each other's optimism at times, and so I
think that is a reallyoptimistic view.
I know that there are some inthe offshore wind community in
specific who are feelingpessimistic about a lot of this.
My last drop for this week lastweek I went to the Louisiana
Wind Energy Week down in NewOrleans, had a fantastic time
(45:00):
catching up with colleagues andfriends and really hearing some
great discussion that's stillfocused on offshore wind
development, particularly in theGulf of Mexico.
That's its focus.
There were other folks therewho also discussed transmission
planning and interconnectionchallenges, who discussed some
onshore wind issues, and thethings that resonated with me
(45:24):
are the people of Louisiana arereally jumping in to provide the
new technologies for all kindsof different energy, including
wind, and I was really enthusedby the discussion I heard and
participated in.
Jim, for you, maybe next year,put it on your calendar.
Speaker 2 (45:43):
Okay, really interesting event.
Speaker 1 (45:46):
Thanks for listening.
We're always interested inother topics and speakers.
Reach out to us if you'd liketo chat with the Offshore Energy
Podcast.
Jim and I are always happy tomake new friends with the
Offshore Energy Podcast.
Jim and I are always happy tomake new friends, Jim it was
great seeing you this week.
You too, hope you have a goodtime.
I will get back to shovelingsome snow, and I'm glad that
(46:06):
snow has left your part of the,your neck of the woods.
Speaker 2 (46:09):
Yeah, the snow's been rained out, so we're back.
It's still cold, but we're backto a no-snow environment.
Speaker 1 (46:20):
All right, jim, it's still cold, but we're back to a
no-snow environment Until wemeet again on the next Offshore
Energy Podcast.
Speaker 2 (46:25):
Thanks, Bye, bye.
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