The Offshore Energy Podcast
Offshore energy and ocean innovation in the United States is transforming the way we power our nation. Join our hosts Ian Voparil and Jim Bennett as they discuss current events, innovation, technology, and the future of the offshore energy ecosystem.
With decades of combined experience, these two industry veterans bring a unique blend of expertise, humor, and captivating stories from the high seas of offshore energy innovation.
Whether you’re an industry expert or just starting to learn about offshore energy, The Offshore Energy Podcast provides a platform for meaningful conversation and exploration. Tune in to enhance your understanding and stay updated on the latest advancements in this exciting field.
Let’s embark on this journey together!
The Offshore Energy Podcast
Episode 2 - Caution, Elections Ahead.
With the backdrop of the US election season, our hosts Jim Bennett and Ian Voparil lay bare the challenges of aligning campaign rhetoric with the realities of energy policy implementation, and how the economic importance of the Gulf of Mexico can steady the tides through political upheavals. Are the same conditions in place for offshore wind?
We challenge the misconception that energy policy must choose between fossil fuels and renewables, advocating for a balanced approach that draws strength from both. Consider how executive orders, budget processes, and litigation shape project timelines, with real-world cases illustrating the sometimes surprising politics at play.
For anyone invested in the future of energy development, this episode provides a fun examination of how the private sector and government can work together to navigate these turbulent waters, ensuring smoother transitions and the potential for more effective policy implementation.
It's election season here in the US, have you noticed? And this one features two presidential candidates with opposite views on offshore wind. Now, polarization is a fact of life in American politics, particularly during campaigns. There's never common ground, and that's nerve-wracking for us as citizens and energy developers alike. But what are the real ramifications of presidential administrations? What goes on behind the curtain? If you're interested in that, I know just the guy to speak with my co-host. Now let's dive into the Offshore Wind podcast.
Speaker 2:I'm Jim Bennett and I have over 40 years of experience developing energy in the ocean.
Speaker 1:I'm Ian Vilpero and I've spent the last 20 years developing offshore energy projects around the world, and this is the Offshore Energy Podcast. Hey, Jim Good to see you. You too, ian. How are you? I'm doing great Happy day after Halloween, just to put us in time, okay, and you too, hope you had a great time trick-or-treating out there.
Speaker 2:Indeed, indeed. I did no trick-or-treating. We have, the grandchildren are away and we just stayed at home.
Speaker 1:So we had a few trick-or-treaters, and that's fine, that's great. Well, you know, with Halloween, uncertain years, comes election season, and here we are, and so here's our Offshore Energy podcast around what to expect during presidential administration changes and you know maybe just a couple of quick introductions why this particular topic is near and dear to each of us.
Speaker 2:I've been part of nine different administrations and, though it may date me, there's an important lesson from one of my first jobs in the government, which was back when I was in college, working with the Carter Mondale transition planning team. Okay, there's the dating.
Speaker 2:It was actually during the last days of the Ford administration transitioning to the Carter administration, and it was basically reading the president-elect's mail, which had backlogged during the campaign leading up to the election.
Speaker 2:And the reason I bring it up is because it was a fascinating experience for me as a student to see the breadth and the extent of issues.
Speaker 2:And you know, can you give me a job, or you need to pursue this policy, or be careful, because there's people out to get you, you name it. The American people provided all of this input to the new administration and what it points to is that the president and the office of the president deal with an awful lot of different things and they talk about policies and they talk about what they're going to do and they make campaign promises. There's no way that they can address all of these issues on their own. They have a whole myriad of operations and people that they work with, political appointees across the government as well as the bureaucracy, the civil service, and they don't always touch on the policies that they may espouse during the campaign. And I just want to bring that point out as we discuss what's going to happen, which we do not know the answer to, but what's going to happen and what we expect might?
Speaker 1:happen. And I'll say too, I've been on the private sector side of energy developments and we've always had to plan across different administrations because we knew that a major election would occur at some point during the process of development. So these are, you know, known milestones and inflection points that you have to manage through if you want to be successful in offshore energy development. So along the way, as we're discussing this, I'll tell you a little bit about some of the you know, the things that we've used to try to make sure that we're consistent and solid even through periods of tremendous change, sound good.
Speaker 2:You're making a good point that the process itself, as I've talked about many, many times, can take six, eight, ten years to start one project, from the beginning of leasing and information collection to actual steel in the water. And that's greater than any of the administration terms if it's a two-term president. But in fact it's a much longer process and involves a lot more activities than any one term of one president.
Speaker 1:That's for any kind of offshore energy development project, even oil and gas in the Gulf of Mexico, which is much more routine than, say, offshore wind in a new part of the United States. It still takes eight years to go from exploration to the development plans being approved and underway for expenditure of capital. So I think that's great. Thank you for bringing that out. Of course, as a former project developer, that also means all along the way I'm pulling my hair out because I know that political risk can shift 180 degrees during any particular election. So here we are in time, without going through all of the different policy positions of our current candidates, former President Trump and current Vice President Harris let's talk a little bit about where they agree on, you know, where we might expect them to either party to be working together towards change.
Speaker 2:Okay, be happy to do that. All of the party positions are in favor of improved predictability. We definitely would want to see that. I know industry wants to see that in the offshore environment and insofar as it's possible to increase the speed of approvals and permitting timelines, that would be great. I don't think anybody disagrees with that that I've seen play out. Maybe you want to speak to activities in the Gulf of Mexico first and I can add to that as far as oil and gas development is concerned.
Speaker 1:Yeah, sure. Well, and I'd say probably a place where the candidates are more alike than different is the realities of oil and gas development in the Gulf of Mexico are already established, a huge economic force, both to our energy system in the United States as well as to employment and tax revenue, and so that's not a system that we expect to see kind of fundamental changes to right. We've seen, even in Republican and Democratic administrations as they come in, even if they have a campaign position that might be on one side or the other of that, we tend to see that that stability of oil and gas development continues on. It keeps moving forward. There are some adaptations to it, of course, but that's a pretty well-established industry that keeps moving. I think the place where this gets really interesting are in the ones that don't have quite as much flywheel behind them. Right as we talk about offshore wind developing in the United States or maybe development in other parts of the US have long history of development in place.
Speaker 2:I think that's true. I think, if I could elaborate on that a little bit from personal experience I think we lived through a couple of administrations, including the Clinton administration, to some extent the Obama administration, where we came in with an idea that, hey, we're going to turn off the oil and gas activities in the Gulf of Mexico. Issues with regard to climate change are more important and I think there was a real recognition fairly early, although it took a little while that this is a fundamental component of both the nation's economy, the regional economy, and our energy diversity situation, and that was just not going to happen. It was going to be. These are things that we're going to continue on, even though the long-term policy objectives of the administration might be different.
Speaker 2:And, if I could bring it to the Trump administration, I think people failed to recognize this. But the Trump administration came in. They were very dubious about offshore wind, opposed, but in fact, the processes were already in place and it was right after Trump's election that the industry showed clear desire to move forward with offshore wind with the first New York sale in 2016. And even after the Trump administration was sworn in, there was a sale in North Carolina that was extremely successful and then a massively successful sale in Massachusetts. Now things turned a little bit after that, but the point is there's a certain amount of continuity that's going to be there either way, and we'll talk some more about that.
Speaker 1:Some of the places where they clearly differ. You know our current crop of candidates is what kind of offshore energy ought to be our focus for the future, and so we do see some differences in around offshore wind in particular, right, and we do see a recognition kind of and this is an oversimplification, but a general Republican position supporting oil and gas development, including offshore oil and gas development, and a Democratic position supporting renewable energy development with enabling policies throughout. Now there's all kinds of subtlety in the details there, right, but we did see that offshore wind is one of those subtleties that really gets pulled into two different directions by each of the candidates.
Speaker 2:I think one of the concerns that I have with it is that so many people view it as an either-or situation. We either have to fully support exclusively fossil fuels or just dump fossil fuels completely and get into renewables, including offshore wind, and I really do not think that that is what the future holds for us. And when we talk about transition, we too often think of it in terms of one or the other, when in fact, what we're going to have is the two playing off of each other, hopefully supplementing and complementing each other in the long term on an economically viable basis.
Speaker 1:Yeah, yeah, Jim, you and I both share that kind of I think, ultimately pragmatic position that we need it all. We need to do it responsibly and we need to do it for the benefit of our country. Maybe it's more in the details where we really start to separate the political parties. Let's hope we can at least agree on those fundamentals, simply Right. So, Jim, now you have this great experience of being present during I think you mentioned eight you know the starts of eight.
Speaker 2:Eight transitions, not nine administrations.
Speaker 1:Eight transitions I guess, yeah, amazing Throughout the course of my career. I don't know. We're not talking. The Washington Adams transition.
Speaker 2:I know we're talking a little later in time, I know. But if you want to talk Washington-Adams, we can go there if you want, but go ahead. I'm sorry.
Speaker 1:I've got to brush up on my American history. So, Jim, what are some of the first things that you've seen being behind the scenes? What do we expect at the start of an administration?
Speaker 2:This transition is going to be neither. Neither Neither a complete cold turkey transition from like it was from Obama to Trump, or a complete 180 degree turnaround of all new people. Both of these administrations, or potential administrations, have some continuity, and typically at the beginning of an administration especially one that is a complete turnaround administration, especially one that is a complete turnaround you have a whole bunch of new appointees and you have a desire or a certain amount of time that's required in order to get to the point where you're effectively managing the government through the political appointees. There's a standing joke about how it takes six to 12 months for a political appointee to find out where the restrooms are, and typically the term of a political appointee it goes from extends from about 12 to 18 months.
Speaker 1:So that gives you a little bit of a, but I'm not disparaging any political appointees, I'm just saying but we recognize that they're both. You know, they both have a track record already, right, right.
Speaker 2:In this particular yes.
Speaker 1:In this case, and they also both have, you know, I think, what we would all recognize is pretty serious and experienced likely candidates for some of those major roles you know Secretary of Energy, secretary of Interior, for example. You know, one might expect the Harris administration to have, you know, literal continuity in personnel across those roles. I think that's what we've heard and we've got an idea of where President Trump might head with some of that from his campaign positions. But, either way, they've already learned the building and they've learned the layout. Yeah, there you go. We expect them to get you know, to start implementing their policies in various ways.
Speaker 2:The Trump administration has its people from four years ago, but there's a lot of newbies as well. The potential Harris administration obviously has a lot of continuity and the appointees that are in the government now and uh know a lot of the ropes. So it's going to be uh, uh. It's not going to be the same as a complete changeover, but it is going to have some continuity and hopefully we'll move forward pretty rapidly with uh, with policy implementation.
Speaker 1:Right.
Speaker 1:So I mean and as a private sector developer, I'd feel like, once the results of the election are known, I have a pretty good inclination which direction the administration will head in a general sense, although project by project, that makes a difference, you know, and we can talk a little bit more about that by project that makes a difference, you know, and we can talk a little bit more about that, how those affect particular projects at some point in our discussion. So let's talk a little bit about continuity and the levers of influence that a new administration can use. Jim, you've seen it all right and I guess maybe the first thing to say is the ultimate levers of power are legislative right, the ones that require passage by Congress and then approval by a sitting president. But let's talk a little bit about some of the levers that new administrations have.
Speaker 2:Well, the one that first comes to mind, of course, is the executive order, and it's probably the most unilateral exercise of power, legitimately and if we can relate it to the offshore wind situation. We're hearing a lot of the rhetoric in the campaign about what's going to happen on day one and the like, and very possibly some dynamic or extreme measures may be undertaken through the executive order, but I really do think you need to keep in mind that that's not necessarily the case and you have to look at whether or not the objectives will be achieved. One of the things that's very different about the offshore wind industry now for this transition than it has been in the past is that there's a lot of existing leases. I mean, I was able to work through many fascinating years of very aggressive leasing and the Biden administration has continued to do that, and these contracts, if you will, are in place. So the exercise of power to undo agreements between the private sector and the federal government is not something to be taken lightly. So you'd have to question whether that's going to be the case.
Speaker 2:You'd also have to examine is it possible that a new administration, a new Trump administration, would be targeting existing leases and approved projects? It's pretty hard to imagine that that's the case. The other possibility is, of course, the budget process, which also involves the legislative branch, where resources would be redirected from the offshore wind program, let us say, to other deemed higher priority programs, and that's certainly a possibility. However, it doesn't take place overnight. It's like many of the things in government, for good reason, take a much longer period of time, and the budget process takes a couple of years. So whether or not that is an exercise that would, for either administration is going to have an immediate effect, is probably not the case.
Speaker 2:Where they can, I think where a new Trump administration, like it did in its last administration, it can affect the speed at which something like leasing advances. It's a very aggressive schedule that's been pursued by the Biden administration and is extended, has been identified to continue out for several more years, and there's the ability to slow that process down. I think there's some who would argue that that process maybe needs to be slowed down, but it would be different for the two administrations the nature in which they do it. So that also argues against the idea that something is going to turn around on January 21st. Yeah, turn on a dime there In either instance.
Speaker 1:You know, I think one of the things that I've appreciated you know, I experienced it in oil and gas, and now we see it in offshore wind too is the planning cycle, the five-year plan, so to speak has helped introduce predictability and, as you say, at least on the front end of leasing right as the opportunity to gain potential access Boy.
Speaker 2:that's a whole nother podcast.
Speaker 1:I know, so we'll talk about that at some point. But what that does allow is a clear understanding of what's likely to happen in the future. That doesn't mean projects are successful right. That's just the tip of the iceberg on getting a project underway by a developer gaining access to that kind of responsibility. That does help you understand the larger context of what else might be going around. So I think that's a really excellent thing to bring up, and we talked about this a couple of times before.
Speaker 1:But there are more subtle ways that administrations can influence projects, perhaps further along than the leasing early stage planning phases. We talked a little bit about timelines and approvals, and we talk a lot about litigation. I'm bringing in a topic that's as near and dear to what I was constantly thinking about in the private sector. Major offshore projects often experience litigation. In fact, good developers plan for it, but they plan for it in specific. Where it might happen. At what point do we see the potential for litigation and challenge to pop up? And you know, in the US process, environmental review is one of those key spaces during project approvals that allow lots of different entities to have standing Right, and so we've seen different administrations affect legal arguments around the specific projects pretty clearly. Do you want to talk a little bit about where we've seen that happen before and what?
Speaker 1:do you think is the best way to keep projects moving forward.
Speaker 2:Sure. Well, it wasn't long after the Massachusetts sale in 2019, I guess it was. The commercial fisheries have been raising concerns about offshore wind for some time, and although the environmental process had been moving along, the Trump administration used the environmental process to say there's some things here that have to be more fully addressed, and so you could look at that both as a genuine environmental concern but also a mechanism to slow things down a little bit, which may or may not be the appropriate thing to be doing, but indeed that did happen with Vineyard Wind in 2019., and it is something that we may see applied to project review and approvals as the administration develops.
Speaker 1:It struck me earlier this year. We saw this year let's see a suit against Dominion Energy's Coastal Virginia Offshore Wind Project, brought by the Heartland Institute amongst um. Let's see a suit against dominion energies coast of virginia offshore project uh, brought by the heartland institute amongst others, of uh north atlantic bright whale impacts right, a real key endangered species environmental issue which I hadn't frequently heard of the heartland institute being particularly involved in. And so you know the politics makes interesting bedfellows. The direction of the administration can really get manifest in lots of interesting ways throughout the system. That just causes a developer to pull out more of their hair, right yeah.
Speaker 2:And that, if I could just add to that, Ian, that is by no means unique to offshore wind, for sure. We have a very definite stakeholder process for federal actions and state actions, government actions in general. That needs to be more fully vetted sector if you want to talk a little bit more about that, because that certainly affects the ability of the projects to move forward as expeditiously as possible.
Speaker 1:All major projects and their developers are thinking about different types of risk. You know we think about technical risk. We think about economic risk and commerciality. We think about operational and organizational risk and HSE risk and how to do it safely without impacting people in their livelihoods. We also think about risk related to political and regulatory issues.
Speaker 1:Very clearly, that's a clear category of risks that I'm very used to trying to articulate. We can't do offshore projects in a vacuum. Previous generations had the opportunity to develop big projects without a lot of public consultation and even engagement in the projects, kind of at the front end, fundamentally in their design. But we can't expect that anymore, right? The public is engaged from the very beginning of, you know, the siting of a potential wind energy area to provide input on the key challenges and opportunities that need to be created from that, and so developers have to consider those in their projects.
Speaker 1:One of the things that you do with political risks, which we were always trying to get better at, is being very clear where they occur. It's hard to quantify the 180 degree shift that political cause litigation or government support of litigation and if so, how? How does that impact the project? Does it just delay the time of the project or does it fundamentally cause a challenge? Delay the time of the project or does it fundamentally cause a challenge? And so we would build those into our techno-economic models of project development and make sure that we've recognized where they were and that we resourced them strongly when they were of significant potential impact. Any administration and we're talking presidential administrations now here in the United States they have really complex shifting agendas even over the course of their administration. Jim, you know, sometimes the kitchen table issues are first and foremost, and the cost of energy always seems to be one of those kitchen table issues in the United States. But sometimes other issues become critically important too other issues become critically important too, I agree.
Speaker 2:I'd like to point out your point about things like executive orders that, if indeed they do occur, how they affect the risks as assessed by the private sector and the decisions that the private sector makes. These long-term policies, whether they're actually focused on a particular project or not, if they're detrimental to the industry, that can have an effect on the supply chain development, the result being that, even though it isn't a federal policy per se, it may be very, very detrimental and extend the timelines for a number of different projects as a result.
Speaker 1:So, Jim, any final thoughts that you'd like to share with our listeners?
Speaker 2:To bring it all together and it's very hard to predict anything could happen, but I do think that there's the likelihood that we're going to have the continuity that we would expect, even under the extreme policy positions of the two administrations that are potentially coming forward. There's going to be continuity on project reviews. There's going to be some continuity on leasing, I think. Continuity on leasing, I think I think there's going to be some continuity on the implementation of approved construction and operations plan. So I do think you have a steady growth situation with the industry and I think that's a good thing. It's going to be different under the two administrations, under either of the administrations, but hopefully it will continue on in a positive way.
Speaker 1:I hope so too. I was thinking a little bit more philosophical when I was thinking final thoughts, talking about elections and all of this stuff, but I think the key thing is I believe in human agency and our ability to take decisions that help affect our environment, and we all hope to do that in a positive way. From our perspective, pessimism right now is irresponsible. We all have an opportunity to participate in our electoral process and also in the development of good, responsible energy offshore, so let's go do it.
Speaker 2:Well, that's great. I completely agree with you, and I couldn't be more in agreement with regard to human agency, and I can't wait to look it up as to what that actually means. Thanks, Jim.
Speaker 2:And I'm really looking forward to our next episode, ian, because we're going to be talking about what we think will happen as a result of the elections. We will know one way or the other fingers crossed there, of course who the new administration will be, and you and I will have the opportunity to make some suggestions or provide some insights into what the specific activities will be that will affect the offshore wind industry. I'm looking forward to that. That sounds great Jim.
Speaker 1:So, listeners, we still encourage you to follow us on LinkedIn, Subscribe on your podcast service. We want to hear from you. Any feedback you give we'll be happy to consider. We're here to make this better for you as a listener and to share what we know about offshore energy development.
Speaker 2:I look forward to the next time we get together.
Speaker 1:Beyond the Horizon with the Offshore Energy Podcast. There you go, cheers, cheers, thank you.