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 5 - Cutting Through the Red Tape For Green Offshore Energy
What if the key to unlocking offshore energy potential lies in cutting through the red tape? Explore this intriguing possibility with industry veterans Jim Bennett and Ian Voparil, who promise to illuminate the often slow and tangled world of regulatory rulemaking and implementation phases, especially in offshore wind development.
Join us as we dissect the complexities and propose innovative solutions to reduce regulatory timelines without sacrificing environmental and social integrity. From navigating multi-agency approvals to examining the pressures on staff capacity caused by burgeoning projects, we cover it all: FAST 41, the potential of programmatic Environmental Impact Statements, and the promise of better resource allocation and data sharing.
We all know Congress makes the laws, but the executive branch, the bureaucracy, makes the rules. Sounds simple and the goal of regulatory streamlining is espoused by all parties, from legislatures to bureaucrats, to the general public and, most notably, by all offshore developers. But reducing the number of regulations, simplifying the development of regulations and efficiently executing regulations is elusive. Let's take a look at this, the Offshore Energy Podcast next. I'm Jim Bennett and I have over 40 years of experience developing energy in the ocean.
Speaker 2:I'm Ian Valparo 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 afternoon, good afternoon to you, ian. How are you?
Speaker 1:I am fantastic Listeners, you can't see us, but I'm wearing my favorite holiday sweater, Jim. What do you think? I withheld comment, but it fits the holiday sweater season mold.
Speaker 2:Thank you. I think it fits the ugly holiday sweater season mold, but I'm glad to be a distraction only to you, jim, to our listeners. We're always very professional and serious, jim, this is a fun episode for us right before the holidays, but on a topic that you and I love so dearly. Right, we called it regulatory streamlining, and this is something that you know a lot about, and hopefully I have experience too, so hopefully we'll have a good conversation.
Speaker 1:I've heard the term regulatory streamlining as often and as far back as I've heard the term offshore wind.
Speaker 2:Yep, indeed, even in offshore oil. I guess we talked about it too and, jim, you know this is we're going to dive into some of the details and the nomenclature and terminology is important in this discussion. And can you give our listeners kind of the basic terminology for maybe the three different phases that we're talking about around regulations?
Speaker 1:Sure, so that we all know what we're talking about. There's a lot of fancy words associated with all of this. Regulatory promulgation. It's one of those big words. It means rulemaking, it means making the regulations, getting the regulations set. Rulemaking is the process, regulation is the rule itself, and we're going to talk a little more about that. And then we also have regulatory implementation, which is the execution of the program or the steps that are defined by the rule. These first two steps are what we're going to focus on. Of course, there's a third piece, which is regulatory oversight, which is enforcement of the rules, typically federal, federal oversight of developers and operators' activities offshore Great Jim.
Speaker 2:Rulemaking and implementation are those two phases we ought to think about. I know developers often pull their hair out during implementation because large projects have multiple jurisdictions, multiple different consulting agencies, as well as the requirement for public and tribal consultation, and I know that we want to offer some solutions there too.
Speaker 1:We do have two or three suggestions, and most of the time when we talk about regulatory streamlining, we're real good at identifying the problem. We're not real good at identifying what to do next, although sometimes we have Indeed and we're going to hopefully give you two or three things that we really think will be worthwhile pursuits. But let's first talk about rulemaking and what we're talking about here, about the writing of rules. This is the mechanism by which government works. This is what the explicit language of governance, in that programs are defined by regulations. Activities of the federal government are defined by regulations in almost all instances. Unfortunately, the rulemaking process, the process of setting down a rule or a process to move forward with, is a monster In my experience. It's inevitably very time-consuming and a difficult process due to the number of nodes, if you will, the number of people who need to review it and approve it, and these are not easy tasks, and the more people that are involved, the more difficult it is, but that is the fact of the matter.
Speaker 2:Congress makes laws. Those laws often define which agency has a jurisdiction over something, and then the rulemaking processes the way that that agency then figures out how it's going to implement the authority that Congress gave it right Is that. Am I getting that right, jim?
Speaker 1:You know, congress makes the laws, the bureaucracy makes the rules, and it sounds simple, but it's much more complicated than that.
Speaker 2:Okay, well, but great, okay. So now I understand, and I guess that's you know. I feel like that's almost a teaser, because anytime you say something, something act. You know that Congress gave the authority to a certain agency and that's not always the same agency that we're talking about, like for offshore wind or oil and gas is BOM right? So that's the consultation process. We're just kind of.
Speaker 1:Let's talk about that. With regard to offshore wind, I think it would be very helpful for everybody to know that offshore wind came into being. If you will, it was around, but it came into being in 2005 with the Energy Policy Act. That was what gave BOEM the authorization to move forward and from there BOEM needed to create regulations or regulatory program the development of the rules for offshore wind. It took four years from enactment of the legislation until the rules, the program definition, was actually promulgated and issued, and that sounds like a long time. But for a whole new program, the track record for rulemaking is a lot worse than that.
Speaker 1:One horror story that I can share is that I was involved in a program earlier in my career that the rules were remanded back by a court. The rules as they developed were remanded back by a court and the court noted that the Department of the Interior wasn't moving quite fast enough, that 14 years to promulgate the regulations was considered a little bit too relaxed, and they use that term, and that gives you an idea of how long these efforts can take on some occasions. Comparison the modernization rule, which was the changes, the inevitable changes to the program, took the better part of a decade in total. The actual formal steps may have been a little bit shorter than that, but between the changes in administrations, the many questions that came up, the many questions that came up, it took about eight years or so to make that many points. Eight points, eight major points as far as the rulemaking was concerned in order to get it passed again.
Speaker 2:And this is the process that's now laid out that an offshore wind developer needs to go through to develop their project. This isn't the review of a specific project. It's simply laying out the governmental process of reviews, authorizations and approvals that has to occur for then a project to move forward and for projects before what? I guess the energy, no, the renewable energy. On the OCS, the 2009 rulemaking, correct cape wind, right, yeah and so absolutely before boom took or had primacy established in the rulemaking.
Speaker 1:I think the initial agency was the us army corps of engineers reviewing cape wind so that's, that's correct as just an activity out on navigable waterways, but something more specific obviously was necessary in order to be moving forward effectively. And now we have a more clarified process and we also have more, and continuing to increase, experience in applying that process, which is a promising development for the approval of projects.
Speaker 2:From the rulemaking side for offshore wind, do you think we can expect significant improvements that are now going to further reduce the timeline and the burden after we've seen the renewable energy modernization rule?
Speaker 1:I think the low-hanging fruit has already been plucked, but the additional efficiencies that we're going to see, I think, are going to be considerably smaller and much more incremental.
Speaker 2:But we will have maybe the implementation of regulations now moving faster because of practice, as projects are moving through. You could have an administration come in and want to redesign the rulemaking, to change the process, to take on big changes and maybe make things more efficient Do we expect that from the incoming Trump administration.
Speaker 1:Well, that's the $64,000 question, particularly with regards to wind, because, on the one hand, we've heard about how everything's going to be stopped on day one, but then, on the other, examination of the situation reveals that it's much, much different now, in 2024, than it was in 2016. And the process improvements that might be identified in the permitting arena, such as are being pursued by the Department of Government Efficiency or will be, may trickle down if you can use that term to wind. It may actually improve the process for wind. We'll see, but I think the expectation is really that the administration is going to focus on oil and gas and improving the permitting process there, but maybe some of the underlying activities will also improve the process for wind.
Speaker 2:Okay, Jim. So let's turn our discussion towards that second major topic regulatory implementation. And when we say that, we're thinking about the process that any particular developer and project feels that they have to go through to get approvals and permits for their project. And I know when folks talk about streamlining, they're usually thinking about how can that process go faster, right, how can I get the approvals for my project faster so that I can go do it and reap the rewards and benefits of it?
Speaker 1:For offshore wind. This is the diagram that you can obtain on the BOEM website. You've probably seen it the multicolor diagram that identifies the multiple phases, including planning and analysis. The main ones, the main four, to get to steel in the water, include planning and analysis, leasing, site assessment and construction and operations planning.
Speaker 2:Listeners. We'll put a link to one in our show notes so you can see exactly what we're talking about.
Speaker 1:And all of those phases together are very, very time consuming and they have multiple agencies involved and it's very difficult to reduce the six to eight years, difficult to re reduce the six to eight years.
Speaker 2:You know you might also have to consult with department of defense and the faa for the actual sighting and location of your facility and you don't, and you don't want them interfering with all the drones that are out there these days point of time.
Speaker 2:Yeah, good thing we're not in new jersey, right? Who knows what's going on? And so, jim, I think the point is that all of those consultations can't be streamlined away. Right, congress wrote laws that make other agencies responsible for regulations of different aspects that interact with offshore wind, and if BOEM wasn't consulting with those agencies, that would just open BOEM and projects up to litigation somewhere down the line. Is there other dead time, right? Is there dead time in this multi-year journey where the developer may have collected its information, has submitted it and then is maybe waiting on a construction and operations plan and approval? You know, where else might we be able to carve some space out?
Speaker 1:Love to be able to identify all this dead time. I don't know where it is, but even if it's there for any particular project and people have a tendency to look at a project and say, well, there's steps A, b, c, d, e, f, d, and then if there's downtime in there we can just collapse the process. But the problem is especially now we've got I think we've got 35 leases out there. We've got multiple projects that far exceed the design capacity of the staff that is addressing them. So anytime there's space available in that process, if we were just looking at one process, it's being consumed by other projects. So it's not an easy process unless we come to some more fundamental changes in the overall activity in order to reduce the amount of time involved for any particular project and Jim how do you feel about things like what was called FAST 41 under the Federal Permitting Improvements Steering Council, 41 under the federal permitting improvements steering council?
Speaker 2:you know it made a determination that covered projects would have to be held to a timeline of particular milestones and approvals and moving forward. You know, does that just do things like that help and let me say this, and jim recognized you, I say this with all goodwill and humility help hold an agency staff to the fire about getting stuff done, or is that too simple a plot and are there unintended consequences of that sort of thing?
Speaker 1:of the overall benefit, but I do think and I do hope that overall, yes, it helps things, but you have to keep in mind and we talked about the different nodes and levels of participation this has introduced another level of coordination. Even though there's substantial and significant resources available with it and we'll talk a little bit about resources it does require coordination and keeping up with the schedule and making sure that the dashboard is properly up to date and an objective examination of whether or not this is actually making projects move faster. I think would be very, very worthwhile.
Speaker 2:Okay. So in our discussion of the implementation of regulation we've talked about the need for multi-agency regulation, we've talked about the need for multi-agency consultation. We've talked about the opportunities for kind of hard timelines and durable schedules and a lot of transparency around those. And, jim, is there opportunity to have the substance of those consultations with other agencies be more direct, more focused on allowing a project to move forward, or do they always have to be fundamental discussions? You may recall me mentioning back when I was my oil and gas days, when I was helping permit an offshore exploration program off of Alaska. We had a real challenge getting our air permits because the EPA was requiring very stringent, almost national, ambient air quality standards towards the point source emissions of the exploration vessel we were using, and so it was almost like that was a wrench thrown into the works. That did ultimately get resolved. The program did move forward, but it was a real complexity.
Speaker 1:Jim, are there opportunities for us to work better together with all of the different agencies involved? One of the things that I observed that I thought helped move things along much more quickly was when the administration displayed some leadership and made it very clear that all of government was going to be focused on, in this particular case, offshore wind. I think it's true of application across the board. One of the biggest problems we have in the execution of the program and other programs across the government is the stovepiping that the various agencies pursue a very narrow view of what their role is outside the context of what the larger objective is, whatever that objective might be.
Speaker 2:And now let's really focus in on the opportunities for improvement in the implementation of regulation. You know you mentioned the all-of government approach and we touched upon a couple of during rulemaking. But, jim, do you see any low-hanging fruit in front of us where we might be able to speed the timeline and speed the efficiency of getting projects through development, but also retaining that good quality of rigor to make sure there are no unintended environmental or social consequences?
Speaker 1:As we're talking about it, I'm going to touch on another topic that will probably not happen either, at least for offshore wind, and that's additional resources. I don't know that we're optimistic about the wind program getting more resources. We're going to have to make use with what we have within the context of what we're able to do. But there are questions that we should keep in mind about additional resources, if and when they become available, and whether it's more efficient to feed them directly into the lead agencies or directly to the support agencies that do the consultations, because all of these responsibilities came upon the support agencies in the last few years, where they just simply didn't exist before and the resources were not there for them. But there's the opportunity to see if those resources can flow directly to the support agencies to fulfill their responsibilities. And finally, we can look at additional resources through a third party like FIPC, and whether or not the deployment of resources across the government for infrastructure projects might be more efficiently achieved in that way.
Speaker 2:This is something that we talked about a lot in the oil and gas industry. Does your permit application fee ensure that there are enough resources in the agency to process and review your permit in a timely manner?
Speaker 1:And the budgetary process, of course, is always two years behind when the needs are identified.
Speaker 2:So that's also a problem For at least the NEPA part of this that I'm aware of, like an offshore energy project permitting, the government relies upon a couple of third parties to help do the contract. Like, the people who are doing that aren't necessarily full-time employees of BOEM right, and so you know at least that mechanism exists to get resources available that can help.
Speaker 1:The oversight does rest with the full-time employees, for example, at BOEM full-time employees, for example, at BOEM. However, as you're saying, third-party entities are providing a lot of the groundwork that's necessary in order to comply with various regulations, including NEPA requirements, but I have to say no-transcript. There's another area that I think has a lot of promise and there's been some interest in it, and it's developed over the last few years, and that's the concept of data sharing. Most of these projects are associated with the development of data as needed for the particular project, and that data is proprietary. That data belongs to the developer who generated it. Insofar and I think there's substantial interest and willingness on the part of developers to do this insofar as that data can be shared, it may reduce the amount of data collection activities that are necessary, particularly during the site assessment phase. It also may lead to more specific and better decisions as far as leasing opportunities are concerned.
Speaker 2:Great to hear.
Speaker 2:I know that in offshore oil and gas we tended to think of health, safety and environmental issues as common and not commercial, and I know offshore wind is getting to that perspective too.
Speaker 2:You know that anything that one developer does that could improve performance in any of those areas is usually quite readily shared with others to help improve their own performance.
Speaker 2:Lots of ocean information on, I don't know, the CTD casts of the ocean on the East Coast aren't necessarily really valuable to lots of different entities, but sometimes the overall interpretation of that stuff might be a lot more valuable. Certainly, the identification of things like potentially sensitive habitats or pooling resources to understand the migrations of threatened and endangered species or marine mammals those are certainly ripe for data sharing and kind of combination to create a more powerful picture of what's known about those own animals. My first few years in the energy industry I came in as an oceanographer and my first few years were doing really fun environmental science all over the world that people hadn't done before, because the energy industry was interested to go and explore in some new potential oil province in some far-flung part of the world that didn't have an existing base of observations and scientific information about their marine environment. So I think the Gulf of Mexico, from an environmental science information, is probably the best studied body of water on Earth because of all of the and the long history of energy development there.
Speaker 1:Bringing this information together is something that's behind another initiative that the Bureau of Ocean Energy Management is pursuing, and that's the programmatic EIS for projects that are in well, in this case the New York Bight, the New York, new Jersey area, where multiple projects might fall under a single programmatic EIS. That holds promise for reducing the amount of NEPA review and analysis that needs to occur independently for each and every project, which has been the approach up until this point, so that's fairly promising.
Speaker 2:And is that because there's now enough baseline environmental information, baseline understanding of the types of potential impacts of offshore wind projects that you can get to programmatic EIS?
Speaker 1:Yes, it's growing and the information can be amalgamated, but it's also because there's more projects.
Speaker 1:But it's also because there's more projects, there's efficiencies of scale when the number of projects increases again, as opposed to what we've been doing, which is an EIS for every project, because every project was basically new. But we'll see how that goes. I came across another suggestion the other day about improving permitting. A lot of projects are required to do a fair amount of analysis of different issues that are already under a regulatory regime of some other sort and that, for example, air quality or water quality or a host of others. But insofar as a project already has a requirement for a permit and there's 19 or 20 or so of these various permits, federal and state that are needed to make a project come to fruition, that are needed to make a project come to fruition but insofar as an issue might be permitted under a different process it may be is it appropriate to exempt that particular issue from the NEPA analysis and reduce?
Speaker 2:the amount, the larger kind of overall project NEPA yes, yeah, interesting. I mean that is an interesting idea. There's like a whole bunch of degrees of consequence to try to understand there too.
Speaker 1:And I've mentioned twice. You know, insofar as this avoids a regulatory change, that's a good thing. And I think there's an issue that we have to address about the incremental changes that might be gained by improved regulatory streamlining, and that's that. You know, at what point do the incremental changes or improvements that occur to a regulatory program? Are they less than the cost associated with making that regulatory change? Because when you want to change a regulation, what are you doing? You're back in the regulation, the rulemaking game, and that's the monster that we talked about earlier today.
Speaker 1:So it's, something that we need to everybody needs to keep a close eye on as we move forward. Is a regulatory change the best way to go.
Speaker 2:You know, thinking of other potential opportunities. Let's say out there, I know that the Fiscal Responsibility Act of 2023 had some amendments to NEPA mandatory deadlines for EAs and EISs, page limits, publicly schedules, trying to get programmatic documentation as much as possible and then relying upon that. And there were a couple of other things that struck my interest too. One is to study online and digital technologies for storing information, promoting the concept of a single environmental document like Google Docs for co-editing and sharing with multiple parties at the same time, technology out there that can kind of help with the coordination and communication of information between all of the different parties that is required. Maybe that's what Doge is going to focus on, we'll see.
Speaker 1:I hope that's the case and I do think that these ideas are good ideas. Page limits, you know, to me that's a no-brainer because of the alternative, but very difficult to implement and very hard to show the discipline that's necessary to make that an effective solution. But it's good ideas and I hope these ideas continue to surface as we look at what improvements and changes can be made.
Speaker 2:We've offered a couple of solutions there and, listeners, we're interested in your ideas too. This is obviously complex, with lots of consequence and a lot of different engagements that are always required in authorizing and permitting major offshore projects, and we'd love to hear great ideas for improvement.
Speaker 1:And some of them are indeed being implemented, and hopefully the good ones will continue to be implemented.
Speaker 2:Yep Listeners. We mentioned the time. We are the week before Christmas. Jim, I'll be off between Christmas and New Year's. How about you? Some of it Still working?
Speaker 1:Actually most of it At least Christmas week. I'm looking forward to it and I hope you have a great Christmas and I hope you don't feel the need to wear that sweater too much.
Speaker 2:It'll spare others eyesight, but feel free. Thanks, jim, you know.
Speaker 1:I hope you have a great holiday too, okay and we'll be back after the first of the year. I don't know that we've identified a next topic, have we Probably not?
Speaker 2:You know we haven't. We're in process, so you and I will spend some of the holidays talking about what our next topic is going to be. And, listeners, we hope you had a great 2024, and we look forward to listening and hearing from you all in 2025. Thanks for joining us. Cheers, cheers.