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 6 - Is Something Wrong with the Way We Do PPAs?
Special guest John Dalton of Power Advisory joins Jim Bennett and Ian Voparil to discuss the recent spate of offshore wind project cancellations and power purchase agreement renegotiations. We highlight the challenges faced by developers and states in navigating procurement processes, allocating risk, and keeping costs down for ratepayers. The discussion underscores the need for flexibility in pricing structures to adapt to changing market conditions and the importance of local benefits to stabilize the future of offshore renewable energy.
We discuss:
• Comparison between real estate development and offshore wind projects
• Definition of solicitations and Power Purchase Agreements (PPAs)
• Analysis of recent cancellations in offshore wind projects
• Discussion on the need for price escalation in PPAs
• Exploration of economic and societal benefits from offshore wind projects
• Importance of community engagement and stakeholder trust
• Call for innovative procurement strategies from states
• Recognition of the evolving landscape of offshore renewable energy
Have you ever taken a drive down a country road and seen one of those future home of lion estate signs, that's, selling houses in a place where they don't yet exist? Maybe there's an impressive neighborhood entry with columns and lion statues, but all you see is the initial dirt road cut into the woods and maybe a bulldozer. Would you want to buy a house in a neighborhood that doesn't yet exist? There's a natural tension between the developer, who'd love to sell all of the houses before the neighborhood was even built and have no capital at risk, and the buyers who want to be sure that they get a good deal for having to wait, like below market sales prices or mortgage rates or maybe cool community benefits like a swimming pool in a playground.
Speaker 1:Our nation's in a similar scenario with the energy to be produced by offshore wind in the future. It's a story about risk management and risk allocation, with tensions between developer states and, of course, the rate payers. And to explore these tensions we have a special guest, john Dalton from Power Advisory, joining us. So grab your suit and let's dive into the Offshore Energy 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 Valpero and I've spent the last 20 years developing offshore energy projects around the world, and this is the Offshore Energy Podcast. Hey, jim, hey, how are you doing, ian? I am fantastic. Happy New Year. How are you Happy?
Speaker 2:New Year to you Doing well, staying busy.
Speaker 1:Staying busy. Yeah, it's been a while since we've gotten a chance to speak together and with our listeners. Do you have any exciting New Year's resolutions that you'd like to share?
Speaker 2:You mean that haven't been broken already?
Speaker 1:Yeah, I guess mine might fall in that bucket too, Jim. It is shaping up to be really an exciting, tremendous and all manner of uncertainty 2025 for offshore energy here in the United States and lots of opportunities, I think, for the US to continue to forward its vision for energy, its vision for economic development and the vision for how we all get along and work together towards these goals. There's one thing that's really been on my mind lately, and this is specific for offshore wind how the solicitations for power and the agreements to sell power and provide other services really are challenging in the United States at this point, and so let's talk a little bit about this in some detail and maybe, for our listeners, we'll just get some definitions out on the table, right, Just to make sure we're all talking from the same sheet.
Speaker 2:Yeah, and for the benefit of the newer listeners, I'd just like to point out that when we talk about PPAs and solicitations, we're talking about the state side of offshore wind program. Go is the proper combination of offtake, which is through PPAs and other mechanisms, and leasing, which is through the federal government and the Bureau of Ocean Energy Management that I used to be a part of. So these are two very, very big pieces and they're both essential and they need to fit together in order for the program to run well.
Speaker 1:Jim well said. You know this interplay between developers, state and federal authorities super important and, of course, required for offshore wind in particular to be successful. So a solicitation is the state's request for proposals from offshore wind developers to deliver their offshore wind energy to the grid, and the amount of power and the schedule of procurement is usually established by a state law or an executive order. So that's that States run a competitive solicitation that outlines key criteria to be evaluated, including the price of the power to be purchased, and they also tend to include non-price criteria. These are things that the state would like to see from successful offshore wind projects, like workforce development, local economic benefit, maybe creation of a domestic supply chain and community benefits and the mitigation of what people call negative environmental externalities. And there's a lot of different factors that might be a part of the solicitation and a part of the of what people call negative environmental externalities. There's a lot of different factors that might be a part of the solicitation and a part of the review that states do when deciding who to go with in their solicitation process.
Speaker 1:And, very specifically, a power purchase agreement or PPA is that long-term contract between the developer and the buyer for power, like that's usually a state agency or maybe a utility company right when the buyer agrees to purchase a set amount of electricity generated at a predetermined price.
Speaker 1:So this essentially guarantees part of the revenue stream for a developer once the project is delivering electrons to the grid, now very different from oil and gas. Sometimes there's also something called an offshore wind renewable energy certificate, or OREC, which is a tradable credit that represents the environmental benefits of the generation of electricity from offshore wind, and those can be bifurcated from the sale of the power itself, the energy offtake, and often are sold into a separate market. That also helps the state meet those kind of non-price aspirations around economic development or decarbonization or procuring power from different types of renewable sources. Just shy of half of the proposed offshore wind projects in the US have either canceled been canceled by the state, or at least renegotiated their contracts or power purchase agreements over the last few years. It's not a tremendous record of success, is it?
Speaker 2:No, it's not, but keep in mind that these are two separate processes to a large degree, and even though a PPA may not be worked out, it doesn't necessarily mean that the project is dead, and that's a very important factor as we move into the next few years as we move into the next few years.
Speaker 1:We have got the perfect special guest to dive into the challenges in the solicitation and agreements markets, why Offshore Wind has experienced some of these challenges in the last few years and also maybe some really insightful ideas on how we can improve that likelihood of success in the future. Listeners, we'd like to welcome John Dalton, president of the Power Advisory, to join us and help us get to the heart of the matter. John, good to see you.
Speaker 3:Ian, good to see you, and Jim, it's great to be talking with you again and really appreciate the invite to participate in your podcast here.
Speaker 2:Absolutely. As Ian said, you're the perfect person for discussion on this topic.
Speaker 1:It's great Listeners. If you don't know John, you sure ought to. But, John, would you mind telling us a little bit about your experience and what Power Advisory does?
Speaker 3:Power Advisory is a management consulting firm focused on the electricity sector. A major area of practice of the firm is supporting various entities with their procurement efforts for offshore wind. This typically includes the various states. We in the last several years have worked with New York State in the form of NYSERDA we're currently serving as the independent evaluator for the Massachusetts solicitation. We have worked with Rhode Island on several of their procurements, currently doing some work in North Carolina and have supported Maine on several of their procurements, currently doing some work in North Carolina and have supported.
Speaker 1:Maine on some of their procurement activity as well. You're the perfect person to have on this, because not only are you advising the state side of things, I know that you also help the developers with recognizing where they can go with their negotiations as well, too. So this is great. So, john, you heard our intro help set the stage for our listeners about what's going on here in the us yeah, you know, I think you some summarized it well.
Speaker 3:Um, right, the solicitations or procurement processes, um, are the framework that's used by the buyers to determine who they're going to be awarding power purchase agreements to and, in these solicitations, they will outline evaluation criteria to provide developers, the parties who are participating in these solicitations, provide developers, the parties who are participating in these solicitations, with guidance regarding what are they really looking for. You know, obviously, price is critically important and price typically represents the majority of weight given in the evaluation process. But they also look at the full range of other considerations, including trying to understand the overall project risk profile. Right, how mature is the project? Where do they stand in their permitting process? Where do they stand with respect to the procurement of equipment? What have they done in terms of their interconnection studies? You know, is there continue to be outstanding risks associated with how the project's going to interconnect to the onshore grid? As well as looking at the economic benefits that the project might be offering the state or the region, as well as any other benefits? You know, are they proposing agreements with?
Speaker 1:labor, are they?
Speaker 3:looking at specific programs to mitigate any environmental impacts. That's related to the procurement framework at the highest level.
Speaker 1:These are, I think, really creative and innovative ways for the states to try to get multiple objectives not just the purchase of power, but also a control on the price of the power, but also all of these other benefits to society that I know in oil and gas we used to talk about a lot, but there wasn't always a specific structure to negotiate those in, at least in other jurisdictions of the world. Offshore wind in the US sure seems. We've learned the lessons that have come from offshore oil and gas before to really make sure that those are incorporated into the contracts that are signed. What's going on with the cancellations? Because you read the news and many of them. I'm not sure my statistics are exactly right, but many of them are challenged. Give us your sense of what's going on in the market over the last few years.
Speaker 3:Yeah, I think you've captured it accurately, ian. There have been a number of cancellations. I think that what these cancellations reflect many of the challenges that the offshore wind sector has faced. When the initial set of contracts were first procured in the initial solicitations, this was a time when offshore wind costs were declining and the procurement frameworks in the power purchase agreements, or PPAs, typically didn't provide for the escalation of the contract price over the term of the contract. They basically required fixed pricing that was specified for the full term of the contract, and these are typically 20 or 25-year contracts. That works when costs are declining.
Speaker 3:But, as probably many of the listeners are aware, over the last several years there have been a number of economic headwinds that offshore wind projects have faced. First of all, we have the inflation that really was unleashed by the COVID pandemic. After that we had the Ukrainian war. That had significant impacts in terms of the offshore wind sector because many of the European countries doubled down on their offshore wind procurement targets as energy independence became increasingly important. And the third factor was the Federal Reserve's efforts to try to get inflation in line by tightening on credit and the federal funds rate, and that obviously resulted in pretty significant increases in interest rates and, as everyone knows, offshore wind projects are highly capital intensive and increases in interest rates has a profound impact in terms of the level of cost of energy.
Speaker 2:Yeah, I'd just like to note that, yeah, it has been some rough seas, so to speak, for the developers and it's not exactly what we had all hoped would happen in terms of the development of these projects. But the factors that you are identifying, john, they're very much factors that have to do with the viability of the project and, of course, the question that's going to be raised immediately is well, what about the rate payers? I know it's tough on the developers, but the whole idea here, or one of the idea here, is to get electricity to the consumers at a reasonable rate, to the consumers at a reasonable rate. So how does all of this affect what the ratepayers is going to end up paying?
Speaker 3:Great question, you know right, it's the cost of offshore wind have increased and that has an impact on ratepayers, and I think that's why, you know, states are being particularly careful in terms of their procurement decisions and, as well as that, they're rethinking how they contract for offshore wind changes in terms of allowing for the escalation of the contract price to really reflect some of these inflation factors that are really driving the increase in the cost of offshore wind.
Speaker 2:I guess also from a policy standpoint, not just the numbers in terms of pricing, but from a policy standpoint. We have an issue here that is getting boiled down to and I'm going to use the S word subsidies, either in terms of investment tax credits, production tax credits, or in terms of the state guarantees through PPAs. In terms of the state guarantees through PPAs, and although subsidies, there's various types of subsidies the word gets thrown around and offshore wind gets labeled with it, and I guess the question is is that a fair characterization of what goes on with regard to PPAs and other offtake mechanisms?
Speaker 3:I guess to me subsidy is a little bit of a loaded term. There are obviously right, there are investment tax credits. Yes, an investment tax credit means that there's a tax benefit that a project's receiving and, effectively, taxpayers are making that project more economic for electricity customers. But the way I view it, Jim, is there's been a deliberate policy decision to implement these investment tax credits to support an industry that's critical in terms of if the US is going to be able to achieve its climate change objectives, which to me is an essential issue, and in the US Northeast there are a very limited number of non-emitting resources that can be developed to achieve these very aggressive greenhouse gas emission reductions, and offshore wind is one of those resources and it has, you know, multiple benefits that, from my perspective, justify and support the establishment and maintenance of these investment tax credits.
Speaker 1:And it's not just the decarbonization of the existing power system too, but it's we expect that we're going to use more and more electricity. You know, doubling the projections for electricity use by 2050 ish nationally, and even sooner in some states and parts of New England. On the sale of power, that is a point that it's easy to focus on the price, but it is also the creation of economic opportunity. It's the creation of workforce opportunity. It's the creation of small businesses that can support larger businesses. It's the opportunity, I think personally, for America to get into this energy industry and potentially help lead the next iterations of its generation around the world. Here's looking at you floating wind, right. The US also did that in oil and gas, by the way, back in the day and, Jim, I know you were involved. You know, back in the late 80s, mid 90s, deep water oil and gas exploration and then development Absolutely Really started here.
Speaker 2:Many industries benefit from various types of assistance, whether you call them subsidies or otherwise. But, of course, keeping in mind the policy implications and the policy directions that we're looking at, that definitely is a major factor, a major consideration as to how much in the way of subsidies large and explicit versus small and implicit various industries are going to receive.
Speaker 1:So, john, you've talked a little bit about some of the reasons why we've seen this complexity over the last few years complexity over the last few years. I do want to also talk about the timing and the sequence of when solicitations come out and when developers bid with their project ideas into this, because, as I've been watching the market, I see some really interesting things that are quite different than the way that I was taught to deliver major opportunities and then projects in the oil and gas industry.
Speaker 3:Certainly, and the timing varies right. So we now have an industry where there are some mature projects that are seeking PPAs and in New England this would include South Coast Wind and New England Wind One, two projects that previously were awarded contracts by Massachusetts, but those contracts were terminated by the developers based on the various economic conditions that I referenced earlier, various economic conditions that I referenced earlier. So these are two mature projects that are well-advanced and are distinctly different than the types of projects or the projects that were competing in the first round of solicitations.
Speaker 3:You know, that would be the Vineyard Wind Project right, which secured a contract in the 2018 timeframe and is, you know, right now kind of currently under construction. So right, so six, seven years later from when the project was originally bid it's entering construction and you know that has there's a lot of implications associated with that length of time, because I think that with time comes uncertainty. Right Things can change, and that's what we saw with many of these second rounder projects that bid in solicitations where they committed to a contract price.
Speaker 3:Things changed and they couldn't perform based on the contract price that they had committed to by shortening up the period from when projects submit their proposal commit to a price to when they secure financial close when they go to final investment decision.
Speaker 3:That's one way to kind of de-risk the projects, but that requires a more mature project. That's one way to kind of de-risk the projects, but that requires a more mature project and as a result, to get that more mature project developers have to invest millions of dollars, which is at risk. The transmission interconnection agreements to probably commit some funds with equipment manufacturers, so it is lower risk to rely on more mature projects, but that comes at the requirement for developers to put quite a bit of capital at risk.
Speaker 1:There's a couple of project principles that I learned when I was working for a big oil and gas company doing offshore projects. You have to make sure your promises early are very realistic. We tend to have a lot of optimism when we're looking at the future. Clear, competitive and defined projects were ready to come to investment decisions. No open switches, no selection still to be made, indeed, detailed engineering and design already completed, and I think this mindset really came from suffering the arrows of failure before, when a project may have decided to take investment but then ran into a technical issue that caused it to change and, lo and behold, caused the schedule and budget to slip significantly. At the point at which you are negotiating commercially, you better know exactly what you want to build, exactly how you're going to do it and indeed have the contracts in place so that you can.
Speaker 1:The lack of price certainty for most E&P companies and that's the part of a large oil and gas company that I worked for they're all price takers. We are selling our product at the going rate. We are used to the wild variations in price that can be achieved in the market, especially for projects that last 20, 25 years, and so that risk, and bearing that risk was a part of the culture that we developed. We came up with all of these strategies to help mitigate that risk, but ultimately we knew that we couldn't control oil prices at any particular time in the future and our range of scenarios that we planned through were very wide. We had to make sure our projects were robust in very high price environments where you're lucky, and even much lower price environments than average.
Speaker 2:I think, ian, that's a great point. Learning those lessons is to put it mildly. The comparison that you're making is absolutely true, but at the same time, the oil and gas industry went through that learning curve over multiple decades, and the wind industry is starting to go through that learning curve now.
Speaker 3:I would definitely agree with that, jim. I think that developers you know developers are different. They have different financial capabilities and there are a number of developers that clearly have the financial wherewithal to make the investments necessary to mature their projects and invest the millions upon millions of dollars to get them to that point. Other developers, I think, are more interested in terms of securing a contract, maybe not at day one, but earlier on in the development process, because these development dollars are the most expensive dollars.
Speaker 1:That developers have access to.
Speaker 3:You know when they, after they secure financial close, secure financial close, they're able to get money from banks and that money is considerably cheaper. And with a contract in place and with financing secured, you know the underlying risk of the project go down and the cost of capital goes down.
Speaker 1:What are the key things that you advise states and you know your developer clients to make this. You know clients to make these projects ultimately become real.
Speaker 3:One of the obvious ones and it's a reform that all of the states and buyers have made would be to make sure that in the power purchase agreement that there is some form of escalation provision that allows the contract price to escalate from at least the period when the proposal was submitted to the financial close. That's the period where the project is at greater risk.
Speaker 3:Once at financial close, they can get some more certainty regarding what their projects are. Once a financial close, they can get some more certainty regarding what their projects are, recognizing how capital intensive these projects are. So that's one very important reform that all parties are making to embed within there some consideration of the underlying interest rate environment, because that's also a critical driver in terms of project costs.
Speaker 1:Give us a couple of examples of escalation provisions.
Speaker 3:They vary, so some states have used the consumer price index. Very straightforward approach. However, the consumer price index, from my perspective probably you know it's a consumer price index. It isn't meant to rack the costs of an offshore wind project.
Speaker 3:So a number of states New York, massachusetts, new Jersey have developed what I would view as more sophisticated indices, what I would view as more sophisticated indices which really try to capture the appropriate proportions of kind of cost inputs. So this would include steel, this would include copper, this would include there'd be a labor component, there might be a manufactured goods component and typically there's a fuel component as well. They vary from state to state but you know there is quite a bit of work that's been done with respect to these.
Speaker 1:While the state still holds kind of a ceiling to the ultimate cost, to rate payers right.
Speaker 3:Yes, so recognizing that one shouldn't require rate payers to absorb unlimited risk. In the Massachusetts solicitation they specified that the escalation would be limited to 15%. And it isn't just escalation, it can be de-escalation. These are symmetrical provisions. If commodity prices, if the various components that are in the index, go down, the contract price would go down. So they're symmetrical and that's one of the important benefits that customers or rate payers would realize.
Speaker 1:Is this common with other renewables? Are they also used? Is this really unusual because offshore wind is so unusual and important, or do we also see it in others?
Speaker 3:We are seeing it with other procurements as well. It's become increasingly common. I think that the reason why it might be more important for offshore wind is the length of time from when a proposal is submitted to when a project achieves financial close.
Speaker 1:Um, so that's really kind of the to me, the interval where risk can cause contract pricing to go awry these non-financial considerations, uh in solicitations and that developers provide uh input on, seem to be so important for the reason why we want offshore wind to be successful. Where have you seen some really good practice examples? Where have you seen that really sharpened to make sure that you know offshore and developments are providing benefits to america and to americans?
Speaker 3:I think that one thing that we're seeing that to America and to Americans. I think that one thing that we're seeing that is really important is if you're going to be giving weight in the evaluation process to commitments that proponents are making for the creation of economic benefits for environmental mitigation, there needs to be some commercial framework put in place to ensure that they live up to the commitments that they made.
Speaker 3:So virtually all states negotiate a memorandum of understanding, or MOU, with a developer where they make them commit to delivering on the various critical elements of their proposal, focusing on, you know, the job programs that they're proposing, the grants that they're going to make to state universities, the commitments that they are making with fishers to support research or to replace equipment.
Speaker 3:So often we'll see a memorandum of understanding or MOU, between the developer and the state Department of Commerce or the state Department of Environmental Management or Environmental Protection, so that, from our perspective, is an important best practice which most states are employing and really is critical to kind of making sure that the considerations that result in the project being selected are delivered on by developers.
Speaker 1:This is new and evolving and very interesting space for us. Government support, as well as some government finance, creates these more widespread societal benefits too. Any additional good practices from the developer side?
Speaker 3:I think some of the good practices are really the engagement that they do with the communities as well as the various key interests in the state right. They have to recognize that this project, if it's going to be successful, requires stakeholder support.
Speaker 2:Yeah.
Speaker 3:They have to early engage with these parties and get out in front and make sure that they become a trusted voice with respect to the impacts of the project Because, as we all know, there's a lot of chatter out there regarding the impacts of offshore wind and it's important that developers are there to be part of the conversation and that they as well have other parties that can support them and can become trusted partners for the parties that are looking at these projects and have to make decisions as to whether they're going to choose to support the projects.
Speaker 1:But we've really gone through this paradigm shift of expectations, both from kind of government but also society, that you have to involve government and society in the early stages to help shape the opportunity and you have to allow them to participate and feel the benefits and also express, I guess, the challenges right that that that new development can create in time and space and environmental impact and conflict with other users. Jim.
Speaker 2:Well, we can't really get away from the fact that we have challenges with the new administration, but in fact it's as much a challenge of the new administration.
Speaker 2:It's been very clearly put forward that we want to be energy dominant, very clearly put forward that we want to be energy dominant. And energy dominant doesn't necessarily mean, and probably cannot mean, any one form of energy. It's going to be multiple forms of energy and I think wind, renewable energy, particularly wind energy, is going to be one of them. And the question is how does it get folded in in a way that is constructive and economically viable? And this is reflected in the appointments that have occurred. The Secretary of Interior he is very clearly and all of the above advocate has been for quite some time and he's got the record to show it as well and so we're going to be including industries that are on the cusp or hopefully on the cusp of being economically viable, including wind energy and the development of an American workforce, an American supply chain and American technology to help support that industry, with the couple of offshore projects that have recently signed and executed solicitations, responses and PPAs.
Speaker 1:there are still permits and approvals needed to keep those projects on track to the schedules that they've committed to in the PPAs, and so that could be a complexity and hopefully that doesn't become an issue for those projects. But, john, are there other pieces that you see that we might want to make sure we keep special eye on?
Speaker 3:I think there's three areas that should be viewed as risks associated with the new administration. One is the timing associated with the issuance of permits. Second would be investment tax credits, the durability of the investment tax credits, and then the potential for there to be tariffs, recognizing that much of the equipment the wind turbine generators in particular the HVDC components if these are offshore wind projects, they're going to require HVDC transmission those are going to be sourced from outside of the US and could conceivably be subject to import tariffs. So that's a cost risk that developers will be concerned with and consideration needs to be given to that.
Speaker 1:And already quite a constrained supply of some of those specialty pieces of equipment, like you mentioned HVDC transformers and switchgear, jim. How can we do this better?
Speaker 2:I think what John has pointed out to us is that there's a lot of complexity in the PPAs and in the offtake agreements, but that, as a larger issue, we have to decide as a society, as a body politic, whether or not these complexities should be pursued, dealt with and even possibly subsidized for the greater good over the longer term.
Speaker 1:Jim. I love it. John shared with us some of these really innovative ways. Now where offshore wind is demonstrating that much wider economic and societal value Projects can better and better time their maturity and their readiness to commit with what the market is willing to accept.
Speaker 3:While we've made progress in terms of these procurement frameworks, there's continued work that needs to be done. Right there's? In the current environment, there are new risks that need to be addressed. Some conceivably need to be shared amongst the parties, and we need to figure out how to do that most efficiently. But I think that there are ways to do that. It's just, we need to figure out how to do that most efficiently. But I think that there are ways to do that. It's just we need to spend the time and need to roll up our sleeves, and all the parties need to work together the buyers, the sellers, the states.
Speaker 1:In our podcasts we have this section called the last drops in the ocean for the week, and that's really where Jim or I mention a couple of other recent things that have happened that aren't on the topic of this podcast but are important for our listeners just to be aware of and, in case they haven't heard about them, to go out and do their own Google search and look, John, you are our guest. Are there any last drops in the ocean that you'd like to share with our listeners?
Speaker 3:Maybe one thing that is pretty on topic and it's something that I just posted on this morning on LinkedIn, and it's it really is. So here in New England we've gone through recently a cold snap where we had not extreme cold weathers but a typical winter cold snap, and in this period we had very high energy prices. And specifically, the energy prices were in the neighborhood, over a five-day period, of about $130 per megawatt hour.
Speaker 3:So when you add that value to the value of the Class I RECs, the value of offshore wind during this period was in excess of $170 per megawatt hour, and offshore wind projects during this period were operating at greater than a 72% capacity factor, so they were operating pretty close to like baseload resources.
Speaker 3:And this is at a period when the system was not under high stress but was experiencing pretty high loads. So that's really some of the value that offshore wind can deliver and is delivering, and I think that's one of the reasons why we really need to focus on this issue and recognize that we have a resource here that can deliver meaningful value to customers and to the full universe of stakeholders out there.
Speaker 2:Reacting to John's comments, I think that's really very, very much on target and appreciate those figures. When you talk about a larger picture of diverse energy sources and all of the above, I think that's critical. Last drop to share with everybody is in this discussion of subsidies, both large and small, and helping industries move forward. I refer everybody to a op-ed piece in the Wall Street Journal last Sunday that took on the task of using the word subsidies and what it meant and whether it was implicitly bad. And I think that in the discourse that occurs, the social and policy discourse that we have, that's a good thing to look at and to think about as we move forward and start to discuss whether or not subsidies should play a role in the development of offshore wind.
Speaker 1:And, I guess, my last drops for the ocean. You know our previous episode we recorded and released before Christmas last year, and now we're coming in right before January 20th, which is when we hope to release this podcast, and so Trump will be inaugurated on that day as president of the United States, and so there may be fast action and executive order from the new administration on energy policy that we don't yet have clear eyes on. So let's hope this podcast doesn't get dated real quick when that happens. So that's one thing. Another last drop I have is a recognition of the passing of president Carter and not being old enough really to remember President Carter and what the nation went through.
Speaker 1:I was doing a little reading and recalled that in the late 70s the US went through its first energy crisis. I kind of remember long lines at the gas station and I certainly remember the tension of my parents complaining about the cost and the difficulty in accessing energy at the time, and Jimmy Carter seemed to be the first president that really sought to reduce America's dependence on foreign oil and foreign sources of energy. And boy, I think that speaks very clearly to where we are right now. The opportunity for Americans to conserve energy provide incentives for the development of our own national resources, as well as to maybe take a leadership role in the creation of new types of energy and new ways to access energy are great things for america's energy future, and we're all a part of making it right now, every day your reference to jimmy carter.
Speaker 3:I just wanted to add to it because because I think from an energy perspective you're right on um he was critical in terms of passing some legislation that really has contributed to where we are today. This is the Public Utilities Regulatory Policy Act. You know PURPA, which you know established the independent power industry and these offshore wind developers are IPPs. So Jimmy Carter are IPPs. So Jimmy Carter, back in 1978, put in place the regulatory framework that really has supported this offshore wind industry and how it's structured today.
Speaker 2:And I can't help but add to that because, unlike yourself, I actually did live through that.
Speaker 1:What was it like, Jim, when the world was a pocketbook?
Speaker 2:Yeah, I actually did live through that as a college student and I just want to reiterate what you and John have said. And it was a real eye-opening experience for the country and Jimmy Carter was good in bringing that to our attention. And I will add that one of my last projects as a graduate student was taking a look at this thing called wind energy and what possibilities it might have for the future. Now it took a while to take off, but it's been going on since since back then and uh, uh, we, we owe a debt to the man a real final last drop.
Speaker 1:There's a really fun new show called landman on paramount plus uh landman tells the story of uh, basically e and p, uh production, oil and gas activity out in West Texas. It's filled with great characters, flamboyant, crazy behavior and has just a tinge of realism in it too. But like every good TV program, it's probably the Hollywood version of what really goes on in Texas and other parts of the US that do a lot of energy development. I found it really fun to watch and so let me recommend it, Jim, to you and John, and also to our listeners. If you have a chance, take a look at an episode. They're very entertaining.
Speaker 2:Yeah, I'm sure that it's an artistic view of Landman, but they are real and they used to come to the Department of the Interior and we used to have meetings and they had interests.
Speaker 1:Yeah, and the main character is played by Billy Bob Thornton, who's quite an actor and I'll say too, I've met a lot of characters that aren't quite Billy Bob Thornton and such good actors but there's some ring of truth to the role as he's delivering it. We're at the end of our episode. We ask that you share with your friends. We've had a couple of great folks share our podcast on LinkedIn, that's. That's seen really expansive growth in our listenership. So thank you so much for sharing. Send us any topics that you're interested for us to discuss and, of course, if you're interested to be a special guest, like John, come join us on the podcast, but reach out. I think you all have our emails and you all know Jim and I on LinkedIn, so we're easy to get in touch with Our next episode. What do you want to talk about?
Speaker 2:This time I think we're going to have a little fun. We'll have some game show activity test your knowledge of offshore wind. It should be of great benefit to newbies, but it should also be very useful for those who are experienced and can help clarify and tell Ian and I if we're on track or maybe we missed the mark here. But, we're going to have a little quiz time and it should be enjoyable for everybody. I hope you join us.
Speaker 1:So, jim, are you and I going to quiz each other, or do I get to write my own questions and then answer them?
Speaker 2:I think I could be really good at that one, I think you should write your own questions and give them to me, and then I'll ask you something else. All right, that's the way it's going to work.
Speaker 1:I look forward to this. I think that's going to be a lot of fun, chip. Thanks, thanks, listeners, we'll see you again soon on the next Offshore Energy podcast.
Speaker 2:And thank you, john, thanks for joining us. Thank you both Really enjoyed it, Bye guys. Bye, bye now, bye now.