WASHINGTON REPORT VOLUME XLIV DECEMBER 2015 IN THIS ISSUE SPECIAL EDITION Thad Allen...........................1 2015 NOIA FALL MEETING REVIEW Thomas Barnett.................1 Ann Coulter........................2 The National Ocean Industries Association Allen added that in events like the Macondo Robert McNally..................2 (NOIA) held its 2015 Fall Meeting from October Well accident, politicians are under tremendous Gale Norton........................3 7 to 9 at the Phoenician in Scottsdale, AZ, with pressure to show results and to be seen as lead- Kirk Lippold........................3 139 members in attendance. ers, but often they can actually hinder the pro- WCR Panel..........................4 cess. When asked what he would have done Committee Speakers.....4-7 The meeting featured nationally known experts differently, Allen said he would have taken con- Executive Committee & on important topics impacting the offshore en- trol of the airspace earlier. It is difficult to juggle Board of Directors.............8 ergy industry, including global affairs, politics, media fly overs, oil spotters and all the neces- Membership Committee..9 energy policy, regulatory issues, accountability, sary response equipment during the heat of a safety and security. Presenters and attendees crisis, and by not closing the airspace sooner President’s Report........9-11 discussed the implications of the looming Presi- rescue and cleanup crews were placed in un- Reception Photos........12-16 dential election, the search for the next House necessary danger, he said. Speaker, the economy, regulatory hurdles fac- ing the industry, offshore technology, offshore Finally, Allen commended industry for avoiding renewables, and seismic testing in the Atlantic. further accidents with the hundreds of vessels that were used throughout the clean up and re- GENERAL SPEAKERS sponse phases. He said that even though this THAD ALLEN achievement was not reported, it was still an Booz Allen Hamilton Executive Vice President extremely impressive accomplishment. and Former U.S. Coast Guard Commandant Thad Allen recounted some of the challenges THOMAS P.M. BARNETT he faced during the Macondo Well incident. He The highly regarded global affairs expert, stra- Thad Allen, stressed the importance of following established tegic planner and author, Dr. Thomas P.M. Bar- Booz Allen Hamilton contingency plans and said that one of the major nett captivated the audience and probed some challenges presented by Macondo was making of the changes and consequences the world will sure that the Federal leaders understood the encounter as energy loses its strategic centrality response and clean up roles of the government for the west and rising Asian powers scramble and responsible parties under the Oil Pollution for energy. Act. Allen said industry has both the capabil- ity and the ability to conduct the cleanup and Dr. Barnett elaborated, saying that despite response activities, while it is up to the Federal the American public perception, the U.S.’s di- regulator to see that the process is managed rect dependency on the Persian Gulf hasn’t and coordinated. existed for years. Instead, energy exported from the region fuels the growing economies of Russia, China and South East Asia and Africa. Thomas Barnett, (Continued on next page) Global Affairs Expert 1120 G Street, NW, Suite 900, Washington, DC 20005 Tel 202-347-6900 Fax 202-347-8650 www.noia.org NOIA FALL MEETING REVIEW Barnett said the U.S. is at critical juncture due tic energy sector, and that they would probably to the fracking revolution. Shale gas has the try to reverse, or at least limit, the damage the potential to become “the next big thing,” and Obama Administration has done to offshore oil the U.S. can leverage shale energy stores to in- and gas. On the other side of the aisle, Coulter crease its global influence. He noted that China warned that the Democratic candidates, name- and the United States have the largest shale gas ly Hillary Clinton, would likely continue, if not reserves, while also notoriously owning the rep- expand, the restraints placed on the offshore utation as the two biggest energy consumers. industry by the Obama Administration. Further discussion revolved around Vladimir ROBERT MCNALLY Ann Coulter, Putin and a more active Russia, the benefits of Bob McNally, President of the Rapidan Group, Political Commentator expanding NATO, the Middle East fallout, cli- delivered a highly informative and enlightening mate change conflict areas, and the massive in- presentation on oil prices and global oil markets. creases in U.S. energy and food production due to new applied technologies. McNally covered historical trends in oil mar- kets and gave his assessment on the future of Finally, Barnett discussed the importance of oil markets, both with regard to the supply side Arctic nations in the near future. With instabil- and demand side. McNally noted that for the ity rampant in many countries near the equa- past 10 years, the oil market has lacked a supply tor, and with an increase in global temperatures, balancer (Saudi Arabia) and that shale won’t re- Barnett said Arctic nations will be at the global place OPEC spare capacity. He added that Sau- forefront. These countries will be responsible di Arabia can withstand extended price routes for a growing percentage of global food and en- better than its rivals. He said this is important to ergy production. note since he believes that the Saudis refuse to yield market share to geopolitical rivals such as ANN COULTER Russia, Iraq and Iran. Ann Coulter delivered fiery remarks on the 2016 presidential election. Most of these re- McNally predicts global balances to remain marks revolved around Republican presidential flooded through 2016 and has a very bullish candidate Donald Trump and U.S. immigration five year outlook, assuming healthy global GDP policy. Coulter repeatedly said that immigra- growth. By 2020, he thinks that oil prices will tion is the most important policy leading up to range from $70 per barrel to $100 per barrel. the election. Likewise, she said that Trump is Robert McNally, The Rapidan Group the only candidate, of either party, to focus on immigration, and this alone qualifies her support for him in the presidential election. During the Q&A session, Coulter provided pre- dictions on how US energy policy would look under several of the presidential candidates. She said the majority of the Republican candidates understood the importance of a robust domes- 2 WASHINGTON REPORT NOIA FALL MEETING REVIEW GALE NORTON CMDR. KIRK LIPPOLD Gale Norton, President and founder of Norton NOIA members were honored and humbled to Regulatory Strategies and former Secretary of hear from retired Navy Commander Kirk Lip- the U.S. Department of Interior, spoke about pold. Commander Lippold captained the USS changes in the U.S. energy sector during the Cole during the 2000 terrorist attack in Yemen, past 10 years. She began by saying that an often which was al Qaeda’s first direct assault against unreported trend in the U.S. energy industry the United States and expanded their brazen is how much safety has improved during this and deadly string of terrorist attacks through- period. Norton said during Hurricanes Katrina out the Middle East. Commander Lippold re- and Rita she witnessed first-hand the response counted the details of leading his crew of val- Gale Norton, of oil and gas companies operating in the Gulf iant sailors through the horrifying attack and its Norton Regulatory Strategies of Mexico. Along with making employee safety aftermath. Seventeen sailors died in the the number one priority, there were minimal oil explosion and thirty-seven were wounded, but leakages despite 19 mobile drilling units that lost thanks to the valor of the crew in the perilous mooring and subsequently impacted pipelines days that followed, Commander Lippold’s five that sit on the floor of the Gulf of Mexico. pillars of leadership were adhered to, and the ship was saved. Norton also touched on the growing number of federal regulations. Referencing the contro- These five “pillars of leadership” include versial Well Control Rule (WCR) that is cur- integrity, vision, personal responsibility and rently being formulated by BSEE, she expressed accountability, trust and invest, and profes- concerned about government regulations pre- sional competence. Commander Lippold dis- venting the development and application of new counted the notion of “empowering” his crew, technologies. Norton noted, “the government correlating that term to less desirable responsi- is not very good at predicting technological bilities being passed along. He instead prefers to changes.” “trust and invest” in his crew members, helping them to act instinctively and thoughtfully during Norton concluded her remarks with a request times of crisis. By training his crew to respond for the offshore oil and gas industry. She said, to stresses above and beyond what was expect- that historically, the industry has not maximized ed of them and applying these leadership pillars, its public relations capabilities until after a his crew not only knew how to do their jobs, crisis occurred and often remained silent during but also the jobs of superior officers and subor- comment periods for potential regulations. dinates. Because of this, in the chaos following Cmdr. Kirk Lippold, Norton said while this is starting to change, al Qaeda’s attack, Commander Lippold had no USN (Retired) much more engagement by the industry is need- uncertainty about how his crew would respond. ed. Oil and gas companies need to be publicly vocal about the benefits they provide to society, and must participate “during every step” of the rulemaking process. Norton is worried that if companies are not more active, the views and opinions of the industry will be marginalized by public opinion and by the regulatory process. 3 Ryan Steen, (L-R) Dave Welch, Stone Energy Corporation; Jesse Morris, Chevron; and Michael Beattie, Anadarko Petroleum Corporation Stoel Rives, LLP discussed the impact of BSEE’s proposed Well Control Rule on the offshore oil and gas industry during the Government Affairs Industry Panel Discussion.