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Capital Report

2018:  MARCH

June 2017 Issue

California’s Cap-And-Trade
Program Has Unclear Future

While U.S. President Donald Trump has been rolling back President Barack Obama’s climate policies, California continues to be bullish in mitigating climate change.

In 2016, the California legislature committed to reducing greenhouse gas emissions 40 percent below 1990 levels by 2030. In April, a California appellate court issued a 2-1 decision that preserves the state’s landmark cap-and-trade program—at least through 2020. Thereafter, the fate of the program is in the hands of the California legislature, which is considering whether cap-and-trade will play a role in the state’s future climate policies, and, if so, in what form.

Port Planning and Investment
Toolkit Now Updated

Two additional sections of a manual to help U.S. port authorities plan, invest in and implement critical infrastructure projects, called the Port Planning and Investment Toolkit (PPIT), are now complete.

PPIT was developed through collaboration between the American Association of Port Authorities, the U.S. Department of Transportation’s Maritime Administration, PFM Group of Orlando, Florida, WSP/Parsons Brinkerhoff of Virginia Beach, Virginia, and industry experts.

The new Planning Module provides clearly defined steps and requirements of the planning process needed for successfully financing a project. The new Feasibility Module addresses the process of refining a project plan by considering all aspects of cost, risk and reward. The revised Financing Module describes different approaches for evaluating project funding and financing strategies and identifying ways to obtain grant funding and public/private financing.

Trump Executive Order Revises
Obama’s Offshore Policies

U.S. President Donald Trump has issued the Executive Order “Implementing an America-First Offshore Energy Strategy” that directs Secretary of the Interior Ryan Zinke to review locations available for offshore oil and gas exploration. It also requires review of certain regulations governing this process, including streamlining permitting for seismic surveys. It directs Zinke to revise or initiate a new five-year Outer Continental Shelf oil and gas leasing program, and it reverses President Barack Obama’s withdrawal of areas in the Arctic and Atlantic Oceans.

In addition, the order calls for a review of all national marine sanctuary and marine national monument designations over the past 10 years and dictates that any future designations or expansions will require a full accounting of energy and mineral resources by the Department of the Interior, along with examination of the potential impact of designation or expansion on the development of those resources.

The National Ocean Industries Association applauded the executive order for recognizing the vital role of offshore energy in an overall national energy policy and pointed out that The Energy Information Administration predicts that in the year 2040, traditional forms of energy will provide almost 80 percent of energy needs. In contrast, The Joint Ocean Commission Initiative expressed concern over the order, arguing that offshore oil and gas should be carried out in a manner that balances the needs of the environment with economic development. The Joint Initiative is also troubled by actions to revisit the designation and expansion of national marine sanctuaries and monuments, which improve fish stocks, bolster food security, promote marine biodiversity, and buffer against the impacts of rapidly changing ocean conditions.

US Interior to Resume Evaluation
Of G&G Permit Applications

In accordance with Secretarial Order 3350, which implements U.S. President Donald Trump’s America-First Offshore Energy Strategy, the Department of the Interior announced it will move forward to resume its evaluation of applications from six companies seeking permits to conduct geological and geophysical (G&G) activities in the Atlantic Ocean.

The action reverses a decision by the previous administration that ordered the Bureau of Ocean Energy Management to deny the permit applications.

The last G&G seismic data for the Mid- and South Atlantic Outer Continental Shelf were gathered more than 30 years ago when technology was not as advanced as today. Data from seismic surveys assists the Department in determining Fair Market Value of offshore resources.

Wyden Introduces Clean Energy Act
With Tax Credits, Incentives

Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) announced legislation to measurably reduce carbon pollution over the next decade through a series of incentives for clean energy and the promotion of new technologies in the private sector.

Wyden’s Clean Energy for America Act includes technology-neutral tax credits for domestic production of clean electricity and clean transportation fuel, as well as performance-based tax incentives for energy-efficient homes and office buildings.

These credits are open to all resources, even including fossil fuels that capture carbon or make efficiency improvements.

Proposals of Jones Act Changes
Withdrawn by CBP

The International Marine Contractors Association (IMCA) welcomed withdrawal of the U.S. Customs and Border Protection (CBP) notice to revoke and modify rulings relating to offshore vessels under the Jones Act.

The CBP proposals would have represented a major change in maritime policy if enacted and had been forecast to result in a substantial GDP loss coupled with significant American job losses along the entire U.S. Gulf coast, according to IMCA.

This development will help provide operators and international contractors the confidence they need to continue investing in the Gulf of Mexico, the IMCA said.

2018:  MARCH

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