January 28, 2021, by Adrijana Buljan, www.offshorewind.biz

U.S. President Joe Biden signed a new Executive Order on 27 January, directing the Department of the Interior to identify steps that can be taken to double offshore wind energy production by 2030 and to pause entering into new oil and natural gas leases on public lands and in federal waters.

The Executive Order comes a week after Biden’s statement of acceptance of the Paris Agreement on 20 January, following the U.S. exiting the Paris Agreement under the previous Administration. With the new order, Biden-Harris Administration aims to achieve a carbon pollution-free power sector by 2035 and put the U.S. on an irreversible path to a net-zero economy by 2050. 

“The order affirms that, in implementing – and building on – the Paris Agreement’s objectives, the United States will exercise its leadership to promote a significant increase in global ambition. It makes clear that both significant short-term global emission reductions and net zero global emissions by mid-century – or before – are required to avoid setting the world on a dangerous, potentially catastrophic, climate trajectory”, the White House states in a press release.

The federal agencies are also directed to eliminate fossil fuel subsidies and identify new opportunities in clean energy technologies and infrastructure.  The Department of Interior said that it would immediately begin a review of processes and procedures to date as it re-invests in a rigorous renewable energy program.

Commenting on the offshore wind target set by the new administration, Liz Burdock, president and CEO of the Business Network for Offshore Wind, said: “President Biden’s actions today confirm the critical role that offshore wind energy will play in creating a clean U.S. energy grid and achieving White House commitments to combat climate change. His call to double offshore wind production in U.S. federal waters sends a clear signal of support to our industry, which will generate billions in new investments”.

“Over the next few years, the offshore wind industry will dramatically scale up development of the U.S. supply chain, growing tens of thousands of new jobs in the process. The offshore wind has been on the precipice of significant growth thanks to states’ bold leadership and President Biden’s executive order further pushes the industry to new heights with a new sense of urgency”, Liz Burdock said.

The U.S. currently has two offshore wind farms up and running in its state and federal waters.

The country’s first offshore wind farm, the 30 MW Block Island Wind Farm, comprises five GE Haliade 6 MW wind turbines which have been in operationsince December 2016.

The two-turbine, 12 MW Coastal Virginia Offshore Wind (CVOW) pilot project, the first wind farm installed in U.S. federal waters, went into operation last year. The pilot project is expected to provide the operational, weather, and environmental experience needed for a 2.6 GW development in the adjacent 112,800-hectare lease site, expected to be operational by 2026.

Peter Bryant, Clareo | 05 January 2021

Within the race for renewables, oil and gas companies are finding themselves in a proverbial rut as they reassess existing profitable models with future energy transition plans.

The nature and magnitude of this shift has set new strategic parameters for the sector.

What adds more difficulty is the question of speed in which companies pursue this conundrum. Should oil and gas companies be more aggressive in their energy transition plans?

Maximizing shareholder value is a part of a multi-pronged strategy to accelerate the energy transition. Those elements include

• Maximizing the value of the current oil and gas business by significantly reducing the cost of production
• Capital allocation efficiency to large offshore projects that needs to anticipate future demand and supply
• A transition of capital expenditure to renewables businesses at a measured pace
• A commitment to net-zero emissions from operations
• An investment in carbon-reduction technologies (e.g., carbon capture and storage)

A serious commitment to all the above is required to influence and shape the market sentiment, and ultimately share price and shareholder value.

As I mentioned in The Wall Street Journal’s article on the energy investor’s dilemma, no oil and gas company has figured out how to make money in a low-carbon energy world. In short, Exxon and BP are two sides of the same coin.

Arguably, improved performance in the core oil and gas sector may not help increase the share price and shareholder value unless it is backed by stock buybacks and high dividends, which would in turn divert capital from investing in new growth businesses.

The slowdown in oil demand combined with oversupply and the resulting low prices means that if oil continues to sit in the range of $30 to $50/bbl, the spread between returns on capital oil projects and renewable projects narrows significantly.

My belief is that a reset is imminent for oil companies and their dividend yield profiles because it will be impossible to maintain their current dividend yields at that price range; no oil company can sell enough assets and borrow enough money to do it.

Most CEOs of the major independent oil companies, especially those in Europe, have realized that a valuable energy company in 20 years is not a pure oil and gas company, and they are transitioning to do just that. But to date that transition has been very measured among the likes of BP and Shell, which includes shifting the percentage of CAPEX to renewables.

To honor this commitment, as reported in The Guardian, BP has pledged to invest $5 billion by 2030 in renewables, which is a tenfold increase, against a total downward revised 2020 CAPEX of $12 billion.

These investments are focused on investing in various parts of the new energy value chain as they build optionality. For instance, Shell, with its offtake agreement, expects completion of Phase A of the offshore (North Sea) Dogger Bank Wind Farm in Q2 2022.

Onshore construction began in 2020. It is being jointly developed by Equinor and SSE Renewables, and first power is expected for summer 2023. The total expected power generation is 3,000 gigawatt hours (GWh) per year, which is enough to power more than 825,000 Dutch households.

Meanwhile, BP has acquired UK’s largest charging company, Chargepoint, and Total has acquired two utilities since 2018 with a combined 8.5 million customers in Europe.

Oil and gas companies also need a strategic viewpoint on where value lies and new and disruptive business models.

Venture arms have traditionally provided that opportunity with varied investments in new energy startups, from smart grids to hydrogen fuel, to further bolster optionality. For instance, BP Ventures reportedly invests between $150 million to $200 million annually into startups, the majority of which are in the renewable energy space.

Although these ambitious commitments by primarily European companies are promising, they have made little movement for their languishing stock prices and market caps. (The market clearly does not see these strategies as entirely credible, in my opinion.)

Orsted, a wind company which transitioned from a coal company, has a market cap ($76 billion) greater than BP ($70 billion), despite having a fifth of the revenue. Or consider this: NextEra Energy, the biggest renewables producer in the US, has a market cap of $147 billion, which is close to Exxon’s $170 billion, despite having 10% of Exxon’s revenue.   

With these forces at play, oil companies will start allocating ever-increasing percentages of their CAPEX to renewable energy, as we have seen.

On average, oil companies allocate 10% of their CAPEX into renewable energy investments, including acquisitions of smaller utilities. Additionally, a shift in CAPEX of between 30% and 50% toward renewable energy in the next 3 to 5 years is possible, although the most aggressive companies like BP say that is 10 years out, for now.

The dilemma is significant, given the uncertainty as to where the sweet spot is that makes their transition meaningful to investors and the market without cratering their core business. BP calls this dual approach “Perform and Transform” and the market does not seem to be buying into either right now. 

Here are a few tips you can use to free your mind and create space for progress.

Article by Janet Autherine, January 8, 2021, www.thriveblobal.com

You are on your way to an abundant life, enthusiastically checking every box on your to-do list, and you unexpectedly become stuck. You try your usual tricks to free yourself, but this time nothing works. Your mind and body are telling you that your old way of operating no longer works and it is time for something new.

There have been so many times that I have had to work through the overwhelm that leads to inaction. It is a frustrating feeling, especially for high achievers who are used to powering through any struggle. Here are a few tips you can use to free your mind and create space for progress.

1) Practice mindfulness.

Island mindfulness brings the gift of presence. It is the convergence of a conscious mind and a free spirit. Find confidence in knowing that you are one with the universe and the universe is rooting for you. Know that your mind can be that junk drawer where you toss everything or a calm oasis. Calm is what we seek.

Begin with five minutes of mindfulness meditation each morning to clear the clutter from your mind. The only requirement is a quiet space to be one with yourself. Eliminate all thoughts of the past or the future and focus on the present. Take a few deep breaths and feel it move throughout your body.

As a society, we have moved away from the joy of stillness, so this may feel like an uncomfortable exercise. Don’t give up! Within a week, you will notice a big difference in your stress level and mindset. Take that calm with you throughout the day and tap into that space when overwhelm starts to set in.

2) Avoid overwhelm.

Mindfulness helped you clear the clutter from your mind. Now, clear the clutter from both your physical space and your to-do list.

Decluttering your physical space can free the mind, so make your bed, give away the clothes that you haven’t worn in a year, store the knick-knacks in the garage, and create a workspace that promotes calm. I am surrounded by books, because that brings me calm.

Finally, identify one activity that consistently brings you peace, such as going for a short walk. This will be your stress-free ritual when stress starts to build up.

3) Get un-stuck.

After meditation, when your mind is calm, have a honest conversation with yourself about what is causing the mental block prohibiting you from accomplishing a particular goal or task (wrong goal, resources, lack of confidence, time constraints).

Act based on your truth, but go at your own pace. If you are on social media, you will notice so many people seemingly passing you by. Understand that everyone is on a different journey.

If you keep your foot on the gas that leads to your destination, you are winning. When you go at your own pace, you enjoy the journey – and you also enjoy the rewards when you arrive safely.

4) Focus on balance.

We get stressed, overwhelmed and stuck when we are focusing on either too many priorities or the wrong priorities.

Multi-tasking is disastrous to balance. Each morning, choose no more than three priorities.

5) Create an abundant life.

Find your purpose and then determine what legacy you would like to create. Your purpose and your legacy are your main missions in life; everything else is either a distraction or a wonderful bonus. Eliminate the distractions.

Finally, don’t keep moving the goalpost for success; walk in gratitude and stop to enjoy each victory. As with any practice, repetition is the key to success.