During my 18 years serving in the United States Senate, I was honored to represent the people and communities of Louisiana, while advocating for our country’s energy industry, which is vital to America's prosperity and security. I want to share an observation about something happening in Washington right now that should concern everyone in the energy business, or for that matter, in any business.
It used to be that when the federal government signed a contract with a company to secure a lease on federal land or signed a document committing to a joint project, that meant something across Administrations and across parties. Unfortunately, that practice has been under threat for some time and is now, it seems, in serious jeopardy.
Consider what happened recently with Blue Point Wind - a joint venture between Global Infrastructure Partners and Ocean Winds - which paid the federal government $765 million in 2022 for an offshore wind lease in New York. Blue Point followed the rules, completed the paperwork, engaged the community, and received community support. Yet last month, the Trump administration pressured the company to wind down this project. The project will now not be built. Community trust has been violated; jobs are lost; and the capital involved will be lost to this region.
In the late 1990s, five oil and gas companies held thirty-six federal offshore leases extended by the Clinton administration off the California coast. They paid the federal treasury $1.25 billion for those leases; some of which dated back to 1968. California sued to block the extensions. The 9th Circuit sided with California. The Bush administration dropped the fight and bought back the leases. Drilling off the coast of California was over, investments lost, jobs lost, and contracts violated.
I was in the Senate then and saw that something had gone badly wrong. These companies had followed the law for two decades, and the federal government ended up writing a check to make its own previous decisions disappear.
Different energy choices, different times, different coasts, different parties calling the shots, but the same violation of legally executed contracts.
To make matters even more complicated for investors, the week that the Blue Point deal was announced, the New York State Common Retirement Fund - with nearly $300 billion under management sent a letter warning the investment companies that if they exited the offshore wind project, it would have a negative impact on how the Fund would vote its shares held in those companies. California regulators have recently subpoenaed another developer over its cancelation of a federally funded deal. So now we have Washington pulling permits from companies that have invested funds in one direction, and states threatening these same companies and pulling them in another direction.
This is a mess, and it's not just a wind problem - it's a business problem.
If you live in Louisiana or Texas, ask yourself this: What happens if a future administration decides offshore oil and gas leasing in the Gulf is no longer politically acceptable? What happens to the rigs and the service companies and the port workers when the next White House has a different idea about what energy source to favor?
It can't be one rule for wind and another rule for oil and gas. It must be one and the same rule for businesses investing capital and contracting with federal agencies.
This goes for offshore wind in the Atlantic; for LNG terminals along the Gulf Coast; for deep water leases in the Gulf of America; for natural gas pipelines; for nuclear facilities; and for critical minerals development.
All of these are necessary to support the future economic growth and vitality of the United States. Permitting reform has been debated for years. Bipartisan deals have been struck and have fallen apart. I get it: reform is hard; it always has been.
But the Blue Point episode and the offshore lease episode many years ago in California show that this problem has been festering for far too long.
Capital goes where capital is welcome. Without trust and without contracts being honored and upheld by the law, without the certainty that comes with those contracts, capital simply disappears. When capital disappears, businesses cannot start, they cannot grow, and they cannot expand. Jobs are lost and economic prosperity for Americans is put at risk.
We deserve better. Let us push members of both parties to pass a strong permitting reform bill that includes a certainty provision to prevent any future Administrations from acting on political whims to cancel and undermine legally binding contracts.
Mary Landrieu, a Democrat, served as a U.S. Senator from Louisiana from 1997 to 2015. She chaired the Senate Energy and Natural Resources Committee.
