Akin Gump Hosts Media Briefing on 2015 U.S. and Global Energy Trends and Prospects

(Houston) – Lawyers at Akin Gump held a briefing for members of the media today, titled “The Global Energy Industry: 2014 Year-End Energy Briefing,” which looked at some of the big issues likely to affect the global energy industry in the coming year. The event was held as an in-person briefing in the firm’s Houston, Dallas and Washington, D.C. offices and as a webinar for participants around the world.

The panel comprised public law and policy partners Jamie Tucker, Charlie Johnson and Jeff McMillen, international trade partners Wynn Segall and Ed Rubinoff, oil and gas partners Steve Otillar and Steve Davis, global projects and finance practice chair Ed Zaelke and partner Dino Barajas and energy regulation, markets and enforcement senior counsel Vera Neinast. The program was moderated by Rick Burdick, chair of Akin Gump’s global energy and transactions group.

The program began with Mr. Zaelke giving an overview of the U.S. wind industry, including a discussion of its capacity for growth. He noted that wind has been so successful of late, in part, because it has been seen as a safe place to invest during the Obama administration. Additionally, the cost of capital has decreased as wind has become more mainstream.

Mr. McMillen then talked about the production tax credit (PTC) and whether it is likely to continue. Although it expired at the end of 2013, he noted that the House of Representatives recently passed a one-year retroactive change and it is very likely, he said, that the Senate will do the same. Mr. McMillen talked about the prospects for further renewal of the PTC in the next Congress and talked about whether a “phase-down” or “phase-out” is likely.

In a discussion of how the mid-term elections will affect U.S. energy policy, Messrs. Tucker and Johnson pointed out that, while Republicans will soon control both chambers of Congress, the lack of a filibuster-proof majority will still make things difficult for them. Still, the GOP will have its largest House majority since World War II. While a divided Congress could mean a more productive president, they added that neither party will want to cede too much to the other.

Some hot issues to watch for in the coming year include:

  • Keystone XL pipeline
  • LNG and exports
  • Offshore exploration
  • Greenhouse gas emissions
  • Hydraulic fracturing

In an update on the impact of U.S. and EU sanctions in global energy transactions associated with Russia, Ukraine and other countries, Mr. Segall spoke about the executive orders to date that have raised the severity of those sanctions. He suggested that companies evaluate their risk exposure, including business activities, locations in which they operate and their personnel in Russia or Ukraine. He also said one big consideration when doing business should be determining whether certain parties involved in an investment, including financing entities, are owned or controlled by Specially Designated Nationals—those identified by the government as owning or being controlled by, or acting for or on behalf of, targeted countries.

Mr. Otillar spoke about the reform of Mexico’s energy market, including legislation from the past year that opened up the market to outside investors. Mr. Barajas added that the reforms have been “transformative,” drastically changing the country’s current power generation policies with the entire sector revamped and reinvigorated. In particular, he said, there has been a lot of activity from private equity and project developers.

The last portion of the briefing provided an update on U.S. exports of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas. Mr. Davis explained that exports of finished petroleum products and LNG have both gone up over the past 30 years. Mr. Rubinoff gave an overview of export restrictions, discussing what has been permitted since the energy crisis of the 1970s, and Ms. Neinast talked about the process for obtaining export applications.

A copy of the presentation is available here.

Founded in 1945, Akin Gump Strauss Hauer & Feld LLP is a leading international law firm with more than 900 lawyers in offices throughout the United States, Europe, Asia and the Middle East.

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