An Interdisciplinary Practice Faces The Energy Challenges Of The Future

Thursday, March 1, 2007 - 01:00

Editor: Would each of you tell our readers something about your professional experience?

Barnett: My experience in the clean technology sector began when I joined a Norwegian clean technology venture fund back in 1997 to help establish a U.S. office, and then co-founded a spin-out venture focused on providing clean technology consulting and investment advisory services. More recently, I served as in-house counsel for the Connecticut Clean Energy Fund, a quasi-governmental organization created to support the development of renewable energy technology in the state. When I moved to Boston, I joined Foley Hoag because of my belief that this firm was extremely well-positioned to become a leading full-service provider of integrated legal services to the energy technology and renewables sector.

Gentleman: For six years prior to joining Foley Hoag, I was the Assistant Secretary of Energy for the state of Massachusetts, where I had worked on the development of competitive electricity markets, including power facilities that could participate in competitive markets. My area of expertise is energy regulatory law, and much of my practice involves assisting energy companies with the energy and environmental regulatory hurdles they face in Massachusetts. The permitting skills I developed in the past constitute a valuable resource that I am now able to bring to a new generation of technology.

Editor: Would you give us an overview of Foley Hoag's Energy Technology and Renewables practice? For starters, what is the origin of this practice?

Barnett: Our Energy Technology and Renewables (ETR) practice is an interdisciplinary practice which brings together our strengths in a variety of service areas, including venture capital and emerging companies, general corporate finance, project finance and development, tax, real estate, environmental permitting, energy regulatory, intellectual property, and government strategies. The ETR practice is a natural outgrowth of a long tradition at Foley Hoag of serving the energy sector, going back to our representation of Eastern Gas & Fuel Associates in the 1960's, and later, its retail affiliate, Boston Gas. In the 1980's, we became heavily engaged in a variety of project development and technology efforts on behalf of energy services companies and co-generation facilities, and that expertise transfers through to the ETR practice today.

Gentleman: Several of us are full-time practitioners, and we draw on others' experience when necessary. Our patent practice is a good example of the resources we are able to draw upon whenever necessary.

Editor: Do most of your people have some kind of technical background?

Barnett: Some, but by no means all. The nature of this practice is interdisciplinary. To serve a client well in this sector, outside counsel must be able to understand the underlying technology, but it is also essential to understand the political landscape, the environmental framework, the often quite unique financial aspects of this area of practice and the applicable tax regime, including incentives. In order to make a project work, we must draw upon an extraordinary range of areas of expertise. Having a technical background is very important, but it is one of a number of critical ingredients.

Editor: Would you tell us something about the practice's clients?

Gentleman: Our clients are very diverse, from multinational oil companies investing in an off-shore wind project to small start-ups seeking patents for new hydrogen fuel technologies. On the project development side, some of our clients include conventional generating facilities that are now looking to us to help them qualify for renewable energy credits by using biofuels in lieu of conventional tools. There is a considerable volume of trading credits across state borders these days, and it is important to be able to fully understand the tax implications and the availability of different credits from jurisdiction to jurisdiction. That knowledge is often the difference between a project succeeding or failing to move forward.

Barnett: We also work with leading-edge companies, one of which is developing cellulosic ethanol technology, and others which are active in wind technology, hydrogen generation, biomass energy and other promising areas. We are also working with companies developing clean energy projects throughout the Northeast, including a solar energy project developer in New Jersey, where some of the best solar incentives are available. We are also increasingly active with European and other foreign companies looking to expand into the United States.

Editor: I gather the services you provide these clients are wide-ranging as well.

Gentleman: Correct; in this field clients have enough to do to develop their technologies and in finding investors. We remove the burden of having to coordinate seemingly disparate legal services by offering clients the IP support on the technology side, and corporate finance and venture capital expertise to attract investors. We also have a strong traditional permitting practice to help them navigate the regulatory seas. We combine these different practice platforms, and the result is a very strategic approach and a cohesive work product.

Barnett: Let me add by saying that while developing a large wind project is very different from developing a new way of generating electricity from hydrogen, one of the common denominators is the need to convince the investment community and the regulators that the technology actually works, and on a commercial scale. To accomplish that it is often essential to have the kind of coordinated legal expertise that only a specialized practice like ours - with its bench strength - possesses.

Editor: What are the most likely areas for growth in this practice?

Gentleman: We certainly are experiencing growth and for a variety of reasons. The development of renewable technology is being driven by government policy and by market forces. The desire for clean air technologies, for technologies that can address global warming, for technologies to reduce the carbon footprint - the pressure is enormous and only increasing. This part of the country is blessed with very great intellectual resources in meeting the challenges that we face, and we expect that our practice will continue to grow as this sector grows.

Editor: Because of such spectacular growth, this is also a very competitive practice area. An increasing number of firms are seeking to move into this space.

Barnett: That is true. Foley Hoag continues to do well in this practice because we had a head start. We have deep roots in this sector and really understand the business challenges and opportunities. We provide a quality of service that, if not unique, is certainly outstanding. It is the breadth and depth of experience we have that gives us a true competitive advantage.

Editor: Ms. Gentleman, you were recently appointed General Counsel at the New England Energy Alliance. What is the Alliance?

Gentleman: The Alliance is an organization of large energy suppliers. It was formed in 2005 to advocate to decision-makers in New England the need to strengthen the region's energy infrastructure. Demand for energy services is beginning to outpace supply, and it will definitely cross the line in the 2009-2010 period. The Alliance is of the view that no single technology is going to provide all the answers. Permitting requirements need to be updated, and an enlightened public policy must contribute to meeting the needs of the future.

Editor: Mr. Barnett, you have been appointed to the Board of Directors of the Northeast Sustainable Energy Association. Please tell us about this.

Barnett: The Northeast Sustainable Energy Association is a non-profit association that has been in existence for about 30 years and serves as a kind of chamber of commerce for the renewable energy sector in our region. It brings together people from a wide range of backgrounds. I am honored to be part of a group engaged in addressing some of the most crucial issues facing humanity at the moment.

Editor: Please tell us about the renewable energy technology market. I gather Boston and the immediate region is one of the principal centers of this kind of activity in the country.

Barnett: Boston and the San Francisco Bay Area are the two leading centers in the country, and in Boston, our academic community drives much of the activity. Harvard, MIT, the University of Massachusetts system and other academic institutions have made a major commitment to the development of energy technology, with particular reference to renewables. That is, of course, an important platform from which many of our clients have, and will continue, to emerge.

Editor: How do you see public policy at the national and state levels affecting your practice?

Gentleman: Over the last five years, nearly every state in New England has increased its support for renewable energy. There is still a gap between the desire of state governments to increase renewable supplies and actual production. Currently, four of the New England states have a minimum requirement that a certain percentage of all electricity consumed must be renewable. However, there is not a sufficient volume of projects on the ground and producing to meet these goals at present. One of the challenges that our clients face is getting government to modernize licensing and permitting requirements to meet those goals.

Editor: What about the future? Where would you like to see this practice in, say, five years?

Barnett: Still growing, of course, and firmly positioned as the leading Energy Technology and Renewables practice. We have a great opportunity here and I predict we will see today's emerging companies grow into medium, even quite large enterprises. There is a tremendous focus on this development along Route 128 - our "Technology Corridor" - today, and it promises to be the foundation for a very strong industry sector in just a few years. That is very good news for the Energy Technology and Renewables practice at Foley Hoag and, more importantly, for the planet.

Please email the interviewees at mgentleman@foleyhoag.com or mbarnett@foleyhoag.com with questions about this interview.