Rising with the tides: Lasse Petterson
The dredging industry has come a long way over its storied history, says Great Lakes Dredge & Dock Company President and CEO Lasse Petterson. It is no longer about altering the natural environment; rather, it is working actively to restore and protect it from the ravages of climate change.
Humanity has been altering the aquatic environment since ancient times. For instance, all seven major tributaries of the Nile were dredged during the reign of the Egyptian Pharaohs to aid in the construction of the pyramids. Likewise, Roman historians describe how dredging fleets were active in the eastern Mediterranean around 1000 BC, and even as late as 300–100 BC in Marseille, as trade harbors had to be extensively cleared of silt accretion.
In 1890, a new player emerged that would significantly advance the practice of dredging. That year, two prominent Chicago businessmen won a tender to build an offshore tunnel on Lake Michigan, and soon thereafter, the Great Lakes Dredge & Dock Company (GLDD) went gangbusters, expanding rapidly over the turn of the century all around North America – dredging, pile-driving and building foundations, bridges, breakwaters and lighthouses in every major city of the Great Lakes district.
Over the 132 years that followed, "GLDD has risen to become the largest dredging company in the US," says President and CEO Lasse Petterson. Indeed, the company has been pivotal in deepening shipping ports and building key naval piers and harbors during wartime. Today, GLDD is active in almost all major ports on the East coast and in the Gulf of Mexico, deepening ports and navigation channels to accommodate larger trading volumes coming in from Asia through an expanded Panama Canal and to facilitate the export of oil and gas products to countries in Asia and Europe.
Additionally, GLDD has been the only US company active in international markets and has deployed its fleets of dredging ships and skilled engineers across the globe. The company was first on the ground in post-war Iraq, carrying out vital harbor reclamation and reconstruction work at the military port of Umm Qasr, and as such played a key role in the transit of humanitarian aid. It has also successfully completed all manner of large-scale, high-profile marine infrastructure. The most notable among these projects have been on the Øresund Fixed Link that connects Sweden with Denmark, the Suez Canal in Egypt, and the construction of the Bahraini resort cities of Diyar al Muharraq and Durrat al Bahrain.
"At GLDD, it is not just dredging," Petterson says proudly. "We deliver innovative engineering solutions and perform precision underwater construction to very tight tolerances which require high-quality workmanship to our clients across every project we undertake. That’s core. Historically, we’ve been instrumental in building and maintaining the US navigation system. We have been involved every time a deepening has been required, from 20 feet to 40 feet to 50 feet, and now to 54 feet, so if you are looking for experience and expertise on soils and environmental conditions in the waterways, come to GLDD."
Taking the helm
Born in the maritime town of Bergen on the west coast of Norway, Petterson grew up navigating his father’s 22-foot wooden one-cylinder diesel engine boat in the fjords surrounding the town. As the first in his family to get a university degree, he graduated from the Norwegian University of Technology with a M.Sc., Engineering. At the time, the oil fields in the North Sea were being developed, and Petterson was drawn to working in the harsh environments of the oil and gas industry. This was to be the beginning of a stellar career in construction, engineering and marine operations in the North Sea, in Asia and in the Americas. He joined the Board of GLDD in 2016 and took over as CEO in early 2017.
But when he took the helm of the company, it wasn’t all smooth sailing. "When I first took over, I’ll be honest, the company had been experiencing a bit of a difficult time. We had recently invested in a large, innovative dredging vessel – the Ellis Island, an articulated tug and barge configuration and the biggest one in the US. But as with many new-concept builds, construction was delayed and over-budget. We’d also had some other subsidiary acquisitions that were not performing well," he says.
Nonetheless, Petterson was bullish about the future. "We were then, and still are, the leading dredging company in the nation by far, with a market share exceeding 40 percent. Our next competitor is about half our size, and we have a reputation for delivering on time and over expectations, with an unparalleled bench of dredging experience among our engineers and leadership team. Hence, I saw restructuring as the opportunity to turn the company around and take it forward."
He did not waste time. Under Petterson’s directive, GLDD reduced its fleet, selling off 120 of its older, less productive vessels and equipment that were impacting the bottom line. GLDD also pulled out of Brazil and reduced its exposure in the Middle East. With that reduction in overheads and other expenses, some employees in the company’s Chicago operations had to be let go. Taking that step was painful, Petterson says, but restructuring has since paid major dividends for the company.
"My first priority was to restore the balance sheet. We now have cash in the bank in the order of some US$180 million, zero draw on our revolver credit, and we are generating good cash flow and margins approaching 20 percent EBITDA, which gives us a solid net debt-to-EBITDA ratio of 1.3," he says.
With the balance sheet restored, the second priority has been to start a fleet renewal program to create a high-tech, productive and efficient dredging fleet by upgrading existing vessels in our fleet.
"Currently, we are building a new hopper dredge to be delivered in 2023, and we are in the midst of engineering for other additions to the fleet," Petterson says.
Bedrock for growth
A third major priority for Petterson since coming on as CEO has been to find opportunities for continued growth. Despite being an old "oil and gas man", he has delighted in seeing new growth opportunities come in the form of providing vital infrastructural support for the expanding offshore wind renewables industry. "Climate change is here and we see it every day on our projects around the coasts. We need to transition over time to a more renewable energy mix," he says.
Offshore wind farm developments are coming to the US in a big way. The White House has set a target for 30 gigawatts of offshore wind generation capacity over the next decade. "That gives us, as an experienced marine company, an excellent opportunity to be at the forefront of developments," Petterson says.
"Today, there is no experienced supply chain in place to support these developments. Some would say that is a big problem, but I see it as a fantastic opportunity for the US marine industry to develop and deliver new services to support what is a fast-growing industry. It reminds me of the days when we developed the oil fields in the North Sea. In the beginning, the projects were built by international contractors, but over time, the national and local industry invested and caught up, and on the back of these investments, several UK and Norwegian companies have become world leaders in their field," he adds.
To capitalize on this opportunity, GLDD has signed a contract with Philly Shipyard, Inc to build the first US-flagged Jones Act-compliant, inclined fallpipe vessel for subsea rock installation. This vessel will service America’s growing offshore wind energy industry and help reach the Biden administration’s ambitious 30 GW of offshore wind goal by 2030.
"This contract, valued at approximately US$197 million, marks a milestone for our company, the US. offshore wind industry and our nation," Petterson said after the project was launched in November last year. "Offshore wind will play a crucial role in helping the US meet its decarbonization and clean energy goals. The unique, technologically advanced vessel we are constructing is an essential step towards building the marine infrastructure required for this new industry, which holds so much promise for our nation economically and environmentally."
This GLDD vessel will be US owned, US built, US operated and crewed by American union workers, and will meet all conditions of the Jones Act. The vessel will transport and strategically deposit loads of rock on the seabed, laying scour protection for offshore wind farm foundations, cables and other structures. The ship will have an overall length of 140.5 meters (461 feet) and a breadth of 34.1 meters (112 feet). Further, the vessel is expected to help spur additional job growth and regional economic opportunities through the creation of a US-based rock supply chain network, which will be needed to supply subsea rock installation activities, from quarries in states along the East Coast.
"With this newbuild vessel’s purpose built to meet the needs of the US offshore wind industry, we are essentially harnessing the best practices to create a new dimension to our legacy and help make history for our country," says Petterson.
He believes GLDD has the skillset and engineering talent to give it the inside track in this market. "Expanding our offering from dredging and building up our competencies in offshore wind makes for exciting times," he says, smiling. "It’s a challenge, sure, but what a wonderful opportunity to be part of making the switch to offshore wind power."
The opportunity also extends to the announcement made in May regarding Empire Offshore Wind, a joint venture between Equinor and BP. GLDD, in consortium with Van Oord, has been chosen to perform the subsea rock installation work for the Empire Wind I and II wind farms off the East Coast of the United States. These wind farms, starting with Empire Wind I in the mid-2020s and continuing with Empire Wind II, are expected to provide over 2 Gigawatts (GW) of renewable energy to the state of New York.
Keeping the crew content
Petterson takes pride in the company culture he has helped create at GLDD. "It’s a great place to work! It’s exciting stuff. We’re out there, in the elements, working on open water," he says.
"Typically, our engineers start with us at university and spend their first five years working on projects all along the coast, utilizing highly advanced equipment to do very precise underwater construction work. They operate on a ‘two weeks on, one week off’ basis, which is fantastic when you’re young. After that, once they want to have a family or need more of a regular work schedule, many choose to stay on. Those that do typically stick with GLDD for their entire career," he says.
Moreover, he sees GLDD’s diversified organizational knowledge as one of the main assets that sets it apart. "Clearly, we have the best people. Knowledge and experience are inherent within our organization; we have people who have been dredging for 35–40 years of their career. They know all the ports, all the navigation channels, like the back of their hand. So, when we’re bidding for new projects, we’re best-positioned to take on those jobs and environments that require complex planning and execution," Petterson says.
Likewise, adhering to safety protocols is of paramount importance on every project the company undertakes, Petterson stresses. "The safety of our team members is a core value for GLDD. Our primary focus, every day, is keeping people safe," he says. "We’re very proud of our injury and incident-free culture. Nothing matters more to me than ensuring every member of our team goes home every day healthy, and I think our employees appreciate this."
Helping coastlines heal
While the sheer scale, experience and capability of GLDD to deliver has earned the company an unparalleled reputation in the dredging industry, Petterson believes its environmental credentials are becoming increasingly important. "I see it as crucial," he says. "Whenever and wherever we operate, we’re committed to the protection of marine shorelines, the restoration of sensitive habitats, and the creation of critical aquatic infrastructure."
The CEO developed his love for the ocean and its many creatures that inhabit it during many years spent working on marine projects, but also as an avid scuba diver and sailor. While he is first to admit that dredging has been, and still is today, criticized for harming local marine ecosystems, he is proud that GLDD is leading the way in turning this perception of the industry around.
"A big part of what our company does is utilizing the dredge material for beneficial use in beach nourishment and the creation of biological habitats in marine, wetland and marsh environments," Petterson says.
Offsetting the impact of climate change
The company’s environmentally sustainable work hails from a genuine passion for helping marine life, Petterson says, rather than just a cynical exercise in ticking boxes on an environmental, social and governance report.
"After all, we’re out on the ocean every day, so it’s vital that we carry it out in the most environmentally friendly way we can. So, if we dredge a shipping channel or a port, like we did in Tampa, then the material we collect can be redeployed to bolster the local habitats of birdlife, or it can stabilize nearby marshlands so they’re not destroyed by rising seawater and storms," Petterson says.
Operating offshore on our coasts, he adds, means that GLDD employees get to witness the impact of climate change first-hand. "There’s no denying it. We’re seeing sea water levels rise. There are more severe storms in the winter that are eroding beaches, damaging coastlines and causing flooding up the Mississippi River, for example," he says.
Fortunately, the work GLDD is doing is helping to stave off the more dire effects of climate change, Petterson explains. "Beach nourishment and restoration is a big part of our company mandate now. We use dredged sand to restore beaches for local communities, which are dependent on tourism," he says. "At the same, this secures habitats for turtles breeding and laying eggs. For example, when the whole river delta in Louisiana was washed out in floods, over four years, we constructed what we call ‘barrier islands’ to protect the delta from being damaged further by storms."
But when asked about his personal philosophy for approaching each day as leader of such a big company, the CEO takes a brief moment to think before answering.
"I think the key is to be flexible, but also focused. Maintain focus on the work that you need to do, every day, yes, but also be ready to pivot or shift gears as needed. As long as that focus is on creating results for the company, for your employees and for shareholders, then you’ll do well."