REPS. SCALISE, MULLIN & DUNCAN ON IMPORTANT AMERICAN ENERGY ISSUES

October 7, 2019
In The News

Energy In Depth recently had the opportunity to sit down with members of the House Energy Action Team to discuss important energy issues facing Americans today.

HEAT is comprised of members that believe in an “all of the above” approach to U.S. energy that includes natural gas and traditional fuels. House Republican Whip Steve Scalise (R-La.) and Reps. Markwayne Mullin (R-Ok.) and Jeff Duncan (R-S.C.) recently sat down with EID to talk about the importance of oil and natural gas, pipelines, U.S. exports and how the United States needs multiple sources of energy to help reduce emissions.

FRACKING BANS

Several presidential candidates are running on platforms that include bans on new oil and natural gas leasing on federal lands, or in some cases federal bans on fracking. Such decisions would have devastating consequences not only for states with significant oil and natural gas development, but across the United States.

Rep. Scalise:

First of all, it would have devastating consequences on consumers. It would lead to higher costs for families, higher electricity rates, but it would also devastate our economy. It would lead to tens of thousands of jobs lost and shipped to foreign countries, and in many cases countries that emit much more carbon than we do to make energy, and it would make our country less secure.

Rep. Mullin:

It would be devastating to Oklahoma’s economy. Seventy-five percent of our economy is based on small business owners and most of our oil producers are independent. The oil and gas industry affects one-fifth of our jobs in the state, whether directly or indirectly. So the economic impact would be huge. And we’re good stewards of the land we live on. We know best how to take care of it and we’ve done a really good job managing our land and at the same time allowing oil and gas to be an economic engine for the state.

Rep. Duncan:

Yeah so, it is not just about where oil and gas is produced, it’s the impact a robust energy sector has on energy costs for the consumer. And in South Carolina we would be impacted if the nation started reducing where we’re producing oil whether prohibiting future exploration and production on federal lands, places like ANWR, offshore lease sales. If we really started restricting those, then future energy costs for South Carolinians go up. There’s a second dynamic that you have to think about that the robust energy economy that we have right now is providing an opportunity for the United States to be net exporters of not only natural gas but oil, for the first time. So when you see global events like we just witnessed with the Iranian drone strike on the Saudi oil fields, we didn’t see a dramatic spike in energy costs that everyone had anticipated. In fact, I’ve heard numbers up to $80 to $100 a barrel, where the prices would go. We did not see that. And I think the reason we didn’t see that is because we have such strong energy production in this country right now.

And so two things: you have a global impact of energy production here in the United States, but you also have the ultimate result of good energy policies, or bad energy polices going forward, on the consumer. The price they pay at the pump, the price they pay for electricity generation, etc.

EXPORTS

The United States has become one of the major global exporters of liquefied natural gas (LNG) in recent years and is expected to lead the world in supplying this resource in the near future. The representatives discussed the domestic and global impacts of the growth of U.S. LNG and oil exports.

Rep. Duncan:

Let me just start with that, visiting with people around the globe, places like Croatia, Montenegro, Southern Europe, they are heavily dependent on Russian natural gas. They see an opportunity to be LNG importers to end the pipelines that are coming across that will create so much dependence on Gazprom and Rosneft. So there are places around the world that are looking west – whether it is the United Kingdom or western Europe or eastern Europe –  looking west to the United States, to be a provider because they know we’re stable, we’re friendly and we’re not going to use energy as a labor of influence for political reasons. So the United States has a tremendous opportunity to benefit our allies and create new allies in the region.

Rep. Mullin:

A big issue that has been taken off the table is the volatility of the oil and gas industry when the United States started exporting not just LNG but crude also, you saw the markets stabilize. We’ve been so dependent on the Middle East, and it’s always been throughout history very volatile in the Middle East. When something would happen, for instance, the Iranians messing with the tankers going through the Strait, typically that would have sent prices through the roof. Or questionable (if we want to say that) who attacked the refineries in Saudi Arabia, you would have saw the markets go through the roof.  And the U.S. economy was affected by that and the rest of the world would be affected by it. You barely even saw a blimp, if anything, this time because the United States is standing there and we’re able to stabilize the markets. And so exports have saved not just the United States, but people around the world tremendous amount of dollars from just stabilizing it.

Rep. Scalise:

I was able to fly down to South Louisiana with President Trump to go see the opening of the Sempra LNG export facility. Which is a $10 billion export facility which was built in southwest Louisiana to export LNG to our friends all around the world. And in fact, they have contracts already in place to help our eastern European friends and our Asian friends so that, not only can they get good low-cost American energy, but it also reduces their dependence on Russian oil. It really undercuts Russia’s ability to use energy as a weapon. So geopolitically it’s become a critical asset of the United States to help our allies around the world and to undermine Russia’s economy and Russia’s ability to influence people politically by using energy as a weapon. So the President was incredibly impressed with what he saw, and of course has put the policies in place to help promote American energy including LNG exports and oil exports. But he also sees the benefit that it provides to our friends all around the world and it dramatically helps us reduce our trade deficit as well.

PIPELINES

As we kick off fall and start thinking about the colder months to come, the reality is that many parts of the country still lack adequate infrastructure to meet winter demand and keep prices affordable, as a result of policies that have blocked important pipeline projects.

Rep. Scalise:

We need to build more pipelines. It’s already one of our great infrastructure assets and there’s a lot more demand, especially in the Northeast where they have a desperate need for LNG. And it can come from American suppliers, but right now you’ve got states like New York that are blocking the ability to export natural gas; not to transport natural gas through pipelines, which are incredibly safe. And instead, those Northeastern states have to buy much more expensive energy from, in many cases, from Russia and other countries, who have to transport it over on tankers. So it increases the cost dramatically, and it undermines America’s ability to supply our own needs here at home. So we need to continue to have a better ability to build pipelines throughout the country and meet demands where they’re needed. I think this is going to be a big issue especially as we’ve been able to find more sources of energy in different parts of the country.

Rep. Duncan:

I would just say, I would add to that. I think the Whip made a great point. There are New England states that are reliant on Russia for their energy because there is no gas pipeline to bring the abundant natural gas we have in this country. As close as the Marcellus Shale is to the New England states – they can’t get it there because there’s no pipelines. So you have a Russian LNG tanker show up at the port, and that’s just unfathomable for me.

The second thing is, we see the environmentalists, who are trying to push America away from the use of fossil fuels, block a pipeline headed to eastern North Carolina, South Carolina, prohibiting it to cross under the Blue Ridge Parkway there. They’re using the courts and they’re doing it because of their environmental leanings, not because of anything else. It is denying at least the southeast, access to natural gas coming from the Marcellus Shale. Those are two things that I can mention right there where pipelines are a big issue.

Rep. Mullin:

To Jeff’s point, the activists groups, or mainly the “Keep It In the Ground” activists, they have cost our industry billions of dollars. They’ve cost the economy hundreds of thousands of jobs. If you want to see where pipelines work, and you want to see the lack of pipelines and different scenarios and the costs, look at Oklahoma City versus Boston. That’s the – you can start there. What are the costs to heat a home in Boston, and what are the costs to heat a home in Oklahoma City, where we have pipelines to build and deliver gas to the consumer? It doesn’t work.

Our dependency on gas doesn’t go away just because you don’t have pipelines. It just depends on how you want to get it there. And pipelines are more reliable, they’re safer, and the revenue can be domestic rather than foreign, versus what New England states are doing by shipping it in.

EMISSIONS

The path to reducing emissions includes varied strategies, as was evident in EID’s discussions on this topic with the HEAT members. But one thing is crystal clear: natural gas is helping to lower emissions and will continue to do so into the future.

Rep. Mullin:

I’ll start with Oklahoma. All the above energy is the best alternative. Oklahoma is the fourth largest producer of oil and gas in the country, as far as the state goes, and we’re number two in alternative energy such as wind and solar. If we want to have a true energy policy, we have an all-the-above energy approach. Texas, who is the number one oil producer, and number one in energy – who is our neighbor to the south obviously – that’s how you reduce emissions. You allow the consumer to choose, and have a choice, and then as the energy producers, they compete with each other. You also see that our costs will be going down. The industry themselves does a wonderful job of investing in new technology. We’ve seen emissions cut, already, without the heavy hand of regulations or the demand that these activists groups have to want to go to 100 percent renewables, which isn’t realistic.

Rep. Duncan:

The biggest way the United States has lowered its footprint and carbon emissions is just through nuclear power. And in South Carolina, we get about 59 percent of our power electricity generation from nuclear power. I think with seven reactors there. We have to find a way, the U.S. government, to continue to support the nuclear industry.  But also understand that there is a byproduct, and that is nuclear waste that has to go somewhere. So long term repository – Yucca Mountain has to be part of the equation. You look at Connecticut for instance they, the governor in there just realized that if they want to meet their attainment goals for emissions, then they need to keep nuclear power online, so instead of decommissioning the reactors, they’re applying for the relicensing of the reactors. And so people are starting to realize that nuclear power is a big part of the energy matrix. It provides 24/7/365 baseload power supply to meet the demands of a growing, robust economy. It’s not transportation fuels, but it meets our electricity needs, and it’s almost zero emissions. So that’s got to be a big part of it.

Rep. Scalise:

American technology and ingenuity is leading the way to lower carbon emissions while also providing the energy that we need to run our country and be a manufacturing powerhouse again. If you look at some of these countries in Europe that signed onto things like the Paris Accord, not one of those European countries is compliant. They can’t meet their own needs and they can’t even attain the goals that they set for themselves because it’s not realistic.

For those people that believe in radical schemes like the Green New Deal, the question that I would ask them is that if they really do believe fossil fuels are immoral – then why don’t they practice what they preach today? Why don’t they stop flying on airplanes today, and live by what they preach, if they really believed it? It shows the hypocrisy of the left, because they want to enjoy the benefits of American energy, which is the most environmentally friendly in the world, while also bashing the very energy that supplies the lifestyle that they enjoy living. We just need to make sure that we don’t buy into that kind of radical policy that would wreck our economy, and send more jobs to countries like China and India, who emit a lot more carbon to do the things that we do in an environmentally friendly way here in the United States.

Thank you to Reps. Scalise, Mullin and Duncan for taking the time to chat with us about these important American energy issues.

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