The Biden administration’s “whole-of-government attack” in forcing a disruptive “green energy” transition is imposing higher consumer prices, costing jobs, and fostering investment uncertainty, oil and gas industry operators said during an April 23 congressional field hearing.
The administration is “deploying a series of interlocking rule-makings, spread across time and different agencies, to thwart straightforward legal challenges and maximize its regulatory agenda’s chances of success,” Denver-based Liberty Energy President Ron Gusek said, referring to the administration’s strategy as “regulatory smurfing.”
And it’s all based on a fantasy, Mr. Gusek said.
“It is popular today to suggest that somehow in the next 10 or 30 years we are going to ‘transition’ fully away from fossil fuels. This will not happen,” he said. The fact is that fossil fuels are and will continue to be essential to affordable, secure, and reliable energy production.”
Houston-based Energy Workforce & Technology Council President Tim Tarpley agreed.
“Despite statements by the current administration to the contrary, the truth is the United States and the world will need a lot more oil and gas in the coming decades even as new forms of energy come online,” he said.
The U.S. Energy Information Administration predicts worldwide demand for all forms of energy will increase by 50 percent by 2050, he said.
“The administration wants Americans to believe wind and solar energy can alone support the grid right now,” chair Rep. Pat Fallon (R-Texas) said, noting if more lawmakers hear about the real impacts of the administration’s energy policies, they’d see two choices in moving forward.
“I can ride my unicorn to this hearing and visit the mermaids out in the pond and it’s all going to be paid for by leprechauns,” he said, “or [we can] live within the bounds of reality and talk about energy needs in a realistic way.”
It’s a needed course-change in the conversation, Mr. Fallon said, noting none of the 15-member subpanel’s six Democrats attended the hearing.
“It’s unfortunate and sad. There’s many people in the course of the political discourse that don’t want to have a serious conversation of our energy needs and what that means moving forward. They’re just appealing to, honestly, you know, gullible and vulnerable minds, particularly at the college level, who believe these climate myths,” he said, adding that they’re encouraging them to “demonize folks in the energy industry.”
None of the seven non-Texas GOP reps on the panel were present, either. In fact, at one point, all the seated panelists were Texas House Republicans not on the subcommittee, including Reps. Randy Weber, Keith Self, and Beth Van Duyne.
“It’s important for members to get out of D.C. and actually hear how policies are affecting Americans,” Ms. Van Duyne said. “I wish some of our Democrat colleagues were here today to hear firsthand how disastrous the President Biden’s energy policy has been to the American people.”
‘Climate’ Assessments, Pipeline Paralysis
Mr. Gusek, Mr. Tarpley, and Houston-based Coterra Energy External Affairs Manager Bill desRosiers laid out a series of costly and confusing rules, regulations, and legal actions imposed since President Biden assumed office in January 2021.“In the attempt to bullet-proof federal decision-making, federal bureaucrats draft environmental reviews that can run into the hundreds, even thousands, of pages, extending the time before permits are issued,” Mr. Gusek said. “And once issued, environmental groups then subject the permit to years more of litigation, further increasing the time and uncertainty involved in the process.”
Among administration actions he cited is the Securities & Exchange Commission’s ‘climate rule’ and 2022 Department of Labor amendment to the Employee Retirement Income Security Act of 1974 that gives “activist fund managers permission to divest from energy companies on the grounds of climate change, regardless of whether or not that was best for the retirees whose funds they managed.”
Mr. Gusek said two pending rules by the Federal Acquisition Regulation Council, composed of the Department of Defense, the General Services Administration, and NASA, require “greenhouse emissions and climate-related financial risk” and “sustainable procurement” assessments.
The administration has aggravated permitting snarls in hampering construction of oil and natural gas pipelines through the Federal Energy Regulatory Commission and manipulation of the Clean Water Act and National Environmental Policy Act, he said.
It has repealed the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020 Act signed by President Donald Trump, Mr. Gusek said, and instead has proposed a rule allowing the Pipeline & Hazardous Materials Safety Administration to “transform itself from a safety regulator into an environmental regulator.”
The landscape was already a permitting maze, but the administration has imposed “end-use regulations,” such as its Waste Emission Charge Rule, its May 2023 Power Plant Rule, its Good Neighbor Rule, and its tweaking of National Ambient Air Quality Standards, he said.
LNG Export ‘Pause,’ Methane Tax
The administration’s suspension of liquid natural gas (LNG) export permits and 2025 implementation of the Methane Emissions Reduction Program tax on methane emissions drew the most ire.According to the Energy Information Administration and Center for Energy Studies at Rice University’s Baker Institute, LNG exports could add between up to $73 billion in U.S. economy activities and 450,000 American jobs by 2040.
Mr. Tarpley, whose Energy Workforce & Technology Council represents more than 200 companies that employ 650,000 workers, said the administration is catering to nonsensical demands affect energy costs, jobs, and global security.
“Shockingly, the administration has taken this action despite the president’s pledge to do the opposite,” he said, recalling in March 2022, President Biden told European Commission President Ursula von der Leyen that the United States would increase LNG imports to Europe “to survive without being beholden to Russian gas.”
“This pledge would not only benefit our allies but would dramatically benefit the U.S. economy and the U.S. energy workforce,” he said citing an industry analysis that the 2022 pledge to Europe would spur $63 billion in capital expenditures, a GDP boost of $46 billion, and 71,500 jobs supported annually” between 2025 and 2030.
“Here in Texas, in addition to oil and gas, we are known for Blue Bell Ice Cream,” Mr. Tarpley said. “They like to say we can eat all we can and sell the rest. The same can be said for natural gas. We have enough gas in the United States to provide cheap, low emissions energy for our population and sell the rest.”
Mr. Gusek said the administration has offered no timeline for when the pause will be relaxed but it “will last at least through the end of the year and jeopardize several large export projects,” such as those in Port Arthur, Texas.
The Methane Emissions Reduction Program tax beginning in 2025 on oil and gas systems is based on prior-year tons of methane emissions that exceed more than 25,000 metric tons of carbon dioxide-equivalent gas.
Therefore, a $900 per metric ton tax is being imposed on 2024 emissions. That goes up to $1,200 per metric ton in 2025 and reaching $1,500 per ton in 2026.
“While the rule has many problems, the two of the biggest involve its treatment of existing sources and its use of a new ‘social cost of methane,’” Mr. Gusek said, explaining how the rule is replicated and tied into other administration rule-changes and regulatory amendments across the Environmental Protection Agency (EPA) and other federal agencies.
“By implementing nearly identical standards for existing sources, EPA’s rule changes the financial projections that allowed those existing sources to be opened in the first place, likely rendering many operations unprofitable and forcing them to shut down,” he said. “To justify this enormous expense, EPA used a new and never-subject-to-public-comment value of the “social cost of methane” to be $1,600 per metric ton emitted in 2020.
“The need for energy workers continues to grow and may accelerate in the coming decades,” he said. “The need for oil and natural gas remains robust, even as various sectors of the economy are electrified and the growth of big data, data centers, electric vehicles, and fleets increase what Americans demand from the power grid.”
This potential labor shortfall is aggravated by administration messaging that the days of oil and gas development are drawing to an end, and by an aging workforce, Mr. desRosiers said, noting an estimated 400,000 are at or near retirement age.
“While this may not necessarily signify a sudden retirement cliff, it underscores the urgency of maintaining a healthy recruitment pipeline into traditional oil and gas businesses over the coming decade,” he said.
“American energy workers have a bright future ahead of them,” Mr. Tarpley said, if President Biden can get out of their way.
“If we make the right policy choices, we can take care of our own energy needs as well as supporting our friends and allies,” he said, adding there is no reason why the United States cannot have “the most affordable and reliable energy system that the world has ever seen.”
