Western Caucus Foundation Forum Highlights Need for Strong Domestic Energy Production

On March 15, the Western Caucus Foundation held a forum titled “Ensuring Energy Dominance: Policies that Support or Hinder American Energy Security.” Against the backdrop of war in Ukraine and rising energy prices, the forum participants discussed the policies that have helped contribute to the current energy crisis and forward-looking solutions to ensure American energy security.

Anne Bradbury, CEO of the American Exploration and Production council, identified four things the Biden administration can do to meet global demand and support domestic production:

  1. Clearly state long-term support for the domestic oil and natural gas industry.

The panelists discussed the about-face from the Biden administration and the uncertainty the administration’s posture creates among investors and producers. Senator Daines emphasized the need for the administration to take a “long horizon” approach to domestic production.

“This is a long-term strategy. This isn’t just when we have $4, $5 gas. In the public capital markets right now, with ESG scores and so forth – there’s been a chilling message.”

Without long-term commitments from the White House, investors are unable to take the long-term approach oil and natural gas producers need in order to produce energy reliably and sustainably.

  1. Restart oil and natural gas leasing on federal lands and remove barriers to obtaining permits.

Much of the discussion focused on regulatory and bureaucratic processes that have restrained production on federal and private lands. President Biden recently claimed that oil and natural gas producers are sitting on active leases:

 “[U.S. producers] have 9,000 permits to drill now — they can be drilling right now, yesterday last week, last year. They have 9,000 to drill onshore that are already approved. So let me be clear, let me be clear: they are not using them for production now.”

As EID explained in a recent fact sheet, there are a lot of factors that could delay both leases and permits. Bradbury pointed out that litigation and permitting are the two main causes holding up exploration and production on the 9,000 leases cited by the administration:

“About 75 percent of federal leases are currently producing. The other 25 percent are currently waiting on APDs, through the incredibly complex process, or they’re held up in litigation. About 2,000 of those leases are being held up in litigation from the environmental left.”

Former Secretary Bernhardt noted that the Bureau of Land Management is currently stalling the evaluation of 4,600 permits. Despite inaction from the Department of the Interior, Bernhardt identified that U.S. producers are currently producing more oil and natural gas than ever on fewer acres:

“I don’t think people realize that we actually have many fewer acres leased today than historically, and at the same time, because of American technology and innovation, we have greater production. There may be 9,000 permits that are issued, but there are 4600 that have been requested and are being waited on. Somebody ought to be tracking that 4600 every day – I can assure you that’s the way people at Interior have done it in the past.”

  1. Invest in pipeline and LNG infrastructure.

Regulatory burdens are not just hindering production on federal lands. The Biden administration’s policies and inaction have limited the build-out of pipelines, refineries, LNG export facilities, and nearly every element of the domestic energy supply chain. Former Secretary Bernhardt described the unprecedented regulatory environment:

“We have witnessed over the last year the most constricted regulatory effort in our lifetime on public lands, at FERC, on private lands, NEPA, EPA. It’s an assault we have not seen before. And it’s an assault that will continue because – literally – activists have filled these agencies.”

Former Secretary Brouillette argued that recent actions at Federal Energy Regulatory Commission and at the Department of Interior “create uncertainty in a legal environment uncertainty that invites litigation.” Brouillette identified the recent FERC guidance on greenhouse gasses and the pipeline certificate policy as the type of activity that applies to both “prospective [pipeline] applications and pending applications,” creating a legal environment that slows down the pipeline construction process.

  1. Support international financing for oil and natural gas projects abroad.

The energy crisis in Germany and in Western Europe demonstrates the dangers of relying on sources of energy from autocratic states. Former Secretary Brouillette made it clear that American-produced natural gas will continue to play a leading role in other nations’ energy security and environmental commitments:

“The bottom line is, somebody has to step up to the plate and provide natural gas to Europe. Because they are going to depend on natural gas, not only for their energy needs, but to the extent that they have environmental goals – 2030 goals, 2050 goals, you name it. You cannot escape the use of natural gas in any environmental goals that I’m aware of today.”

However, American energy exports cannot maximize their impacts without complementary investment in infrastructure, such as LNG import terminals, abroad. According to Senator Daines, “a lot of us have been talking about the geopolitics of this for a long time, but now the geopolitics has slapped us right in the face.” Sen. Daines encouraged institutions such as the Export-Import bank to help foreign nations scale up the infrastructure necessary to reduce energy dependence on Russia and other antagonistic states.

Transition from “less to more.”

The panel emphasized the need for an “all of the above” energy strategy to meet worldwide demand reliably, affordably, and sustainably. Former Secretary Brouillette called out the faulty zero-sum narrative Democrats in Congress and in the Biden Administration are pushing:

“When I think about things like ‘energy transition,’ I think if you look back in American history, the transition has been in many cases less about the replacing of certain fuel sources, it’s been additive. And what’s happening now in the world is that the transition is going from less energy to more energy. And it’s going to continue that way, which is why we need all forms of energy. Yes to renewable power, yes to nuclear power, yes to natural gas, and certainly less to oil.

It is going to be a transition from less to more. And the market will determine where that portfolio sorts itself out.” (emphasis added)

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