When President Joe Biden openly advocates for phasing-out oil and gas as primary energy generators in the United States within a decade, what appears as a news scroll blip for most Americans is a clap of thunder across the rolling West Texas sage of the Permian Basin.
“The messages, virtue signaling, and rhetoric that have come from the federal level lately, tell us oil and gas is evil or not on the side of average the American, or on the side of caring for our environment,” Midland Mayor Lori Blong told Congressional lawmakers during a Feb. 16 field hearing in her city, which she called “the energy capital of Texas and, arguably, the energy capital of the United States.”
Forty percent of U.S. oil and natural gas production and 7 percent of global output comes from the Permian Basin, which also spans southeastern New Mexico.
Being the scapegoat for controversial U.N.-led predictions of “catastrophic” climate change is demoralizing enough, but businesses and people in “energy producing communities” like Midland are now facing financial and family challenges fostered by the Biden administration’s “rush-to-green energy” policies, and by his own January 2023 words claiming oil and gas would only be needed for 10 more years.
Blong, who in addition to serving as Midland’s first female mayor, is a founding partner in Octane Energy, an oil and gas exploration and production company that manages more than 300 wells across 35,000 square miles of West Texas and southeast New Mexico.
Biden’s call for an end to her industry “has made it difficult to access capital” and fostered a “decease in investment” in new exploration and new wells, she said.
Uncertainty Plagues Permian
With the administration tying pipelines up in regulatory knots, and “the SEC-driven ESG (Environmental Social Governance) movement” pushing investors away, Blong said the future is hazy in West Texas, and that uncertainty is “creating growing market distortions” that “need to be reversed.”
“These policies prevent individual Americans and American businesses from growing as we otherwise could, prevent us from creating jobs as we otherwise could, and—most importantly—prevents our country from being energy secure as it otherwise could,” she said in her witness testimony.
Midland Hispanic Chamber of Commerce Chair Adrian Carrasco, who is also president of Premier Energy Services in Midland, said in his witness testimony that the city’s 6,200 businesses are no longer confident about the future, which places strains on community organizations and families.
Independent Petroleum Association of America (IPAA) Board chair Steven Pruett, also president/CEO at Elevation Resources in Midland, said local oil and gas producers can no longer rely on banks to get needed loans.
“It’s a whole new game” under the Biden administration, Pruett said in his witness testimony, noting that two to three years ago, there were 20 capital equity groups investing in oil and gas companies with only “five or six” now “that can raise capital.”
“My peers and I know we have to survive on our own cash flow,” he said, noting less than half the money in developing new wells is being invested now than two years ago.
Because of this, Pruett said, “We will be short of oil and gas in the next two years and it will be very damaging” to the global economy.
Blong said the administration seems to forget that 96 percent of the products Americans use every day, from pharmaceuticals, clothing, electronics, and cosmetics, “to name just a few,” are derived from petroleum likely from the Permian Basin.
Rep. Dan Crenshaw (R-Texas) agreed. “If we took away petroleum products … look around the room, you’d pretty much watch everything disappear. It is places like [Midland] that help us to maintain the reality we now live in.”
GOP ‘Unleash’ Bill Package
The field hearing was the third staged in Texas this week by Republican-led committees. On Feb. 13, the Natural Resources Committee’s Energy & Mineral Resources Subcommittee held a hearing in Odessa on how federal energy production supports local communities.
On Feb. 15, the House Energy & Commerce Committee’s Energy, Climate & Grid Security Subcommittee (ECGS) held a hearing on the border crisis in Weslaco the Rio Grande Valley.
The ECGS subcommittee also orchestrated the Feb. 16 Midland hearing entitled, “American energy expansion: Improving local economies and communities’ way of life,” which emphasized the fiscal and socio-economics benefits of the Permian Basin’s oil and gas industry, and how it is threatened by the Biden administration’s “rush to green energy” policies.
Of particular interest in the Midland hearing were seven proposals relating to oil and gas regulation, permitting, taxation, infrastructure, and exportation within a 17-bill “Unleash America’s Energy” package introduced into the House since January.
The seven bills mandate 30-day federal approval of “cross-border energy infrastructure,” aka, pipelines; call for removal of “public interest” as a categorical review when the U.S. Department of Energy (DOE) weighs natural gas export proposals; repeals the federal Natural Gas Tax; prohibits a president from banning fracking by executive order; and requires the National Petroleum Council to research U.S. refinery capacity and needs.
Two resolutions among the measures express that there should be “no restrictions” on oil and gas exports, and express disapproval of Biden’s revocation of the Keystone XL pipeline permit.
Other proposals in the 17-bill package, which will dominate the House Natural Resources and Energy & Commerce committees agendas when Congress returns to Washington on Feb. 27, include the “Securing America’s Critical Minerals Supply Act” and permitting/regulatory reform amendments to the “Clean Air, Toxic Waste, Solid Waste, and Inflation Reduction Act.”
Texas Leads in ‘Green Energy’
As in previous hearings, the witnesses—even those advocating for alternate energies—lobbied for regulatory reform and an overhaul of federal permitting systems.
Biology & Geosciences Professor Dr. Michael Zavada, who chairs the University of Texas Geosciences Department, said the headlong dive into green technologies is foolish.
“It is prudent for the United States to diversity our energy portfolio as the safest, most reliable way to maintain long-term, energy independence,” he said, calling support for American oil and gas projects for at least 50 years “a good strategic move in a hostile world.”
Zavada advocates for a diverse array of energy sources, claiming “the Permian Basin will remain so in any new [energy] paradigm that emerges in at least the next 50 years” because it is also “an ideal environment for solar, wind,” and other renewable energies.
He said that equitable investments “to all components” in the energy toolbox could ameliorate boom and bust cycles in “oil patch” cities but investments should not favor renewables “at the expense of” oil and gas.
“We all agree oil and gas aren’t going away anytime soon, but the U.S. can embrace ‘all of the above’ without pitting one against the other,” Rep. Scott Peters (D-Calif.) said, noting that Texas leads the nation in alternate energy development as well as in oil and gas.
“Texas also is the national leader in clean energy development. It is first in wind-power, second in solar and storage,” he said. “Forty percent of the state’s power comes from wind, solar, and nuclear sources. Picking winners and losers is failed strategy.”
All options are viable and should be pursued with equal gusto, Rep. Tony Cárdenas (D-Calif.) said.
Texas is doing it bigger and better with many different energy sources. That shows we can do all of that and we have been doing all of that. We can move forward in a way that we can have it all.”
But as a series of recent oil pipelines show, “We can do things better, we can do things right, and we have to make sure we hold people accountable to do it right,” he said.
Oil & Gas Get Grant Shaft
Blong, Pruett, Carrasco, and Zavada each recounted examples of how new regulations and rules encoded into the Bipartisan Infrastructure Law and Inflation Reduction Act favor alternate so-marketed “green” technologies when issuing grants for innovation and good practices that Permian Basin oil and gas producers have practiced for decades.
The new bills and federal agency emphasis “have given benefits to solar and wind that are not afforded to oil and gas,” Long said, noting that oil and gas producers are “not opposed” to alternate energies being participants in federal grant programs, and want to participate as long as the government is even in evaluating submissions from oil and gas producers.
“If the federal government truly wants to work with energy companies to positively impact the environment, one tangible suggestion is to significantly invest in technologies for beneficial reuse of produced water from oil and natural gas extraction,” Blong said.
She said Midland-based innovators have developed technology for reuse of water used in oil and gas sites, but the federal government is apparently not interested in anything except investments in “renewables.”
“Federal efforts in this case could help to accelerate our beneficial reuse efforts, rather than the federal efforts we have seen to restrict our industry but which do not ultimately benefit our communities,” Blong said.
There is a reason that oil and gas innovation is not getting the grants and investment money some alternate energies are, Peters said.
The grants are for “subsidizing as things gets started, things that are new like carbon capture, direct-air capture, geothermal, nuclear. We’re advancing new energy technologies,” he said, not sustaining an industry that just recorded record profits.
“The goal is to drive up domestic energy production using all these sources and to allow the world to do the same,” Peters said.
From The Epoch Times
