Op-ed: With a Democratic majority in the House, infrastructure must remain key priority

Earlier today, The Hill published an op-ed by former Congressman Charlie Melancon of Louisiana calling on Congress to develop a comprehensive infrastructure plan in 2019. Rep. Melancon argues that in a time when partisan politics are seemingly at a record high – Democrats and Republicans can come together on at least one thing: infrastructure. He emphasizes the importance of further development in the US, noting that fourteen million Americans have jobs directly related to infrastructure.

Despite the bipartisan benefits of investment in our critical infrastructure, Melancon points out that there are still fringe groups opposing infrastructure advancement and modernization. He writes:

It’s clear that infrastructure development must be a priority in 2019. Yet, that’s not what we have seen in the bayous of Louisiana or the plains of the Dakotas. For example, energy infrastructure projects have been plagued with fringe activists and anti-energy protesters who continue to escalate tactics, often times breaking the law and endangering themselves and innocent bystanders in the process. Some have taken to chaining themselves to construction equipment and creating aerial blockades in the trees. In Pennsylvania, one vigilante protester started a fire near equipment and spread spoiled food near a construction site to bother workers and attract wild animals.

Melancon contends these “risky demonstrations and polarizing attempts are further contributing to the collapse of public discourse around this important issue.” Vigilante tactics and ideological opposition to responsible infrastructure development are not conducive to moving the US forward. Melancon even notes that “some groups have even gone as far as to demand banks refuse to do business or associate with the energy companies building projects to better serve American consumers across the country.” He concludes that although our infrastructure deficiencies are complicated and will take time to address, it starts with a straightforward and bipartisan plan right now in 2019, as he writes:

The U.S. faces complex infrastructure deficiencies that are undoubtedly multi-faceted and will take some time to improve. These matters will not be solved overnight; or within the next year, for that matter. But a long-term solution starts with a strong infrastructure plan with bipartisan support in 2019. Through the integration of effective public-private partnerships and a clear vision, lawmakers can hit the ground running and develop a plan to grow our nation’s infrastructure.  

White House focusing on strengthening US energy industry

A number of media outlets have recently reported the Trump administration is focusing efforts on strengthening the US energy industry and investment in critical energy infrastructure. In addition to being a key advancement for economic growth, Politico reports these efforts also aim to portray strength to Russia, as US states in the northeast have previously relied on imported LNG from Russia – partially due to a lack of energy infrastructure in the region.

The President plans to use executive action if necessary in order to encourage further investment in infrastructure and streamline the regulatory process. Politico also highlights President Trump’s past executive orders to approve permits for the Dakota Access Pipeline and Keystone XL. While legal challenges carry on regarding Keystone XL, Dakota Access has been safely transporting 500,000 bpd for more than a year.

The Daily Caller recognized the White House’s emphasis on bolstering the energy industry, writing:

The administration’s policies have been met with fruitful results. The U.S. last year surpassed both Russia and Saudi Arabia to become the world’s largest crude oil producer. The U.S. shale oil boom, made possible with the invention of hydraulic fracturing, has continued to witness record-setting production numbers, blowing past the predictions of international analysts. The Energy Information Administration announced Thursday that it now expects the U.S. to become “energy independent” by 2020.

Expanding the nation’s pipeline system is a major goal of the White House. As hot development spots, such as the Permian Basin in Texas and the Marcellus Shale in Pennsylvania, continue to churn out oil and gas, the administration wants pipelines to deliver product to markets across the country.

Increased investment in our critical energy infrastructure, bolstering the industry, and developing a stronger, more resilient grid will benefit Americans from coast to coast. From more affordable fuel costs to new jobs and economic growth, the focus on US energy can play an important role in meeting our nation’s growing needs.

Democrats can lead the way on infrastructure development in 2019

An op-ed penned by Former US Rep. Harold Ford Jr. was recently featured in the Memphis Commercial Appeal, contending it is now up to Democrats in leadership to “put forward an agenda that will deliver on what’s been absent in Washington recently – results – and set the party up to succeed in 2020.”

With partisan strife at a seemingly all-time high, Republicans and Democrats may be able to agree on one thing: infrastructure development. Ford underlines “nearly two-thirds of Americans support President Trump’s proposal to increase infrastructure spending, which is remarkable for any policy from the current White House.” And have no doubt, our infrastructure must be a priority moving forward: The American Society of Civil Engineers’ latest report card gives U.S. infrastructure a barely-passing D+ grade, and called for $2 trillion of investment by 2025 to bring our resources up to code.

As an energy-rich nation, the US must take advantage of its resources in order to meet the needs of its consumers from coast to coast. Ford writes:

Domestic shale development has positioned the United States to become a net energy exporter by 2022 for the first time since the 1950’s. This newfound energy security is creating jobs, helping address climate change and catalyzing economic growth. It has happened largely as a result of prudent public-private partnerships, which have helped deploy infrastructure to keep up with burgeoning production, including some 14,000 miles of pipeline expected to be installed this year.

However, when it comes to investments in our critical energy infrastructure, the industry has faced a series of challenges and legal hurdles. As Ford writes:

From North Dakota to the Louisiana bayous to the Texas deserts and the Appalachian woodlands, we have witnessed a sequence of events including online, courtroom and construction site fights that render it extremely difficult for new and efficient energy infrastructure to be invested in and rolled out.

All sides have to respect the regulatory process, a process designed to protect the safety of our communities and environment. Fringe tactics don’t advance the country’s interests.

As Mr. Ford concludes, it’s time for Democrats to step up and take the lead on infrastructure development. He writes:

Let’s set the right stage for progress now and even in 2020 by focusing on infrastructure and building a stronger, more durable and ready to be invested in America for the future.

Louisiana Governor: Pipelines Safest Way to Transport Oil

Louisiana Gov. John Bel Edwards reaffirmed his support Wednesday for the Bayou Bridge Pipeline and the coastal refineries the soon-to-be-completed pipeline will support.

“What I will reaffirm is my commitment to make sure that all of the refineries situated in south Louisiana, along the river will continue to be able to get their supply of oil,” Edwards said during his monthly call-in radio show.

“There is no safer way to do it than a properly constructed, properly maintained pipeline. You can’t do it by truck, you can’t do it by rail as safely. That’s my commitment, but we are going to do it in a way that meets all of the requirements imposed by law and that is as safe as it can possibly be.”

Edwards comments came in response to a question from Dean Wilson, executive director of the Atchafalaya Basinkeeper, regarding alleged violations incurred by the pipeline’s developer. In response, the governor emphasized that concerns of this nature should be included in ongoing litigation.

To date, legal challenges to the project have largely been hollowed out in court proceedings where activists have been forced to admit inconvenient facts. Last fall, a Louisiana district court judge chided pipeline foes, writing in a ruling that the court would not accept “the self-serving unscientifically corroborated testimony” provided by an environmental activist.

US can play key role in responsible infrastructure development in Latin America

As the government shutdown continues, all eyes have been on Washington as ongoing budget negotiations between President Donald Trump and Democratic congressional leadership have proven futile. As GAIN spokesman Craig Stevens writes in his recently published op-ed in Morning Consult:

Given all this attention [to the border], it has been difficult to miss the poor living conditions facing the Central American population. Take Honduras, for example, where two-thirds of the population lives in poverty. Many migrants moving toward the U.S. border started their journey in Honduras, looking to leave behind the violence and inadequate living conditions.

Although the region’s challenges are multi-faceted, progress starts with small steps, and the US can play a major role in improving living conditions in countries like Honduras by facilitating responsible energy infrastructure development. As Stevens contends, Latin America has lacked adequate resources and the infrastructure required to provide reliable electricity and fuel to meet its consumer needs. He writes:

Energy-rich countries such as the United States can play an important role in this, too. For example, the U.S. Trade and Development Agency’s Gas Infrastructure Exports Initiative can help to facilitate responsible energy development in Latin American countries.

While the US under the current administration has been hesitant to increase assistance to the region, China has seized the opportunity and has begun developing relationships with several Latin American governments through its investment in the region, nearly $150 billion since 2015. As GAIN strategic advisor James “Spider” Marks writes in his recently published op-ed in Real Clear World, “China’s deep commitment to Latin America is a direct challenge to the United States.”

Marks underlines several concerning elements of China’s growing involvement in our backyard – much of which has a negative impact on the people throughout the region. He writes:

A number of countries in the region are already benefiting from China’s Belt and Road Initiative, a long-term plan for increased trade and economic growth with significant foreign policy and geopolitical implications. Although most of the states participating in the program span Asia, Africa, and the Middle East, the number of Latin American participants is expected to grow as China continues to express its willingness to invest in the region. 

However, these countries have already started to pay the price for their growing dependence on China. From Venezuelan oil deals to Ecuadorian mining issues, infrastructure development has been conducted irresponsibly, with significant repercussions falling on local populations. As reported by the Washington Post, “many Latin Americans have criticized China for its extensive promotion of Chinese firms, labor, and machinery within state-to-state investment contracts, and its lack of local governance standards, including inadequate environment and labor protections.” Are we surprised? Of course not. 

As both Stevens and Marks conclude, as an energy-rich country, the US is well-positioned to foster responsible energy infrastructure development in countries throughout Latin America, such as Honduras. Through private-public partnerships, in tandem with strong industry standards and regulations, these goals can become a reality.

Energy industry going above and beyond when it comes to cybersecurity

The US Government Accountability Office (GAO) recently released a report with claims that there are a series of “weaknesses” in how the Transportation Security Administration (TSA) manages its pipeline security efforts. While it’s worthwhile to continually evaluate the resilience of our nation’s energy networks, what this report doesn’t acknowledge are the lengths that the energy industry is already going to in exceeding regulatory best practices around cybersecurity. It’s important to keep in mind that guidelines outlined by the TSA are a baseline framework, and many operators continue to exceed these standards. In fact, the global oil industry was expected to increase spending on cyber defenses by $1.9 billion in 2018.

Safety is the top priority for the natural gas industry. Although the GAO report is a helpful assessment, any changes to the current status quo should not be made in an overly hasty manner. There are inherent risks involved in every industry, but the TSA and energy developers are working closely together, taking robust steps to anticipate any potential threats and develop safeguards accordingly. From decades of extensive experience, the TSA and pipeline operators have developed layers of resilient support and strong security programs to mitigate risk.

In addition to comprehensive training exercises to simulate active assaults on the grid, dozens of natural gas and oil companies share cyber threat intelligence with each other and the federal government. Therefore, there is little chance that a severe service disruption could occur to the natural gas transmission network. And in the exceedingly rare event of a disruption, impacts would be localized and brief, and it is extremely unlikely that a single point of disruption could result in an uncontrollable cascading outage.

Regulators play a critical role in modern energy development. But “playing politics” or adding more regulatory hurdles is not the answer to bolstering industry security – the US must instead streamline the permitting process, establish straightforward expectations, and ensure regulatory certainty for developers. In an era when the US is producing record amounts of oil and gas, lawmakers and regulators alike must welcome investment and foster an environment conducive to energy infrastructure development.

Lawmakers Urge Trump to Get Keystone XL “Over the Finish Line”

Members of congress are urging President Trump to take action to move construction of the Keystone XL Pipeline forward after a federal judge overturned the State Department’s approval of the project in a ruling last month.

In a Dec. 14 letter, forty-four lawmakers, including Montana Sen. Steve Daines and Rep. Greg Gianforte said the recent court decision “has brought real and immediate consequences, halting critical preconstruction activities and invalidating the analysis that underlies the approval issued by your administration.”

“This comes despite extensive review by the previous Administration saying the pipeline will have minimal environmental impact and generate significant economic benefits,” the letter states.

“While we believe that it is important to conduct appropriate environmental reviews, we also believe that further review will not contribute to the existing body of science that already supports pipeline construction and instead will have a significant impact in our rural communities.”

Lawmakers go on to note that the $8 billion project will create an estimated 6,600 new jobs and amount to a nearly a $4 billion capital investment in 2019 alone. According to the letter, the November court decision halting pre-construction activities has already resulted in a loss of at least 700 jobs.

“We respectfully urge you to take every practicable step to get this project over the finish line and workers back on the construction sites.”

GAIN Coalition spokesman Craig Stevens echoed the concerns outlined by lawmakers, while also emphasizing the importance of the project. “Continued study of the matter places an unnecessary burden on limited government resources, while intensifying concerns about the regulatory uncertainty provided to vital infrastructure projects,” Stevens said.

“The Keystone XL pipeline represents an important investment in both the U.S. and Canadian economies and should be built without further delay.”

Op-ed: “The American energy strategic advantage”

The Washington Times recently published an opinion piece by GAIN strategic adviser James “Spider” Marks underlining the importance of American energy and its critical role in the global market. Marks contends that the oil and gas industry is vital to our economy and way of life, supporting more than 10 million American jobs and is responsible for heating our homes, fueling our vehicles, and providing reliable electricity. However, Marks argues the benefits of a strong American energy industry extend beyond its borders. The op-ed writes:

American energy exports can provide stability to the international energy market and foster more prosperous relationships between the United States and countries seeking reliable energy, while bolstering American foreign policy objectives in the process. Look what’s happening today in Ukraine. Russia seized Ukrainian ships and crew members. Crimea is already lost to Russian criminality. What’s next? Fundamentally, this is all about European Union access to Russian oil and gas. The United States must be a viable alternative.

The United States has encouraged European countries to limit their reliance on Russian energy, offering more stable American LNG alternatives instead. European leaders appear to be interested and receptive to U.S. energy, and willing to support building new LNG import terminals to accommodate shipments. Germany has already offered support to build in a terminal in the northern part of the country, with others likely to follow suit.

But in order to fully meet our potential when it comes to stabilizing the global energy market and assisting our allies, we must complete pipeline projects that are currently underway and encourage future investment in our critical energy infrastructure. Marks points out that modern pipelines are the “safest, most efficient method of transporting product, from extraction until it reaches consumer markets.” Despite this, projects across the country, from Keystone XL, to Bayou Bridge, to Mountain Valley, continue to face unwarranted scrutiny from opposition, regulatory uncertainty, and a number of legal hurdles. As Marks concludes:

In order to best utilize our fossil fuels, meet our energy needs and provide reliable fuels for our allies around the world, we must prioritize the safe completion of pipeline projects currently underway and welcome future investment. While thorough evaluations and careful analysis are critical steps of the process, permits must be streamlined and regulations clear and consistent. It is time for U.S. officials to put aside partisan politics, focus on the facts and understand the significant need for infrastructure development.

Op-ed – “Gas prices reach new 2018 low, but some states won’t reap the benefits”

The Daily Caller recently published an opinion piece by GAIN spokesman Craig Stevens highlighting record-low gas prices for 2018. Stevens suggests that the cost of fuel is one of the “most recognizable and reliable economic indicators” here in the US, affecting millions of Americans each day. The op-ed emphasizes the benefits of affordable gas, noting that the average US family spends about five percent of its annual income on fuel, about $2,400 for last year. With cheaper gas prices, the money that families save can instead go towards a variety of other household commodities.

Stevens contends that the “downward trend in retail fuel prices is a boon for consumers, and it owes largely the surge in energy development happening across the nation.” He points out that while the national average of gas prices is impressively low, states like California face gas prices more than 40 percent above the national average. Stevens argues:

As conventional wisdom holds, retail prices follow crude. But there’s more to the story. Crude oil makes up about half the price consumers face at the pump, and research indicates that a $1 change in the price of crude oil moves the retail value by approximately 2.4 cents. From there, many factors come into play, including local demand, state taxes, marketing and distribution.

One of the heftiest costs producers face — which, in turn, gets passed on to consumers — is that of moving energy products. Once pumped from the ground, developers ship oil and natural gas to refineries, which process it into market-grade fuels. These products are then transported to regional hubs, and finally on to the point of sale.

Studies show that as much as 20 percent of consumers’ costs owe to the expense of moving fuels from stage to stage. 

Not surprisingly, states with the highest fuel costs tend to be those that lack midstream infrastructure to safely and effectively transport fuels.

The United States’ remarkable shale development has restructured the flow of energy from outside-in to inside-out, and pipeline deployment has struggled to keep pace.

In addition to a lack of infrastructure, several states have vehemently opposed new pipeline construction to alleviate these bottlenecks, such as New York Governor Cuomo’s “blockade” on infrastructure. Other states, like Pennsylvania, California, and Washington have implemented high fuel taxes. And by no coincidence, these states have some of the highest gas prices across the country.

Moving forward, the US must take advantage of the boom in energy production. In order for all Americans to share in these low fuel prices and benefit accordingly, we must expand our critical energy infrastructure network. Denying infrastructure growth is preventing progress – from New York to California. As Stevens concludes “To extend this progress nationwide, and to solidify the country’s march toward energy security, policymakers should prioritize the United States’ infrastructure capabilities.”

US oil exports hit key milestone

Earlier this week, Bloomberg reported the US has become a net oil exporter for the first time in 75 years. This status serves as both a practical and symbolic milestone, indicating the US’ dominant role in the global energy market. The article highlights the factors leading up to this newfound “energy independence,” writing:

The shift to net exports is the dramatic result of an unprecedented boom in American oil production, with thousands of wells pumping from the Permian region of Texas and New Mexico to the Bakken in North Dakota to the Marcellus in Pennsylvania.

On paper, the shift to net oil exports means that the U.S. is today energy independent, achieving a rhetorical aspiration for generations of American politicians, from Jimmy Carter to George W. Bush. Yet, it’s a paper tiger achievement: In reality, the U.S. remains exposed to global energy prices, still affected by the old geopolitics of the Middle East.

Although the US is exporting record amounts of oil to our allies around the globe, there is still much work to be done when it comes to growing our energy infrastructure and achieving more efficient transportation methods. As reported by E&E News, the oil industry has flared a record amount of natural gas in Texas’ Permian Basin this year, and is expected to flare even more gas in 2019. Flaring is the process of burning excess gas at drilling sites that could not be transported for consumer use due to a lack of infrastructure in the region. In addition to being a potential environmental concern, flaring disposes of valuable gas that could be utilized by consumers around the country, such as those in New England who are preparing for another frigid winter.

Fortunately, there are a number of projects underway in the Permian to help alleviate the pipeline bottleneck, and will better position the US to maximize oil production, export capabilities, and efficient transport of product. Bloomberg writes:

U.S. crude exports are poised to rise even further, with new pipelines from the Permian in the works and at least nine terminals planned that will be capable of loading supertankers. The only facility currently able to load the largest ships, the Louisiana Offshore Oil Port, is on pace to load more oil in December than it has in any other month.

GAIN recognizes the US’ status as a net exporter of oil as an important milestone in our history and moving forward. A strong American energy industry not only plays a critical role in fueling our growing economy, but also stabilizes the global market with the US as a key player.