Progressive Group Calls for Enactment of Permitting Reform to Boost Energy Infrastructure

Earlier this fall, lawmakers on the fringe left poured water on the passage of Senator Joe Manchin’s (D-WV) bill to update our country’s antiquated environmental laws. Now, according to congressional leaders, scuttled permitting reform legislation may be back on the table in the lame duck session of the 117th Congress. It’s an important development on Capitol Hill, and one that is long overdue. 

Support across the political spectrum is also fueling support for a bipartisan win on permitting reform. At the start of December, the Progressive Policy Institute released a letter outlining their priorities for the end of the year, which included energy permitting reform to “boost energy supply and combat climate change.” Common-sense permitting reform is among the most bipartisan of issues, especially as the war in Ukraine and inflation have illustrated the need for more domestic infrastructure. 

As PPI notes, household energy prices have risen 32 percent “between October 2020 and October 2022.” While Congress has made strides to address some of these concerns by allocating over a trillion dollars in the bipartisan infrastructure law, CHIPS and Science Act and others, the money is at risk of being hamstrung by onerous red tape. 

Unnecessary permitting has severely impacted projects across the country. PPI notes that “often duplicative government reviews and nuisance lawsuits have pushed average time for permitting to 4.3 years for transmission [projects], 3.5 years for pipelines, and 2.7 years for renewable energy generation projects.” In a time of extremely volatile energy supply, demand and prices, an ever-increasing lead time on completing vital projects that would alleviate much of the existing pressure cannot continue. Congress must take up commonsense permitting reform.

PPI suggests that the easiest avenue in which to streamline the permitting process is to pass the Energy Independence and Security Act (EISA) as part of an omnibus bill or in the renewal of the NDAA. The EISA would most notably require the president to set a list of twenty-five high-priority infrastructure projects to receive priority permitting, approve the Mountain Valley Pipeline and set one to two year targets for environmental reviews. 

As the EISA is the most immediate way to cut the red tape continuing to constrain American energy projects, the GAIN Coalition echoes PPI’s bipartisan approach to permitting reform and calls on Congress to pass the Act as soon as possible.

NPR Critique of National Investment into Natural Gas Misses the Mark

This week, the federally-funded National Public Radio (NPR) published a news report criticizing the use of natural gas in the United States. NPR’s piece believes that natural gas may stand in the way of reaching our national climate goals set forth by President Biden – reporting that is pushing false narratives to the public. Natural gas is an important component of our energy portfolio, and with deep reserves of this important source, its utilization keeps America powered and environmentally-friendly.

Compared to crude oil or coal, natural gas is far more environmentally friendly than other fossil fuels, and provides a stable energy buffer to the expedited green energy transition. The NPR story contains a quote from a researcher who makes the case against new natural gas power plants. He says “the consensus is that we need to be at net zero greenhouse gas emissions economy-wide by about 2050 in order to avert the worst impacts of climate change. Continuing to build natural gas plants certainly seems at loggerheads with that commitment.”

However, the production, transportation, and use of natural gas in the United States is beneficial not only to the U.S. economy, but also for our climate goals. Since 2005, the primary energy sources for U.S. power generation has shifted from coal to natural gas and renewables. As the EIA reports, the U.S. electric power sector produced 32 percent less CO2 in 2019 compared to 2005.

This reduction in pollutants is directly related to the 27 percent decrease of coal’s share of US electricity generation and the 19 percent increase in total generation of natural gas in the same realm. It is important to support this momentum towards natural gas, being that it emits half as much carbon as coal when generating electricity.

The IEA’s data comes as the United States continues to produce record amounts of natural gas from the Marcellus, Utica, and Permian formations. Using domestic-sourced natural gas to produce electricity and heat American homes and businesses is key to further bolstering the economy and ensuring both grid reliability and energy security.

While not entirely emissions free, natural gas is far better than other electricity generating fossil fuels. It burns cleaner, moves safely and efficiently across our robust state-of-the-art pipeline network, and keeps electricity prices low. We need more natural gas to reduce carbon emissions, not less.

EIA Downgrades: The U.S. Shale Boom is Over

A recent article by OilPrice outlined how, even though U.S. shale production is increasing, it is doing so at a much lower rate when compared to the boom before 2020. Similarly, this production growth is much slower than was expected even a few months ago. In another unfortunate turn of events for Americans already facing high energy prices, the U.S. shale oil boom seems to be over.

Over the course of the year, the U.S. Energy Information Administration (EIA) has downgraded its forecasts for crude oil production in 2022 and 2023. Though the EIA expects the annual average production to set new records, the administration has consistently decreased its expectations since the year began. According to the November short-term energy outlook, the EIA expects U.S. crude oil production to average 11.7 million barrels per day (bpd) in 2022 and 12.4 million bpd in 2023. However, these projections reflect a 21% decrease in production. 

These downgrades are a combination of multiple factors, namely, inflation, the war in Ukraine and supply chain disruptions. However, one of the most important aspects impacting producers’ supply has been the administration’s lack of material support for their projects and sector.

The Biden administration has continued to send mixed messages to domestic energy companies, often blaming them for price gouging, encouraging more taxes on their industry, and using regulatory tools and agencies to block new projects. The CEO of Hess illustrated the damage this has done to our position in the global energy markets, saying recently, “shale was thought of as a swing producer, the Saudis and OPEC have waited this out. Now, really OPEC is back in the driver’s seat where they are the swing producer.”

If the administration does not take immediate action to reverse course on their own inaction regarding the domestic oil and gas sectors, then more downgrades are to be expected in the near future. In that case, the U.S. will continue to be beholden to Saudi Arabia, unable to fully supplement our allies’ energy needs in Europe, and feel the price of continuing energy volatility. The administration should be investing in domestic energy infrastructure so that pipeline constraints do not hamper supply and demand.

An Expensive Thanksgiving Previews a Costly Christmas

Inflation is eating at the pocketbooks of all Americans, causing them to spend more money today than they were a year ago. Whether those increases manifested themselves in food prices, travel fees or lodging, Thanksgiving was more expensive this year than it has been in years. According to a Farm Bureau survey, the cost of a Thanksgiving meal this year was up 20 percent from last year’s average, or approximately $10.74. While inflation played a key role, supply chain disruptions and a rise in energy and fuel costs also drove up prices. 

Often overlooked, diesel prices have skyrocketed to record premiums over gasoline and crude oil. Supply stockpiles have decreased in recent months, and the war in Ukraine has driven the cost up. This is extremely important as diesel is the preferred fuel for most farming equipment, as well as the trains and trucks that move our goods. Farmers across the U.S. have worked diligently to face these challenges, but more expensive fuel has meant more expensive inputs, such as fertilizer. 

Traveling to see family and friends also took a larger bite out of the holiday budget. Compared to 2021, the average airfare is up about 40 percent. Families driving to see relatives were also faced with higher costs. Even though gas prices have declined from the record high this summer, they are still 8 percent higher than this time last year.  

Unfortunately, Americans can expect the upcoming holiday season to follow the same trends as Thanksgiving. As the Wall Street Journal notes, diesel inventories on the east coast currently range around “25 million,” and “an average winter will deplete them by about 20 million.” That means any significantly cold winter could have much of this country in an immense squeeze, further driving prices upward.

The administration should have been working overtime to increase the supply of energy over the last half-year, as well as our domestic capacity to transport it to market. They could’ve been encouraging and supporting more infrastructure projects, such as pipelines, instead of depleting our strategic petroleum reserve, for example. Yet, without proactive action from the administration to bring down prices, Americans are left to bear the burden of overpriced holidays. 

Hopefully, we will see a return to cheaper costs across the board and Americans will have relief by the time next year’s Thanksgiving and Christmas seasons come around. 

Looming Rail Strike Underscores Importance of Pipeline Infrastructure

While most Americans were busy preparing for Thanksgiving, news broke that a work agreement between railroad companies and rail workers had derailed. The agreement, negotiated by President Biden, would have kept America’s vital rail network running without interruption, but the deal fell apart last week after unions failed to ratify the contract. Now, the stakes are rising for both sides to clinch a deal by December 9th. Without a contract, our country could be paralyzed by a strike affecting the freight rail industry, thereby upending America’s supply chain right before the holiday season.

The threat of a strike could have broad consequences for the entire economy, as freight railroads account for roughly 40 percent of U.S. long-distance freight volume – more than any other mode of transportation. 

However, the impact of a rail shutdown could be particularly harmful to the U.S. energy industry and could put upward pressure on prices. According to S&P Global, a rail strike could “disrupt deliveries of crude in the US, primarily North Dakota Bakken crude from the Midwest to refiners.” This point was echoed by a recent letter from an energy trade group to Congress, which noted a strike could force production cuts and “deplete U.S. gasoline and diesel supplies and drive-up fuel prices.”

This reality is unfortunate, and could in part be avoided  by embracing pipeline infrastructure, which scarcely needs labor to operate. Pipelines carry most of the nation’s crude oil to refineries, but each day about 300,000 barrels move by rail. By moving more crude oil, and even Liquified Natural Gas (LNG), from trains to pipelines, we would not have to worry about the prospect of strikes impacting our own energy security.

At the same time, a rail strike would put upward pressure on energy prices – a reality consumers can ill afford during a period of high inflation. When it became public on Monday that the strike was back on, oil prices spiked and natural gas prices surged and have remained elevated. Compared to rail, pipelines are considerably safer and less expensive for transporting, according to government studies and industry analysis. 

While pipelines cannot move all types of energy, like ethanol, moving crude and LNG away from railroads would be a considerable improvement over the existing system. Now, America’s consumers wait with bated breath for a quick resolution

Energy Expert Emphasizes the Need for an All-of-the-Above U.S. Energy Policy

The GAIN coalition recently sat down with Patrice Douglas, former chairman of the Oklahoma Corporation Commission, to discuss U.S. energy policy. Douglas, the former President of SpiritBank and Executive Vice President of First Fidelity Bank, shared concerns that the Biden administration’s hostility towards U.S. energy production and infrastructure causes uncertainty for investors. She worries this could have long-term consequences for the energy sector. Douglas explains that “the Biden administration has left investors feeling uncertain and feeling like they have to look at this risk before they invest. And risk has a cost.” For the American people, this “cost” is sky-high energy prices.

Douglas agreed that U.S. consumers can’t continue to be exposed to the recent “whiplash” of energy prices. Douglas said she “talked to a young mother the other day, who said she’s struggling to fill up her tank with gas to get to work.” All Americans are impacted by these high energy prices, whether they’re filling up their tank with gas or trying to heat their homes for winters. The 39 percent price spike in the last two years has put a tremendous burden on Americans of all ages and backgrounds, especially people living on a fixed income like our seniors. Douglas says, “It really worries me for our aging population.”

In order to turn the tides on the U.S. energy crisis, the Biden administration must embrace what Douglas calls an “all-of-the-above” energy strategy. She says she supports investments in renewable energy sources like wind and solar but that the U.S. can’t “discount where most of our energy comes from right now… oil and gas.”

Click here or the photo above to hear more from Patrice Douglas

‘Tap Oil fields’ Writes Patrice Douglas in New Opinion Piece

America’s emergency oil reserves are being drained at an unsustainable pace with no plan to refill it over the long-term. That’s the key takeaway in a brand new opinion piece authored by GAIN Strategic Advisor Patrice Douglas for RealClear Energy. Douglas emphatically writes, “we need a real long-term strategy to keep both energy prices affordable and our country’s oil reserves fully stocked.”

The SPR was created in 1975, following oil supply interruptions during the 1973–1974 oil embargo, in order to mitigate future disruptions during periods of conflict, acts of God or natural disasters. Maintained by the Department of Energy, it is located in underground salt caverns along the coastline of the Gulf of Mexico in Louisiana and Texas. The Reserve has a capacity of 727 million barrels, but as of November 17th, had dwindled to just 392 million barrels.

Douglas notes that this unfortunate reality could be entirely avoided. She says President Biden has been using the SPR as “his personal political tool” as a means to “keep prices artificially low.” At the sametime, Douglas writes that the need to even tap the SPR is “an acknowledgment of the president’s hostile oil policies and how they have contributed to the imbalance between supply and demand. This imbalance has caused volatility in the oil markets, resulting in record-high gasoline prices over the summer.” 

Instead of draining the SPR, Douglas recommends President Biden tap America’s abundant oil fields, which can be used to actually increase the supply of oil for gasoline. She concludes her opinion piece by saying “we need a real long-term strategy to keep both energy prices affordable and our country’s oil reserves fully stocked. We can accomplish this through building more pipelines, reducing regulatory burdens, reforming our permitting laws, and supporting energy producers.”

The Environmental Paradox of the Biden Administration’s Energy Policies

One of the Biden administration’s most devastating energy policies has been its lack of support for domestic energy infrastructure projects, particularly for pipelines. As energy demand at home and abroad has rebounded, supply has not been able to meet demand, largely due to transportation and export constraints. 

This is no more evident than in Texas’ Permian Basin. In the resource rich areas of Central and West Texas gas production has accelerated but the boom in production has not been correlated with an increase in pipeline capacity to transport natural gas to processing facilities, leaving the existing pipeline network “effectively maxed out.” That’s the gist from Bloomberg, who observes there is no immediate solution in sight, as pipeline extensions necessary to ease the constraints are not slated to come online until the second half of next year. This over-supply and lack of capacity necessitates two options: either scale back gas, effectively killing valuable oil production, or continue to produce crude and burn off the excess gas. Neither path is favorable, but scaling back production with recently volatile energy prices is not prudent. 

Companies across the U.S. would prefer to build pipelines when there is the necessary amount of oil and gas to flow through it. However, build or extend the lines too late, “and transportation shortages can occur resulting in the need to flare,” as Bloomberg notes. This appears to be the case in the Permian Basin, as federal policies have hamstrung energy infrastructure projects. 

It is ironic that, in the name of environmentalism, the Biden administration has weaponized regulatory hurdles and permitting to impede energy infrastructure projects from receiving the necessary support, now leading to increased emissions due to burning off gas. There is no clearer example of this than in New England, where the lack of pipelines is causing states to import natural gas, resulting in inflated energy prices this winter, according to the EIA. 

While Texas has to flare off gas due to a supply glut, New England will need to rely on foreign countries – a perverse reality that can be avoided entirely. 

The GAIN Coalition has highlighted the lack of pipeline infrastructure consistently, illustrating that the excess of natural gas from the Permian Basin could be alleviating the financial hardship felt by many both domestically and abroad. If the U.S. had prioritized these pipeline infrastructure projects over the last few years, then our energy could be making it to market, not having to be burned off. This is just another example of how the administration’s short-sighted energy policies have not worked, and in fact, harmed both the U.S. and our allies abroad.

GAIN Coalition on Rep. James Comer’s Report on Democrats’ War on Energy

In a recent report, Ranking Member of the House Committee on Oversight and Reform, James Comer (R-KY) detailed the Democrats’ war against domestic oil and gas companies. The Administration and its party have “promoted anti-American energy policies,” and failed to deliver a comprehensive plan to address high energy prices and market deficiencies.

The report outlines at least ten failed policies that the Administration has pushed over the course of the last two years. Rep. Comer writes, “President Biden shut down the Keystone XL pipeline, implemented a moratorium on oil and gas production on federal lands, drained U.S. oil reserves, and enacted energy policies that increased costs for Americans.” The GAIN Coalition has also highlighted many of the policies that the Biden Administration and its respective agencies have utilized in its attack on domestic energy. Specifically, GAIN has called to attention the canceling of the Keystone XL pipeline, onerous regulatory hurdles such as NEPA, depleting the SPR to dangerously low levels, and banning oil and gas leases.

While the Biden administration’s war on energy production is evident, it is encouraging that the GOP members of the House Oversight Committee are not only illustrating failed policies, but offering long-term solutions. The most notable are the committee’s calls for supporting energy infrastructure and pipeline projects. The report specifically notes, “Expediting the Federal Energy Regulation Commission’s (FERC) review of pending applications will help lower future emissions and ease rising costs for consumers.” More pipeline capacity is necessary for producers to transport energy to market for consumers, as well as export facilities for our allies abroad. By supporting these projects, supply will be able to compliment demand, thus reduce price for Americans across the country. 

The GAIN Coalition believes that supporting infrastructure projects is a key to unlocking American Energy, and wholeheartedly supports the call for its support in Rep. Comer’s report. We hope that the President and his Administration take these solutions seriously so that the energy crisis can begin to be alleviated.

Biden Promises “No More Drilling” Despite Ongoing Energy Supply Crisis

In the midst of an unprecedented energy crisis, President Biden continues to send mixed messages to the American fossil fuel industry. His inability to offer clear and concise, forward-looking policies in the traditional energy sector is making companies question if they should invest their capital into new oil and gas projects. This lack of confidence, coupled with misguided federal policies, continues to exacerbate the ongoing supply challenges facing our country.

For example, yesterday White House staff who handle the President’s twitter account posted online that energy companies should use their capital to “expand supply and lower prices at the pump.” Yes, we all want to increase the supply of domestic energy, but it’s Biden’s own administration that has made it so much more difficult to produce here at home. President Biden has said numerous times that he wants to “end fossil fuels as we know it” and make it impossible to build new energy infrastructure such as oil and gas pipelines. 

At the same time, this tweet contradicts what the President himself has been saying on the campaign trail where he speaks off script and extemporaneously. In New York over the weekend, he pledged to end fossil fuels altogether, saying there would be no more drilling on federal land or offshore. After being pressed by an anti-fossil fuel protester in the audience, he said “No more drilling…there is no more drilling.”

The fact that the President is doubling down on banning drilling shows how out of touch he is  from the ongoing energy crisis. The President clearly isn’t pumping his own gas. American voters in today’s midterm election cite the economy and inflation as their top concerns. Wll, much of the inflation we are experiencing is a direct result of high energy costs – a fact that can be reversed if we increase the supply of fossil fuels into the economy.

Our country needs more drilling, not less. The President is hoping to have it both ways when it comes to selling his failed energy agenda: give the impression that he wants to help solve the crisis, but take no tangible steps to make it happen to appease his base. The country, and consumers, will continue to suffer unless his administration’s energy agenda changes course.