Inside Sources published an opinion editorial from former senior advisor to U.S. Energy Secretary Sam Bodman and GAIN spokesman Craig Stevens in which he urges U.S. leadership to consider strengthening U.S. energy production and infrastructure investment. The piece notes a large container ship was recently stranded in Egypt’s Suez Canal for six days – blocking off critical global LNG trade for a number of nations. Incidents like this can cause oil prices to spike and severe delays in critical shipments.
Stevens explains how increasing energy dependence on foreign sources can be detrimental to the U.S.:
“Unsurprisingly, countries that largely rely on importing their energy resources are vulnerable to delays or increased oil and gas costs when incidents like the Suez blockage occur. Ultimately, consumers are the ones who have to pay the price. With gas prices already increasing here in the U.S., imagine if we had even less domestic oil and gas being produced to help meet the fuel needs of both our country and our allies. Or less infrastructure to help safely transport these resources. No matter what kind of resources you think should power our homes and businesses or fuel our vehicles and planes, it is clear the U.S. should prioritize growing domestic energy production and focus on a path towards energy independence.”
The Biden administration’s federal ban on oil and gas leases would undermine the successful progress America has made so far in energy independence. A study from the American Petroleum Institute found that a federal leasing ban would increase U.S. oil imports from foreign sources by approximately 2 million barrels a day and cause our nation to spend more than $500 billion on energy from foreign suppliers.
Stevens goes on to highlight the valuable role of the U.S. energy sector:
“The U.S. oil and gas industry has been a reliable component of American economic success for decades. A study from API reveals in 2015, the industry supported over 10.3 million jobs and contributed more than $1.3 trillion to the U.S. economy. The same study found that between 2011 and 2015, industry jobs increased by 500,000 each year and benefitted all 50 states. Why should we rely upon unstable energy sourcing from the Middle East or South America when right here at home we can create jobs and steady the global energy market? Reducing domestic energy production risks higher gas prices and potential energy shortages at home – while strengthening foreign states by growing their economies.”
It would be a dire mistake for the Biden administration to minimize domestic oil and gas production and increase reliance on unstable, foreign sources like Venezuela or Iran. The Suez Canal blunder should serve as a prime example of why we should continue to support U.S. energy independence.
Bloomberg reported the Permian Basin will soon produce crude oil at levels not seen since the start of the pandemic, a promising signal that the U.S. and global economy is ramping back up. Texas, in large part due to the Permian, is the largest oil-producing state in the nation, playing a key role in keeping U.S. energy affordable and accessible.
Higher prices are buoying drillers’ confidence. Benchmark Nymex oil gained nearly 35% in the past four months after OPEC and its alliance cut production to strike a balance between demand and supply. The fossil fuel is also getting a bump as Covid-19 vaccinations progress and Americans travel again, boosting gasoline consumption.
Output in the basin will reach 4.466 million barrels a day in May, the most in a year, and rig counts have touched a one-year high, according to the latest data from the Energy Information Administration. Total American crude production peaked at over 13 million barrels a day last year before the global pandemic crushed oil prices, forcing scores of drillers to file for bankruptcy and shutter wells.
As the economy bounces back and the world returns to “normal,” it is critical that U.S. energy resources are there to pave the way. The oil and gas industry will play an important role in the return to widespread travel, and will continue to provide economic, national security, and energy security benefits.
Former Dirty Jobs host Mike Rowe is backing a new documentary airing on Discovery+, Six Degrees. In Six Degrees, Rowe delves into how many seemingly unrelated topics and inventions are actually intertwined and connected. The docuseries specifically highlights the interconnected role oil and gas plays in everyday life– something Gizmodo reporter Dharna Noor took issue with in a recent article and interview with host Mike Rowe. Noor takes aim at the show, calling it “big oil-funded propaganda.” While Rowe acknowledges industry sponsorships, he notes they had no control over script or editorial changes to the series.
Addressing Noor, Rowe explains the critical role the oil and gas industry has played for centuries:
“With respect, Dharna, your view of the energy industry seems awfully one-sided. Obviously, no one who lives on this planet wants to see it “fried,” including me. But no objective person can look at the history of fossil fuels, and not conclude that the petroleum-based products and natural gas have lifted more people out of poverty than any other product in the history of the world. I realize that’s a hard thing to admit, but the fundamental challenge of feeding a hungry planet could not be met without fossil fuels. That doesn’t mean we shouldn’t be moving toward cleaner alternatives with all due speed – we absolutely should, and from what I’ve seen, we absolutely are. But we shouldn’t deny the role that fossil fuels play in our daily life or try to divorce ourselves from oil and gas today. Doing so would destroy life as we know it. Agriculture, transportation, healthcare, clothing, textiles, space exploration…everything would be impacted.”
Rowe raises a valuable point that is often disregarded by the mainstream media: life as we know it would not exist without oil and gas. To watch Six Degrees, click here.
Stars and Stripes recently published an op-ed from Major General James A. “Spider” Marks (US Army, retired) in which he calls for the need to strengthen our domestic energy capabilities to strengthen American national security and energy security interests, pointing to the recent six-day blockage of the Suez Canal. The blockage caused severe delays for critical oil and gas shipments, as the Canal is a critical waterway for international trade.
Marks notes how this type of blockage could be dangerous for the U.S. if leadership chose to increase reliance on foreign energy sources:
“Around 8% of global liquefied natural gas trade and 10% of seaborne oil trade pass through the Suez Canal every day. With energy prices already elevated before the blockage, any delay lasting more than a week could have resulted in soaring costs and acute shortages. A similar disruption in the future, whether accidental or intentional, could precipitate international economic crises and leave millions out of power. Although the United States’ energy reserves and domestic production capabilities would have enabled it to endure a lengthier blockage, current efforts to forcibly shift the United States away from traditional fuel sources will leave it more exposed to future disruptions. The Ever Given fiasco demonstrates why such an approach is fundamentally irresponsible.”
Natural gas, an abundant resource in the U.S., is critical to powering American homes and businesses with affordable and reliable energy. Marks notes that the U.S. natural gas and oil industry generates nearly 8% of the nation’s GDP – and pipeline projects like Dakota Access, Line 3, and Line 5 are crucial to safely transporting our nation’s prosperous energy production transnationally.
Marks also highlights the geopolitical role U.S. energy independence plays, writing:
“By helping allies and strategic partners to meet their energy needs, the U.S. can extend its economic and political influence while limiting that of China, Russia and Iran. Unless the United States develops its export capacity to the point of becoming a viable alternative, many European countries in particular will be forced to import Russian gas to the detriment of their security and ours — which is Russia’s plan exactly … to wedge itself in the NATO alliance and European Union partnership.”
As the Biden administration considers new policies to limit American energy potential, it is important to look at this incident and ponder the outcome had the U.S. not been in the energy-hegemon position it currently is. U.S. leadership should continue to prioritize domestic energy production to protect national security interests and strengthen the national economy.
Bloomberg Law reported North Dakota Attorney General Wayne Stenehjem is seeking a consultation with the U.S. Army Corps of Engineers regarding the continued operations of the Dakota Access Pipeline. On April 9th, the Biden administration is expected to make a decision on whether or not the pipeline can continue transporting crude oil while the Corps conducts additional review on the project. Stenehjem penned a letter directly to Lt. General Scott A. Spellmon of the U.S. Army Corps of Engineers to express concern, writing:
“The State of North Dakota is vitally concerned about the future of the Dakota Access Pipelines, the construction and operation of which has been authorized by the U.S. Army Corps of Engineers for over four years. The Corps has also repeatedly defended DAPL for years as the safest and most environmentally friendly way to promote public interest by transporting oil from North Dakota to distant refineries, safely generating many thousands of good paying jobs and contributing to billions of dollars in tax revenues essential to the state of North Dakota.”
Since 2017, the Dakota Access Pipeline has helped transport 570,000 barrels of oil per day – approximately 40% of the Bakken’s oil output on a daily basis. Dakota Access plays a key role in the local economies that employ highly- skilled oilfield workers, union mechanics, pipefitters, electricians, and heavy equipment operators. DAPL yields a number of undeniable benefits for the state.
Stenehjem is not the only advocate for Dakota Access. Mark Fox, Chairman of the Mandan, Hidatsa, & Arikara (MHA) Nation also wrote to the U.S. Army Corps requesting immediate consultation regarding the future of the pipeline. Fox notes that over half of the oil produced on the tribe’s reservation relies on transit via DAPL. Although recent protests in Washington highlight opposition to the pipeline, it is important to lend an ear to voices like Stenehjem and Fox and the facts they present.
Pipelines play a critical role in safely and efficiently transporting oil and gas for consumer use, and most Americans agree. A recent poll conducted by the Wakefield Research on behalf of the Association of Oil Pipe Lines found the general public consensus around oil pipelines were largely favorable, revealing the popularity of pipelines has increased over the past two years despite negative media coverage of projects.
Nearly 70% of respondents said their “current impression” of oil pipelines was positive. The poll also found that 68% of people were only willing to spend $50 or less per month on “higher energy fees” to reduce climate change – with only 3% of individuals willing to pay $250 or more to support climate change efforts. Notably, interviewees were in favor of measures that avoid increased energy costs.
Pipelines are a safe, reliable form of oil and gas transit. Not only are pipelines safer for transporting oil and gas than rail or truck, but they are far cleaner as pipelines are able to transport a large capacity of product in a short time span, emitting minimal emissions. In addition, pipelines take up a small surface footprint and are typically placed away from highly-populated areas. It is not difficult to see why most energy consumers have a favorable perception of pipelines.
Pipeline infrastructure projects are a cornerstone to the U.S. energy sector and economy, as noted by Pipelines for America:
“Experts predict that oil and natural gas infrastructure will lead to an investment of nearly $46 billion dollars for energy consumers in the United States over the next 25 years as the industry builds out nearly 1,300 miles of new pipeline.”
Not to mention, new pipeline projects provide thousands of new construction and engineering jobs to support the U.S. workforce. While the Biden Administration has pushed out policies in opposition to pipeline projects, it is clear the American people continue to see the value in them.
Real Clear Energy published an op-ed from Benjamin R. Dierker, Director of Public Policy for the Alliance for Innovation and Infrastructure, in which he highlights how opposition to natural gas usage ultimately harms energy consumers. Dierker notes that natural gas is not only an abundant and reliable source of energy, but is extremely affordable for lower-SES Americans and state program beneficiaries. Fighting natural gas means working against at-risk individuals:
“Energy bills jump when utilities use higher cost resources or invest in expensive technology. Natural gas is cheap and abundant, and power can be generated at local plants. Abrupt transitions to renewables mean higher energy bills for the people least able to pay, as the cost of investment plus transmission from far away wind and solar farms is calculated into utility bills. Further, low wage earners are most vulnerable to blackouts if the grid cannot meet demand. Inevitable grid strain from heatwaves, freezes, or maintenance leaves food to spoil for families living paycheck to paycheck.”
Not only is natural gas an essential source of affordable energy for millions of Americans, but it provides critical economic advantages. According to American Power & Gas, the natural gas industry increases the national economy by $385 billion dollars annually and creates almost 3 million jobs. Regulatory threats to natural gas projects threaten these job opportunities, and could leave many union workers without a paycheck. It is important to consider the livelihood of these Americans as court disputes over pipeline projects play out. Not to mention, natural gas is environmentally-friendly as it burns cleaner in comparison to other fossil fuels, making it extremely efficient in many different ways.
The positive impacts of natural gas can no longer be unfairly brushed aside by policymakers and regulators. In conclusion, Dierker notes:
“Blocking natural gas projects means higher bills for low-wage earners, it means slashes to state programming, it cuts good-paying jobs from hardworking laborers, and it sets the stage for more emissions and an inefficient energy transition. Reliance on natural gas is the answer for the poor and those hoping to escape poverty. Restricting natural gas and pipelines only leads to harm, and that harm is felt by real people across the nation.”
The head of the Mandan, Hidatsa and Arikara Nation, Chairman Mark Fox, recently raised concerns in a hearing with North Dakota lawmakers regarding the oil tax sharing agreement between the state and the tribe as well the potential shut down of the Dakota Access Pipeline (DAPL).
Fox proposed the MHA Nation levy its own tax on the oil wells that begin off the Fort Berthold Indian Reservation but straddle the boundary. Currently, all tax revenue from those wells goes to the state under the existing agreement, amounting to millions of dollars each year. Fox called the situation an “inequity that has existed for a long time.” North Dakota State Senators and the tribe will continue further discussion regarding the proposed legislation.
Fox also highlighted a draft letter he’s considering sending to the U.S. Army Corps of Engineers concerning the Dakota Access Pipeline. The letter requests a single tribe consultation between the MHA Nation and the Corps regarding “the alternatives being considered by the Corps regarding continuity of operations of the Dakota Access Pipeline (DAPL) or alternative delivery systems while any NEPA-related or other federal review of DAPL is conducted.”
The letter further describes the importance of oil and gas production to the MHA Nation, and the role of DAPL:
“Over half of the oil produced on our Reservation is transported to market via DAPL. MHA Nation’s interests as an oil and gas producing Tribe are unique among other Tribes in our region. We insist on a one-on-one consultation before any action is taken that would adversely impact the market value of or oil and gas resources…”
The discussion and letter come after a years of legal challenges to DAPL, which has safely operated for nearly four years. The pipeline plays a critical role in transporting Bakken crude from North Dakota to a hub in southern Illinois. While the Corps is considering the next steps on DAPL, it is paramount they prioritize its benefits and recognize the pipeline’s safety record.
E&E News reported attorneys general from 21 different states are suing President Biden for revoking a key, border-crossing permit for the Keystone XL pipeline. In their lawsuit, they noted the U.S. government has studied the safety, environmental impacts, and economic benefits of the pipeline for years, and how President Biden bypassed Congressional authority:
“Essentially, the President purports to unilaterally shutter Keystone XL to send a climate-friendly signal to the international community and secure a stronger negotiating position in his efforts to combat climate change…Congress has never allowed the President to encroach upon its powers over international and interstate commerce in order to facilitate the President’s pursuit of such vague objectives.”
In addition to state attorneys general considering how the President overstepped his authority in revoking the permit, his decision is detrimental to economic growth. The Keystone XL Pipeline would have provided 60,000 direct and indirect job opportunities, $3.4 billion in wages, and $10 million in green energy training. Many policymakers were deeply disappointed by the decision. South Dakota Governor Kristi Noem tweeted the following:
“The Keystone XL Pipeline would’ve benefitted South Dakota towns for decades. It would’ve brought jobs, growth to small businesses, and funding for local schools. South Dakota joined the lawsuit to overturn President Biden’s misguided decision.”
Montana Attorney General Austin Knudsen noted the project would have been a “lifeline” for his state, noting the pipeline would have been the largest property taxpayer across six different counties. Knudsen highlighted how nearly 4,000 job opportunities are now gone in his state with the cancelled project.
While President Biden continues to push for a green energy agenda, he must come up with a clear plan to reintroduce job opportunities for Americans instead of taking them away without a Plan B.
Governor Gretchen Whitmer recently released a new proposal to ensure Michigan’s access to propane in anticipation of shutting down Enbridge’s Line 5 pipeline, a leading carrier of natural gas liquids that are refined into propane and used to heat homes across Michigan. The Governor’s new plan calls for more state investment in rail and propane storage infrastructure and pledges to find new suppliers while working with the industry to deal with potential shortages.
What’s not mentioned in the plan is the increased risk to the environment when using rail to transport natural gas vs. pipelines. Pipelines are proven to be safer, more environmentally-conscious, and more efficient than transporting gas via rail or truck. The alternative of transporting oil and gas by rail presents unnecessary risk, requiring hundreds of thousands of barrels be delivered across busy interstate roadways and waterways, potentially leading to a disastrous spill. Data from the U.S. Department of Transportation has shown that pipelines result in far fewer incidents and personal injuries compared to road and rail.
In addition, a 2017 Carnegie Mellon study found that air pollution and greenhouse gas costs are substantially larger for transport by rail when compared to pipeline. The study specifically points to the harm posed by ground-level emissions from locomotives, as well as railroad infrastructure moving goods through dense population centers. The study notes emissions from trains moving through cities are likely to contact many more people than those emitted at rural power plants for pipeline pumping stations.
Another downside to shutting off pipelines is the increased cost to Michigan’s energy consumers. It was recently reported that residents in Michigan are struggling to pay winter heating bills after February’s cold spell. If Enbridge’s Line 5 is canceled, these utility bills have the potential to soar even higher, making it even more difficult for families to make ends meet.
Governor Whitmer and other elected officials should embrace practical positions that advance our nation’s energy security. The United States has the potential to rebound even stronger than before the pandemic, but only if we continue to invest in our communities and ensure affordable energy for Michiganders through safe infrastructure.