The U.S. House of Representatives released its energy bill, H.R. 1, the Lower Energy Costs Act which will increase the production and export of American energy and reduce the regulatory burdens that make it harder to build major infrastructure in the United States through comprehensive permitting reform. The Lower Energy Costs Act will also expedite critical mineral mining, streamline manufacturing, and make it easier to transport and export American natural gas by repealing the natural gas tax and speeding permitting for critical projects. It will also reform the National Environmental Policy Act (NEPA) that currently adds years of delays and millions of dollars in costs to energy and infrastructure projects. The Lower Energy Costs Act will provide a streamlined, simplified permitting process for all federally impacted projects, speeding construction for pipelines, transmission, and water infrastructure. By fast-tracking the approval process for American energy production on federal lands and waters and speeding up the permitting process, the bill will lower costs for Americans and help grow the U.S. economy.
The Bill is an attempt to dispel some of the Biden Administration’s anti-oil and gas policies, pipeline permitting delays, and rejections of critical mineral mines such as revoking the leases for the Twin Metals mine in Minnesota and withdrawing lands from mining, despite resources known to be in place. President Biden is conducting war upon American energy, apparently preferring the United States to get its oil from hostile countries or countries with dirtier energy whose standards are not on par with American companies and to get its critical minerals needed for technologies the Biden administration promotes (wind turbines, solar panels, and electric vehicles batteries) from China, who dominates those supply chains.
The Institute for Energy Research (IER) showed in its report on environmental quality that Biden’s preference for oil production outside of North America results in oil and natural gas production moving from countries with the highest environmental standards to countries with lower, or even functionally zero, environmental standards. IER’s report creates an environmental quality index to quantify this disparity. The report illustrates that oil production in the United States and other developed countries (Canada, Norway and the UK) is actually better for the environment than importing from producers in the Middle East, Africa and Asia. Yet, Biden removed the Presidential permit from the Keystone XL pipeline on his first day in office, decreasing the amount of oil the United States can import from Canada, and is holding Federal lands and waters hostage from legally required lease sales that would help increase future oil production. Recently, Biden withdrew 16 million acres from oil exploration in energy-rich Alaska, after suspending legal leases in the Arctic National Wildlife Refuge during his first week in office.
Revenues from Domestic Production
By withholding oil and gas production leases and minimizing land available for future production, President Biden is not allowing taxpayers to get the full value of the resources on public lands owned by the American public. Not only would increased domestic production provide lower energy costs for Americans, but taxpayers would benefit from federal and state government revenues increasing from rents and royalties. The Department of the Interior’s Office of Natural Resources Revenue disbursed $21.53 billion in revenues generated in fiscal year 2022 from energy production on federal and Tribal onshore lands, and federal offshore areas. Part of those revenues collected from oil, gas, renewable energy and mineral production on federal lands within states’ borders and from offshore oil and gas tracts in federal waters were distributed to the respective states. Alaska received $45 million in fiscal year 2022—less than 60 percent of what Texas received despite having massive federal lands rich in resources. New Mexico received the largest revenues from production on federal lands in fiscal year 2022– over 60 times more than Alaska.
Permitting Reform Needed
President Biden told his federal agencies to ensure climate change is factored into their work and even issued that edict to the Federal Energy Regulatory Commission (FERC)—a politically independent agency in charge of certain energy activities including natural gas permitting. His administration has been so diligent in those matters that the Energy Information Administration (EIA) recently reported that interstate natural gas pipeline capacity additions reached a record low in 2022 based on data collected over 27 years. In 2022, 897 million cubic feet per day of interstate natural gas pipeline capacity was added from five projects, with only one project adding a relatively small amount of new pipe. The 2022 gas pipeline capacity additions were just 3 percent of the record amount added (28,040 million cubic feet per day) in 2017. Since the Federal Energy Regulatory Commission (FERC) has to approve new interstate natural gas pipeline capacity, the news speaks loudly regarding its motivations as does President Biden’s promise to cause the demise of the U.S. oil and gas industry stated during his campaign. Regulatory hurdles are clearly stymying growth in pipeline capacity and thus to natural gas production, which points to much-needed permitting reform for interstate pipelines.
The Mountain Valley pipeline is a good example of why permitting reform is needed. The Mountain Valley pipeline is a 303 mile pipeline from northern West Virginia, through Southwest Virginia, and connecting with an existing pipeline near the North Carolina line. It was originally set for completion in 2018 and is now 94 percent complete. Permitting delays and court action have increased the pipeline’s cost from the original estimate of $3.5 billion to $6.6 billion. If all goes well in court and with obtaining remaining permits, Equitrans Midstream Corp., the lead partner in the project, hopes to have the remaining work done in time for the pipeline to begin transporting natural gas by the end of this year. This pipeline alone would add more than double the capacity of total U.S. interstate pipeline additions last year.
Minerals Needed for Renewable Energy and Electric Vehicles
While the United States has critical minerals needed for wind turbines, solar panels, electric vehicles and their batteries, Biden is making it difficult to mine those resources in the United States by removing lands from mining, revoking leases, delaying permits and listing wildflowers as endangered. That means the United States will become dependent on China for them. John Podesta, Biden’s clean energy czar, remarked that the Chinese energy and technology industries will play a major role in future domestic energy production. Podesta said Chinese companies will be “big players” in U.S. energy production and electric vehicle manufacturing. He noted that the companies would be able to take advantage of the Inflation Reduction Act and the Chips and Science Act, two laws the Biden administration would use to bolster American supply chains. Even Secretary of Energy Granholm said that “We can all learn from China.” That is because China has 80 percent of the processing capability for the critical minerals needed for renewables and electric vehicles. So, Biden, Podesta and Granholm are telling Americans that we need to be 4 times more dependent on China for our future energy needs than we were on the Middle East for oil.
However, what we should learn from China is that the country is diversified in its energy program and not appearing to adhere to its carbon reductions. It has approved more coal plants for construction than the UK has in its entire generating fleet—plants that easily operate for 40 to 60 years. China’s coal plant inventory is larger than the entire generating fleet of the United States. China gets over 50 percent of its electric generation from coal and consumes over 50 percent of the world’s coal each year. Further, its coal generation is so cheap that it makes over 50 percent of the world’s polysilicon—an energy intensive product needed in solar panels. The country respects diversity of supply with more wind, solar and hydroelectric power than the rest of the world, and an aggressive nuclear energy construction program. It imports oil and natural gas from the United States, Russia and the Middle East to supplement its own production of oil, natural gas, coal, lithium, cobalt, rare earth minerals and other metals. China is looking to the future and ensuring it has sufficient energy to grow its economy and keep its people supplied with energy during droughts and heat waves that it has experienced over the past several years. In comparison, under Biden, the United States is moving toward wind and solar power that rely on the wind blowing and the sun shining, and increasingly upon China for the essential parts of those devices.
The Lower Energy Costs Act, if it becomes law, will cut red tape and increase domestic energy production to lower energy costs and stop U.S. dependence on hostile foreign countries for energy and minerals. With the passage of the Lower Energy Costs Act, the United States can end the war on American energy, become energy independent again, and lower costs for Americans. But obstacles are in the way. Chuck Schumer, Senate Majority Leader said the bill was dead on arrival and a non-starter. Americans should be up in arms at Biden’s energy program, which will be limited to almost complete electrification, produced mainly by renewables. Limiting choices for Americans is what socialism and communism – two forms of totalitarian government — is all about.