Compromise Can Get Energy Legislation Moving

The energy industry should be willing to compromise with opponents to get key legislation it wants, such as crude oil exports and faster LNG export licensing, three members of Congress told the North American Gas Forum on Oct. 6.

They also agreed U.S. energy policy has a role to play abroad.

In a wide-ranging panel discussion, Sen. Heidi Heitkamp (D-North Dakota); Rep. Ted Poe (R-Texas); and Rep. Bill Johnson (R-Ohio) agreed that an all-or-nothing approach by industry won’t work. Heitkamp said there are “irrational” positions on both sides of energy issues.

“I’m the 49^th most liberal senator from the 50^th most conservative state—I know about compromise,” Heitkamp said at the Washington, D.C., conference.

Current energy issues “are no-brainers that would take five minutes to solve in a boardroom,” Heitkamp said, but added that government doesn’t work the same way corporations do. Congress has to hear and respond to multiple viewpoints. Unfortunately, energy issues now are falling into two, bitterly opposed camps and the energy industry will suffer if it doesn’t respond.

“Energy opponents are in an irrational conflict with the oil and gas industry: They (energy) are the bad guys” in the view of environment activists, Heitkamp said. However, energy providers tend to want everything they seek and ignore their opponents. Thus, nothing gets done, she said.

“Everybody loves the golden egg that is being laid but very quickly that golden egg is getting cracked. What’s happening is violating Economics 101. Energy is a commodity,” Heitkamp added.

The North Dakota senator referred to “the Keystone effect,” what would normally be a mundane regulatory issue becomes a do-or-die environmentalist cause. “Keystone is not about catastrophic climate change; it’s about American jobs. It’s a pipeline,” she said. But the industry’s failure to see early on the views of the project’s opponents, and respond to those views, has stalled construction. “For me, this is a fairly urgent issue,” she said.

Heitkamp, a former state attorney general, won election in 2012 in one of the closest Congressional races that year over North Dakota’s Congressman Rick Berg.

As for natural gas, the industry is worried about low prices “but the solution to low natural gas prices is low natural gas prices,” the senator said, explaining that low prices will stimulate demand and that will eventually raise the commodity’s price.

Poe, who represents Texas’ 2^nd District in suburban Houston, emphasized the need to increase energy exports. He humorously invoked the advertising slogan of Texas’ famous Blue Bell Ice Cream, “We eat all we can and sell the rest.”

“In Texas, we use all (the oil and gas) we can and want to sell the rest. But we can’t sell it abroad,” he said. “In Houston, 50% of our economy is the port, and 50% of that business is energy related.”

Poe said his membership on the House Foreign Affairs Committee has convinced him that LNG exports “are an economic issue and also a geopolitical issue” that can serve as a counterweight to Russia’s attempt to dominate Europe.

The Congressman told of a meeting he had with the prime minister of Ukraine in Kiev after the Russian invasion.

“He told me, ‘quit sending us canned food and send us natural gas.’ That was two years ago and we haven’t done anything to help Ukraine (or) other eastern European countries of the Baltics. Gazprom turned off Ukraine’s gas in the winter of 2009 for political reasons. It’s cold and dark in Ukraine in the winter, people died because of that,” Poe said.

He added that the federal government “should let the market control” export issues. “For example, we can trade anything we make with Mexico except crude, that’s nonsensical,” Poe said.

Johnson was elected to eastern Ohio’s mostly rural 6^th District—the center of the Utica unconventional shale—in 2010. He said he has learned, like Poe, from trips abroad just how important the shale revolution has been to the world’s energy market.

“You can’t go anywhere in the world and talk about gas and not see a map of eastern Ohio,” he said, adding the Utica development provides an economic growth model for both Washington and the Ohio capital in Columbus. “Unemployment has fallen 60% in my district and is driving down the unemployment rate across our state. That’s why Ohio is the leading state for economic development in the Midwest.”

Johnson sharply criticized the federal government’s slow pace in licensing LNG export projects.

“LNG is big, it could mean 45,000 new jobs and many of those jobs would be for the people I represent,” he added. “It’s mind-numbing. Meanwhile, the administration and the bureaucrats at the Department of Energy are slow-walking on this very important issue.

“The leaders in other countries are trying to set the rules of (energy) engagement. We have to lead or we will fall behind. Our energy policies are based on an outdated era. We thought our energy resources were limited and now we know that is not true,” he said. The European Union emphasizes security of supply for commodities “and they are begging American to get in the energy export market” as a counterweight to Russia.

In addition to compromise and flexibility, Johnson said the U.S. needs to approach the energy revolution in the same way as the nation it did in the 1960s with the Apollo moon shots.

“Where would be if Washington would just step aside and advance a true energy policy for all forms of energy, oil, gas, coal and alternative energy? It was only 66 years from the Wright brothers’ first flight in 1903 until 1969 when Neil Armstrong stepped on the moon—all Ohio boys, by the way. Our energy supply should be independent and secure, then how our economy could kick into gear.”

The panelists agreed that trend of federal over regulation of energy will continue and Heitkamp warned that “the regulation of carbon won’t go away. Understand, you will be in a carbon-constrained world. Now, let’s figure out what that is.”

Paul Hart can be reached at phart@hartenergy.com.