HOUSTON—If there was one thing Rick Perry, U.S. Secretary of Energy, wanted the assembled crowd of energy executives, analysts, media and other interested parties to take away from his keynote address on March 7 at CERAWeek by IHS Markit it was that innovation, not regulation, has set America on a path toward energy security, and it will continue to do so.

Along the way he backed his boss, President Donald Trump, by saying on several occasions and in several different ways that the rollback of regulations and the opening of exports and stricter (or abandoned) trade policies have led to what he called a “new energy realism” while criticizing “old energy pessimism” as harmful to economic prosperity.

“I think all of us can agree on a vital point,” he said. “Energy security is a roadmap to economic prosperity. Today, we have the opportunity to reaffirm a new direction.

“America is in the midst of an incredible energy revolution driven by a cascade of technology innovation,” he continued.

The lifelong politician and former governor of Texas was quick to point out that such innovation is happening in the industry, not Washington, D.C. “Innovation has been revived beyond the Beltway,” he insisted.

To illustrate his point he said the Department of Energy (DOE) met with energy producers and midstream developers in Houston a few weeks ago to identify the next generation of technologies to “unlock more of our nation’s natural resources.”

The discussion ranged from carbon capture technologies to new solar technologies to “stepping up efforts on storage.”

He also touted the development of hydraulic fracturing technologies by the oil and gas industry as leading the country toward energy abundance.

“There is a tremendous amount of optimism in the energy sector, and for obvious reasons,” he continued. “America is producing abundant, affordable energy from a wider range of sources than ever thought possible, and we are using this energy more cleanly, more efficiently than ever before.”

He included in those innovations renewable energy such as solar and wind power. “You’re in a renewable area,” he said of the Lone Star State. “Texas has produced more wind [power] than but five countries.”

On the environment, Perry said, “We don’t have to choose between growing our economy and benefitting our environment. By embracing innovation over regulation we can benefit both.”

From 2005 to 2017 “while the U.S. economy grew we also led the world in reducing carbon emissions by 14% over that period of time,” he said.

It should be noted that for much of that time, the U.S. oil and gas industry was under tighter Obama-era regulations including adoption of a rule to reduce methane emissions. In 2016, before the rule was put on the chopping block by the Trump administration, the Bureau of Land Management estimated the methane waste rule would prevent as much as 180,000 tons of methane emissions annually, or about the equivalent of taking 950,000 cars off the road. 

In general, Perry took a measured approach on environmental questions during his media briefing. He indicated that renewables will eventually be a significant part of the mix but at the moment, “fossil fuels make up 80% of the world’s energy usage.”

He called trying to create a specific date when fossil fuels would no longer be allowed and when renewables would be exclusive “a fool’s errand.” Earlier he said that studies show that “even in 2040 fossil fuels will make up 77% of the world’s energy mix.”

On trade, Perry touted the lifting of the oil export ban and the lifting of restrictions on oil and gas exploration both offshore and onshore, as positive measures to energy development. Further, the recent LNG exports from Sabine Pass and Cove Point “underscore the Trump administration’s desire to increase gas exports.”

He also cited U.S. natural gas exports going to “26 nations on five continents” as a sign of the country being on the cusp of being a net natural gas exporter.

He agreed with Trump on steel tariffs. “I think it’s a good conversation to be having,” he said. “I’m not going to speak for the president but he knows there are countries that are impacting the market by their engagement in subsidies, some would say unfair practices. I do agree with the president that we need to be better negotiators and to look for better deals.”

Perry closed out his speech in a question-and-answer session with IHS Markit’s Daniel Yergin and discussed the DOE’s vision of developing the Appalachian region as an energy security back up to the Gulf Coast.

In the wake of Hurricane Harvey, Perry said he’s long been aware from his experience as Governor of Texas that a crippling hurricane or a human-caused disaster could not only cripple energy and petrochemicals in the region but also the nation.

“From a national security standpoint, where could we duplicate that footprint,” he asked. “The Appalachian region is sitting on top of two very prolific gas formations (Marcellus and Utica). Building that footprint would not only be security to this country, but also economically be a powerful tonic for states that some might have thought that the grand economic days of their lives were in the past. I happen to think it’s in the future.”

Len Vermillion can be reached at lvermillion@hartenergy.com or @LenVermillion.