DV Journal

President Joe Biden’s comments about energy policy the weekend before Election Day raised questions about his party’s leadership on a key issue as temperatures drop and heating bills rise. His latest missteps, critics say, reflect Biden’s overall energy policy failures.

On Saturday, Biden stunned coal-country allies like Sen. Joe Manchin (D-W.Va.) by announcing coal-fired power plants will be “shutting down.”

Biden followed up on Sunday by promising progressive students at Sarah Lawrence College, “no more drilling…there is no more drilling…I haven’t formed any new drilling.”

Republicans immediately linked Biden’s comments to vulnerable Democrats like U.S. Senate candidate John Fetterman.

“Like almost every issue, John Fetterman and Tim Ryan are frauds when it comes to energy policy,” said Chris Hartline with the National Republican Senatorial Committee. “Despite their lies on the campaign trail, they’re all in with Joe Biden to reduce domestic energy production, eliminate fossil fuels, end fracking and shut down coal plants.

“At least Joe Manchin has the balls to occasionally stand up to Joe Biden on energy,” Hartline added. “Can’t say the same about John Fetterman and Tim Ryan.”

The White House quickly walked back Biden’s comments, but members of the energy sector say it is part of the administration’s long-standing anti-fossil-fuel energy policy that began when he first took office.

For example, last week Biden took another shot at oil companies, saying they have been making record profits from things such as the Russia-Ukraine war and can afford to bring down prices.

“In the last six months, six of the largest oil companies have made more than $100 billion,” said Biden, standing with Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm. “I think it’s outrageous what their – the – size of the profit.”

If oil companies passed that on to consumers, Biden claimed the price of gas would decrease by around 50 cents. Consumers might appreciate that, especially with the national average for a gallon of regular at $3.75. At this time last year, the national average was $3.40.

“They have a responsibility to act in the interest of their consumers, their community, and their country, to invest in America by increasing production and refining capacity,” said Biden about oil and gas companies. “If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions.”

American Petroleum Institute (API) president Mike Sommers was not holding back his thoughts on Biden’s remarks. Speaking Tuesday at a press call, Sommers told reporters Biden “repeated the same debunked assertions he’s made in the past” and again arrived at a policy proposal that Sommers said would do the exact opposite of what would help U.S. families and businesses.

“Increasing taxes on American energy discourages investment in new production, which is the exact opposite of what we need to do,” said Sommers. “Oil companies do not set prices. Global commodity markets do, (and) canceling pipelines, increasing duplicative regulations, asking foreign producers to increase oil production, or more baseless accusations of price gouging all send the wrong signal to the markets, and to the American energy producers working every day to provide the fuels we all need.”

Progressives praised Biden’s comments. In a tweet, Occupy Democrats said Biden brought down the “hammer on oil companies for gouging Americans,” and that they should stop war profiteering.

“The American people are going to judge who’s standing with them and who is only looking out for their own bottom line,” said Biden.

Some Republicans said Biden’s release of oil preserves was designed to win votes, not solve policy problems. API has released a “10 in 2022: Ten Policies to Unleash American Energy and Fuel Recovery” plan. API’s Frank Macchiarola said it could spur nearly $200 billion in direct investment, generate over 225,000 jobs by 2035, and support production growth in things such as natural gas and oil.

“America can continue to be the world’s energy leader, but it’s going to take solutions,” said Macchiarola. “To date, the Biden administration has made unfounded claims of price gouging, emptied one-third of the supplies in the Strategic Petroleum Reserve, unsuccessfully asked OPEC to increase supplies two years in a row and now it’s proposing to tax U.S. companies competing globally, (but) that’s not a plan.”

The 10-point plan calls for things such as lifting development restrictions on federal lands and waters, fixing the permitting process to speed things up, accelerating liquified natural gas (LNG) exports, and advancing the energy workforce of the future by pushing and supporting Science, Technology, Engineering, and Math (STEM) programs to “nurture the skills necessary to construct and operate oil, natural gas, and other energy infrastructure.”

For an energy-rich state such as Pennsylvania, the 10-point plan could do a lot.

“Pennsylvania sits atop a portion of the Marcellus shale, the largest estimated proved reserves of any U.S. natural gas field. But limited pipeline takeaway capacity has constrained production in recent years and driven prices higher in consuming regions that lack sufficient access to these resources,” said API Pennsylvania Executive Director Stephanie Catarino Wissman. “Enabling the construction of previously canceled and currently stalled pipeline projects could support additional supply from the Appalachia region to key U.S. Northeast and Southeast markets.”

David N. Taylor, President and CEO of Pennsylvania Manufacturers’ Association is interested, and not just for his industry but all industries.

“Energy independence is critical for American national security,” said Taylor. “At every opportunity, the Biden administration has sought to suppress domestic energy production, whether by killing the Keystone XL pipeline, yanking leases in Alaska, banning the harvesting of energy on federal lands, stacking the Federal Energy Regulatory Commission (FERC), or villainizing domestic energy and the Americans who produce it.”

Referring to Biden’s international requests for oil-producing countries to increase their production and help combat rising prices, Taylor said Biden would rather reward enemies of democracy like Venezuela than permit increased energy production here at home.

“Joe Biden has no idea what he’s talking about.”

Environmental activists call it a “methane fee.” The energy industry calls it a “natural gas tax.” Either way, Pennsylvania consumers are likely to feel the effects in their pocketbooks.

The U.S. House of Representatives is expected to vote this week on its version of the budget reconciliation bill — also known as the “Build Back Better” bill — which includes increased fees on methane emissions. Methane is a byproduct of oil and natural gas production, and as a result, the fee would be an increase in the cost of production.

Environmentalists say reducing methane is essential to the fight against climate change. At the COP26 meeting in Scotland last week, the United States announced it will participate in the Global Methane Pledge to cut methane emissions 30 percent by 2030.

“Methane has more than 80 times the warming power of carbon dioxide over the first 20 years after it reaches the atmosphere,” says Environmental Defense Fund (EDF) on its website. “Even though CO₂ has a longer-lasting effect, methane sets the pace for warming in the near term.”

As National Geographic reports, “Whereas carbon dioxide persists for centuries, most methane converts to carbon dioxide or gets cycled out of the atmosphere within about a decade.”

Meanwhile, two of the world’s biggest methane emitters — China nor Russia — refused to sign the Global Methane Pledge.

And energy producers point to America’s surging costs to heat their homes this winter and the wider inflation problem as evidence this is the wrong time to add costs to consumers’ utility bills.

“This is nothing more than a tax on natural gas at a time when policymakers should be focused on solutions that support affordable, reliable energy while reducing emissions,” says API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola.

“We must continue to drive down methane emissions without adding new burdens on American families and businesses,” added said Karen Harbert, President and CEO of the American Gas Association. “Our analysis indicates that the proposed tax could increase natural gas bills from 12 percent to 34 percent, depending on the variation of the proposal assessed.”

Sen. Joe Manchin, a Democrat representing natural-gas producing West Virginia, has been reluctant to support legislation with a tax or fee on methane. As a result, House Democrats have been trying to find ways to change the terminology and get Manchin’s blessing once the bill is approved in the House and sent to the Senate. Democrats’ have a razor-thin majority in both chambers and need the support of every Democrat in the Senate.

Winning over Manchin has not been, and will not be, easy.

“Major oil and gas companies are actively investing in, developing, and using new technologies to detect and repair leaks, which are known to be a public health risk and contribute to climate change,” Manchin said in August 2020.

Delaware Valley U.S. Reps. Madeleine Dean (D), Mary Gay Scanlon (D), and Brian Fitzpatrick (R) declined to respond to requests for comment about the upcoming Build Back Better bill vote.

Meanwhile, API’s Frank Macchiarola says methane is already being regulated.

“The direct regulation of methane by the EPA is the most impactful way to build on the downward trend of methane emission rates in key producing regions rather than a duplicative and punitive natural gas tax that would only hurt American consumers and undermine the economic recovery,” says Macchiarola.

Gordon Tomb, senior adviser to CO2 Coalition, does not see a need for the regulations.

“Methane makes up a minuscule portion of the atmosphere — less than two parts per million — and together with carbon dioxide contributes an estimated 0.012 degrees C a year — an amount too small to even measure,” says Tomb. “Regulating emissions of either gas has no basis in science and imposes an unnecessary burden on businesses and the people who buy their products.”

And, Tomb added, “When politicians are talking about regulating methane, they are usually talking about taxing methane that gets leaked to the environment during production operations, treating that methane as a pollutant,” says Tomb. “Of course, methane is put into the atmosphere from all kinds of sources, and in the scheme of things the amount in the atmosphere is quite small irrespective of where it is coming from.”

The Marcellus Shale Coalition has also warned that taxes or fees would be bad for everyone.

“Layering more taxes on strongly regulated domestic energy production increases costs for those who produce and rely on these essential resources, with low-and fixed-income families shouldering the disproportionate share of the tax hike,” the group wrote in a September letter that included the Gas & Oil Association of West Virginia and the Ohio Oil & Gas Association.

And while organizations including the Sierra Club say fossil fuel organizations do not care about the environment, Marcellus Shale Coalition begs to differ.

“Our members are fully committed to improving air quality and further reducing all emission sources, particularly methane since it is the very product we sell, through leveraging best available technologies and practices.”

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In a newly-uncovered video, President Joe Biden’s nominee to help oversee the nation’s banking system says that if small U.S. oil and gas companies went bankrupt, that would be a good thing.

It’s a suggestion that in the current climate — gasoline prices soaring and some consumers looking at 50 percent hikes in energy costs this winter – may not be such a “good thing” for getting her nomination through a 50-50 Senate.

Saule Omarova, tapped by Biden to run the Office of the Comptroller of the Currency, has been embroiled in controversy since her nomination was first announced. While she did hold a minor role in the George W. Bush Treasury Department, her economic resume is nontraditional at best.

While a student at Moscow State University (Moscow, Russia, not Moscow, Idaho) where she was a “V.I. Lenin Personal Academic Scholarship” recipient, Omarova wrote her thesis on “Karl Marx’s Economic Analysis and the Theory of Revolution in The Capital.” Now that she’s been nominated to one of the top financial positions in the administration, Republican senators like Pat Toomey, a Pennsylvania moderate, want her to release a copy as part of the vetting process.

Thus far, she has refused.

“Republicans will overwhelmingly oppose this self-described radical,” Toomey said last month. Professor Omarova “has been celebrated on the far left for promoting ideas she herself has described as radical,” including advocating for “effectively end[ing] banking as we know it.”

Now a video of Omarova addressing the Jain Family Institute’s 2021 Social Wealth Seminar in March has raised new concerns.

“Here what I’m thinking about is primarily coal industry and oil and gas industry,” said Omarova in a video clip unearthed by American Accountability Foundation (AAF). “A lot of the smaller players in that industry are going to probably go bankrupt in short order — at least, we want them to go bankrupt if we want to tackle climate change.”

Omarova went on to say that “we cannot afford” the economic fallout and job losses that would ensue if the U.S. were to bankrupt oil companies. But given her progressive politics — she’s proposed having all private bank deposits go to the federal government in order to “democratize money” — her sentiments are hard for the energy sector to ignore.

“This is ludicrous,” says Dan Weaver, president and executive director of Pennsylvania Independent Oil & Gas Association, a membership organization with businesses large and small, some of them family-owned operations. “That idea is preposterous and sickening, to say the least.”

“This is a reminder that there are opponents of oil and gas who are in high positions or seeking high positions in the Biden administration,” says Dan Kish of the Institute for Energy Research (IEA) and American Energy Alliance (AEA). “I think people see that at the pump. They’ve seen reports that they’re going to pay more this winter.”

The timing of the new revelation is problematic for Biden and his Democratic allies. The White House has taken several high-profile actions to discourage domestic fossil fuel production, even as consumers have been hit with higher gasoline prices and warnings that home heating costs this winter will soar.

The Biden administration even asked OPEC to increase production to help people dealing with high gas and heating oil prices. OPEC declined, leading critics to say the administration should rethink its steps against domestic oil and gas production.

Locally, U.S. Senate candidate Dr. Valerie Arkoosh is calling for a statewide ban on fracking, despite the billions in economic impact from the industry.

“We’ve already seen Keystone XL pipeline workers lose their jobs, we’ve seen people’s businesses and their family budgets hurt by higher gas prices and ultimately that’s the game,” says Kish. “The game is to drive energy costs to skyrocketing levels and make it very difficult for people to use a kind of energy they use in the hopes that they’ll go and use the stuff that they want to use.

“Natural gas generation is leading to a cleaner atmosphere,” added Weaver, pointing to data from EIA. “The science is there, and if we were to ‘bankrupt’ all the oil and gas companies here, where is the energy coming from? What about the thousands of products that we use every day that don’t come from anything other than those feedstocks?”

The White House continues to back the troubled nomination. “Saule Omarova is eminently qualified and was nominated for this role because of her lifetime of work on financial regulation, including in the private sector, in government, and as a leading academic in the field. The White House continues to strongly support her historic nomination,” they said in a statement to Fox News.

And while Toomey has been an outspoken opponent, Pennsylvania’s other senator, Democrat Bob Casey, has been silent.

All things considered, Kish says it does not surprise him that somebody connected to the Biden administration feels this way about oil and gas.

“What surprises me is that she mistakingly said it publicly, or at least in a way that became public,” says Kish. “I don’t think she expected it to become public.”

Interest in electric vehicles has been popular among public officials this year. Even President Joe Biden issued an executive order in August incentivizing EV sales. They are a key part of the “Build Back Better” framework the White House released Thursday.

Now we are seeing this issue gain traction in Pennsylvania. Gov. Tom Wolf should know his state’s economy depends greatly on natural gas for jobs, economic activity, and supporting most residents’ transportation needs.

Natural gas produced in places like Pennsylvania can be converted to liquid fuel – such as gasoline – and is directly stored in the fuel tanks, sent to the combustion chamber, and ignited to make your car drive. We have all seen the signs on public busses saying “this bus runs on natural gas.”

Yet Wolf is disregarding that fact by proposing measures that would also deny consumers a choice for their vehicle use and ignore the clear environmental downsides about EVs.

The proposals laid out in the Pennsylvania Climate Action Plan surrounding electric vehicles are far too ambitious and give preferential treatment to programs that won’t be beneficial to the state. The Drive Electric PA (DEPA) Coalition, Alternative Fuels Incentive Grant (AFIG), and the C-PACE expansion are just a few programs that give clean energy unfair advantages and take away from funding for the already clean and profitable natural gas industry. The AFIG sets up four different incentive programs that provide things such as rebates to people who use alternative fuels. C-PACE expansion gives benefits to businesses like low-interest loans only for clean energy efforts. The plan itself notes the significant upfront costs that will be required to make any of it possible.

The natural gas industry has a unique importance to Pennsylvania, and this resource is a key element in traditional vehicles. Pennsylvania is the second-largest producer of natural gas in the U.S., making it a net exporter of gas to other states and countries. The sector supported half a million jobs in 2019 and contributed $78.4 billion. These unique statistics make it all the more concerning that public officials are considering subjecting Pennsylvania to other states’ standards. For example, the Zero Emission Vehicle (ZEV) Program in California is emulated in the PA Climate Action Plan. It would essentially implement a part of California’s smog and pollution control standards with the requirement of a percentage of electric vehicles in the state, even though California’s and Pennsylvania’s climates are on opposite ends of the spectrum. In addition, those two states’ economies are vastly different. California does not depend on a natural gas industry for driving economic activity as Pennsylvania does.

To force this kind of mandate on a state like Pennsylvania makes no sense. One argument Pennsylvania officials have enjoyed using thus far is that analysis shows even though EVs require a large upfront investment, they will eventually be cost-effective. As a former administrator for the U.S. Energy Information Administration, I have devoted my career to prioritizing the reliance on credible and accurate data for informing sensible policymaking. With electric vehicles on average costing $13,000 more than typical combustion vehicles, it would take an extraordinary amount of time to see the returns that are being predicted, if ever.

Electric vehicles may have some benefits for reducing emissions, but they are by no means a silver bullet solution. A recent Brattle Group study shows the switch to require these cars that use massive amounts of electricity will put a large strain on power production. There is also a misconception behind how they emit a significantly less amount of greenhouse gasses. Electric vehicles are not zero-emissions vehicles. In reality, all types of vehicles produce emissions at some point, even electric vehicles. During the manufacturing phase of electric vehicles down to having to charge them, there is still emission of carbon involved. The more you have to charge the battery the more worn down it gets, resulting in it losing its ability to maintain charge and increasing methane emissions by up to 16 percent. If we try to move towards EVs too quickly, we won’t have enough power to fuel the production, and our need for electricity will grow too quickly.  Current EIA data shows that 19 percent of electricity still comes from coal, a fuel source with a higher emissions intensity. Using more coal-fired electricity to power electric vehicles will therefore undercut any potential emissions reductions benefits with EVs.

Mandates for EVs are being proposed in various states, and to some degree are even included in the $3.5 trillion Reconciliation bill being put forth by Congress. It is high time we take a look at all the options and all the facts, instead of forcing something that does not meet the needs of most Pennsylvania residents.