U.S. Senator Kevin Cramer (R-ND), member of the Senate Environment and Public Works committee, delivered remarks on the Senate floor on the Biden Administration’s “9,000 Lease Lie” amidst a backdrop of skyrocketing inflation, soaring gas prices, and Biden’s ongoing supply chain crisis.
“We have a geopolitical opportunity right now to cut Putin’s malign influence and we should be taking full advantage of it. What we ought to be doing is encouraging production not just with our rhetoric, but with our actions. Producing more U.S. oil and gas will – believe it or not, proclaim it or deny it – reduce global greenhouse gas emissions. Producing more U.S. oil and gas will reduce the West’s reliance on dirtier fuels from our adversaries. Doing so also avoids unilaterally disarming our own economy and losing ourselves to a 2050 fantasy that’s come straight up to a 2022 reality. Some in the Biden Administration may finally be starting to understand energy security is national security and economic security. So, Mr. President, I say let’s make the world safer, and let’s unleash American energy production,” said Senator Cramer.
Senator Cramer highlighted the hypocrisy of the Biden Administration’s rhetoric about the oil and gas industry and warned about the lasting consequences for the global energy markets and the environment if America sticks to President Biden’s status quo.
”The Biden Administration is succeeding in its mission to destroy any chance to once again be energy independent. Their radical nominees, actions in the courtroom, regulatory schemes, budget proposals, and foot-dragging exude hostility toward fossil fuels, inflicting a distinct chilling effect on the oil and gas industry,” said Senator Cramer.
In his remarks, Senator Cramer specifically highlighted the Biden Administration’s:
- Misleading rhetoric about oil and gas leases and permits;
- Increased regulatory timeline for Applications for Permits to Drill (APDs);
- Extension of onshore and offshore oil and gas leasing bans;
- Stalled review of pending applications to increase U.S. Liquefied Natural Gas export terminals; and
- Efforts to rely on despots in Iran and Venezuela for oil instead of American producers.
“I’ve talked to a number of producers in North Dakota and they’re capital-starved. If the right messages were being sent to the markets, we could pick up another 200,000 to 400,000 barrels of oil per day. In January 2022, North Dakota produced 1.1 million barrels per day. To put this in context, Europe imports 2.3 million barrels per day from Russia. At North Dakota’s peak, we produced 1.5 million barrels per day of oil. North Dakota alone could provide two-thirds of the product Europe imports from Russia. It would be cleaner than Russian oil and would lessen Putin’s malign leverage over Europe,” said Senator Cramer.
The speech as prepared for delivery can be viewed below.
Madam President,
In poll after poll, most respondents blame President Biden’s policies for increasing inflation and rising gas prices.
NBC: “Biden’s job approval falls to the lowest level of his presidency amid war and inflation fears.”
In Gallup’s poll, which they dubbed “Americans Offer Gloomy State of Nation Report” in February – before the record gas prices at the pump we’re seeing today – the biggest decline in satisfaction sat squarely with energy policies. Only 27 percent of Americans said they were satisfied with energy policies – the lowest Gallup ever measured in its trend and dropping 15 percentage points in one year.
But if you ask the Biden Administration and Congressional Democrats, who seem more interested in finger-pointing than finding solutions, the culprit changes on a daily basis. First, it was OPEC+ not producing enough oil, then it was evil corporations price gouging at the expense of hardworking American families, then it was Vladimir Putin’s invasion of Ukraine, and now it’s oil and gas companies sitting on 9,000 “leases.”
Let’s drill deeper into that number to truly understand what’s going on here and why this type of rebuttal argument is a total disservice to the American people and our allies abroad.
The first and most fundamental mistake Ms. Psaki has made is using the word “lease” and “permit” interchangeably. They are not synonymous other than both are regulatory hurdles required by the federal government for a producer to work on federal lands.
Second, it is important to understand the majority of oil and gas leases on federal lands are currently producing. There are 35,871 total oil and gas leases in effect, with about 66 percent of them producing. The rest are going through an abused regulatory process or being held up in litigation by environmental NGOs.
Over 2,200 of the leases are currently in litigation.
Third, a lease does not mean the rented land contains oil and gas. Producers must perform exploratory work to discover whether their lease contains minerals. Oil and gas producers procure multiple leases because they need to mitigate the financial damage which could result from acquiring “dry” leases.
Fourth, before any development on leases can occur, producers and agencies must navigate the bureaucratic labyrinth of permitting and environmental laws covered by the Endangered Species Act, National Historic Preservation Act, and the National Environmental Policy Act, to name a few, which can take years to complete.
Fifth, just because a producer obtains a lease and navigates the regulatory hurdles required to permit a well does not mean they can begin extraction. They must secure adjoining leases for horizontal drilling, accrue capital to finance mineral development, schedule rigs, construct access roads, obtain pipeline rights-of-way, establish infrastructure to capture natural gas, and hire a capable workforce. All of these steps have been delayed by the Administration’s roadblocks, and Biden’s supply chain and labor crisis.
Finally, after obtaining an adequate number of leases, clearing all the regulatory hurdles and planning the logistics of the project, companies must obtain an approved application for permit to drill, otherwise known as an APD. There are currently 4,604 federal APDs awaiting approval from the Bureau of Land Management (BLM) and another 162 APDs on Indian land. The Biden Administration’s BLM could approve these permits now, enabling companies to move forward with development to supply much-needed domestic energy at home and abroad. However, BLM is approving them at the slowest rate since the Obama Administration, a fact Ms. Psaki conveniently left out when she claimed President Biden was doing everything possible to lower gas prices.
Now, let’s look at some data on APD timelines:
In March 2020, the BLM testified in front of the House Natural Resources Committee about the Trump Administration’s efforts to improve oil and gas permitting processes. In Fiscal Year 2019, the BLM approved 3,741 APDs on Federal and Indian lands. The average APD processing time for a single application dropped from 139 days in Fiscal Year 2016 to just 44 days in Fiscal Year 2019.
In Fiscal Year 2021, which included four months of the Trump Administration, APD approval times shot back up to 89 days, doubling the amount of time. This is yet another example of the Trump Administration’s energy success being eliminated by the Biden Administration’s incompetence.
The Biden Administration approved just 97 permits for oil and natural gas wells across federal lands in January 2022, a significant plunge from the 643 issued last April.
On top of the regulatory hurdles, industry considerations, supply chain issues, and labor shortages, producers must have certainty their product can reach the global market. A key aspect of reaching the global market and reducing the EU’s reliance on dirty, Russian gas are U.S. Liquefied Natural Gas (LNG) export terminals.
As of March 16, 2022, the U.S. Department of Energy had 16 applications pending or under review for increasing U.S. LNG exports. If Secretary Jennifer Granholm signed off or expedited the review on these applications we could continue to increase our export capacity to help our allies abroad and grow our economy here.
The Biden Administration has continued to extend its onshore and offshore oil and gas leasing ban quarter after quarter, despite being required by the Mineral Leasing Act to conduct quarterly lease sales. At this point in the Obama Administration, they had held 35 onshore lease sales.
That’s not all. The Biden Administration is actively working to starve the fossil fuel industry of financial capital in order to push them out of existence.
In March, the Securities and Exchange Commission (SEC) released a proposed rule on climate disclosure. This authority – forcing publicly traded companies to develop and disclose their risks from climate change – is not in the purview of the SEC. Congress never passed a new law granting them new authority in this space. It only serves to further discourage investment in domestic energy development and prevent American energy independence, a critical tool for peace and the reduction of global emissions.
The Biden Administration is succeeding in its mission to destroy any chance to once again be energy independent. Their radical nominees, actions in the courtroom, regulatory schemes, budget proposals, and foot-dragging exude hostility toward fossil fuels, inflicting a distinct chilling effect on the oil and gas industry.
I’ve talked to a number of producers in North Dakota and they’re capital-starved. If the right messages were being sent to the markets, we could pick up another 200,000 to 400,000 barrels of oil per day. In January 2022, North Dakota produced 1.1 million barrels per day. To put this in context, Europe imports 2.3 million barrels per day from Russia. At North Dakota’s peak, we produced 1.5 million barrels per day of oil. North Dakota alone could provide two-thirds of the product Europe imports from Russia. It would be cleaner than Russian oil and would lessen Putin’s malign leverage over Europe.
Investors in domestic oil and gas have to receive the right market signals in order to invest their capital. The Administration seems to believe energy production is simply a switch you turn on and off when you need it. It’s not. It is a very capital-intensive industry, reliant on regulatory certainty. No sane energy CEO would invest millions or billions in a project with the backdrop of an administration seeking to “transition” them out of existence. Let’s take a walk down memory lane on some of the signals this Administration has sent:
- The President himself said during the campaign stop in 2019: “I guarantee you, I guarantee you we are going to end fossil fuel and I am not going to cooperate with them.”
- Secretary Granholm appeared in a video calling for leaving fossil fuels “in the ground.”
- She then spoke to the Energy and Environment Research Center in North Dakota, an exceptional organization at the forefront of promoting carbon capture and other innovative solutions to reduce emissions. During her speech, she proclaimed the United States doesn’t “have much moral authority” to criticize China over its emissions.
- Then did an about-face last month at CERA and told energy companies to produce more.
- John Kerry flies around the world making outlandish comments like the US won’t have coal in 2030 and discourages the world from buying US energy.
- Meanwhile, recent reports indicate the Administration would rather turn to despots in Iran and Venezuela instead of producers in America. It makes no sense and it’s offensive to every American blue-collar worker.
We have a geopolitical opportunity right now to cut Putin’s malign influence and we should be taking full advantage of it. What we ought to be doing is encouraging production not just with our rhetoric, but with our actions.
Producing more U.S. oil and gas will – believe it or not – reduce global greenhouse gas emissions. If you don’t want to take my word for it or the extensive studies, science, and documentation of this fact, Biden EPA Administrator Michael Regan told the Financial Times recent calls for increased oil output are compatible with goals to cut CO2 emissions. In fact, he said these are not mutually exclusive.
Producing more U.S. oil and gas will reduce the West’s reliance on dirtier fuels from our adversaries. Doing so also avoids unilaterally disarming our own economy and losing ourselves to a 2050 fantasy. Some in the Biden Administration may seem to finally begin to understand energy security is both national security and economic security. The answer is simple if they are serious about real change – unleash American energy production.
With that, I’ll yield the floor.
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