Released November 10, 2023 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--The five participants in the third Republican presidential debate Wednesday night were not asked any direct questions about oil and gas or the energy transition. But two questions from moderators, one about sanctions on OPEC+ member Venezuela, and the other about making life more affordable for the middle class, drew promises of reopening oil and gas taps as at least part of the solution.
Absent the party's front-runner, former President Donald Trump, the list of hopefuls included former South Carolina governor and Trump administration appointee as UN ambassador Nikki Haley, Florida Governor Rick DeSantis, former New Jersey governor Chris Christie, South Carolina Senator Tim Scott and entrepreneur Vivek Ramaswamy.
Responding first to a question from moderator Kristen Welker, host of NBC's Meet the Press, about sanctions on Venezuela, DeSantis declared, "We should never rely on Venezuela for oil." He continued, "I'm going to unleash all of America's energy potential." He promised, on day one of a DeSantis administration, to end all Green New Deal regulations.
Then a prompt from moderator Lester Holt, host of NBC Nightly News about planned action "the moment you take office, to help Americans manage the cost of living," drew further oil patch promises.
Scott began by promising to "sign the XL Keystone (sic) pipeline and start seeing resources flow." He also promised "certainty and predictability," in the future of leasing, so producers could depend on the usability of any leases purchased. Scott also promoted going beyond being energy independent, to being "energy dominant."
Former governor Christie agreed, noting, "Energy is the key to this because it drives every one of those other prices." When Holt challenged Scott on whether opening energy markets would reduce prices "on day one," the latter responded that the promise of greater supply would immediately affect markets.
Christie also acknowledged Scott's point about the immediacy of the price effect. "...when you go ahead and you tell people, 'We are going to unleash every bit of American energy, every bit of its potential,' what happens in the futures markets? The prices go down."
In addition to unleashing upstream oil and gas resources, Haley looked at taxes charged at the pump. "The first thing I'll do is eliminate the federal gas and diesel taxes in this country." She quickly added Scott's point of surpassing energy independence to the point of dominance.
Ramaswamy agreed with supply and demand rules, adding coal to the list of energy sources requiring a boost.
Reality
To be fair, the participants had been asked a very specific question: What would they do on day one? The only thing a president could do on that day would be to issue a host of executive orders, whose authority would be limited. It is not likely possible to end fuel taxes, enable the Keystone XL pipeline or sanction Venezuela on January 20.
The larger question of how to reopen fossil fuel options lies with Congress, the judicial system and government entities like the Environmental Protection Agency, the Department of Energy, and others. For example, conflicts between oil interests and environmental organizations have seen court action in recent months over a relatively small issue regarding the amount of Gulf of Mexico acreage to be offered in an Inflation-Reduction-Act-mandated lease. For more information, see September 27, 2023, article - BOEM Postpones Gulf of Mexico Oil & Gas Lease Sale.
Keystone XL, originally planned to bring oil sand production from fields in Alberta to Nebraska, was abandoned by operator TC Energy Corporation (NYSE:TRP) (Calgary, Alberta) after almost a decade of forward-and-backward rulings by various courts and three presidential administrations. While cancellation of the project by President Joe Biden in 2021 was the final straw for TC Energy, simply reinstating it from the White House would only be one step toward any actual completion. Only 8% of the pipeline was ever constructed.
There is little doubt that a Republican administration would be a friend to oil and gas interests, and likely to enhance energy affordability. But today's opposing forces are creating roadblocks to both energy and environmental interests as they face off across courtrooms and in public opinion.
Commenting on the debate, IIR Energy's Geoffrey S. Lakings said, "From a U.S. perspective, the focus should be on providing energy security to the rest of the world, be that in hydrocarbons or innovation like small modular nuclear reactors. As the U.S. should be very concerned that the BRICS (Brazil, Russia, India, China and South Africa) is expanding to include Argentina, Egypt, and the UAE. Also, there is an opportunity to provide an alternative to China's BRI (Belt and Road Initiative) for emerging nation states. As we find ourselves at an energy/environment/sustainability crossroads, as we have witnessed the energy crunch and crisis unfold the last few years in Europe, which is now being exacerbated by the war in Eastern Europe. And, of course how the renewable energy supply chain has been disrupted out of Asia."
Lakings continued: "So to me the answer lies in energy security as well as cyber security, but therein is a whole 'nuther story."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Absent the party's front-runner, former President Donald Trump, the list of hopefuls included former South Carolina governor and Trump administration appointee as UN ambassador Nikki Haley, Florida Governor Rick DeSantis, former New Jersey governor Chris Christie, South Carolina Senator Tim Scott and entrepreneur Vivek Ramaswamy.
Responding first to a question from moderator Kristen Welker, host of NBC's Meet the Press, about sanctions on Venezuela, DeSantis declared, "We should never rely on Venezuela for oil." He continued, "I'm going to unleash all of America's energy potential." He promised, on day one of a DeSantis administration, to end all Green New Deal regulations.
Then a prompt from moderator Lester Holt, host of NBC Nightly News about planned action "the moment you take office, to help Americans manage the cost of living," drew further oil patch promises.
Scott began by promising to "sign the XL Keystone (sic) pipeline and start seeing resources flow." He also promised "certainty and predictability," in the future of leasing, so producers could depend on the usability of any leases purchased. Scott also promoted going beyond being energy independent, to being "energy dominant."
Former governor Christie agreed, noting, "Energy is the key to this because it drives every one of those other prices." When Holt challenged Scott on whether opening energy markets would reduce prices "on day one," the latter responded that the promise of greater supply would immediately affect markets.
Christie also acknowledged Scott's point about the immediacy of the price effect. "...when you go ahead and you tell people, 'We are going to unleash every bit of American energy, every bit of its potential,' what happens in the futures markets? The prices go down."
In addition to unleashing upstream oil and gas resources, Haley looked at taxes charged at the pump. "The first thing I'll do is eliminate the federal gas and diesel taxes in this country." She quickly added Scott's point of surpassing energy independence to the point of dominance.
Ramaswamy agreed with supply and demand rules, adding coal to the list of energy sources requiring a boost.
Reality
To be fair, the participants had been asked a very specific question: What would they do on day one? The only thing a president could do on that day would be to issue a host of executive orders, whose authority would be limited. It is not likely possible to end fuel taxes, enable the Keystone XL pipeline or sanction Venezuela on January 20.
The larger question of how to reopen fossil fuel options lies with Congress, the judicial system and government entities like the Environmental Protection Agency, the Department of Energy, and others. For example, conflicts between oil interests and environmental organizations have seen court action in recent months over a relatively small issue regarding the amount of Gulf of Mexico acreage to be offered in an Inflation-Reduction-Act-mandated lease. For more information, see September 27, 2023, article - BOEM Postpones Gulf of Mexico Oil & Gas Lease Sale.
Keystone XL, originally planned to bring oil sand production from fields in Alberta to Nebraska, was abandoned by operator TC Energy Corporation (NYSE:TRP) (Calgary, Alberta) after almost a decade of forward-and-backward rulings by various courts and three presidential administrations. While cancellation of the project by President Joe Biden in 2021 was the final straw for TC Energy, simply reinstating it from the White House would only be one step toward any actual completion. Only 8% of the pipeline was ever constructed.
There is little doubt that a Republican administration would be a friend to oil and gas interests, and likely to enhance energy affordability. But today's opposing forces are creating roadblocks to both energy and environmental interests as they face off across courtrooms and in public opinion.
Commenting on the debate, IIR Energy's Geoffrey S. Lakings said, "From a U.S. perspective, the focus should be on providing energy security to the rest of the world, be that in hydrocarbons or innovation like small modular nuclear reactors. As the U.S. should be very concerned that the BRICS (Brazil, Russia, India, China and South Africa) is expanding to include Argentina, Egypt, and the UAE. Also, there is an opportunity to provide an alternative to China's BRI (Belt and Road Initiative) for emerging nation states. As we find ourselves at an energy/environment/sustainability crossroads, as we have witnessed the energy crunch and crisis unfold the last few years in Europe, which is now being exacerbated by the war in Eastern Europe. And, of course how the renewable energy supply chain has been disrupted out of Asia."
Lakings continued: "So to me the answer lies in energy security as well as cyber security, but therein is a whole 'nuther story."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
