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U.S. oil & natural gas industry 'leads the way' in energy production, emissions reductions


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The Center Square

A U.S. House Energy and Commerce subcommittee  highlighted how the U.S. oil and natural gas industry is a global leader in clean energy production at a Wednesday hearing.

In a memo to members of the Subcommittee on Environment, Manufacturing, and Critical Material, Chairman Rep. Cathy McMorris Rodgers, R-Washington, highlighted the strength of the American energy industry.

“Blessed with tremendous natural resources and an economic system that fosters the free flow of capital to support its innovative and technological capabilities, the United States has developed and maintains the most sophisticated, efficient, and productive systems of energy production and delivery in the world,” she said. “Its vast and complex electricity systems deliver uninterrupted power to the public, manufacturers, and industry – all of which serve to provide the affordable, reliable energy, feedstock, and power necessary to expand and protect America’s economy, security, the environment, and the public welfare.”

 

The U.S. energy industry “has fostered world-changing entrepreneurial and innovative activity” that has driven economic growth, more efficient energy production, and reduced pollution, McMorris Rodgers notes. Over the last 50 years, combined air pollutant emissions dropped by 78%, according to the EPA. Emissions reductions occurred as the national GDP increased by 304%, vehicle miles traveled increased 183%, the U.S. population increased over 60%, and energy consumption increased 48%, she said.

McMorris Rodgers also cites reports showing how U.S. air quality levels are superior to those reported in countries worldwide, largely credited to the U.S. shale revolution, which “serves as a lesson in the benefits of American energy expansion and accompanying environmental benefits, including reductions in carbon dioxide emissions.”:snip:

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Senators are only making fools of themselves by attacking oil company mergers

In a recent letter to the Federal Trade Commission Chairman Lina Khan, Senate Majority Leader Chuck Schumer (D-N.Y.) and 22 other Democratic senators stated that they are concerned “about two blockbuster oil-and-gas deals announced in October: ExxonMobil’s proposed $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion acquisition of Hess Corporation — two of the largest oil-and-gas deals of the 21st century.”

The senators’ basic complaint is that the mergers “are likely to harm competition, risking increased consumer prices and reduced output throughout the United States.” The letter then summarizes the long-term process of consolidation in the fossil energy sector since the 1990s, asserting that the result has been “anticompetitive coordination in the industry” allowing the producers to direct “their individual supplies into, or away from, particular regions of the country enabl[ing] them to achieve ‘price uplift scenarios’ and to ‘leverage up’ prices.”

 

This takes even Washington’s political silliness to new heights. Where even to begin?

Nowhere do the senators ask the obvious question: Why would market forces have caused a consolidation process for at least the last 30 years?

One factor, both large and obvious, is the technological revolution behind hydraulic fracturing and horizontal drilling in oil and gas exploration and production. Horizontal drilling can extend for several miles, meaning that leasing rights for parcels must be contiguous; the alternative is an expensive and complex system of contracting under conditions of great uncertainty about the resources to be discovered and their market value over ensuing decades. Is it really so difficult to see that the allocation of risk under such hypothetical contracts would be exceptionally difficult to negotiate?:snip:

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Despite voluntary gains on methane reductions, EPA will impose yet more regulations on the industry

The EPA is expected to announce final methane emissions rules Saturday. Between 2018 and 2022, methane emissions in seven of the nation’s primary oil and gas producing regions saw declines ranging from 18% to 77%, and a lot of it was from voluntary programs. Experts say it’s hard to predict what the impacts of the final EPA rules will be, and they are expected to be thousands of pages long.

:snip:

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