[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
AMERICAN ENERGY EXPANSION: IMPROVING
LOCAL ECONOMIES AND COMMUNITIES' WAY
OF LIFE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY, CLIMATE, AND GRID
SECURITY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 16, 2023
__________
Serial No. 118-10
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
53-144 PDF WASHINGTON : 2024
-----------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
CATHY McMORRIS RODGERS, Washington
Chair
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio Ranking Member
BRETT GUTHRIE, Kentucky ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio DORIS O. MATSUI, California
LARRY BUCSHON, Indiana KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina TONY CARDENAS, California
GARY J. PALMER, Alabama RAUL RUIZ, California
NEAL P. DUNN, Florida SCOTT H. PETERS, California
JOHN R. CURTIS, Utah DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona MARC A. VEASEY, Texas
GREG PENCE, Indiana ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice LISA BLUNT ROCHESTER, Delaware
Chair DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia KIM SCHRIER, Washington
TROY BALDERSON, Ohio LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
------
Professional Staff
NATE HODSON, Staff Director
SARAH BURKE, Deputy Staff Director
TIFFANY GUARASCIO, Minority Staff Director
Subcommittee on Energy, Climate, and Grid Security
JEFF DUNCAN, South Carolina
Chairman
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio Ranking Member
BRETT GUTHRIE, Kentucky SCOTT H. PETERS, California
H. MORGAN GRIFFITH, Virginia LIZZIE FLETCHER, Texas
BILL JOHNSON, Ohio DORIS O. MATSUI, California
LARRY BUCSHON, Indiana PAUL TONKO, New York
TIM WALBERG, Michigan MARC A. VEASEY, Texas
GARY J. PALMER, Alabama ANN M. KUSTER, New Hampshire
JOHN R. CURTIS, Utah, Vice Chair KIM SCHRIER, Washington
DEBBIE LESKO, Arizona KATHY CASTOR, Florida
GREG PENCE, Indiana JOHN P. SARBANES, Maryland
KELLY ARMSTRONG, North Dakota TONY CARDENAS, California
RANDY K. WEBER, Sr., Texas LISA BLUNT ROCHESTER, Delaware
TROY BALDERSON, Ohio FRANK PALLONE, Jr., New Jersey (ex
AUGUST PFLUGER, Texas officio)
CATHY McMORRIS RODGERS, Washington
(ex officio)
C O N T E N T S
----------
Page
Hon. Jeff Duncan, a Representative in Congress from the State of
South Carolina, opening statement.............................. 1
Prepared statement............................................. 3
Hon. August Pfluger, a Representative in Congress from the State
of Texas, opening statement.................................... 5
Prepared statement........................................... 7
Hon. Scott H. Peters, a Representative in Congress from the State
of California, opening statement............................... 9
Prepared statement........................................... 11
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 13
Prepared statement........................................... 15
Hon. Tony Cardenas, a Representative in Congress from the State
of California, opening statement............................... 18
Prepared statement........................................... 20
Witnesses
Lori Blong, Mayor of Midland, Texas, and President, Octane Energy 22
Prepared statement........................................... 25
Submitted questions for the record \1\....................... 123
Adrian Carrasco, Chairman, Midland Hispanic Chamber of Commerce,
and President, Premier Energy Services......................... 33
Prepared statement........................................... 36
Michael S. Zavada, Ph.D., Professor of Biology And Geosciences,
and Chair, Department of Geosciences, The University of Texas
Permian Basin.................................................. 43
Prepared statement........................................... 45
Steven H. Pruett, President and Chief Execuive Officer, Elevation
Resources, and Chairman of the Board, Independent Petroleum
Association of America......................................... 48
Prepared statement........................................... 51
Answers to submitted questions............................... 126
Submitted Material
Inclusion of the following was approved by unanimous consent.
Report of the Permian Strategic Partnership, ``Power of the
Permian: A Vision for U.S. Energy Independence, Economic
Growth, and National Security,'' July 2022..................... 81
Report of the Permian Strategic Partnership, ``2021 Annual
Report: Leading The Way,'' 1A\2\
Report of the Institute for Energy Research, ``The Environmental
Quality Index: Environmental Quality Weighted Oil and Gas
Production,'' by David W. Kreutzer, Ph.D., and Paige
Lambermont, February 2023...................................... 101
----------
\1\ Ms. Blong did not answer submitted questions for the record by the
time of publication. Replies received after publication will be
retained in committee files and made available at https://
docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=115349.
\2\ The report has been retained in committee files and is available at
https://docs.house.gov/meetings/IF/IF03/20230216/115349/HHRG-118-IF03-
20230216-SD002.pdf.
AMERICAN ENERGY EXPANSION: IMPROVING LOCAL ECONOMIES AND COMMUNITIES'
WAY OF LIFE
----------
THURSDAY, FEBRUARY 16, 2023
House of Representatives,
Subcommittee on Energy, Climate, and Grid Security,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 12:50 p.m., at
Bush Convention Center, 105 N. Main Street, Midland, Texas,
Hon. Jeff Duncan (chairman of the subcommittee) presiding.
Members present: Representatives Duncan, Burgess, Walberg,
Curtis, Weber, Pfluger, Rodgers (ex officio), Peters, and
Cardenas.
Also present: Representatives Carter, Crenshaw, Allen,
Miller-Meeks, and Cammack.
Staff present: Kate Arey, Content Manager and Digital
Assistant; Nate Hodson, Staff Director; Tara Hupman, Chief
Counsel; Sean Kelly, Press Secretary; Mary Martin, Chief
Counsel, Energy and Environment; Peter Spencer, Senior
Professional Staff Member, Energy; Michael Taggart, Policy
Director; and Kris Pittard, Minority Professional Staff Member.
Mr. Duncan. The Subcommittee on Energy, Climate, and Grid
Security will now come to order.
The Chair now recognizes himself for 5 minutes for an
opening statement.
OPENING STATEMENT OF HON. JEFF DUNCAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF SOUTH CAROLINA
First off, I want to thank you all for being here, both our
local witnesses and my colleagues who made the trip, both from
DC and from their respective districts.
This looks a little different than our normal hearing and
our normal hearing room. But I am excited we are in Midland,
Texas, for our first Energy field hearing. I believe field
hearings gives us a unique boots-on-the-ground perspective on
how the policies and rhetoric coming out of Washington, DC,
affect, and actually impact, regulated parties and communities.
We unfortunately have an administration that has taken a
whole-of-government approach to wage war on American energy
production. President Biden has repeatedly promised to phase
the industry out of existence and has followed through by
creating uncertainty and issuing regulations to make energy
harder to produce, more expensive for consumers. The rush-to-
green agenda has also compromised our energy security, making
us more reliant on our adversaries for sources of energy.
Two years ago, America was energy dominant for the first
time since 1952. In 2019, we became the number-one oil and gas
producer in the world. This drove down the cost for consumers
at home, benefited our allies abroad by providing supply as an
alternative to Russia and to OPEC. Much of this success is owed
to the innovation and entrepreneurial spirit of the shale
revolution created by hydraulic fracturing and the production
of both oil and natural gas, something this community knows
better than most.
Energy and Commerce Republicans have solutions to build off
of the success of the shale revolution and get us back to
energy dominance. We have a series of bills that aim to unleash
innovation by creating regulatory certainty and encouraging
long-term investment. This is in sharp contrast to the Biden
administration and congressional Democrats who want to make oil
and gas production impossible.
For the United States, we produce oil and gas cleaner and
safer than nearly anywhere in the world. And we need policies
that reflect this reality instead of ones that undercut our
success. We need to unleash more American energy.
So I am looking forward to the hearing, looking forward to
hearing the perspective of our witnesses today, the ones who
really understands the impact that the industry has on
communities like Midland.
Also, I would like to thank Chair Rodgers for holding this
hearing and my colleague, Congressman Pfluger, for hosting us
here in his district.
[The prepared statement of Mr. Duncan follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. I would like to yield the remaining of my
time--balance of my time to Mr. Pfluger for some opening
remarks.
OPENING STATEMENT OF HON. AUGUST PFLUGER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Pfluger. Well, thank you, Chairman Duncan, Chairwoman
Rodgers, and the rest of the committee for making this trip to
Texas.
OK. Is this on now?
I would like to thank the entire committee for making the
trip here. We obviously had a little bit of air travel
difficulty and are glad to be here. We will have some more of
our colleagues joining us.
But Midland, Texas, Odessa, Texas, the Permian Basin is
where our Nation's energy debates should take place. I am
excited to have a bipartisan group of Congressmen and women
here and that our community gets to showcase how the Permian
Basin, and those in the audience today, are indispensable to
America's economic and national security.
Under Chair Rodgers' leadership, this committee is
committed to engaging with local communities to understand the
challenges that American people are facing today, many of which
have been inflicted by this current administration.
Thankfully, this city anchors the most important region
that is poised to solve many of the critical issues facing our
Nation and our world. If you listen to the White House, oil-
producing regions are greedy and unpatriotic. But nothing could
be further from the truth as we look out into the crowd today.
The story of the Permian Basin is one of innovation. It is one
of unending entrepreneurial spirit and community. In fact,
Permian producers have a long history of rising to the
occasion. Extraordinary cooperation between the U.S. Government
and American oil companies is what helped win World War II as
Permian crude literally fueled General Patton's infiltration of
the German border and eventually the defeat of Hitler.
It is often quipped that that war was won inch by inch, and
that is true. The U.S. launched two incredible pipeline
construction projects, the Big Inch and the Little Big Inch.
And the Inch lines delivered more than 500,000 barrels of
Permian oil a day to the Northeast, and they were incredibly
successful in safeguarding the precious commodity from U-boat
attacks. Those pipelines are still in use today.
Again, in 2008, another engineering feat allowed Permian
producers to rise to the occasion when hydraulic fracturing and
horizontal drilling enabled the U.S. to significantly increase
production of oil and natural gas in what is known as the shale
revolution. This put OPEC on its heels. It established U.S. as
the energy-dominant country in the world. It gave us an
indispensable tool for national security.
In 10 years, production of the Permian has grown from well
under 1 million barrels a day to over 5\1/2\ million barrels
presently. That is 40-plus percent of total U.S. production and
7 percent of the world production.
Just like it did throughout World War II, the Permian Basin
is doing its part to make this country energy secure. It is
also helping our allies around the world. You cannot understand
U.S. energy dominance without visiting the Permian Basin.
I am incredibly proud to show off my district, to have the
conversation here, and to talk about the importance of
delivering affordable, reliable, secure energy, not just to
Americans, but around the world.
With that, I yield back, Mr. Chairman.
[The prepared statement of Mr. Pfluger follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. I thank the gentleman for having us and for
your comments.
I now recognize Mr. Peters from California for 5 minutes.
OPENING STATEMENT OF HON. SCOTT H. PETERS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Peters. Thank you, Mr. Chairman.
I want to say it is great to be back in West Texas.
Thank you, Mr. Pfluger, for having us.
Mr. Pfluger does a wonderful job representing you all and
advocating for you in Washington, DC. He might think that it is
a credit to him that he got such a big crowd. But I think it is
because folks heard there might be a Democrat, and they want to
see what that looks like. It is a pretty rare commodity in
these parts, I understand.
On my previous trips, I have visited Houston, Midland, and
Lubbock and learned about the oil and gas industry and local
communities. I got a tour from Pioneer of fracking and some
drilling. I came away with an understanding of how this
industry is not just an economic feature of Texas but a
cultural one.
And today I met people whose families have been working in
energy for generations. It is hard, honest work. They are proud
of it, and today I am excited to continue our dialogue.
To start, I want to say that this country has never solved
any great problem, whether it is sending a man to the moon or
winning a world war or beating back a pandemic, without the
participation of both political parties. And in Congress I have
three energy priorities that I think are ripe for bipartisan
cooperation right now.
First, permitting reform. In the 118th Congress, we can
work together to make it easier, not harder, to build things.
For my Republican colleagues, this means looking beyond just
oil and gas and truly investing in an all-of-the-above energy
strategy. In the coming decades, we have to build massive
amounts of energy and infrastructure, including transmission
lines, solar, wind power, carbon capture, nuclear, and more.
And Texas is a great example of this energy future. We know
the State is a global leader in oil and gas, but it also leads
elsewhere. The American Clean Power Association found that
Texas is the national leader in clean energy development, just
ahead of my home State of California, which might bring some
smiles in this room, because everyone likes to be bigger in
Texas, all right? So you are bigger than California in clean
energy.
This State is first in the Nation in wind power and second
in solar and storage. Forty percent of the electricity in Texas
comes from wind, solar, and nuclear.
We can learn valuable lessons from Texas and admit that
picking technology winners and losers is a failed strategy,
whether you are focused solely on natural gas in Texas or solar
power in California.
On permitting reform, my Democratic colleagues have to
accept that environmental laws written in the 1970s primarily
to stop bad projects can and should be updated to meet the
environmental challenges of today. And we can work together to
speed up our processes without sacrificing environmental
outcomes.
My second priority is making our energy system cleaner. We
all agree that oil and gas isn't going away anytime soon. We
also can agree that making U.S. oil and gas production cleaner
is good for the economy and the environment. For the oil and
gas industry, the focus must be on methane, a super pollutant
more potent and harmful than CO2.
Last year, Democrats passed the Inflation Reduction Act,
which included billions of dollars to monitor and reduce
methane emissions at oil and gas facilities. This money can
help address the methane problem without breaking the bank for
companies, and I would love to work with you to make sure that
this money is spent effectively in California to help your
producers make this advance.
Third, I want to talk about advanced energy technologies.
The United States should lead the world in developing and
exporting technologies like carbon capture, geothermal, direct
air capture, and advanced nuclear. The U.S. oil and gas
industry can help develop carbon capture and carbon removal
because they have the knowledge, labor force, and capital to
take these technologies from good ideas to large-scale
deployment.
We can clean up our domestic energy production and help the
world do the same, positioning the United States--and Texas,
parenthetically--as a global energy and climate leader.
It is wonderful to be with you today, and I yield back.
[The prepared statement of Mr. Peters follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. I thank the gentleman.
Now it is my pleasure to recognize the chair of the full
committee, Mrs. McMorris Rodgers, for 5 minutes for an opening
statement.
OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Thank you, Chairman Duncan.
And a big thank you to you, Congressman Pfluger, for
organizing, helping organize this field hearing today.
We are really excited to be here in Midland for the first
field hearing of the House Energy and Commerce Committee for
the 118th Congress. And Congressman Pfluger is the first Member
representing the Permian Basin to serve on the best committee
on Capitol Hill, the Energy and Commerce Committee.
But this is--this is really important to all the Members
that are here. Thank you for being here, and we are looking
forward to the discussion today. Thank you for the witnesses
also.
Our primary energy objective is to ensure reliable, secure,
and affordable delivery of energy to Americans, to their homes,
to their businesses, the grocery store, and everywhere in
between. We must build upon our Nation's diverse and abundant
natural resources to create more secure supplies and more
dependable power. And we must work to develop a predictable
regulatory landscape, one that unleashes America's unmatched
genius for innovation and technological leadership.
While we have examined solutions in our hearing room, in
Washington, DC, to secure our energy future, here today in
Texas we get to see where it all begins in places, like the
Permian Basin. It begins with the workers, the families, and
all the people living and working in energy-producing
communities like Midland and so many others, large and small,
all across this Nation.
We cannot achieve a more secure energy future, create more
jobs, and increase affordability without the people who do the
work and take the risk to produce American energy.
Today's hearing will shed light on the benefits of energy
production at the local and State level, and it should serve as
a reminder of how American energy expansion helps communities
across our country and how we can change the regulatory
environment to speed up this expansion.
America is a diverse Nation blessed with abundant natural
resources. And we must be responsible stewards of those
resources to ensure our communities flourish. Different areas
of the country have different advantages, and the one-size-
fits-all, top-down approach is not the way to go.
For instance, I come from Washington State. The Pacific
Northwest has abundant hydropower. The Marcellus Shale has
helped make the U.S. the world leader in natural gas
production. Wyoming has the potential to provide uranium to
power advanced nuclear reactors across the country. And the
Permian Basin, where we are today, has made us the world leader
in oil and natural gas production.
And August has impressed upon me that it is the hard-
working and the--it is hard-working people and the ingenuity of
the people that have made this happen in the Permian Basin,
bringing tremendous benefits in terms of economic opportunity
and tax revenues for local schools and communities.
Last year, the Texas oil and gas industry paid nearly $25
billion in local and State taxes and royalties to support
schools, infrastructure, and local services. It is almost
double what it was 5 years ago. Permian Basin operations
represent a major portion of these revenues.
Unfortunately, this administration has signaled repeatedly
their intention to reduce oil and gas production in coming
years. Today, we will hear from witnesses on what this would
mean for communities like Midland: Lost jobs, lost revenues,
and lost livelihoods.
I would like to join my colleagues in thanking Midland
Mayor Lori Blong. You sit at the intersection of energy,
economic development, and the needs and concerns of our
families, those who live here in Midland. You and Mr. Carrasco,
the Midland Hispanic Chamber of Commerce, both have unique
perspectives on the challenges facing small businesses,
including surging energy costs. Given your experience and the
experience of our other witnesses, today's hearing is to
explore the role of innovation in advancing cleaner, more
productive operations.
Allowing businesses the freedom to experiment is
fundamental to innovation. We saw this with the shale
revolution where entrepreneurs found a more efficient,
effective, and cleaner way to produce oil and gas, giving new
life to oil wells and opening up new opportunities to produce
American energy. And we did this with some of the highest
environmental and labor standards in the world.
Unlocking our resources and removing barriers to American
energy should be a bipartisan goal, and we are here bipartisan
today.
I am confident that the voices we will hear today will
reinforce that unleashing American energy is the best path
forward to strengthen our energy security, reduce emissions,
and make life more affordable across the board.
Thank you. I yield back.
[The prepared statement of Mrs. Rodgers follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Before I recognize Mr. Cardenas, I want to
thank the chairwoman for letting us wear jeans and boots today.
Now I recognize Mr. Cardenas for 5 minutes.
OPENING STATEMENT OF HON. TONY CARDENAS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Cardenas. OK. Got it.
Thank you very much, Mr. Chairman. Really appreciate this
opportunity. But I really want to thank somebody who I owe my
life to, Congressman Pfluger.
Thank you for getting us here safely. Our flight from
McAllen to DFW to get to Midland didn't work out very well. So
he swiftly commandeered a flight here and it was good and
smooth, and he didn't fly it for us. I don't know if that is a
good or bad thing.
You do fly, correct?
He does fly.
But, again, I think it is really important for us to
understand that we are here as Americans. We are all Members of
Congress. We are very blessed to represent our various
communities, yet at the same time we come together. And
sometimes we do argue, fuss, and fight, but it is because we
have the best interests of all of you at heart.
And when I say ``all of you,'' as the United States of
America, I think that we all understand that we carry on our
shoulders to be the shining example to the world and how, when
we do our best, we definitely are the best. And it is not from
a place of ego. It is just a place from being blessed to have a
country of innovation like no other, to have a country that is
willing to get into the eye of the storm and come out in a way
that we make the better--the world a better place for everyone.
So with that, I just want to say thank you for bringing us
together in your beautiful community here.
And I do have jeans but no boots. When I was--when I was
single and much more successful, I got a pair of boots made for
myself. But that was a long, long time ago. But I did wear the
jeans.
``American Energy Expansion: Improving Local Economies and
Communities' Way of Life,'' which is the title of today's
hearing, but I think it is really important for all of us to
understand that we can do all of that, and we have been doing
all of that in many, many ways.
But the fact of the matter is the world is changing, and we
are having an impact on the environment. And we must move
forward in a way where we can actually have it all, and we can.
But that means we have to be looking at all energy
opportunities. And as was mentioned by my colleague from
California, Texas is doing it bigger and better in many ways
with many different energy sources.
And so making sure that we can do it right, I want to use
one example that we cannot repeat, for example, when it comes
to the 2017, it was Kineder Morgan--or Kinder Morgan, excuse
me--announced the Permian Highway pipeline that would be routed
through the Texas Hill Country. Despite citizens' protests and
lawsuits filed, construction on the pipeline did begin.
And in March of 2020, an accident during construction
caused about 36,000 gallons of drilling fluid to spill. It
contaminated the groundwater, which local families depended on,
and the drinking water source that they depended on as well,
and it had let hazardous materials in the drilling fluid. And
it was regarded as carcinogenic to humans.
Contaminating the drinking water is something--like I said,
we can do things right. And we have to make sure that we hold
everyone accountable to do it right and to actually finish the
job in a way that doesn't leave behind any catastrophe or
anything that would actually cause harm to our communities', as
the title of this hearing is ``way of life.'' And it is
important that we all understand that we can do it better, and
we can make sure that we hold everyone accountable.
Today we are hearing from four witnesses who are giving
different perspectives of how to do it right, what we are doing
right, and what we need to do better.
I want to use an example of my father. I am the youngest of
11, and my father came from Mexico. And he spoke very little
English but--and he was a man of very few words. And one day I
asked him what it was like, just--I don't remember why I asked
him this question. I must have been watching TV, and there was
some crop dusting going on over the fields.
And my father started in this country as a farm worker. He
only had a first-grade education. He was proud of being a hard,
hard-working man.
And I said, ``Dad, what would you do in the fields back in
the '40s and '50s when you were a farm worker when they were
crop dusting?''
He said, ``Son, we put a rag over our face, and we just
kept working.''
Well, obviously, that is not good for the people working in
the fields. It is not good to have practices--today we know
better. We know how to do things better. Science has brought us
a long way. We have practices that we should be practicing,
that we used to do in the past, that we shouldn't be doing
today. No one should be subjected to that kind of environment
in the workplace.
And so what I am here to say is that we want to come
together and make sure that the United States continues to be
the leader and also the shining light for the rest of the
world, to make sure that tomorrow is better than today.
And I have grandchildren. I was just looking at their
pictures a few minutes ago that was sent to me. And I want
their world to be good and better than it was when we got here.
So, with that, my time has expired, Mr. Chairman. Really
appreciate this opportunity and thank you so much.
I yield back.
[The prepared statement of Mr. Cardenas follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. I thank the gentleman.
And we now conclude with Member opening statements.
There are other Members coming due to the flight delays.
They will get here when they get here and will participate at
that point.
The Chair would like to remind Members that, pursuant to
the committee rules, all Members' opening statements will be
made part of the record.
I want to thank all the witnesses for being here today and
taking the time to testify before the subcommittee. Each
witness will have an opportunity to give a 5-minute opening
statement followed by a round of questions from Members.
And our witnesses today are the following: the Honorable
Lori Blong, mayor of Midland; Mr. Adrian Carrasco, chairman of
the Hispanic Chamber of Commerce; Dr. Michael Zavada, professor
at the University of Texas Permian Basin, who is stepping in
for the posted witness who was unable to make the hearing; and
Mr. Steven Pruett, President and CEO of Elevation Resources,
chairman of the board, Independent Petroleum Association of
America. We appreciate your being here.
And I will now recognize Mayor Blong for 5 minutes to give
an opening statement.
You are recognized.
STATEMENTS OF LORI BLONG, MAYOR OF MIDLAND, TEXAS, AND
PRESIDENT, OCTANE ENERGY; ADRIAN CARRASCO, CHAIRMAN, MIDLAND
HISPANIC CHAMBER OF COMMERCE, AND PRESIDENT, PREMIER ENERGY
SERVICES; MICHAEL S. ZAVADA, Ph.D., PROFESSOR OF BIOLOGY AND
GEOSCIENCES, AND CHAIR, DEPARTMENT OF GEOSCIENCES, THE
UNIVERSITY OF TEXASRMIAN BASIN; AND STEVEN H. PRUETT, PRESIDENT
AND CHIEF EXECUIVE OFFICER, ELEVATION RESOURCES, AND CHAIRMAN
OF THE BOARD, INDEPENDENT PETROLEUM ASSOCIATION OF AMERICA
STATEMENT OF LORI BLONG
Ms. Blong. Good afternoon.
And thank you, Chairman Duncan and Chairman Rodgers and
members of the subcommittee.
Thank you to Congressman Pfluger for all of your work in
making this happen.
We welcome you to Midland, the energy capital of Texas and,
arguably, the energy capital of the United States. We believe
that the secure, affordable, reliable, and responsibly produced
oil and gas of the Permian Basin is a critical component to
promote human flourishing, both domestically and abroad.
My name is Lori Blong, and I serve as the cofounder and
managing partner of Octane Energy, a Midland-based operator. I
also have the distinct privilege of serving as the first female
mayor of America's energy epicenter, Midland, Texas.
Today the perspective that I hope to share with you is not
as a representative of a special interest group or as of a
research firm but instead from the perspective of a small
businesswoman, a community leader, a wife, and most
importantly, a mother to three very spirted West Texas children
who are growing up here in the oil patch.
I am a second-generation Midlander, having graduated from
high school just a few blocks from where we are now. And I am
also a second-generation member of the oil and gas industry.
Mine is a boots-on-the-ground perspective, and I am deeply
conscious that I could see our region and my own business
succeed or fail based on the decisions that you make and the
policies that you advocate for.
Somehow over the past century, much of the U.S. has begun
to think of oil and gas as merely a fuel source for
transportation or for heating, and the reality is that these
hydrocarbons that we produce are also responsible for creating
the highest standard of living in any society in the history of
the world. And there are also components in as much as 96
percent of the products that we use every single day, from
pharmaceuticals to clothing and electronics, just to name a
few.
I am sure that everybody in this room has a mobile phone in
your pocket, and I want you to note that the part of your phone
that breaks when you drop it is the part that is not produced
from petroleum products.
The pipeline and the infrastructure permitting headwinds,
the current SEC-driven ESG movement, and the current
administration's vow to put an end to fossil fuels are all
creating growing market distortions and need to be reversed.
These policies prevent individual Americans and American
businesses from growing, from creating jobs, and energy--and
the energy security that we otherwise could.
Many of the members of this subcommittee have stated that
energy security is national security, and I completely agree
with that sentiment. We are watching today's newspaper
headlines demonstrate how critical these reserves are to the
future of our Nation.
We have the energy we need right here in the Permian Basin
to keep American homes warm, to provide electricity to
hospitals and schools, and to keep our country and our allies
safe. But we must have Federal advocacy and support for the
energy production that we require.
We also need the Federal Government to change the tone from
restriction to proactive partnership with environmental
solutions. And we have watched as the Federal Government has
invested our tax dollars into wind and solar energy options,
among others. We know that the Federal Government is doing
those things. And we know that--we also have technology
available that we have--we have identified much of it here in
the Permian Basin for beneficial reuse of produced water that
millions of barrels that are being produced every single year
as associated byproducts of oil and gas production.
If we could get the Federal Government to partner with us
in developing those into scalable, economically viable
solutions for produced water in the Midwest and West United
States, this would be a game changer.
Directly underneath our feet right now where we are
sitting--you may not know this, but oil is being produced
beneath where you are sitting, about 10,000 feet below ground
here, and it is being extracted 2\1/2\ miles south of here on
the south side of town.
Our Permian advances in science, engineering methods, and
processes have yielded the safest, most environmentally
responsible barrel of oil in the world. Considering the
regulatory framework at the Federal and State levels, a barrel
of oil in the Permian Basin is the greenest barrel of oil
produced in the world.
Another tangible benefit that the city of Midland is
currently experiencing from oil and gas is record sales tax
collection. Much of it is attributed to the activities related
to the oil and gas industry. This enables us to provide city
services, healthcare, education, and many other things without
overburdening property tax payers.
We are providing jobs in Texas to nearly half a million
people with an average annual income of $115,000. And we are
tied for lowest unemployment rate in the State at 2.4 percent.
An 18-year-old with a commercial driver's license can earn six
figures a year in Midland, Texas. Not just can, but they do.
We have a crucial ingredient to enable flourishing: Secure,
responsible, reliable, and plentiful American oil and gas.
I have heard it said that the last drop of oil on Earth may
be produced right here from the Permian Basin because we are
innovative, we are hard-working, and we understand how to watch
our costs. Today I ask you to take a stand to enable and
empower our people, removing unnecessary headwinds and
roadblocks--the American ingenuity and productivity that all
Americans--so that we may thrive and flourish.
Thank you.
[The prepared statement of Ms. Blong follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Mayor, thank you so much.
And I will now go to Mr. Carrasco for 5 minutes.
STATEMENT OF ADRIAN CARRASCO
Mr. Carrasco. Good afternoon.
Chairman Duncan, Chairwoman Rodgers, and members of this
committee, I would like to thank you. And it is an honor to be
a witness at this hearing that has so much meaning and positive
impact in the world.
I would like to say a big thank you to Congressman Pfluger
for his leadership, service, and dedication to our district.
I am Adrian Carrasco. I am the chairman of the board of
directors of the Midland Hispanic Chamber of Commerce,
president and owner of Premier Energy Services, and board of
trustee of Midland Community College.
The MHCC has over 30-plus years of advocating, partnering,
and supporting small minority businesses in Midland County.
When I say ``minority,'' it is not just color. It is women-
owned businesses and veteran-owned businesses.
As many organizations suffered during COVID, the MHCC did,
as well. And we had to totally rebrand the MHCC to ensure that
we continued the great work of the past and create opportunity
now and for the future.
The mission of the MHCC is to successfully lead, develop,
and advocate for our members, while encouraging the
advancement, economic growth, and social development of the
Hispanic and minority community. The MHCC provides commerce
opportunities through quality of education, quality of
business, quality of jobs, and quality of life.
We all know that small businesses play a key role in
increasing commerce, providing jobs, and bringing economic
development within our community. It is crucial that we
continue to provide business education, funding opportunities
for business growth, and guidance for positive growth.
As communities like Midland grow, we look to entrepreneurs
to develop businesses that meet the need of the community and
its growth.
Through programs like our Bettering Your Business at
Breakfasts, we have been able to education new and existing
small minority businesses on how to obtain a credit line, how
to build cost-effective websites, and how to promote the
business and its services.
The MHCC builds connections between its members and the
business community. With our quarterly business mixers, we give
current members and future members the opportunity to network
and develop business relationships for growth. It is important
that we serve as a liaison to assist in making small minority
businesses more marketable, ensure stability and lasting
prosperity.
Due to the positive impact of the oil and gas industry on
local communities, this has given aspiring entrepreneurs the
opportunity to fulfill dreams of owning a business. We have
seen home bakers open restaurants and bakery shops, restaurants
expand their businesses into second locations and catering
services to the oil field drill sites. Licensed commercial
electricians have expanded services into the oil and gas
sector, and cosmetologists and barbers have opened their own
shops.
I applaud the great work of the Midland Development
Corporation and Kevin Dawson with Maybe in Midland/Odessa on
their successful efforts of bringing new brands of restaurants,
family entertainment centers, aerospace- and aviation-related
businesses to Midland.
Midland is home to over 6,200 business establishments and
provides over 100,000 jobs. Oil and gas in the Permian Basin is
an economic driver not only here but throughout this Nation and
the world. MHCC will continue to support our local minority and
small business owners so they can provide economic growth and
commerce in our community.
Premier Energy is a proud member of the MHCC, and my
company is celebrating its seventh-year anniversary. I grew up
in Kermit, Texas. And I actually started working in the gas
plant industry at 18 years old and was able to continue work in
the summer to help pay my way through college. I have over 14
years' experience in the production field of the oil and gas
industry. I am proud of my 64 employees. And without them, my
wife and I could not continue to grow and provide exemplary
services to our customers.
Premier focuses on new construction and maintenance of well
and battery facilities, environmental, and remediation and
reclamation work, earthwork, and vessel repair.
I thank companies like Diamondback Energy, Pioneer Natural
Resources, Elevation Resources, Walsh & Watts, and others that
trusted me and my company to get the job done. Over the years,
I continue to be impressed upon the innovation, the safety, and
the commitment to the environment by these companies and all in
this industry.
The use of plastic-lined facilities and berms is a true
commitment to eliminating oil or produced water to fall
directly onto the ground. The use of automation to monitor tank
levels, well sites, and production facilities has allowed
electricians to expand upon their knowledge and prevent
overflow.
I am often disturbed by the attacks that groups display
against this very important industry. The oil and gas industry
is very responsible, and I get to see it firsthand. I challenge
those that don't understand or go by hearsay to come visit an
oil well and a facility site. All are invited to see the
innovation, safety, and the importance of taking care of the
environment.
I commend the Texas Railroad Commission for being in the
forefront of working with oil and gas operators to provide
clean oil and gas in Texas. Oil and gas operators and service
companies have a positive impact on employment, building strong
communities and quality of life. I have seen my very own
employees able to buy and qualify to purchase their first home,
first new car, and give back to their churches and communities.
I have witnessed one of my own managers recently become a
citizen of the United States.
Furthermore, I have provided opportunities for our contract
lease operators to be hired on a permanent basis by oil
producers which, in essence, will have access to more extensive
training, benefits, and quality of life.
I thank you and look forward to your questions today and
for a progressive dialogue.
[The prepared statement of Mr. Carrasco follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Thank you.
The Chair will now recognizes Dr. Zavada for 5 minutes.
STATEMENT OF MICHAEL S. ZAVADO, Ph.D.
Dr. Zavada. Yes. Good afternoon, everybody.
I am Michael Zavada. As my mother used to say, I am not a
real doctor. I am a Ph.D. and geoscientist in environmental
geology.
I would like to start off by saying that I don't think
there is any doubt that the oil and gas industry in West Texas
over the last 100 years actually has contributed to the
development of the towns in this region. It has made major
contributions to the energy available and the security of the
United States.
And with new technologies, the Permian Basin continues to
be a major producer. I think we are all aware of the argument
and the data that surrounds climate change and continues to be
discussed on levels in academia and also in politics and other
areas.
But one thing I--one point I do want to make. I do think it
is prudent if the United States--for the United States to
develop alternative energy sources with a result to diversify
our energy portfolio. I think this is necessary. That is the
safest and most stable way of maintaining long-term energy
independence.
But we shouldn't make any one form of energy excessively
important. I think this is the most strategic way to protect
the energy grid and has a good strategic move in the world, in
a hostile world.
The Permian Basin, known for its supplying a major portion
of America's energy, will remain so in any new paradigm that is
emerging for the future. And that will be at least for the next
50 years. It is no secret that West Texas is also an ideal
environment for the production of alternative energy: solar,
wind, hydrogen fuels, among others.
I believe with rational and cooperative investment in the
development of all forms of alternative energy will not only
diversify our energy portfolio but continue the long-term
tradition of West Texas as a major source of America's energy
needs, and will also help our towns that rely heavily on oil
right now transition to a new paradigm. I think to develop--I
do have some suggestions to develop a sustainable plan for the
communities in this region.
First of all, I would like to say, in partnership with
industry and academics and academia within Texas, we need to
continue to invest in developing technologies that will
ameliorate the larger amounts of CO2, methane, and
other volatile organic compounds released into the atmosphere
at all phases of oil and gas production. That is recovery,
transport, refinement, and use.
Industry and academics are already engaged in efforts--not
in an adversarial way, but in a cooperative way--to remediate
some of the environmental issues, for instance, as have already
been mentioned, carbon capture, utilization, and sequestration;
hydrogen fuels; and fuel-cell technologies. Industry is also
partnering with academics to explore ways of cleaner-produced
water to minimize needs for injection wells and to minimize
low-grade earthquake damage.
All of these efforts by industry and academics need to be
consistently invested in as long as fossil fuels remain a
primary energy source, and they will. I think any projections
of 10 years or any time like that is just unreasonable.
And we have to get a level head about how this transition
will actually occur, and that we should keep all of the
components of it. It shouldn't be at the expense of any one
component.
OK. So here is one of the suggestions--here is another
suggestion. Because of the nature and rise of full price of a
barrel of oil, many towns in West Texas that are only dependent
on the industry take a characteristic--take on characteristics
of a boom-and-bust economy and woefully lag behind communities
in other parts of Texas and the United States that have more
diverse and reliable tax base.
This also leads to a large number of itinerant workers
living in temporary housing: trailer parks, RVs, and man camps,
many of which are not regulated for disposal of human waste and
are hosted on dusty, barren lots. They are reminiscent of
worker camps associated with coal mining in the early part of
the 20th century.
Itinerant workers and their families changed the
effectiveness of funding that was intended for more permanent
population with regard to education, health, and welfare. So
this is an issue that many communities struggle with, as costs
go up to service all of these families, as workers come into
our towns, particularly in Odessa and West Odessa.
I think many companies have been effective in yielding
large profits from their investors, but focused investment on
permanent infrastructure in the communities of the Permian
Basin is necessary: improving schools, roads, creating parks,
walkable communities, supporting a variety of programs to
enhance entertainment in these communities, summer programs to
help children more success--to be more successful in school,
and specialized programs for immigrant families.
Industry operations should be relegated exclusively beyond
the borders of a town. This would be for aesthetic, health, and
safety reasons.
There should be investment in providing help to these
communities to better zone and plan their rural communities to
be more beautiful and pleasant communities to live in. This
often attracts other businesses, and people become permanent
residents in the community.
In other words, what I am advocating for is that they are
to diversify--they are to diversify their job base, in other
words, the types of jobs they have, rather than to rely on one
industry.
Provide funding to communities to seek out energy
industries or tangential industries to diversify the jobs
available in the region. This would ameliorate the effects of
oil and gas boom-and-bust cycles. This will also diversity the
skills of the workforce and may attract unrelated industries to
the area in which workers' skills are transferable, further
diversifying and stabilizing the community's tax base.
Thank you.
[The prepared statement of Dr. Zavada follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Dr. Zavada, thank you and thanks for, at short
notice, coming in and being part of the hearing.
I now go to Mr. Pruett for 5 minutes.
STATEMENT OF STEVEN H. PRUETT
Mr. Pruett. Thank you, Chairman Duncan, Chairman--
Chairwoman McMorris Rodgers, Congressman Pfluger for inviting
me, and to all the members of this distinguished committee for
making the arduous trip to Midland, Texas, the heart of the
Permian Basin. It is an honor to speak with you today.
I am Steven Pruett, founder and CEO of Elevation Resources,
a private, Midland-based independent oil and gas company that
happens to be owned by East and West Coast institutions and
myself. We are active in drilling and operating horizontal
wells in the Permian Basin.
I am also chairman of the Independent Petroleum Association
of America, which I will refer to as the IPAA, which represents
over 6,000 independent oil and gas companies and individuals in
33 States. We are based in Washington, DC. So you will be
seeing me more over the next 2 years.
Elevation, along with the other active drillers in the
Permian Basin, rely upon horizontal drilling and multistage
hydraulic fracturing to develop unconventional shales that
comprise over 90 percent of the oil and natural gas production
in the Permian Basin today. As Congressman Pfluger said, in
2008 we were producing about 700,000 barrels a day. And thanks
to horizontal drilling and fracking, we are now producing 5.6
million barrels per day. And we have got more upside from
there.
I am going to discuss three factors that affect and limit
the growth of U.S. natural gas production--U.S. oil and gas
production. That is the impact of regulatory uncertainty,
permitting delays in labor, and supply-chain shortages.
So regulatory uncertainty has constrained capital formation
and the reinvestment of cash flows needed to increase U.S. oil
and gas production. As a result of the COVID-induced oil and
gas price collapse, over 300 oil and gas companies and oil
field service companies filed for bankruptcy protection, and
many ceased operations permanently. The universe of investors
who will invest in oil and gas companies is dramatically
smaller than a few years ago due to ESG concerns and financial
losses. The number of banks loaning money to oil and gas
companies is half what it was 5 years ago due to loan losses
and ESG mandates from their investors.
The EPA is drafting rules for Quad-O b and c
implementation, which dictates the equipment and practices we
use to manage and reduce emissions. The EPA is--in the
rulemaking process for the Inflation Reduction Act methane fee,
which is ambiguous and gives the EPA a license to tax our
industry as they see fit.
The IPAA supports Congressman Pfluger's H.R. 484, the
Natural Gas Tax Repeal Act, as it addresses the tax that is
singularly focused on the oil and natural gas industry,
implemented by the EPA, which does not have taxing authority or
the resources to do so, and utilizes a taxing formula that is
flawed at best. It is--we believe that much of this language
was drafted by environmental firms that really know nothing
about our business.
Rest assured, Elevation and our peers have made and
continue to make substantial investments in methane recovery.
All of our operations are closed systems. We have also invested
in emissions monitoring and reduction technologies ahead of the
EPA rules. Oil and gas producers utilizing these technologies
produce the lowest-emission oil and gas in the world here in
the Permian Basin.
IPAA also supports Chairman Duncan's H.R. 150, Protecting
American Energy Production Act. State regulatory bodies have
been delegated primacy from the EPA, and in Texas we believe
the Railroad Commission and TCEQ are best informed and best
staffed to regulate oil and natural gas operators in their
respective States.
Giving the President authority to shut down hydraulic
fracturing is akin to killing the shale revolution, which is
responsible for growth in U.S. oil production from 5 million
barrels a day in 2008 to 12.3 million barrels a day presently.
And natural gas production has increased from 56 billion cubic
feet a day in '08 to over 100 Bcf today, which has been an
economic engine for our country and, as Congressman Pfluger
reminds us, for our allies in providing cheap, reliable energy.
Permitting delays for infrastructure development limits
growth in U.S. oil and gas production. Without pipelines,
processing plants, export terminals, oil and gas production in
the U.S. will not grow as we need markets for our product.
Examples include the permitting of reactivating the
Freeport LNG export facility, which is 20 percent of LNG
exports over 2 Bcf a day to our allies in Europe, and there's
other LNG export terminals waiting on years for export
approvals.
Permitting natural gas pipelines serving the Northeast
where power generators are still burning coal and homes and
businesses still burn heating oil and import LNG from abroad,
not from the U.S. Gulf Coast, due to the Jones Act--that needs
to be fixed.
And leasing Federal land does not translate into drillable
locations, as many other permits and easements are needed.
There is the BLM in Carlsbad, New Mexico, sitting on stacks of
permits that are needed because a well is not going to be
drilled if they can't get product to market.
Finally, labor and supply-chain constraints have not been
aided by the Biden administration's negative messaging.
Further, the oil industry is aging. My generation is
approaching retirement, setting our industry up for the great
crew change. However, there are not young people to replace my
generation in the oil industry.
Over the last 2 years, oil fields experienced 15 percent
wage inflation, if you can find the qualified workers. We have
also experienced months-long delay in completing and preparing
wells due to manpower and equipment shortage.
Drilling completion costs for my company are up 40 percent,
and we still have escalating costs for steel labor while we
have very weak natural gas prices because we don't have
adequate pipeline capacity.
To reduce uncertainty and improve the investment climate
needed to grow U.S. oil and gas production, we need Congress to
provide oversight of the EPA, the Department of the Interior,
the FERC, and the SEC as it relates to regulations affecting
the oil and natural gas industry.
Thank you very much.
[The prepared statement of Mr. Pruett follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. I want to thank the gentleman, and we now have
finished up the opening statements portion.
Other Members are very, very close. I hate that they didn't
get the benefit of--don't start my clock yet--of your
testimony, and I hate they are not going to get the benefit of
my excellent questioning of you. But now, I will now recognize
myself for 5 minutes for questioning.
You know, when I looked at the title of this hearing,
``American Energy Expansion: Improving Local Economies and
Communities' Way of Life,'' I thought about all the time I
spent in the State of Louisiana. Now I am an honorary Texan
thanks to Governor Abbott, and it is great to be in West Texas.
When I have spent time in Louisiana, from Lafayette and New
Iberia to Thibodaux, Houma, on down to Port Fourchon, on the
sides of Highway 90, a four-lane highway, there is business
after business after business after business after business
after business after business after business after business
that are somehow involved in supporting energy production
offshore.
It could be HVA services, it could be food services, it
could be transportation, it could be, you know, drilling mud,
it could be supply vessels, it could be casing, it could be all
the downhole widgets that make energy production possible
offshore.
Guess what I saw last night when I drove from the airport
in Midland to the hotel across the street. On I-20 Business, I
guess is what it is called, Mayor, business after business
after business after business after business after business
after business that supports the energy production that happens
in the Permian Basin. That is an impact on the economy. Those
are great jobs within those industries that you guys represent.
But the workers and the businesses themselves, they join
the United Way and the Chamber of Commerce and they support
ball teams at the YMCA and they go to church and they tithe and
they tip the waitresses and they eat at local restaurants.
Tremendous trickle-down economy within the energy sector, both
in Louisiana, Oklahoma, Texas, and anywhere energy is produced.
I saw it firsthand just from a little short drive from Midland
airport to downtown. You know the impact. You know the impact
that energy provides.
And I think about when you--and I talked with the guys from
Pruitt Energy today. When you take a barrel of hydrocarbon, you
put it under pressure--God gave us this tremendous ability to
figure this out--you put a barrel of hydrocarbon under
pressure, and it miraculously separates in all kinds of
products during the cracking that we use today, whether it is
bottles--and I look around and see all the things that may
derive from a barrel of hydrocarbons. It is an amazing
substance produced right here in the Permian that makes the
lives of people around the world so much better.
But this administration is killing this industry. OK. I
appreciate the President saying that we are going to still need
oil and gas for a while. His definition of ``a while'' and my
definition of ``a while'' and your definition of ``a while''
all could be different. We use ``10 years'' in Washington for
all kind of stuff. Ten years is just kind of a filler word, 10-
year budgeting, 10-year this, 10-year that. It is going to be
here a lot longer than 10 years, and I am glad of that, but we
have got to support the industry, not kill it.
So, Mr. Pruett, you mentioned how regulatory uncertainty
and the COVID price collapse, ESG movement, how it all
constrained the capital available to the industry.
Can you explain how the President promising to end oil and
gas production in the U.S. impacts your ability to establish
long-term investment that is needed?
Mr. Pruett. Yes, I will give you an example.
So we--I mentioned we are owned by East and West Coast
institutions through a private equity fund. And when we needed,
when our bank held a gun to our head and said, ``You need some
additional equity or we won't extend your credit agreement,''
and--or, ``If you don't put in the money, the alternative is
you won't drill anymore, you are going to blow it down, and we
will own your cash flows''--and it was a major bank--we went to
our primary investor, even though we are 10 years old, we are
way beyond the period in which they should be investing money,
we are surviving on our own cash flow.
So we went out to our 20 or so investors, and two of the
largest--and they are household names, one is the largest money
manager in the world--said, ``Not only are we not going to
invest, we are going to sell our shares back to the company.''
And we negotiated a price, and they went on their way, which
was fine. Actually, it was fantastic, because we managed to
scrape together the money between myself, our CFO, and our
primary investor.
We got a new lease on life, paid down debt a little bit,
and cut our debt in half over the next 6 months by not
drilling. But basically, we quit drilling, we started blowing
it down, but we complied with the bank, and now we have a great
relationship with that same bank. We expanded our credit group.
But there were many companies during that same time, even
though we violated no covenants and our credit statistics were
good, we were all put into the workout group just because the
CEO mandated that. And we--they were basically telling us, ``We
are going to dictate your budget. You can't drill. We own your
cash flows.'' And that was a dark place to be. But,
fortunately, we got price recovery. The industry has healed,
those of us who survived that dip. And--but in the meantime,
the number of banks who would even consider loaning money
shrunk, and most of our banks said, ``We have a mandate from
the top not to advance any more capital than what we have
already committed to you.''
So it was--it is a whole new game. So from that experience,
my peers and I, all knowing we have to survive on our own cash
flow--we can't rely on the banks, we can't rely on getting
external money, the number of private equity firms has dropped
from 30-something to probably 5 or 6 that can actually raise
capital. And it is just a new world.
So, while we are not public, I mean, the publics are all
saying, ``We are going to reinvest 30 percent of our cash flow,
the rest will go to share buybacks and dividends,'' because
that is what their investors want. But it is the same for
private companies. We now need to provide dividends, and that
will fundamentally limit the ability of Permian Basin and U.S.
oil companies to grow.
Mr. Duncan. My time is expiring, so I want to thank you for
that.
I look forward to the other Congressmen's comments and the
questions you guys and talk about the impact on the economy and
the government in that area.
I am going to go to Mr. Peters from California for 5
minutes.
Mr. Peters. I just want to say I want to talk a little bit
about a place where I really think we can agree in concept,
even though Mr. Pruett points out some of the--maybe we haven't
gotten it quite right in terms of regulating. But that is
methane. A lot of my colleagues have pointed out that the shale
revolution has dramatically reduced the production of carbon
dioxide over other sources of energy, and that is absolutely
true.
The problem is that fugitive methane takes away a lot of
the climate benefit from that, and I think that is an
opportunity for us to work together to close this gap, whether
it is--even Dr. Zavada said 50 years. It is going to be some
long time that oil and gas is going to be around. Let's just
make it clean while we are doing it, and I think there is a
real opportunity there.
In fact, when I went to Qatar to thank them for helping us
with refugees from Afghanistan, everyone asked about refugees.
I asked the emir about methane. I said, ``What do we do about
methane?'' This is something where we can really, I think, come
together and agree.
It is complicated. When I visited Texas Tech, we visited
with the petroleum engineering department there. It is not easy
to get right. I commit to working with you to get the mechanics
of it right, because I think we owe you that. We want to get it
right. We don't want to be wasting money or product.
But I think it is an operative concept. If we can work
together, we can tone down the rhetoric around oil and gas a
little bit, even as other sources of energy help diversify our
economy.
And, Mayor, I would say that is important to you, because I
didn't hear--to be honest with you, I heard that right now
Midland is killing it. Congratulations, right? So right now we
are not looking at a lot of downsides. But you are concerned
about the talk, what you hear about the future. And I think one
way to bridge the gap--and I say this to Midland--is help on
methane. Let's all come together and fix that problem.
Mr. Pruett, you did mention the problems you had with the
methane fee in the Inflation Reduction Act, but there is money
that is going to come out to help producers comply. And can you
talk to me about how we can work together to make sure that
that money gets to the Texans and Oklahomans and Pennsylvanians
who are doing this work to really deal with this methane issue
that I just identified?
Mr. Pruett. Yes, Congressman Peters, our 6,000 members
distrust the EPA because they have had a target on our back. If
the monies were instead managed and permitted by the DOE, I
think it would be a very different picture.
The concern is that, in order to qualify for a grant from
the EPA, you are basically going to lift the hood on all of
your practices. And for some of the small operators who aren't
in compliance with the coming regulations, that is a frightful
process, because they may be subject to fines for their
noncompliance. And the irony is they are the ones that need the
funding most--not my company, not Diamondback or Pioneer,
because we are already in compliance.
So if there is a way to move the funding, it is kind of
like the EPA has never taxed anything before. That is in
Treasury Department--that is unnerving--and the same thing
about applying for grants. DOE has the technical experts, the
scientists, the engineers. The EPA, it is a different concern.
And I just don't think members will sign up for those grants.
Mr. Peters. I think it is a very constructive comment. I
think we have also assigned the EPA other grant-making that
maybe doesn't--a square peg in a round hole. And I will take
that back and consider it.
Mr. Pruett. Thank you.
Mr. Peters. But in terms of the money, I want to make sure
people understand that the intent is to make sure that we can
help people comply.
By the way, your Representatives, Mr. Pfluger, Mr. Curtis,
have also explained to me that when I hear that the industry is
interested in methane compliance, it often comes from the big
players. And it is the independents who are low to the ground
and living month to month that need the help. So that is the
intent of us and that we are trying to achieve, and we will
keep at that.
And if you can't send me a Democrat, I guess Pfluger is all
right.
Mister--I am sorry. I want to ask the mayor. The region has
been effective at both producing large amounts of oil and
natural gas and welcoming new technologies like solar and wind.
How would you like policymakers to better communicate on
energy policy so that we embrace this all-of-the-above thing
without pitting one against the other? What would you like to
hear out of DC? What would sound good to Midland on that score?
Ms. Blong. I think the perception here, and perhaps the
reality, is that we have picked winners and losers in certain
cases because we have given, you know, we have given benefits
to solar and wind that we have not afforded to oil and gas. And
so, we are faced with restrictions. We are faced with
regulatory headwinds and with permitting issues that are making
things harder for to us move forward.
And so I think that pulling back on some of those headwinds
that we face would go a long way. Most of the folks in oil and
gas don't really have a bone to pick with solar and wind
development as long as it is a level playing field.
Mr. Peters. You will only hear 10 more seconds from a
Democrat in this whole hearing. So let me just say this:
I believe in subsidizing and researching from the Federal
Government as things get started. I think your comment is
legitimate as those industries mature. I think right now,
concentrating on investing in things that are new like carbon
capture and direct air capture and things that need help, I
will take that comment, as well, as constructive.
And, again, thank you all for having us in Midland. I love
visiting here. I have--still have to explain what chicken fried
steak is, but I enjoy it when I get it.
So I yield back.
Mr. Duncan. Where are we getting chicken fried steak?
Because I am.
Mr. Peters. Down the street.
Mr. Duncan. OK. Yes, you just drive north up to the
panhandle. You will see all the windmills you want, and there
were a lot of them subsidized by the Federal Government, at
least initially.
I will now go to the full committee chair, Mrs. McMorris
Rodgers, for 5 minutes.
Mrs. Rodgers. Thank you, Mr. Chairman.
Again, just a big ``thank you'' to all the witnesses and
everyone for being here today. It is great to be in the energy
capital, as you labeled it, or called it.
You know, and in America, we often--we often celebrate
American ingenuity and creativity and what it has meant for us
in so many different--different fields, sectors where we have
led the world. And the result of that has been America has done
more to lift people out of poverty, raise the standard of
living more than any other Nation in the history of the world.
And energy is foundational to all of that. You can't do
anything without energy. It is our economy. It is our way of
life. It is our national security. And I think at a hearing
like this, I am reminded of just how foundational energy is.
And we truly do need the all-of-the-above approach.
The fact is that America has been leading. And right here,
you know, the numbers Mr. Pruett was sharing about just the
increase in production, energy production, because of new
technology in Midland has had a tremendous impact here in this
community, impacting a lot of people's lives. And I just wanted
to have you talk a little bit more about that.
But it has been--what we need to make sure that we continue
to focus on is that all-of-the-above approach and continue to
advance the new technologies, the innovations, the research
that is going to ensure that we lead.
And so to the mayor, I just wanted to have you speak a
little bit more about what you have seen in Midland since, I
guess, it was 2005, 600 percent increase in production, oil
production, here and just the impact that that is having as far
as on the city, your ability to provide for people, on
individuals that live here, citizens, your way of life.
Ms. Blong. Well, thank you.
One of the things--you know, I am recently elected, and so
I did polling in the fall, so I have fresh information on some
of the biggest concerns for our community.
And the number-one polling issue in our community is
education, and number two is healthcare. And so, when we look
at the things that are really being impacted by this, it is
really the population growth that we have seen and also some
State-level issues that are really not yours to deal with, with
recapture and other things here in the State of Texas. But
education here in Midland is our number-one concern.
And we--all of these families that are coming in here,
workers at all different levels, are bringing kids with them.
Our average age in Midland, Texas, right now is 31 years old,
and our largest group of population is ages zero to 4.
And so we have this dynamic in Midland of an extremely
young population, folks that care a lot about getting good
education for our kids. And so that is probably the single most
significant impact.
But we also see other things, you know, housing, affordable
housing in the booms-and-bust cycles that were referenced, and
some of the man camps and the things that are associated with
that. So there are concerns that we are facing because of rapid
population growth and the development of oil and gas.
Mrs. Rodgers. Does it mean more revenue also to the State,
or----
Mr. Blong. It absolutely means more revenue.
And so, on the positive side, we are collecting more tax
revenue than we have ever seen, especially on sales tax, but
also our tax basis for ad valorem tax is higher than it has
ever been. And so that is a pro and a con, right? So the folks
here are paying a lot in taxes, but we are also collecting
that, and we are able to move some things forward.
And we see this facility that we are in and other capital
campaigns that we have had over the last few years where we
have developed things in Midland to improve upon the community
that we have. And so that has been afforded to us because of
oil and gas.
We also see so much innovation taking place that we export
out of the Permian Basin to other basins around the world
technology that was developed here because we have investors
that are willing to put their money into it here. They know
that we take care of their capital. They know that we are
creative and we have the groups that are able to advance
technologies in Midland. And so we are benefiting not just here
but the world because of that.
Mrs. Rodgers. Thank you. Appreciate that.
Mr. Carrasco, I understand that you are a Midland trustee,
or you said that. Would you just speak to what the energy
production here and expansion has meant for the students at
Midland College?
Mr. Carrasco. Thank you, Chair Rodgers.
Without a doubt, it is something that we continue to work
on. My goal as a board of trustee is workforce training. We
have to train our workforce. We have to be able to develop the
innovation that is out there for us to continue to grow.
And, with that, as you train students, they get into better
jobs, so they benefit in the community. They buy homes. They
buy their first home. They buy their first car. They get to go
shop a lot more in the mall. So it is an opportunity for them
to be able to improve their quality of life.
And it helps the oil operators because we have to be a
partner with them to make sure that we not only provide what
they need, but we need plumbers, we need A/C and refrigeration
techs because our homes are growing. So there is a lot of
opportunity. And so it is our job, and it is something that I
am very proud of that we are working on a CTE design right now
and a big state-of-the-art CTE building where we are going to
be able to train students so they can get out into the
workforce quicker.
So that is an opportunity that is definitely there for our
students.
Mrs. Rodgers. OK. I ran out of time that quickly. I had
more questions, but I will save those conversations for later.
Mr. Chairman, I yield back.
Mr. Duncan. You are the chairwoman of the committee. Do you
think I am going to gavel you?
Before I recognize Mr. Burgess, who will be our next
Congressman to question, there are two former Members of
Congress in the room: Pete Olson, who I served with, former
Energy and Commerce member, and former Congressman and now
Texas Tech Chancellor Kent Hance, right here in Texas.
Welcome, and thank you guys for participating.
I will now go to Mr. Burgess for 5 minutes.
Mr. Burgess. Thank you. And thanks to everyone for being
here. We were late, and I apologize to you for that.
But I just have to share something with you. You have a
great Congressman in August Pfluger. We are sitting in the
McAllen Airport at 5:15 this morning, and things start looking
bad like they can sometimes on an unnamed national airline.
People are scurrying around. They are closing doors. They are
wheeling people off the plane we have already gotten on.
August doesn't miss a beat, and--well, what he told me was,
``I got 400 of my closest friends coming to this hearing, and I
will not disappoint them''--not ``I cannot disappoint them,''
``I will not disappoint them.'' And he gets on his phone, and
he arranges not one but two chartered aircraft.
I still don't know who is paying for them, August. I hope I
am not.
And he gets us--for the most part, gets us all here. We
didn't all make it. But it was a big deal, and he moved--
literally moved Heaven and Earth to make sure that this hearing
came off.
So big hand to your rep, Representative Pfluger.
And, Madam Mayor, in, of course, spending the last 8\1/2\
in airports--and I apologize I missed your testimony, but I had
a chance to read it, reread it, reread it, while we were
waiting. And, you know, we had kind of an interesting start to
this Congress. It took us 15 votes to elect a Speaker. First
time that has happened in a hundred years. Kent Hance called me
at midnight on one of those nights and said, ``What the hell
are you all doing up there?''
But, in your testimony, a hundred years ago, Santa Rita No.
1 came online. And that kind of--when you talk about education,
particularly for our State, I mean, that changed the curve.
Can you tell people who may not know about Santa Rita No. 1
a little bit about that event?
Ms. Blong. Sure. So it was the first well that really
brought on the Permian Basin and changed the trajectory of this
region.
Before that, we were known as the midway station between
Fort Worth and El Paso. That is how our name came about, so we
became known as Midland, halfway between Fort Worth and El
Paso. And, whenever we saw Santa Rita No. 1 and the development
that exploded here quickly thereafter, it has really been an
interesting trajectory for our community and for our region--
not just for Midland, Texas, but for Odessa and for all of our
surrounding communities.
And so we have seen the expansion of communities with
education, with roads and infrastructure, with workforce
training, with our--we have two community colleges, one in
Odessa and one in Midland, and then we have the University of
Texas Permian Basin. And so----
Mr. Burgess. Right.
Ms. Blong [continuing]. So much growth has come in the
community, largely driven just by oil and gas. And so we have
seen some diversification. But, for the most part, it was
driven by the discovery of this huge basin and the reserves
here.
Mr. Burgess. And the creation of the permanent endowment
fund----
Ms. Blong. Yes.
Mr. Burgess [continuing]. For University of Texas and----
Ms. Blong. Absolutely.
Mr. Burgess [continuing]. Texas A&M. Not that those
universities are important to me, but they are to other people.
Ms. Blong. Right.
Mr. Burgess. But the Permian Strategic Partnership is also
a big deal----
Ms. Blong. Uh-huh.
Mr. Burgess [continuing]. Here, and you all have worked
very hard to promote that.
Can you, in a couple of words, just kind of tell us what
the Permian Strategic Partnership----
Ms. Blong. Absolutely.
Mr. Burgess [continuing]. Has meant?
Ms. Blong. So the Permian Strategic Partnership is a
collection of 20 companies and several others that are joining,
and they have pooled their resources voluntarily to solve some
of the greatest issues that we face in our community. And so
they are addressing healthcare and workforce training,
education--I am going to miss some--affordable housing, and
transportation issues, infrastructure related to our region.
And they are not just addressing that in Midland but in the
Permian Basin at large.
Mr. Burgess. And one of the more exciting things you said
is that technology that is developed here because of the
expertise and the investment is exported to other areas, and
you all are doing it so well here that the overall carbon
footprint of the United States year over year since 2005 has
gone down. And it is because of exporting that technology.
And Chancellor Hance, I do have to also mention--
Representative Peters mentioned the great engineering school
you have built out at--in Lubbock at Texas Tech to create the
engineers or to educate the engineers of tomorrow. So that is
the sort of stuff that is coming out of West Texas. And the
country--the world--benefits from that.
Mr. Pruett, let me just ask you because you spent a lot of
time in your testimony talking about, look, the methane problem
that Representative Peters addressed is true. It is real. But
the longer the gas is stranded here--he calls it fugitive
emissions, venting and flaring. All of those are byproducts of
the fact that you can't get your product from here to where it
ultimately is going to be sold, generating electricity in
Dallas or Houston or at an LNG facility out of--off Freeport.
So are there things that can be done to hasten that
delivery?
Mr. Curtis [presiding]. And, Mr. Pruett, can you answer
rather quickly and so we can move on to the next speaker?
Mr. Pruett. Yes. Just permitting reform to--we need to
replace aging pipelines. Kinder Morgan's pipeline was down for
9 months to California. They needed our gas. We couldn't get it
there. So we need to replace our aging pipeline infrastructure.
We need the permits to do so.
Mr. Curtis. Thank you.
Mr. Burgess. Well, we are going to help you do that.
Mr. Pruett. Thank you.
Mr. Burgess. Thank you.
Mr. Curtis. Thank you.
The Chair now recognizes Mr. Walberg.
Mr. Walberg. Thank you.
I think I--it is on. I see the green light.
Thanks for waiting around for us. And, again,
Representative August Pfluger did a masterful job of getting us
here. And I think it showed the desire to make sure that we had
a chance to hear from the industry, the community, and the
concerns that really assist us all, so thank you for being
here.
Mr. Carrasco--and did I pronounce that right? I wasn't here
for your opening statement.
Mr. Carrasco. That is fair.
Mr. Walberg. I read all of your statements--written
statements--so I guess I am up to that. But, Mr. Carrasco, I
also sit on the Education and Workforce Committee as well as
this committee, and I hear from countless constituents about
the challenges that they face in attracting and growing a
workforce in these critical industries.
How is your community addressing career exploration and
workforce training for the oil and gas industry?
And, secondly, how are you engaging with K-12 as well as
postsecondary institutions?
And I would add the final point: How are you dealing with
parents to get them past the peer pressure of saying Johnny and
Susie have to go to 4-year institution when there may be better
values for them and a lifelong opportunity?
Mr. Carrasco. Well, thank you, sir.
And, without a doubt, I mean, we understand that, within
our increasing industry, we need workforce training.
To address your pre-K, we are now building a pre-K academy
that is going to serve the community well of over 280 young
students that we are actually going to be able to----
Mr. Walberg. You have toy oil wells or something they work
with?
Mr. Carrasco. No. They will be able to--well, we are able
to accelerate early childhood teachers in a 3-year degree. It
is the first bachelor's degree that we have. So we will be able
to fill that void in the education. As Mayor Blong has talked
about, that is a very important----
Mr. Walberg. Right.
Mr. Carrasco [continuing]. Piece of ours.
Also the fact that we are starting with our strong dual
credit programs so our seniors, our juniors are able to take
dual credit. And they--and we talk to them about careers. We
talk to them about, if you don't want to go to a 4-year
institution, it is all right. You can be an electrician and
make a lot of good money. You can be a welder. You can be a
diesel mechanic. And we will train you, and we will put you out
into the workforce fast.
So thanks to the Permian Strategic Partnership, because
they have invested in us. Along with their partners, they
invested in our community college to make this happen so we
don't have to put the burden on the taxpayer, ask for a bond or
this and that. So very grateful for that because it allows us
to be able to expand our reach and understand what our
operators need, what our industry needs, what our community
needs.
Mr. Walberg. More student loan debt to follow----
Mr. Carrasco. Exactly.
Mr. Walberg [continuing]. Many of them.
In his State of the Union address last week, President
Biden said that we would need fossil fuels for at least another
decade.
Coming from Michigan, auto industry capital, that idea that
we could move past the use of fossil fuels, these essential
resources, in 10 years is laughable, or cryable. But that
doesn't mean that the administration won't try.
So, Mr. Pruett, how are the backdoor rulemaking efforts by
the EPA and DOE affecting the industry's ability to produce oil
and gas and keep our country energy independent?
Mr. Pruett. You know, what is frustrating for the IPAA and
the industry as a whole is, under the Obama administration, the
Clinton administration, certainly under Trump and the Bushes,
we had access to--we had a dialogue with the EPA. That is no
longer the case. We have no--they will not return emails, phone
calls. There is no dialogue.
On the other hand, I am on a group with EDF--Environmental
Defense Fund--Ceres, UT Austin scientists, and the majors where
we are collaborating to look at ways to measure and reduce
emissions in the Permian. That is collaborative. It is kind of
across the aisle, but the EPA doesn't want to hear from us.
They would rather get their formulas from EDF and others that
don't apply and are not calculable.
And, further, their subpart W Excel spreadsheet is flawed
as it can be, and that is how we are reporting emissions and
how we will be taxed. So there needs to be a lot of help and a
dialogue with industry to create something that is
implementable and viable. It is really not even a
constitutional or--I don't think it will survive the courts as
presently contemplated to implement the methane fee.
Mr. Walberg. OK. I thank you.
These rush-to-green policies by the Biden administration
have caused an increase in investment in traditional energy
production. My own horsehead pump at the end of my cornfield
hasn't pumped for 9 months, and very little before that. It
will pump long enough to pay for my daughter's wedding. That is
about it. That helped.
Mayor Blong, how has the Biden administration's rhetoric
around the oil and gas industry impacted communities like yours
and these industries that they support?
Ms. Blong. I think the main impact that we see is the lack
of access to capital for a lot of our local businesses. And so,
through the downturn during COVID and following, we saw a lot
of businesses suffer and fail in our community.
And, whenever we are facing the kind of headwinds that we
have at a Federal level with the rhetoric that has come out of
DC, it does not incent people to want to invest in what we are
doing. And, if he is calling for an end to our industry
entirely, it has caused difficulty for access to capital.
Mr. Walberg. OK.
Ms. Blong. I think that is the biggest----
Mr. Walberg. Thank you.
My time has expired. I yield back.
Mr. Duncan [presiding]. I thank the gentleman.
And now the Chair will go to the vice chairman of the
committee--Subcommittee on Energy, Climate, and Grid Security,
Mr. Curtis, for 5 minutes.
Mr. Curtis. Thank you, Mr. Duncan.
I was also going to compliment our colleague, Mr. Pfluger,
but he is not in the room, so I am not going to waste my time
with that.
And I would rather give a shout-out to my colleague from
San Diego, Mr. Peters. I think it is no small thing that you
are here today, and I think it is no small thing that you have
been to Houston and to many places to understand this from our
perspective. And I just really compliment you on that.
And I would say to all of us, to the extent that we heed
his thoughts about methane, really that helps fossil fuels be
viable into the future and helps with the argument that we want
to replace our adversaries' foreign fuels with U.S. foreign
fuels. So my staff will tell you, Mr. Peters, they roll their
eyes when I talk about methane because they know that I want to
do something. I want to join you in that effort. So thank you
for bringing that up today.
Mayor Blong, you and I met just briefly, but we share some
things in common.
Ms. Blong. Yes.
Mr. Curtis. I was a mayor of Provo City, some of the
happiest years of my life being a mayor. I think that is a
really important position that you hold.
And, in my congressional role, I too represent many people
who derive their income, their livelihoods, from oil and gas
and, in my case, actually coal as well.
And I would like to focus on a couple of your comments that
were in your testimony.
You said, ``The messages, virtue signaling, and the
rhetoric that have come from the Federal level tell us oil and
gas is evil or not on the side of average American or the side
of the care of our environment.''
And then you made a very, very bold statement: ``Our
Permian advances in science, engineering, methods, and
processes have yielded the safest, most environmentally
responsible barrel of oil in the world. A barrel of oil
produced in the Permian Basin is the greenest barrel of oil
produced in the world.''
And then, in your testimony, you used the word ``vilify.''
So can you tell me why you and your constituents feel that your
way of life are vilified?
Ms. Blong. As to why it is vilified, I am not sure that I
can speak to that, but I would like to address that,
absolutely.
I think that the--there is a large lack of understanding in
our Nation and in our world for what oil and gas professionals
really do and for the care that we give to making sure that we
are doing it in the most economically viable but also
environmentally friendly way. Our families live here. And my
children are going to bed at night just not very far away from
the closest drilling operation. We can see it from our house,
from our street. And so we care a lot about that.
We are incented locally to invest our time and our money
and our efforts into making sure that we are doing this well,
and so I think that is a really important thing to consider.
Mr. Curtis. So is it fair--and some of this, I am
projecting for my constituents----
Ms. Blong. Sure.
Mr. Curtis [continuing]. In Utah. Is it fair to say that
they are disturbed when they hear and they see the shutting
down of U.S. fossil fuels here in United States, and then they
hear the messages to Iran, to Venezuela, to Russia to produce
more?
Ms. Blong. Yes.
Mr. Curtis. Can you just, like, explain how that makes them
feel?
Ms. Blong. Well, absolutely. And I think that that is--you
are exactly right. We are watching a national push to some of
these other basins around the world where we do not have
friendly relationships with their governments. We know that
they don't have our best interests at heart. And they are
producing a dirtier barrel of oil than what we are.
And so we are--we are able to do the job that community
around us needs to do, the Nation needs us to do, and the world
needs us to do, but we are facing our strongest headwinds from
our own Federal Government.
Mr. Curtis. So you mentioned you can see the rigs and
things like that. You mentioned you are a mother of three.
Can we assume that you care deeply about your children's
future and about the Earth that they inherit----
Ms. Blong. Yes, absolutely.
Mr. Curtis [continuing]. And you do care about these
environmental issues? And not just you, but the people that you
represent. And could you speak to that for a minute?
I call Utahns the best environmentalists in the world.
Ms. Blong. Uh-huh.
Mr. Curtis. I don't know about your constituents. Mine hate
to be called environmentalists. But can you speak to that for a
minute?
Ms. Blong. That is absolutely true. As a mother and as a
person who has lived here for--now I am the second generation,
as I said, raising the third generation here in our community,
I will also tell you that some of the oil and gas companies in
the Permian Basin are doing more to advance beneficial reuse,
water recycling operations, and the technologies associated
with that than anyone else anywhere in the world. And so we are
advancing those technologies right here.
Mr. Curtis. Thank you.
Mr. Pruett, I want to just quickly turn to you.
I believe, when we go to the year, let's say hypothetically
2050, and we see what energy sources we are really using, there
are going to be four variables that determine what we will use:
reliability, affordability, safety, and clean.
Can you speak for those in the room today? Are you prepared
to compete with fossil fuels in all of those, including the
clean area, moving forward?
Mr. Pruett. Absolutely. I--look, we produce in the closed
systems, as Mayor Blong said. We are drinking the water from
aquifers from which our wells drill through. So we are on that
path.
I think a big part of the challenge for our industry is
having you all here and having people see it to believe it,
that we are good stewards of the land. And so I do think,
representing thousands of smaller independents, we have got to
pull some of the older practices to the modern practices that
we employ since all of our facilities are less than 10 years
old. That will----
Mr. Curtis. I am going to cut you off because I am out of
time, and the chairman is going to cut me off.
Mr. Pruett. That will be the key, to bring up the laggards
to the highest standards, and we will be competitive.
Mr. Curtis. Thanks, Mr. Chairman. I yield my time.
Mr. Duncan. I thank the gentleman.
And, as a football aficionado, I just realized that Midland
and Odessa gave us Friday Night Lights, so I want to thank you.
Ms. Blong. You are very welcome.
Mr. Duncan. Yes. Look, I'm going to skip over Mr. Weber and
come back to you and go to Mr. Pfluger. It is his area, so Mr.
Pfluger.
Mr. Pfluger. If I may have just a minute of personal
privilege, and then I will----
Mr. Duncan. OK. Go ahead.
Mr. Pfluger [continuing]. Yield back for Mr. Weber's.
To both Chairman Duncan, Chairwoman Rodgers, thank you for
bringing this committee to the heart and soul of energy
production here in this country. We are so thankful for your
leadership. Not even one month into the legislative business,
and we are already talking about the most important thing for
our economy that underpins our national security. And I can't
thank both of you enough for bringing this many Members, being
able to introduce you to our community, the hardworking men and
women.
And, as a small token of our appreciation, we figured that
you needed to go home with a little piece of West Texas.
And, Chairman Duncan, you have been mentioning a cowboy
hat, and so we have a Leddy's cowboy hat that I would like you
to take home with you. Most of the time in West Texas, we don't
wear it indoors. We will give you a second to put it on so that
you can go home to South Carolina and show off your new cowboy
hat there.
Mr. Duncan. Wow.
Mrs. Rodgers. Wow.
Mr. Pfluger. Chairwoman Rodgers, we can also do a cowboy
hat. However, in West Texas, we have worn spurs for a long
time. And, as a token of our appreciation for your leadership,
we have a spur pendant that we hope that you will wear with
pride in Washington and in Washington, DC, and maybe as a piece
of symbolism to spur along our government to do the right thing
and put a little bit of reality--some West Texas reality--into
Washington, DC.
Mr. Duncan. As long as she doesn't stick the spurs in the
committee members----
Mr. Pfluger. I have a feeling that might happen, but that
is OK. We are good with it if you do.
Thank you for your leadership, and it is--not everybody can
see it as much as the cowboy hat.
Mrs. Rodgers. Here we go. Oh, it is great. Look at this.
Oh, OK. Here we go. I have some spurs here. Great. All right.
Great.
Mr. Pfluger. Thank you. I yield back.
Mrs. Rodgers. I apologize that I am going to have to sneak
out now. I have some other commitments I have to get to,
another plane to catch.
But, first and foremost, it is great to be here. And so
pleased that we were able to bring the Energy and Commerce
Committee to Midland, Texas, for our first field hearing.
A big thank you to Congressman Pfluger for all his help in
organizing and putting this all together. But also just know
you have a great Representative. He is a great voice for you.
He represents your community, this industry so well--a strong
defender and promoter of American energy and oil and gas
production that is driving our leadership on so many different
fronts.
So it is great to be here. I look forward to coming back
again and spending more time with all of you. And just keep up
the great work. Keep innovating, keep working hard, keep
leading the way, OK? Good to be with you.
Mr. Duncan. Thank you so much.
August, I don't know who wears it better, me or John
Dutton.
But, anyway, now I will go to Representative Weber for 5
minutes.
Mr. Weber. Boy, that is a hard act to follow, I will tell
you.
But I will tell you this. How many Members in the crowd
remember who E.F. Hutton was? Some of you all are almost my
age. When August speaks, he is like E.F. Hutton: We listen. So
give him a hand, will you?
[Applause.]
Mr. Weber. I don't mind telling you that having August for
a friend gives me status. You know, I had a friend in the fifth
grade gave me the measles one time, and this is a lot better
deal. So it is great to be here.
Mayor, I want to come to you. I didn't get to hear your
testimony. We were on the second plane. It is exciting what you
wrote. I have read most of it and tried to listen and pay
attention to everything going on.
You actually write in your testimony that you are a
privately held exploration and production company that operates
and stewards--you all, don't miss that word--stewards over 300
wells across 35,000 square miles of West Texas, southeastern
Mexico.
I think, for the gentleman from California, our colleague
across the aisle, I think a lot of times that is missed on some
people, that some of the original environmentalists were
farmers and ranchers and people who cared deeply about the land
and things that have to happen.
Well, August and I have a great relationship for a number
of reasons, not the least of which is I am the upper Gulf Coast
of Texas. I represent from the Louisiana border, that other
foreign country, right down the Gulf Coast toward Corpus
Christi. Michael Cloud is below me. I have got the first three
coastal counties. We produce 65 percent of the Nation's jet
fuel, 80 percent of the Nation's military grade fuel, almost
twice the Nation's gas in the eastern Rockies.
You all punch holes in West Texas out here. Now, I am going
to put you all on the spot again. How many of you all remember
The Beverly Hillbillies show? When he says he went out hunting,
and up through the ground comes some bubbling crude--what did
they call it?
Ms. Blong. Black gold.
Mr. Carrasco. Black gold.
Mr. Weber. Texas----
Mr. Carrasco. Texas tea.
Mr. Weber. Texas tea. There you go. You all remember that.
You all saw the--you saw the reruns, young lady.
So you all punch holes out here, and you send it down to
us. We are the pipeline capital of the world, really, in Texas,
235,000 miles of pipeline. We produce that oil, gas--the
gasoline, jet fuel. And I will just go right down the list. So
August and I really have a great, great, great energy
connection on what you all do.
And did I mention that you all are good stewards of what
you all do? So thank you for that.
I want to ask a couple of--I want to point out a couple
things and then ask a couple of questions.
First, Americans need to understand that not only are we
good stewards and do we care about our environment, because we
have got kids to raise--you said you have three. I have got
three kids and eight grandkids, and our oldest granddaughter is
22, married 2 years, and I am fixing to be a great grandpa. So
I am getting old. All that to say I am getting old.
Americans need to understand that we care just as much
about our environment and the country as anybody else. And I
would even argue really, in some fashion, maybe even more
because we understand what is at stake.
2013, when I got elected to Congress, Jim Clifton, then the
CEO of a research committee, Gallup polls, came and spoke to
us, the Republican freshmen, and he made this comment. He said
that free enterprise is not a fiscal tool, it is a spirit.
And I said, ``Wait, wait. What did you say, Mr. Clifton?''
``Free enterprise is not a fiscal tool, it is a spirit.''
And I thought, you know what? He is on it. If you get the
spirit of free enterprise, you will do it no matter what, and
you will do it right, and you will do it correctly, because you
care about those kids and grandkids. You care about this
country. You run risks. I owned an air conditioning company for
35 years. I am a small business guy. You invest your capital,
and you are not guaranteed that you are always going to get a
return.
Americans need to understand that energy for us is energy
dependent--what we are doing, energy independence, it is
national security. It is energy dominance. It is economic
security. It is actually geopolitical security, what you all
do, because when America is strong, the world is a safer place.
Now, Dr. Zavada, you made a couple of comments in your
writing too. I had a chance to read through it. You say these
observed changes have motivated governments, talking about
climate change, and the people of primarily developed countries
to seek alternate--alternative energies to ameliorate the
effects of fossil fuels.
We love renewables. Renewables are good. But let me just
say this. You know, we went through Winter Storm Uri 2 years
ago when Texas was number-one energy State, produced most of
our energy, 5 percent of solar panels, we found out--we found
this out. Renewables cannot be the leading actor in this movie.
They can play a supporting role. Back to John Dutton's--where
did my John Dutton friend go?
What you all do is important. I hope you all understand
that. I hope you understand that we care about our environment.
Everybody here is a perfect example of industry and the care
that they have for this country and why I am glad to be here.
And I will yield back.
Mr. Curtis [presiding]. Thank you, Mr. Weber.
Chair now turns to Mr. Pfluger.
Mr. Pfluger. Thank you, Mr. Chairman.
First, I would like to thank some people behind the scenes
before I get into my questions.
We have a phenomenal team with multiple Midlanders, not
just here in the Midland office, the Odessa office, but also in
our DC office. A lot of people put on this hearing today, to
include my chief, John Byers, Deputy Chief Evan Thomas, Lyssa
Bell, and Preston Howey, who are Midlanders, Corbette Padilla,
and Monica Mauldin. They did a great job, and we are thankful.
Fabulous.
The title of this hearing is so important. We are in an
energy expansion. We are in an expansion--not a transition, but
an expansion. And we have to keep focused on that. And I want
to talk a little bit about the shale revolution. And this
revolution has allowed so many people around the world to not
be impoverished by energy, without energy. But there are still
many who don't have access to energy. And I don't want to see
us go down that path here, the path that Western Europe is
going through right now, where they have made bad choices that
led to terrible situations. We can't get there.
When it comes to the reduction of emissions, we have
reduced CO2 emissions 30 percent over the last 10
years, 14 percent on methane. Yes, we will continue to do what
we can here. And we will work together, but it is innovation
that makes that happen.
I have three questions.
Mr. Carrasco, thank you for your testimony. Thank you for
your leadership. You have 64 employees. That is amazing. How do
those families feel--we will do 1 minute each for 3 questions.
How do those families feel when the President of the United
States says--and I quote--``I am going to end fossil fuels''?
How do they feel about the careers they have chosen?
Mr. Carrasco. Well, I think it brings panic, because, you
know, how can you say that it is going to be gone in 10 years?
These are employees that have been with me for well over 10
years that have benefited from this industry and the innovation
of this industry and the safety of this industry. So, without a
doubt, there is panic because, you know, they say, ``What will
we do after? Where do we go after?''
So, you know, obviously we need to understand that the oil
and gas industry are here to stay. And I will tell you--I talk
about this, about how I get to see it firsthand. I see these
operators and what they do and how they employ--they help me
employ people so they can have a quality of life. So I--
sometimes they ask me, ``What is going to happen?''
Mr. Pfluger. You know, those families aren't just putting
food on the table. They are adding to our national security.
They are doing something that no other country in the world has
done. We have revolutionized the delivery of affordable,
reliable, secure energy.
And, Mr. Pruett, we appreciate what you do. But what
happens to our country--in 1 minute or so--what happens if we
stay on the path of the policies that we have seen over the
last 2 years, where we have basically legislated through
Executive fiat? What happens to our country, to our national
security vis-a-vis the energy industry?
Mr. Pruett. Well, the path we are on with China's oil
consumption recovering, we are going to be short crude. And a
lot of the experts, including, you know, Scott Sheffield, who
runs Pioneer, are predicting $150 oil, which won't be good for
this country or the developing world or our allies. And that is
not a scenario that I want or our members want.
And unless we remove the regulatory barriers and the access
to capital constraints that we face now, we will not be able to
grow U.S. production enough to meet the growth in worldwide oil
and gas consumption.
Mr. Pfluger. We hear this talk about 9,000 permits when we
know that most wells take up to 50 permits. So how many permits
do you think we need throughout the United States--maybe it is
impossible to say.
Mr. Pruett. Well, it is just--the BLM and the other
regulatory bodies in States other than Texas are intentionally
slowing down our activity. Unless you have the easements to lay
the pipes so you can get product to market, you are not going
to drill the well. So it is a whole series of permits that have
to be approved by States like New Mexico and the BLM, and that
is just not happening. And it is true offshore as well.
Mr. Pfluger. Well, thank goodness for our Railroad
Commission. They do a great job of helping us to achieve the
multiple goals that we have.
I appreciate my colleague from California. I appreciate
your comments and wanting to work together, and I think we can
work together.
To the mayor, great testimony. Thank you for your
leadership. I will give you the last 40 seconds here.
How do we innovate? Is it privately? Is it government, top-
down directed? How do we innovate to achieve not only taking
care of our world, but making sure people still have
affordable, reliable energy?
Ms. Blong. I think the best innovation comes from private
companies and from the good ideas of people who have boots on
the ground. I do not believe that the best ideas come from the
government top-down. But I do think that there are things that
we can do to facilitate good ideas and to invite more people to
the table to bring those forward.
One of the areas that that is taking place is cooperation
among companies on produced water and solutions for injection
for SWDs but then, also, how we might be able to recycle that
water and have beneficial reuse. They are leading the way in
that, and I am thankful for that.
Mr. Pfluger. Well, the Permian Basin is the heartbeat of
this country when it comes to the energy innovation, when it
comes to taking care and doing better. And I think we can and
have and we will continue to demonstrate ways to take care of
this Earth but also ways to make sure that the quality of life
remains the highest that it has ever been.
Thank you for coming to the Permian Basin, which is leading
the world through the shale revolution and through a hundred-
plus years of national security for our country.
I yield back.
Mr. Curtis. Thank you, Mr. Pfluger. And thank you for
hosting today.
The Chair now recognizes the gentleman from Georgia, Mr.
Carter.
Mr. Carter. Well, thank you, Mr. Chairman.
And thank you all for having us here today. And I want to
echo the comments made about your Representative. August
Pfluger is a great Representative and is certainly a rising
star in Congress, and we look forward to his leadership for
years to come.
As you heard, I am from Georgia. I guess I am not too
popular in Texas right now. But, nevertheless----
Voice. Don't bring it up.
Mr. Carter. I kept--well, I didn't. I didn't say anything.
I just, you know----
Voice. Don't complain.
Voice. Don't complain.
Mr. Carter. No. It is--you know, I kept looking for our
quarterback doing community service on the side of the road,
but I didn't see him, but nevertheless.
Anyway, thank you. Thank you for having us here. And thank
you for the work that you are doing. And I mean that sincerely.
Look, I am--I have served in the previous session on the Select
Committee for Climate Change. I am a member of the Conservative
Climate Caucus. I have the honor and privilege of representing
the entire coast of Georgia, over a hundred miles of pristine
coastline.
The environment matters to me. It is my home. It is where I
have lived all my life, where I intend to live the rest of my
life. I want to make sure, just like you do, that we take care
of our environment. We all understand how important energy
independence is to our national security.
Mayor Blong, like you, I was a mayor in another life, and,
you know, in no small part, the job of a mayor is kind of to be
a cheerleader. I mean, you are the one who has got to keep
everybody encouraged and keep things going.
It must be difficult knowing that this administration, that
this President, day one--day one, declared war on fossil fuels
and on fossil energy. And, even in the State of the Union
address here just last week, when he said that, you know, it
was only going to be around for the next decade--I mean, it
must be difficult for you to keep everyone here and those of
you in business--to keep everyone encouraged that, you know, we
all know that we in America have not gotten as much credit for
decreasing carbon emissions that we should.
The United States of America has decreased carbon emissions
more in the last decade than the next 12 countries combined--
the next 12 countries combined--while still growing our
economy. I applaud what you have done in the fossil fuel
industry. You have done it, but, Mayor, it must be difficult
for you to keep people encouraged.
Ms. Blong. I think one of the best things that Midland has
going for it is public-private partnerships to be able to
address the needs that we face as a community. We have Pioneer
Natural Resources that partnered with the city of Midland to
put in a water reclamation facility to take effluent water from
the city of Midland and use it for fracking and other things.
And so we see this partnership, this convening of oil and gas
companies and the leadership and innovation that they have
partnering with our municipal needs and our community needs.
We are seeing that not just with water, but we are seeing
it with our education system and with so many other things. And
so I believe that the way forward for us as a community and
really the way forward for us as a Nation is to listen to the
creative business minds in our----
Mr. Carter. Absolutely.
Ms. Blong [continuing]. Communities, to take a page from
their book.
Mr. Carter. And then to hear our President--our President,
he is my President too--to hear him say that, you know, the
reason for high gas prices is because the industry has stopped
pumping oil. You know, why have they stopped investing? Have
you seen the decrease in investment? Are you worried about
that? Are you preparing for that? What is the--tell us: What is
the pulse?
Ms. Blong. I would say that we have seen a decrease of
investment. And certainly through those COVID years, it got
really, really difficult. And Steve Pruett has referenced some
of that from his own story.
But I do believe that we are seeing some of that bounce
back. The other thing that we are seeing locally is local
investors, people who have made good money in the oil business,
are investing back into other for-profit efforts here in our
community. So they are investing in technological advances, in
fracking and in other things, water issues that I have
referenced multiple times here. But they are--those dollars are
coming back into our economy from people who made their money
here. They are investing back into our community.
Mr. Carter. Right.
Mr. Pruett, have you seen investment in infrastructure?
What is your feelings?
Mr. Pruett. Well, I would echo what Mayor Blong said about
it is the old style of financing of family offices and
syndicates, of redeploying money they have made, money in the
oil business over the decades, and they are putting it back in.
That is really the best source of capital an entrepreneur has
right now, is local money, or I call it Texas family office
moneys.
So I am seeing some improvement, banking markets starting
to heal just because the leverage in our sector has come down,
so we are better credits. So that is encouraging as well.
So I think the capital--the big issue is just we are
distributing so much cash to investors now as an industry, and
that is just----
Mr. Carter. Right.
Mr. Pruett [continuing]. Something investors have demanded.
That is not changing.
Mr. Carter. Well, I am here to encourage you. I am here to
thank you. I thank you. I thank for the innovation. You have
cleaned up the industry. You continue to clean it up. You have
continued to invest in innovation. And thank you for that, and
thank you for what you do for energy in our country, and God
bless you.
Mr. Pruett. Thank you for your service.
Mr. Carter. I yield back, Mr. Chairman.
Mr. Curtis. The gentleman yields.
The Chair now recognizes, also from Texas, Mr. Crenshaw.
Mr. Crenshaw. Thank you, Mr. Chairman.
Thank you all for being here. It is great to be in August's
district. Wonderful, wonderful time in Midland. Been here many
times. And it is a place like this that keeps America afloat in
hard times, and that is absolutely true.
It is probably why J.P.Morgan's CEO, Jamie Dimon, called a
world without fossil fuels a road to hell, and so I kind of
want to examine what a road to hell might like look.
For starters, you essentially lose the ability to heat your
home or cool your home. That ability, by the way, saves
millions of lives a year.
You have to do away with all the things that you need to
build a modern society: steel, concrete, plastics, all gone. No
roads, no bridges, no buildings, no hospitals, no cars, no
military defense, phones, computers, no other modern luxuries:
all gone without fossil fuels.
And--oh, yes, fertilizer too. Synthetic fertilizer is one
of the main reasons we can feed billions more people than we
ever thought possible, and that is made because of natural gas.
The recent societal collapse in Sri Lanka might be a great
example of what happens when radical environmentalists get
their hands on the reins of policy and insist upon organic-only
fertilizers. So no air-conditioning, no hospitals, no
biomedical devices, no cars, no planes, maybe mass starvation.
That does sound kind of hellish, to be honest.
It is more than that. I mean, it is the basic things we
need to stay healthy. It is antihistamines, antibiotics, cough
syrups, lubricants, creams, ointments, any gels, processed
plastics which are made for heart valves and other specialized
medical equipment. Petrochemicals are used in radiological dyes
and films, intravenous tubing, syringes, oxygen masks.
We could go on and on and on, but, if you took away
petrochemicals and then you looked around the room, you would
watch basically everything disappear. That is pretty amazing.
And it is places like this that help us maintain the wonderful
reality that we all live in.
I am concerned, though, about the investment in this
important industry. Recently, J.P. Morgan head of oil and gas
research Christyan Malek said the bank had identified a $600
billion shortfall of upstream investment needed between now and
2030 to meet what he called a muted view of global oil demand.
I am wondering if you all can expand upon that point. We
will start with you, Mr. Pruett.
Mr. Pruett. Yes. That is a--I have read that research,
where the--we are investing 400 billion in oil and gas
development exploration and development now. We were investing
over 800 billion. Researchers think we need to invest about a
trillion a year, which happens to be what is being invested in
renewables now, which is great.
But there is an imbalance, and so there is so much capital
flow to the low-return investments and renewables, which we
need to do, but there is too much capital flowing there. It
reminds me of the various oil booms where too much money flowed
to our industry, and we destroyed value. It is happening in the
renewables at the expense of the upstream and midstream oil and
gas development.
So, unless that rebalances, we will be short oil and
natural gas in this world within the next 2 years, and it will
be very economically damaging.
Mr. Crenshaw. And maybe you could also talk about some of
the end uses of the products that many of your members pull
from the ground. You know, maybe expand upon the list--the long
list that I just gave.
Mr. Pruett. Well, I don't know that I can. That was
comprehensive. It is very impressive.
But, you know, one thing that people miss is the amount of
petroleum that goes into making a wind turbine or a solar
panel. There is a massive amount of coal that is used to burn
the silicon to make a solar panel. The components of a wind
turbine are resins and petroleum-based products. And the amount
of mining that goes on, which is all diesel-driven equipment,
to mine lithium and cobalt for batteries. There is a huge
supply chain that depends on petroleum to make renewable power
possible.
Mr. Crenshaw. And it is a pretty dirty supply chain.
And, Ms. Blong, I want to come to you on this, because you
have mentioned that, here in Midland, we produce one of the
cleanest, most greenest barrels of oil. I am paraphrasing, I
think, what you said.
Ms. Blong. Uh-huh.
Mr. Crenshaw. But, you know, I tend to agree. I have seen
research that says that American natural gas is 42 percent
cleaner on a lifecycle basis than, say, Russian natural gas.
Can you speak to that and how your industry here is cleaner
than the rest of the world? The point we are making here is
demand is going to increase around the world no matter what.
Ms. Blong. Uh-huh.
Mr. Crenshaw. So somebody has got to produce that. Should
it be us, or should it be the Saudis?
Ms. Blong. I think that is an excellent point.
One of the ways that I think we produce greener and a
better barrel of oil here is that we are looking for ways to
capture emissions before we are required to. And we see that as
destruction of value.
If we have to vent or flare, we are actually destroying
value and losing money. And so we need to have access to be
able to capture that and get it to market.
We require permits to be able to build the midstream
pipelines to get that gas to market, and so we need y'all's
help to get that accomplished.
Mr. Crenshaw. How much better could we do for the
environment if we were allowed to build more pipelines more
quickly?
Ms. Blong. I think that we could come close to solving some
of--I don't know if we could permanently solve, but from an oil
and gas perspective, we could alleviate most of the methane
concerns for those kinds of emissions if we had access to the
pipeline permits that we need.
Mr. Crenshaw. Thank you, and I yield back.
Mr. Duncan [presiding]. The Chair will now go to the
gentleman from Georgia, another Bulldog, Mr. Allen, for 5
minutes.
Mr. Allen. Well, yes. Correction. Well, my mom and dad are
Bulldogs, and my youngest daughter and my middle daughter went
to graduate school there, so--but I do know how to go ``woof,
woof, woof,'' OK? And it has been more fun than that. I went to
Auburn, and so it has been tough.
But, anyway, Congressman Pfluger, thank you for all this.
It is amazing what you have done here for us in the last 2
days, and the things we have seen have been eye opening. I
mean, it is just you had to be here to experience this. And it
is just a privilege for me to be here.
And, you know, I have been around a while. I spent most of
my life in the business world creating businesses, growing
companies, and I know a lot of the challenges out there and
understand the challenges with the oil and gas industry. I
served on the Energy Action Team, and we had a lot of the--
mostly independents coming, which is another thing.
Big Oil doesn't produce the oil in this country. I think it
is a small percentage of it. It is the independents that are
producing the oil.
But a little history on energy. I graduated from Auburn in
1973, and it was not really a good economy then. And then,
within a year, the oil embargo hit, and it almost devastated
our economy. And, I mean, I didn't know if I was going to be
able to keep my first job.
And we were only 28 percent dependent on energy in this
country at that time. And, in fact, our fellow Georgian, who
Buddy knows very well, Jimmy Carter, was elected President
because he promised to make this Nation energy independent. He
created the Department of Energy.
And then, you know, it didn't take long that, you know, we
fast forward to 2008, the Great Recession. The administration
during that--that came into office at that time declared war on
the coal industry. All this money that my MC spent to clean
coal to meet the Clean Air Act that was passed by Congress--he
spent all that money. The rules all changed.
And so the State of West Virginia--I am not predicting
anything here, but the State of West Virginia had the tenth-
best economy in the Nation. Today, they are third from last.
That State has been devastated.
You know, you cannot--I mean, so what happened is, in
2016--and the other thing that is great, we have an election
every 2 years in this country, so we can kind of see where the
American people sit on these issues. But the bottom line is, in
2016 we had the majority in the House, we had the majority in
the Senate, and we had the White House.
And, under the leadership of Paul Ryan and many of our
leaders on committees, we went through the Congressional Review
Act. We unleashed the economy. I had no idea what that would
do. All I know is I was all in. I was pro-business, and we had
a pro-business administration.
I could not believe what I saw. We became not only energy
independent, we became energy dominant. Do you realize how much
power that is? We were setting the price of a barrel of oil.
There was unprecedented world peace.
And so, you know--so what we get to then--of course, then
COVID hits, and, you know, we have--you know, we got a major
reset, and it was a big problem.
Mr. Pruett, you started your own business, and, you know,
like I said, we have an election every 2 years. Election every
2 years. If we get a pro-business administration in this next
term, how long would it take you to get back to where you and
all of your members to get back to where we were just 3 years
ago?
Mr. Pruett. It is probably about 2 years. So, when I make
the decision and my board approves a budget, it takes about a
year to contract the rig, get all the permits, and that is in
Texas. That is the fastest cycle time anywhere. But it is a 2-
year timeframe to really get the machine turning, and then
there is a lag on getting all that production to market.
But it can be done. But we need the White House. Without
the White House running this, we are----
Mr. Allen. Right. Right. Well, one of the things I realized
in business, too, is our whole economy is based on confidence.
I mean, we are 70 percent----
Mr. Pruett. That is right.
Mr. Allen [continuing]. Consumer economy. And, if consumers
aren't happy--and they are not happy right now. You know, this
war on fossil fuel has created the inflation issue in our
country. I mean, bar none. I mean, every--this coat has oil in
it, OK? It affects everything in our economy.
And I experienced that in construction. Construction costs
have skyrocketed because of the price of a barrel of oil. And I
do know, like--I am out of time, but I do know how it was back
during COVID. I mean, you guys were calling because we had a
war between Russia and Saudi Arabia, and oil was $7 a barrel,
and I had a lot of friends in your business that called me and
said, ``We have got to get the price up to at least market,''
you know, ``We are going broke here.''
So--but, anyway, thank you for hanging in there. Keep the
faith.
Mr. Pruett. Thank you.
Mr. Allen. And I think the American people are going to
wake up.
Mr. Pruett. Appreciate it.
Mr. Duncan. Chair will now recognize Ms. Miller-Meeks for 5
minutes.
Mrs. Miller-Meeks. Is it on?
Mr. Duncan. Should be.
Mrs. Miller-Meeks. All right. Well, thank you very much. I
thank Energy and Commerce Committee for having this hearing.
And, while in Texas, if you are around Representative
Pfluger and Representative Weber and Representative Burgess and
Representative Crenshaw, you hear a lot and have had the
pleasure of hearing how everything is bigger and better in
Texas in every way that you can imagine.
However, let me say that I grew up in Texas around San
Antonio, started at San Antonio Junior College at 16, enlisted
in San Antonio, have all my education from San Antonio. But I
realized I was threatening the reputation of Texas that it is
bigger, and so I went to a smaller State.
In the spirit of qualifying the States we represent,
Representative Peters mentioned solar in California, and
McMorris Rodgers mentioned hydropower. So I just want to take
the opportunity to say that that smaller State that I moved to,
Iowa, has 50 percent of its energy from renewables, and we are
an energy exporter, so Iowa is an energy State along with
Texas.
But, also, that Iowa has 50 percent of its energy--over 50
percent electricity is generated from wind power,
Representative Pfluger, but I will give Texas credit, because
overall does produce the most wind power of all States. It is
also the top crude oil and natural-gas-producing State in the
Nation. And we have learned how important that production is to
both the State and to Midland in particular.
And, as States increasingly depend on nondispatchable
resources, such as wind, we need strong natural gas supply and
deliverability.
Why? For 2021, the U.S. Energy Information Administration
reported that total U.S. primary energy consumption was equal
to--anybody have a guesstimate? Ninety-seven quadrillion Btus.
And how much of that was from renewables, such as wind and
solar? Twelve point five percent. How much from natural gas?
Thirty-two percent.
And we know, having gone to both COP26 and COP27, everyone
around the globe acknowledges that energy demand--global energy
demand is increasing, despite advances in energy efficiency.
Mr. Zavada, you mentioned health risks associated with the
oil and gas operations and also from climate change. But are
you aware how many people perish from cold or heat exposure
each year?
Dr. Zavada. Not offhand, no.
Mrs. Miller-Meeks. Lancet and Wall Street Journal articles
in 2021 indicated exposure to hot or cold temperatures is
associated with over 5 million--5 million premature deaths
globally each year. Heat deaths account for 1 percent of global
fatalities, about 600,000, but cold kills 8 times as many
people, 4.5 million annually.
A study by the National Bureau on Economic Research in
March of 2019 estimates that, by driving down natural gas
prices, not only did that help Midland, but by driving down
natural gas prices, the fracking revolution saved more than
11,000 American lives annually from 2010. Eleven thousand lives
saved by what you do here in Midland, Texas.
The best way to protect people from heat and cold excess
mortality deaths is access to plentiful, cheap energy. And that
often means carbon-based fuels.
Mr. Pruett, can you speak to how a strong oil and gas
industry is necessary to support other sources of energy,
including Texas and Iowa wind?
Mr. Pruett. Yes. As I mentioned earlier, the components of
the renewable machines, whether it is the massive wind turbines
that you have all seen that populate west Texas and the
panhandle or solar panels or the wires that are built to
transmit remote renewables to consuming markets like the San
Antonio area, where you hail from, or from the panhandle to
DFW, petroleum is critical in all of that.
And, without--this idea that the world can survive on
renewables without petroleum is just unrealistic, as Dr. Zavada
said, because of the components that go to make it and the
enabling of those--the construction of and the management
operation of renewables is tied to petroleum. And the density
of it and the use of petroleum in transportation fuels also
cannot be ignored.
Mrs. Miller-Meeks. Thank you.
And will you discuss the topic of Federal permitting
reform? For me, both permitting reform for oil and gas projects
and permitting reform for transmission come to mind, and we
must find a better balance between energy project development
and environmental goals. And I think that we can do both of
those. Not lessen environmental standards but provide greater
certainty and predictability to permitting efforts.
Because my time is running out, Mr. Chair, I would ask--the
question I want to ask of our panel is if they can speak to the
challenges that exploration and production companies have faced
with respect to permitting and what reforms may be helpful at
the Federal level.
If they could submit that in writing, and then I will yield
my time.
Mr. Duncan. Yes. So we will talk about the ability to have
questions inserted in the record and answered at the end.
I will now go to the birthday girl, who turned a year older
today, Mrs. Cammack from Florida.
Happy birthday, and you are recognized for 5 minutes.
Mrs. Cammack. Thank you.
Well, I can't think of a better place to spend my birthday
than Midland, Texas. I love it.
No. Thank you. And thank you for everybody for showing up
today. I thank you to all my colleagues, everybody, and the
witnesses for appearing before us.
And, as the lone Representative from Florida and the Gator
Nation, Dan, hell is listening to Buddy Carter talk about
another national championship. That is hell.
We are going to get you, though, for Texas. Welcome to the
SEC.
Thank you to my friend, August, and fellow congressional
baseball teammate. I am not sure if you all know, he was our
MVP last year. I trucked a guy at home plate, and you still got
MVP. I don't know how that happened.
But, in addition to having great States, Texas and Florida,
great constituents, wonderful industries, we also share
something else in common. We are both taking all of
Representative Peters' constituents from California. No.
Seriously, thank you for being here. It does. It means a lot.
Seriously, we do appreciate you being here.
And, you know, a couple of weeks----
Mr. Peters. Careful. You know how they vote.
Mrs. Cammack. I think we are getting the good ones.
Mr. Allen. That is great.
Mrs. Cammack. See, the people have personalities in
Washington. We all aren't like doorknobs.
So a couple of weeks ago, Chairwoman Rodgers, she hosted a
full committee hearing on energy dominance and concerns within
the industry. And one of the things that stood out that--was
that every single one of the witnesses, Republicans and
Democrats, were in favor of domestic production. And we
recognized that as Americans we can do it better, cheaper,
safer, efficiently, and cleaner than anywhere else in the
world. That is an American idea, not a partisan one.
Something else that stood out was the recognition that we
are an energy economy, and it is not only the thing that powers
our everyday lives, from our schools, for our businesses and
everything in between, but our domestic energy economy is the
foundation for the American dream.
One of our witnesses, Ms. Donna Jackson, she made a comment
that really stuck with me. She said that because of high energy
costs at home, when they turn on the lights, when they fill up
at the gas station, and basically everything else, that folks
weren't living paycheck to paycheck anymore. They were living
paycheck to Wednesday and borrowing the rest to get by.
That really stuck with me as somebody who was raised by a
single mom on a cattle ranch. My family, we were commercial
sandblasters. And I just--I had never heard anyone say anything
beyond paycheck to paycheck, because I know what it is like to
live paycheck to paycheck. Heck, I remember what it was like
filling up my gas tank when I was homeless with pocket change.
That really stuck with me, the impacts that the regulatory
regime has had in the last 2 years on our producers.
And so I think it is incumbent upon us here today, as
representatives of the people's House, that we do the most
important thing, which is get the hell out of your way. We need
to get government out of the way, because I believe that our
producers can do it better than anywhere else. And so, that is
going to be our goal, is to help get out of the way.
Now maybe because it is my birthday, maybe it is because I
am sleep-deprived, I am feeling a little froggy, but I'm going
to ask my first question to you, Madam Mayor.
The Department of Energy is proposing new energy
conservation standards for new household gas and electric
cooking devices. This move comes shortly after the Consumer
Product Safety Commission suggested that they should ban gas
stoves under the pretext of reducing indoor air pollution.
Now, I personally see this as President Biden's rush-to-
green agenda to phase out oil and gas and electrify everything.
Should gas stoves be phased out, and how this will impact
costs to consumers?
Ms. Blong. Absolutely they should not be phased out, if
only for the fact that they cook better. As a person who loves
to cook, that--I prefer to cook on a gas stove.
No, I think that this is something that is a little bit of
posturing on their part. I don't believe that it is a needle
mover in terms of consumption in our Nation. And so I think
that it is posturing, but I do believe that it is symptomatic
of the lack of understanding of how energy actually works and
how our grid works in----
Mrs. Cammack. Exactly.
Ms. Blong [continuing]. In the United States.
Mrs. Cammack. My husband, who is the avid chef in our
family, when he cooks at the firehouse, he loves a good gas
stove. So this really got him riled up.
Mr. Burns. Yes.
Mrs. Cammack. But I will move on because I only have 22
seconds.
I am the author of the REINS Act, which would rein in the
regulatory environment across the board. Any major rule or
regulations that had a $100 million impact or more would come
back to Congress for an up-or-down vote.
Mr. Pruett, I have got 7 seconds. Give me the number-one
regulations that you want taken off the books.
Mr. Pruett. NEPA.
Mrs. Cammack. Easy. Done.
I yield back.
Mr. Duncan. Awesome. The gentlelady's time is expired.
She yields back.
Mr. Duncan. I gave you 8 seconds because it is your
birthday.
Mrs. Cammack. Just 8?
Mr. Duncan. First off, I want to thank all the witnesses
and panelists. You-all have done a great job, and thanks for
taking time to be here for this field hearing.
Seeing there's no further Members wishing to ask questions,
we will wrap this up.
Mr. Pfluger. Mr. Chairman?
Mr. Duncan. Yes, sir.
Mr. Pfluger. I have three thank-yous: Number one, to my
legislative energy director, Clara Cargile, for putting a
phenomenal hearing on from our standpoint; number two, to our
witnesses, as you just mentioned; number three, to all of the
oil and gas workers, industry professionals, and residents of
the Permian Basin who are in the audience today for what they
do.
Mr. Duncan. Thank you.
Go to Mr. Peters for just a second.
Mr. Peters. I want to say thanks to Midland for hosting us.
I am not from a State that is much of a producer. I just
want you to know that I am committed to taking a trip to Texas
whenever I can to learn about this. I think we have to work
together. For us to work together effectively, we have to
understand it. So you have my commitment that I will keep
trying to work with you.
And I would just also just remember that when some of the
times when--sometimes when people say something into a
microphone in a political context that are ridiculous, they are
ridiculous.
And you know I thought that the testimony from the
gentleman here, the professor, that oil and gas is going to be
around at least 50 years is more along the lines of reality. I
think we should just keep that in mind as the heat of politics
plays out and that I am very well aware that oil and gas is
going to be with us for a long time. I just hope we can make it
clean and as part of a larger suite of all-of-the-above energy,
which is what my colleagues talked about as well.
So, again, thanks to Midland for hosting us and thanks to
Chairman Duncan and chairman of the committee Rodgers for
bringing us out.
Mr. Duncan. Yes, appreciate that. I thank the Democrats as
well.
Just some last comments. I ask unanimous consent to insert
into the record documents included on the staff hearing
documents list.
Without objection, that will be ordered.
Pursuant to committee rules, I remind Members they have 10
business days to submit additional questions for the record.
And I ask witnesses to submit their response within 10
business days upon receipt of the questions.
Without objection, the subcommittee is adjourned.
And God bless Texas.
[Whereupon, at 2:56 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]