In Senate, a Clash on What’s Causing Energy Prices to Spike

Sen. King's comments spark debate on reliability of solar

Senator Angus King (I-Maine) asks questions at a Senate Intelligence Committee hearing on the Foreign Intelligence Surveillance Act (FISA) in Washington on June 7, 2017. (Kevin Lamarque/Reuters)

Senators on the Energy and Natural Resources Committee’s Energy Subcommittee heard testimony July 13 on the drivers of high energy prices, a key issue for Americans across the country as inflation rages and November midterms loom closer.

In May of this year, Rasmussen Reports found that 82 percent of likely voters in the United States considered themselves concerned about increasing gasoline and energy costs. Fully 60 percent rated themselves “very concerned.”

The same poll found that half of likely voters think catastrophic impacts from climate change are probable over the coming century.

“Our reliance on fossil fuels even when we produce it here means we will be stuck paying the prices set in the global market, subject to OPEC and affiliate producers like Russia,” said Sen. Mazie Hirono (D-Hawaii), who chairs the subcommittee, in her opening testimony.

Yet, in his own opening testimony, Subcommittee Ranking Member Sen. John Hoeven (R-N.D.) said that “President Biden’s Green New Deal policies” were helping to drive up gas prices, citing the administration’s moratorium on onshore and offshore oil and gas leasing.

After missing its latest deadline to issue a legally required five-year leasing plan for those sites, the Interior Department released a draft plan on July 1.

It includes “no more than ten potential lease sales in the Gulf of Mexico (GOM) and an option for one potential lease sale in the northern portion of the Cook Inlet of Alaska.”

An oil and gas attorney recently described the administration’s approach as a “de facto moratorium” on offshore leasing to Bloomberg.

A man pumps gas in Irvine, Calif., on April 1, 2022. (John Fredricks/The Epoch Times)

Divergent Perspectives

Experts at the July 13 hearing had divergent perspectives on the causes and means of addressing high energy prices.

David J. Bissell, president and CEO of the Kauaʻi Island Utility Cooperative, told the subcommittee his utility had succeeded in providing 70 percent renewable electricity on Hawaii’s least populated island. In recent years, renewable penetration correlated with a fall in rates.

“I’d like to emphasize how important federal incentives have been to our success,” Bissell said in written testimony.

He advocated that the Solar Investment Tax Credit be prolonged with the addition of direct pay, “with a delay in further phase out until at least 2030.”

John Larsen, a partner with the Rhodium Group think tank, also voiced support for a range of tax credits, citing spending in the Build Back Better Act.

He argued that Rhodium’s analysis showed that energy costs for consumers could be reduced by 2030, in large part by reducing reliance on gasoline. He claimed that the savings would come even as petroleum output remained roughly the same as it is now while natural gas output rose.

“While total household energy costs are currently elevated, they are actually roughly in line with average costs over the last 40 years,” he asserted, again referencing his organization’s analysis.

Scaring Off Capital Investment

Ron Ness, president of the North Dakota Petroleum Council, drew attention to what he called “anti-oil and gas policies put into place by the Biden Administration,” arguing that rhetoric on the energy transition has scared off capital investment.

“Amidst their messaging and regulatory efforts to hamstring our industry, the President and his Cabinet are calling on us to increase production. This contradictory messaging is confusing and creates added uncertainty in the market,” he said, later adding that “our industry will need pipeline and refining capacity to keep pace with our country’s projected future growth.”

Pump jacks and a gas flare are seen near Williston, North Dakota, Sept. 6, 2016. (Robyn Beck/AFP via Getty Images)

Julie Fedorchak, chair of the North Dakota Public Service Commission, called on her listeners to show “patience” regarding any transition to 100 percent renewable energy in her own written testimony.

Unlike what Bissell described on Kauaʻi, she said increased penetration of renewables in North Dakota has correlated with higher energy bills. She also questioned the reliability of solar and wind, arguing that it will take time for people to develop innovations that address the current shortcomings of those intermittent power sources.

“Quite simply, there is a huge gap between the President’s 2035 clean energy deadline and the permitting processes, supply chains, and construction timelines necessary to build the new generation and transmission infrastructure needed to meet that goal,” she said, referring to President Joe Biden’s goal of electricity decarbonization by 2035.

Disputed Opinion

Sen. Angus King (I-Maine) took issue with Ness’s argument that rhetoric from the Biden administration and the cancellation of the Keystone XL pipeline have substantially influenced the industry.

Ness told King that pressures from banking and finance have had “a significant impact.”

King interrupted: “I think what’s having a significant impact is the desire to give money back to your stockholders.”

He also expressed skepticism about the claims that renewables have created unreliability on North Dakota’s grid, suggesting that Bissell’s use of batteries proves “storage is the key.”

“Senator King hit it right. We need battery storage. We don’t have that yet,” said Fedorchak during questioning by Hoeven.

“You can’t compare Hawaii to a place like North Dakota,” she added, noting that North Dakota was subject to dramatic shifts in temperature.

Sen. John Hickenlooper (D-Colo.) asks questions during a senate committee hearing on Capitol Hill in Washington, on Jan. 11, 2022. (Greg Nash-Pool/Getty Images)

Sen. John Hickenlooper (D-Colo.) questioned Ness, of the North Dakota Petroleum Council, on why he thought production would grow in the Bakken Formation.

“Out of every 100 barrels in the Bakken, with the best technology in the world, we leave 85 of those behind,” Ness responded.

“We need the right price to go get it and the right investment climate,” he added, faulting ESG (environmental, social and governance) policies, among other barriers.

Sen. Bill Cassidy (R-La.) faulted the Biden administration’s policies on refineries, including renewed pressure for refineries to blend in biofuels.

“When the administration says they’re doing everything possible to lower the price of gasoline, they’ve actually got a set of policies which are putting refineries out of business, which makes it absolutely impossible to lower the price at the pump,” he said.