Energizing America: Bill removing regulations on energy production set for debate

Colin Campo
The Courier

A bill focused on driving the United States as a dominant energy producer was formally published Tuesday. It heads to the House of Representatives at the end of the month for debate.

The bill, H.R. 1, is a return to the idea of American-made, but instead of tangible goods, its focus is energy. By opening the market up for American energy production, Majority Leader Steve Scalise, R-La., who sponsored the bill, said it would have a twofold effect of helping the economy and taking a large share of the market away from foreign powers.

"What we're saying is let's let Americans produce energy in America and it will lower the price not only at the pump but also of the household electricity costs, which are dramatically higher and then that solves a lot of other problems in the supply chain," he said.

Transportation costs are also increased by the price of energy. "If we lower the cost at the front end, meaning let us produce more energy in America, we do it cleaner and smarter than anyone else in the world, then we also lower the cost for families who are struggling under the high burden of (President Joe) Biden's inflation," Scalise said.

Shell's Ursa platform operates in the Gulf of Mexico about 150 miles southeast of Port Fourchon.

H.R. 1 is a combination of bills that came out of three committees, Energy and Commerce, Natural Resources and Transportation and Infrastructure.

The first 10 bills to come out of the House are controlled by the majority leader, and Scalise said by listing it as the first, it is the most important one to him. H.R. 1 will hit the House floor for debate March 27-30. If it passes it moves to the Democratic-led Senate for approval and then still needs to be signed into law by the president.

Oil and Gas, a global commodity

The bill streamlines oil and gas permitting and leasing by reducing the number of regulatory agencies from seven to one, the Federal Energy Regulatory Commission, which Scalise described as a "one-stop shop." Once a company received permission from the federal government it would still have to seek permits from the state and local governments.

This would reduce the number of federal agencies that could slow or outright halt projects, he said.

Scalise argued that efforts to reduce oil production in the U.S. have had a number of additional effects globally. It increased the price of energy, increased overall emissions and also increased transportation costs.

Someone is going to supply the demand for oil, he said, and if not the U.S. other entities like OPEC and Russia will step in to fill the demand, controlling the supply, driving up prices and reaping the benefits. The U.S. is the largest free market supplier with regulations that lower its carbon footprint, and when it steps into the oil and gas sector it takes economic power away from those entities with lower emissions, Scalise said.

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"So then we make OPEC irrelevant if we are producing more in America, and we saw that just a few years ago when we had a thriving energy industry; prices were lower and OPEC was not even a factor, because even if they said 'we want to limit production,' it didn't matter because America was making up the difference," Scalise said.

He added that countries were becoming more dependent on Russia for oil in the lead-up to the Ukraine war. "Putin was making about $700 million a day selling his energy to America and Europe before the war, so our weakness on energy policy helps fund Putin's war on Ukraine," Scalise said.

Congressman Garret Graves, R-La., who serves on both Transportation and Infrastructure and Natural Resources, said that U.S. emissions are lower per unit of energy than just about anywhere else in the world. He said there is one exception, a single study that put Saudi Arabia above America.

"But not by much, so we're either the lowest or the second lowest in the world," Graves said. "So if you are going to be using oil and gas, why not get it from the places that have the lowest emissions?"

A Cut of the Profits

Scalise has been working on establishing rules and revenue sharing for wind energy with the Breeze Act, and it has been included in H.R. 1. The bill would see revenue sharing from the Gulf increase from 37.5% to 50%, and would establish revenue sharing not just for oil and gas, but also wind.

Onshore oil drilling has a shared revenue of 50% with states. Scalise said there is no reason that states like Louisiana should receive less than that amount just because the drilling occurs in their waters.

The bill would remove the $375 million cap on the Gulf of Mexico Energy Security Act, and Graves added that H.R. 1 ensures offshore leasing is required to be done on a regular basis. Both congressmen said this would mean a large influx of additional money for coastal restoration.

Rare Earth Minerals

Energy requires infrastructure. Whether it's copper wiring to transmit the energy or lithium for energy storage. H.R. 1 has incorporated legislation from Congressman Pete Stauber, R-Minn., which focuses on rare earth minerals.

These minerals will be crucial for energy production like wind turbines in the Gulf because that energy would have to be transmitted by cables to the on-land grid, said Graves. The bill would allow for access to permits for rare earth minerals found on federal lands, said Scalise.

"And I just go back to the 'Hey, if we're not making it here, we're getting it from other countries like China who don't have the good environmental standards that we have,'" Scalise said.