Source: Oil Price News, by Dan Doyle
To talk about a Biden-Harris administration let’s first talk about the Obama-Eric Holder/Loretta Lynch administration. Back in 2015 and 2016, when Holder and Lynch were President Obama’s Attorney Generals, my frack company was beset with an IRS audit, an International Fuel Tax (“IFTA”) audit and a Department of Labor investigation. Not to be excluded, I was also personally audited by the IRS. Fortunately, me and my company cleared the IRS audits without penalty (other than paying our accountant). The Department of Labor audit got us for something less than $250, based on some arcane back of the book calculation on arbitrarily given bonuses. But the IFTA audit did some damage with a $40,000 paperwork related fine even though all our taxes were paid at the pump. All three agencies and all four audits were federal, and all came at roughly the same time. When I asked the Department of Labor attorney how she even found our little basement office, she kept mum. There was no point in her answering—we both knew why she was there. Her 18,000-employee strong department, like the IRS and IFTA, had been weaponized to undermine the oil and gas industry. AGs Holder and Lynch, likely with President Obama’s blessing, were picking and choosing and me and my industry got picked.
On March 1st, in 2016, I came home from work and told my wife I was worried about Aubrey McClendon, the founder of Chesapeake Energy and American Energy Partners. The following morning, he was to be arraigned in Oklahoma for violations of the Sherman Anti-Trust Act. Aubrey and I had emailed each other a few times over the previous weeks and I meant to send him a message of support but never got to it. Kids and dinner and school projects got in the way. The following morning, on his way to the arraignment, Aubrey was instantly killed when the SUV he was driving hit a concrete bridge abutment at a high rate of speed. Whether or not it was an accident or suicide, I don’t know. Either way it was just horrible. Now I can only hope his family is at peace, but I am not. Attorney Generals Holder and Lynch, in their zeal to disrupt the American oil and gas engine, set their sights on McClendon and dusted off some old claptrap, the Sherman Act. Never mind that no one had been convicted under its laws since the 1930’s, or that McClendon was infamous for driving lease prices up, not down, by conspiring with competitors. This was just a witch-hunt, a word we have become all too familiar with since the more recent Trump administration and the unprecedented attacks that have come along with it. McClendon’s sin was being incredibly effective at deploying fracking to free up natural gas. He was a risk taker and that put him and his investors at risk, but to our federal government he was the face of fracking, and that made him a target of convenience for Obama’s AGs.
Oddly, during the 2012 State of the Union, President Obama stated that he supported fracking – “We have a supply of natural gas that can last America nearly 100 years…and my administration will take every possible action to safely develop this energy.” That was what was said, not what was done. Under his watch the resistance was born. Study after study of the Keystone and Dakota Pipeline projects were commissioned with the hope that one would finally yield the predetermined answer of “no.” Activist federal judges ruled in favor of lawsuits stopping natural gas pipelines from crossing federal waters. Discredited and now forgotten Josh Fox’s anti-fracking documentaries were accepted as the gospel truth even though his truth was manufactured. So much glowing press until he was debunked and no one bothered to cover that. In general, the industry was tarred and feathered in a groundswell of animosity directed at the people keeping the lights on. Now, we have Vice President Biden saying he supports fracking when he swings through natural gas rich Pennsylvania, but we all know that is just politicking. His previous anti-fracking statements, all of them inconveniently caught on imperishable video tape, suggest some double speak here.
So where does Joe Biden truthfully stand on fracking? That depends on who he’s talking to. In the old days they called it “waffling” and it was a disqualifier. Not so any longer. If there is any sort of pushback, the 2020 method is to simply just deny that you have multiple positions on the same subject. When no one pushes back, why not? They call Joe a fair-minded moderate, a congenial and thoughtful friend to both sides of an argument. I’m sorry, I just don’t see it. A moderate doesn’t choose a San Francisco prosecutor with an anti-fossil fuel record as a running mate. A moderate also wouldn’t choose socialist New York Congresswoman Ocasio – Cortez to co-chair his climate task force. During the recent Harris-Pence debate, Ms. Ocasio-Cortez Tweeted “Fracking is bad, actually”. So, I guess we at least know where she stands, a breath of fresh air given the chicanery of the Biden-Harris oil and gas platform. Now rumors of New York Governor Andrew Cuomo as a Biden administration Attorney General are being reported. True or not, it knocks the wind out of the rest of that moderate argument. Remember, Governor Cuomo was the guy who ordered his own state regulators to study the health and safety of fracking. When their study qualified fracking as environmentally safe, Mr. Cuomo outlawed it anyways. So much for open minded moderation, Mr. Biden. These aren’t “across the aisle” sorts of people that Biden’s handlers would want you to believe are open minded to US Energy Policy. Moderates simply don’t choose vehemently anti oil and gas lightning rods as successors, advisors and top cops.
In a recent Rasmussen Reports poll, 59% of respondents didn’t think Joe Biden would serve-out a full four-year term due to health-related issues. That would leave us with Senator Harris as president. And where exactly would that leave us? I would argue, uncertain at best. When President Trump won the 2016 presidential election, the oil and gas industry immediately turned on after a punishing two-year downturn. Oil and gas prices didn’t rise as a result of his victory, but business confidence did. Operators teed up new drills and completions and service companies like mine were immediately called back to work. We finally had an administration that was supportive of extraction rather than vaguely duplicitous about it. Four years later, having a new Commander and Chief who is well known as anti-fracking isn’t going to do much for industry confidence. Investment will dwindle, jobs will be lost and the environment will suffer. Natural gas power plants are the reason for the considerable drop in CO2 emissions in US air over the last decade. Fueling these plants is the gas from fractured horizontal shale. Stop fracking and natural gas stops flowing—right away.
Should a Biden presidency prevail in the upcoming elections, my own experience tells me that our oil and gas industry will be facing regulatory headwinds that will far exceed the blow back I personally faced during President Obama’s time in office. As the owner of a frack company, this has me worried. We want to continue to grow and prosper so I don’t at all want to give up. Instead, I’ve considered giving in. In fact, I spent a considerable amount of time during the slow days of the Covid pandemic researching renewables as a means to offset possible declines in oil and gas activities. We are an energy company so why not consider all things energy?
Wind was my first thought as I live on the Great Lakes and wind over water is every bit as good as an oil and gas lease with good porosity and rich oil saturation levels. But wind is a NIMBY issue. The very people that demand it are also staunchly aligned against it when it lands in their own backyards—see Massachusetts Bay. That and the cost of windmills—far beyond my limited means—turned me to solar. You can scale solar, maybe not cost effectively, but phasing it in was my plan so I began casting about for advice. An acquaintance in a nearby state had participated in a solar farm on a brown field—as has become a good and common though heavy on regulation practice. His group did not include a battery bank installation, allowing storage and passive use, but it was still expensive, about $20 million all in to permit and build it out. Of that cost, his state picked up a third, the federal government covered a third and his group added the last third in straight equity, though they ended up being a 100% owner. Now that his project is up and running, his group will also benefit from better rates for renewables vis a vie consumer choice and a production tax credit. I’m in favor of renewables being in the energy mix but this is not an “economic” project. Should a Biden-Harris administration start to restrict oil and gas development, sound reasoning says energy prices will rise and then, at that time, a move into solar may make sense. Because I have to answer to my banks and my employees, I didn’t see how I could participate in solar in a way that would cover my bills. Maybe someday, but not until solar stands on its own, particularly in the Northeast. Just like all the current credits, though, the renewables buildout will be built on the backs of consumers through higher taxes, public debt and much higher energy costs—all three of which are disqualifiers for me.
Curtailing our oil and gas production won’t be immediately covered by renewables. That’s impossible. It would take decades. Instead, what will happen will be the opposite of the intent (as is typical with bad policy). The US would be forced to infill shortages with heavy and highly polluting tar oils from Canada and sulfur-rich grades from the Middle East Gulf States or from Mexico, and maybe even from socialist Venezuela. That’s really too bad because shale oil is light and low in sulfur and is clean compared to most other grades of oil. Gone too would be the enormous gains our industry has provided in terms of national security. We don’t have to go begging to despots, dictators and bad guys anymore. Kill oil and gas and we’ll be beholden once again to the same policy that got us into wars. We have our own energy now. We are no longer desperate for anyone else’s.
America is finally energy independent. Granted, this is a squishy phrase as we’re short on oil but far, far ahead in natural gas. But on a BTU basis we are there and then some. This has been a wish in the making for decades and decades yet suddenly, over the last few years, a movement has emerged that finds this abhorrent, a scandalous privilege, a raping of the earth that must be undone. Equally baffling is a major candidate, one-half of a bifurcated democracy, is supportive of it.
Equally puzzling in the rush to embrace green energy is the fact that there has been so little regard for embracing the truth. Look into the waste stream of battery production and disposal. It is as dirty as any old school oil and gas project, only more so. Look into nickel smelting and lithium mining. Look up Sudbury, Canada’s superstacks and acid rain. All these inconvenient truths have been brushed aside as irrelevant, or simply covered up, in the name of progressive energy policies. People need to know that there is no panacea, that everything has an environmental cost, even renewables. But somehow the truth doesn’t make it into the anti-frack argument.
Should a Biden-Harris presidency act to derail our unprecedented efforts, we’d be giving up all our gains, including environmental gains for nothing in return. Why? Shale is a treadmill that requires constant investment. A shift in public policy will quickly stop the flow of private money needed to maintain and grow production. America will quickly fade away into brownouts. A disproportionate burden will fall on working men and women and the poor. And trillions of dollars will be spent on negative returns. Good public policy would be geared towards conservation which can be turned on like a light switch. To my knowledge not a single green hero has been made out of advocating for better door and window seals, or insulating attics with R 30 insulation, or keeping those car tires at 32 psi.
Expect the obscuring of the truth and duplicity to continue. A Biden-Harris administration will continue to claim they’re for fracking—except on public lands—where 300,000 oil and gas jobs are at risk along with oil production equaling roughly one million bbls/day per the Department of the Interior. We probably won’t hear much about rare earth minerals—essential to solar panel production—and the fact that the market for them is 70% supplied by China. In fact, if the two-way position of their campaign is any indication, we likely won’t know what exactly their policy is until it is written into law or mandated on day one by executive order. Lawsuits will abound and there will be much gnashing of teeth. But through permit delays, studies and regulatory measures, this administration could claim they are only being thorough while the intent all along was to see us wither and someday be blown away by one of those idle windmills I keep driving past.