Energy leaders call for change in US policies | News, Sports, Jobs

WASHINGTON, DC – A shift in energy policy is needed to provide America with affordable and reliable energy, a North Dakota energy industry regulator and industry spokesman told US senators Wednesday.

Public Service Commission Chair Julie Fedorchak and North Dakota Petroleum Council President Ron Ness testified before a subcommittee of the US Senate Committee on Energy and Natural Resources. Sen. John Hoeven, R-ND, serves as the subcommittee’s ranking Republican member.

The purpose of the hearing was to examine pathways to lower energy prices in the United States.

Fedorchak said transitioning the grid to all renewable energy may be achievable and, for many, desirable, but it will not lower costs, especially not in the next 25 years.

“It is noteworthy that 35 percent of the energy consumed by North Dakotans last year came from renewable sources, one of the higher penetrations in the nation. Perhaps this explains why customers are growing leery of the promises of low-cost renewable energy. Our utilities have aggressively pursued green energy, assuring customers that it will save them money, and yet their bills are rising,” she said.

She noted natural gas customers in North Dakota have seen an increase of about 30% since 2016, which she attributed to the dual use of gas for home heating and electrical generation and the lack of planning and coordination needed to sustain both those uses. She added electrical transmission costs in North Dakota have increased 388% since 2003.

She cited the difficulty in promising consumers they will save money, given the magnitude of the changes that are being attempted through prematurely closing existing facilities, building renewable generating resources and billions of dollars in new transmission lines to accommodate them, incorporating renewable energy into a Grid meant to function with traditional resources, converting transportation fleets and developing charging stations as well as converting homes and industrial systems to cleaner power sources.

“In short, we are reinventing and rebuilding the entire energy system that sustains the lives, work, travel and communication of every single person and business in the United States. Considering the magnitude of this challenge, and the warning signs we are already seeing from our current approach, the solution I am going to suggest is quite simple. Most of this can be solved with one thing: patience,” Fedorchak said.

Technology needs time to fix the gap between the reliability attributes of wind and solar megawatts versus thermal megawatts, Fedorchak said. Research and technology also can also fix the emission problems of coal and natural gas through commercial scale carbon capture and storage, she said.

Ness said Russia’s war on Ukraine has aggravated price increases at the gas pumps, but the root problem is increased demand coupled with production restraints caused by Biden Administration policies.

“One of the most significant attracting obstacles the oil and natural gas industry faces in its efforts to meet growing energy demand is difficulty in the capital investments necessary to maintain, stimulate and expand exploration and production. In the Bakken, we need $20 million per day of investment to substantially grow production,” he said. “Besides the operational challenges of labor and supply availability and costs, our industry’s investment decisions are being driven by the market and what matters to their investors. This administration and many in Congress are telling the market that fossil fuels are not here to stay, that they are not a stable long-term investment. So even at a time of record profits, we are not seeing companies reinvest in growing production because the market is signaling that is not a sound investment.”

Ness said turning to foreign countries with human rights abuses and poor environmental standards to increase the oil supply and bring down prices ignores the vast resources available in the United States.

“We do not need to look to other countries to produce more oil. We have the resources and the capabilities to produce everything we need here at home,” Ness said.

In March 2022, North Dakota’s oil production was 1,122,640 barrels per day, or about 400,000 barrels of oil per day lower than the state’s peak production in November 2019.

“United States officials have discussed the possibility of importing more oil from Venezuela to help meet demand. The entire country of Venezuela only produced 688,000 barrels of oil per day in January 2022. By just ramping up North Dakota production to our previously high levels, we could go a long way towards filling the need without relying on Venezuela,” Ness said.

Ness also called for a greater focus on new pipelines and refining capacity to keep pace with projected demand for energy.

“If we are serious about ending this crisis, we need investment and regulatory certainty to build the infrastructure necessary to transport and refine our products,” he said.

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