Energy Production and Infrastructure in the 21st Century
Houston is not only the energy capital of the United States; it’s the energy capital of the world. Our district is home to every facet of the oil and gas sector – upstream, midstream, and downstream. We also support wind, solar, geothermal, waste-heat, and hydropower. That is why I serve on the Energy and Power Subcommittee and the Environment and Economy Subcommittee of the House Energy and Commerce Committee. I have always believed in a national energy policy that supports all domestic sources of energy while protecting the environment and expanding the economy.
The 2010 Macando oil spill in the Gulf of Mexico raised many questions about safety and the future of offshore oil and gas production. The resulting investigations into this accident and the safety precautions that the federal government put in place have given us some of these answers.
Our office has worked in a bipartisan fashion to ensure that shallow and deep-water drilling moratoriums lifted, rule promulgation was reasonable, and federal leasing was efficient. The results speak for themselves.
In January 2015, the Department of Interior released a draft proposal for 2017-2022 Outer Continental Shelf leasing. The draft is supported by many stakeholders and seen as a reasonable approach to restarting production in the Gulf of Mexico. Additionally, in April 2015, the Department released a draft rule for Blow-out Preventer (BOPs) and well-control regulations. The draft rules take an important step forward in the protection of human life and the environment.
I continue to press upon the Administration the importance of our offshore resources and encourage them to open new areas for seismic testing and exploration. It is critical to our area that the entire industry is able to continue to produce offshore. I support industry efforts to restore confidence in off-shore production.
Natural Gas/Shale Production
Until relatively recently, natural gas-rich shale formations throughout the United States were not considered to have significant resource value because no technologies existed to economically recover the gas. The development and deployment of hydraulic fracturing combined with horizontal drilling has dramatically increased the gas production from these unconventional shale gas plays, including the Eagle Ford, Barnett and Permian basins. Today’s energy outlook differs greatly from that of pre-2008.
With such a large domestic supply, the U.S. has a true opportunity to lessen our dependence on foreign sources of energy and reduce feedstock costs for our manufacturing sector. The resulting capital expenditures have created jobs in our district and help reestablished Houston as the energy capital of the world.
We have successfully passed legislation, H.R. 351 – the LNG Permitting Certainty and Transparency Act that would increase American natural gas export capabilities. The construction of Liquefied Natural Gas (LNG) facilities in and around the Gulf Coast has resulted in hundreds of millions of dollars in investment and thousands of jobs created. The United States has over 36 trillion cubic feet of proven natural gas reserves, far more than we can consume domestically. Our ability to export will strengthen our economy at home and our allies’ security abroad.
As a Co-Chair of the Congressional Natural Gas Caucus, I look forward to continuing to work on this issue.
Hydraulic fracturing is a technique that has been used since the 1940s to stimulate oil production from wells in declining oil reservoirs. More recently, it has been used to initiate oil and gas production in unconventional reservoirs where these resources were previously inaccessible. This process now is used in more than 90% of new oil and gas production wells. Onshore production, including hydraulic fracturing, is regulated at the state level except in cases where the state has delegated that authority back to the federal government.
Historically, the Environmental Protection Agency (EPA) had not regulated the underground injection of fluids for hydraulic fracturing of oil or gas production wells. In 1997, the U.S. Court of Appeals for the 11th Circuit ruled that fracturing for coal bed methane production in Alabama constituted underground injection and must be regulated under the Safe Drinking Water Act (SDWA). This ruling led EPA to study the risk that hydraulic fracturing for CBM production might pose to drinking water sources. In 2004, EPA reported that the risk was small, except where diesel was used, and that regulation was not needed. Consequently, EPA currently lacks authority under the SDWA to regulate hydraulic fracturing, except where diesel fuel is used.
However, as the use of this process has grown, some in Congress would like to revisit this statutory exclusion. As such, in 2010, Congress directed the EPA to conduct another study of the environmental management of hydraulic fracturing. Until the study is complete and I can review the data, I currently support maintaining the exemption of hydraulic fracturing from the provisions of the Safe Drinking Water Act, especially in light of no federal studies indicating that the practice has contaminated drinking water supplies. Hydraulic fracturing plays a major role in the development of virtually all unconventional oil and natural gas resources and thus should not be limited in the absence of any evidence that fracturing has damaged the environment.
In August 2015, the EPA released the draft study. The report concluded there were no direct-causal links between hydraulic fracturing and groundwater contamination. The EPA did cite issues related to poor drilling practices and casing requirements. These issues have been addressed by State Oil and Gas Commissions through reasonable and effective regulation of standards. The practice of hydraulic fracturing has resulted in an American energy renaissance. I will continue to work to expand these capabilities and lessen our dependence of foreign sources of fossil fuels.
Since 2005, Texas has led the nation in wind production. Texas is now the number one wind producing state in the country. Thanks to forward-thinking policies and infrastructure investments, Texas produces more wind than the next 10 states combined.
It is my hope we can achieve similar success with solar power, either utility-scale or residential expansion. I support the continued research and development of renewable and alternative energy sources. Over the years I have supported several bills that would increase funding to research and development projects dealing with new and cleaner energy sources as well as bills that would provide financial incentives to produce energy from wind, solar, biomass, geothermal, and other sources.
I will continue to support programs and projects seeking to create cleaner energy technologies because we all benefit from a cleaner environment and fuel diversity.
Keystone XL Pipeline
In 2008, Canadian pipeline company, TransCanada, filed an application with the U.S. Department of State to build the Keystone XL pipeline, which would transport crude oil from the oil sands region of Alberta, Canada, to refineries on the U.S. Gulf Coast. Since it would connect the United States with a foreign country, the pipeline requires a Presidential Permit from the State Department. In granting or denying a permit application, the State Department and President must determine whether the proposal is in the “national interest.”
The Keystone XL Pipeline would link secure and growing supplies of Canadian crude oil with the largest refining markets in the United States, including the Houston Ship Channel, which would significantly improve North American energy security and supply. In the State Department’s Draft Environmental Impact Statement for the project, the State Department found that the Keystone XL pipeline “would counteract insufficient domestic crude oil supply while reducing U.S. dependence on less reliable foreign oil sources.” According to the Department of Energy’s Energy Information Administration (EIA), the Keystone XL could directly offset up to 900,000 barrels per day that the U.S. currently imports from Venezuela and offset 20% of current imports from nations in the Organization of Petroleum Exporting Countries (OPEC) like Venezuela and Iran (data from the EIA).
TransCanada has agreed to comply with 57 additional Special Conditions developed by the Pipeline and Hazardous Materials Safety Administration for the Keystone XL Project. The supplemental environmental impact statement on the project went so far to state that the incorporation of these conditions would result in a project that would have a degree of safety over any other typically constructed domestic oil pipeline system under current code and a degree of safety along the entire length of the pipeline system similar to that which is required in High Consequence Areas. In addition, according to the U.S. Department of Transportation, pipelines are the safest and most environmentally-responsible method for transporting petroleum products as compared to other methods, such as trucks, rail and tankers.
Lastly, while there are concerns about possible emissions resulting from processing the oil sands, it is important to note that there are already fifteen refineries within Keystone XL’s proposed delivery area in Texas that currently process heavy crude oil that is similar in composition to the oil that the Keystone XL pipeline would carry.
In 2014, the Department of State released a sixth and final Environmental Impact Statement. The report concluded that the KXL pipeline would not significantly impact the release of Greenhouse Gases (GHGs). I have long supported the Keystone XL Pipeline. Further, I support cross-border pipelines that integrate North American energy production. The House of Representatives has passed legislation that I co-sponsored with Chairman Fred Upton (R-MI) that would provide statutory certainty for all cross-border infrastructure, including pipelines. This project will create domestic jobs, raise local revenue, improve America’s energy independence from hostile foreign nations, and ensure a more consistent and reliable energy supply to our country.
Unfortunately, President Obama denied the KXL pipeline application in 2015. I do not believe this was the right decision. Climate change must be addressed but we must also secure energy production for our country as it is a major generator of economic activity. It is my hope we can pass cross-border infrastructure legislation that will remove these types of decisions from the political arena.
Gas Prices/Crude Oil Exports
Current petroleum and gasoline prices are set by a complex mix of factors, including global crude prices, increased world and U.S. demand, refinery capacity and maintenance schedules, gasoline imports, prescriptive fuel mandates, and geopolitical events. Unfortunately, many of the factors behind short term gasoline prices are beyond our effective control, and most of us will have to rely on oil and gasoline for our transportation for at least the next 25 years.
To increase supplies and reduce our vulnerability to events like this, I strongly support increasing and diversifying domestic production in areas like Alaska's North Slope, federal lands in the West, and the Outer Continental Shelf. We cannot drill our way out of our energy needs, but we cannot ignore the benefits America gains with responsible domestic production.
The recent expansion of domestic oil production has resulted in a mismatch between our refining capabilities and our production in the field. Our domestic refiners have invested hundreds of millions of dollars to expand capacity and technology while absorbing as much U.S. oil as possible. I support the capital expenditure that results in jobs in our district. Our production, however, has reached a point where exporting excess oil may make sense. The current export ban on domestically produced crude oil is a relic from the 1970s oil embargo. We should reexamine the policy. While I am supportive of exporting crude oil, as increased supply may lower world prices, I do not believe we should do so without effective and efficient government oversight.
In December 2015, the FY16 Omnibus Appropriations bill included language that addressed most of my concerns. The bill included provisions that provided the President with emergency authority to cease exports in times of national emergency and short supply. While I would have preferred a regulatory process that was not subject to electoral politics, I am pleased the Executive branch has an oversight role.
I hope to continue to work with my colleagues across the political spectrum to create the correct policy that protects U.S. national and economic interests while promoting additional domestic production.
I am a Member of the House Energy and Commerce Committee, which has jurisdiction over the Federal Energy Regulatory Commission and the Department of Energy. The Committee continues to dedicate time to ensuring that our grid is prepared for continued growth and a diverse set of fuels that can be used as a power source.
I was able to work with my colleagues to pass legislation that would protect utilities from environmental legal action when the Department of Energy issues a “must-run” order in times of emergency. We must protect our environment but we must also keep the lights on.
I am also a founding member of the Grid Reliability Caucus which promotes innovative and cutting-edge grid technologies.
More on Energy
Washington, DC - Rep. Gene Green today announced that the House Subcommittee on Transportation, Housing and Urban Development, and Related Agencieshas preliminarily approved $150 million for Houston METRO’s North and Southeast lines, with $75 million dedicated to each project. This funding would include final design, land acquisition, and construction for the first segments on the North Corridor and Southeast Corridor Projects.
Washington, DC - Rep. Gene Green released the following statement regarding the progress of the American Clean Energy and Security Act (ACES Act).