I'm Jordan Blum, editorial director at Hart Energy here at CERAWeek by S&P Global, and I'm joined by American Exploration and Production Council CEO Anne Bradbury.
Jordan Blum, editorial director, Hart Energy: So just to start things off, what are you most concerned about right now?
Anne Bradbury, CEO, American Exploration and Production Council (AXPC): Well, Jordan, you know, we represent the upstream producers—the leading upstream producers in the United States—and I would say that my companies are most concerned about the coming regulatory tsunami out of the Biden administration. There are a number of regulations from the EPA [U.S. Environmental Protection Agency], from the Department of Interior, and even from the SEC [U.S. Securities and Exchange Commission] that are sort of aimed at making it more expensive and more difficult to produce energy here in America. So I would say that is certainly very high on our list of concerns right now.
JB: So how do you explain that dichotomy we kind of have there with that onslaught of regulations that you're concerned about while the administration is still saying, ‘produce more oil and gas’ and ‘we want to expedite infrastructure projects’?
AB: Yeah, it's very concerning. There seems to be a pretty inconsistent energy policy and messaging around energy out of this administration. I mean, we heard it even just as recently at the State of the Union where the president said oil and gas is going to be around for 10 more years. Well, you know, of course in the industry, we all laughed a little bit because we know that oil and gas is going to be around for decades to come. And you know, it's 80% of the world energy mix today. And that number isn't changing anytime soon. So we are committed to continuing to produce in an ever cleaner manner and to help the world meet its climate objectives. But to do so, we really need a rational energy policy out of this administration, and unfortunately, we're hearing a lot of conflicting messages and conflicting policies.
JB: In that vein, you hear a lot about the role of natural gas and LNG. The term that's been tossed around for years now is bridge fuel. Is it that, or is it much more?
AB: I think LNG is much more than a bridge fuel. I think that is certainly part of it. But we know that renewable energy in the form of wind and solar and that sort of thing is not going to be able to power a global economy anytime soon. We also know that LNG is continuing to become cleaner and cleaner at every step of the process. And in terms of the life cycle emissions, I was just listening to [Chesapeake President and CEO] Nick Dell’Osso in the global gas seminar talk about how all of their gas is responsibly sourced. We're continuing to reduce emissions across the board from all of our producers. And I know the pipeline and the LNG companies are doing the same. So we think that there's a really bright future for LNG and we think it is a critical part of a future global energy mix. It emits half of what coal does at combustion. And so right now all of the emissions increases that we're seeing is largely coming from coal. If we want to get serious about emissions reductions, we have to get serious about natural gas.
JB: Now obviously we're seeing a lot of LNG growth—more trains being built—and I don't know if ‘fast tracks’ is the right word, you'd probably disagree with that, but moving forward at least. Then you'll have an incident like what happened at Freeport LNG –is that a greater cause for concern or more of an isolated accident?
AB: I think that was an isolated event. I know that this industry is committed to safety first and foremost. And you know, first, we are primarily concerned with the safety of our workers and the safety of the communities in which we operate, but we also want to do everything we can to avoid disruptions in the marketplace. Because that's a critical part of being a reliable consumer. So I know that from all of the companies that I talk to, commitment is priority number one.
JB: And from an upstream standpoint, I know some companies have done this already, but do you see an end to unnecessary flaring on the horizon?
AB: A majority of my companies have already committed to end routine flaring. And we think that is a trend in the right direction and a trend that is going to continue. You know, we also know that part of that is, we need infrastructure and take away capacity, and that's the best thing that you can do to reduce flaring. And so one of the things that I'm a little bit optimistic about for this year is permitting reform to allow more build out of natural gas pipelines, interstate pipelines, to build that modern infrastructure that we need, which also has the dual benefit of keeping emissions down to minimize flaring and to minimize other emissions.
JB: So Congress isn't known for expediency by any means, but you really are optimistic about that degree of infrastructure reform this year?
AB: I'm moderately optimistic because I hear it from both sides of the aisle. I hear from Republicans who want pipelines built and I hear it from Democrats who want transmission lines built and renewable energy built. There is a great moment and a great opportunity for an all-of-the-above permitting reform. I think it will take some time. I think what you'll see from Congress in the next month or so is sort of the opening bid from the Republican Congress on what their version of permitting reform looks like. And then I think that'll be the starting point for negotiations for potentially, again, an all-of-the-above permitting reform agreement down the road.
JB: Is it pretty essential that that happened this year ahead of an election year next year when it's hard to get much of anything done?
AB: You know, I think the farther out from an election it happens is probably better, you know, but I'll say these things take time and there's no artificial timeline to put on permitting reform. There's no cliff that Congress is faced with, which is often helpful to force action. And that doesn't exist. So I wouldn't give up on it if it doesn't happen in 2023, but certainly you're going to see more legislating a little further out from the election for sure.
JB: On the topic, again, of energy transition, let me say. Do you see your companies getting more involved too with things like carbon capture hydrogen? Where do you see those roads headed?
AB: I would say yes to all of the above. I think we know what the energy of today looks like and we know we're going to need fossil energy for a long time. It's the most energy dense form of energy out there. And as the world's energy needs continue to grow, we're going to need to continue to need fossil energy. So a lot of my companies are doing really exciting things with hydrogen, are doing really exciting things with CCUS. That was one of the overall on balance. We found there was a lot we did not like in the Inflation Reduction Act—the IRA—but there [were] some good provisions on CCUS to make it more economically viable and around hydrogen that we were supportive of. And so with that, I think does come some more commercial interest from our companies in developing that.
JB: Great. Back to just convention now—conventional and unconventional oil production—do you see the U.S. hitting new records this year in terms of production volumes, this year or next?
AB: I think it's possible for sure. You know, we're already right around or at record productions of natural gas. We're a little short on oil, but you do see companies growing incrementally and so I think that's very possible for our future leader this year.
JB: Well, thank you so much for taking the time. I really appreciate it. For more information, please visit us online at hartenergy.com.
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