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Producers’ Pick | Kathleen Sgamma: We Need Pipelines to Send Natural Gas to Europe

Brian Kilmeade Show / Brian Kilmeade
The Truth Network Radio
March 26, 2022 12:00 am

Producers’ Pick | Kathleen Sgamma: We Need Pipelines to Send Natural Gas to Europe

Brian Kilmeade Show / Brian Kilmeade

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March 26, 2022 12:00 am

President of the Western Energy Alliance Kathleen Sgamma says the Biden administration needs to cut the red tape so we can produce more oil and gas and build pipelines that would enable us to send more natural gas to Europe.

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Visit to learn more about Galaxy Z Fold 4. Only 10% of drilling is happening on federal lands. The other 90% is on private lands. But I'm talking about the 10% in that case. So the argument that there are just no opportunities to drill for oil is just not true. Really? But what about the regulations you put in place?

And are permits all it takes? I haven't seen Jen Psaki in a hard hat in the oil fields, but maybe I just have to get out more. Kathleen Skamma joins us now. Kathleen is the president of the Western Energy Alliance. She represents 200 member companies engaged in all aspects of environmentally responsible exploration and production of oil and natural gas in the West.

Kathleen, thanks so much for joining me. I want you to take on Jen Psaki's comments. I imagine you hear that and your head wants to explode. Well, actually what she said is correct.

But the spinning of it is what's the problem. So we are indeed lucky that in the United States only 10% of our oil and natural gas production is federal. Because if more were federal, then we wouldn't be the number one producer of oil and natural gas in the world. Because the federal government puts up so many roadblocks on federal lands that we're lucky that the most prolific basins, the Bakken in North Dakota, the Haynesville in Pennsylvania, West Virginia, Ohio, the Permian in Texas and New Mexico, we're lucky that those predominantly are on non-federal lands. But in the Rockies, where I am, I'm in Denver, we have a lot of public lands. And the most prolific basins in the West do have public lands. And it's almost impossible to develop in the West without touching some federal lands or minerals. And so when we do hit a pocket of federal minerals, we have to go through this whole years-long process in order to develop.

And so it's bad enough in normal times, but when you have an administration that is putting up additional roadblocks and drawing out the process, putting up more bureaucracy, starting off with more new regulations, trying to starve our industry of capital, then it really becomes very difficult to operate on federal lands. And I'd love to take on the 9,000 permits and leases if we have time for that. Yes, right now. Go ahead.

Great. So, indeed, there are about 9,000 outstanding permits on federal lands. So she is correct in that respect. However, a permit to drill is not the only permit that's necessary. We need rights-of-way, which also come from the federal government, in order to lay the pipelines and the gas-gathering lines, because we now, because of pressure from investors and from environmental groups, we don't want to flare at all anymore. So we want to capture all the natural gas right away. And that's probably a good thing, although in some senses when the nation is, when there are high gasoline prices, we can't turn on those oil wells as quickly as we could in the past. But we want to reduce flaring, but we need pipelines in place to capture that gas.

And guess what? Environmentalists stop pipelines all across the country. So if we can't get the rights-of-way and the pipelines to put that natural gas in, we can't develop that oil well. So that's one reason some of those permits don't go drilled. Another reason is that the federal government is so inefficient that companies have to get in hand several years of drilling permits before they can really start, because they don't know how long it will take the federal government to get any one particular permit. And you don't want to get into a situation where you've drilled a certain number of wells, and then you have to stop your rig to wait for federal permits, because that permit could take a month, two months, six months, a year. So we do have to, because of the inefficiency of the federal government, we have to have several permits in hand, and not several, but many. So you might have a well pad that has eight wells on it, but that well pad can be drilled in a matter of months, and then you want to move on to the next one. So we need to have many years of permits in hand, and sometimes you start off drilling, and that one well or a couple wells determine that, you know what, there isn't enough oil and natural gas on this particular lease. We're not going to drill all these other permits that we thought we were going to. So it's those inefficiencies in the federal permitting system that does cause us to have that large inventory, and not all of those permits get drilled. So is that part of the reason the XL pipeline wasn't done? They've had three years to get it done, but environmental challenges and court cases stop that thing from being finished? Well, the Keystone XL pipeline story started out, I think it was in the mid-2000s, and they started going through all the processes, and then they were required to get a permit from the Department of State, because the pipeline crosses into Canada. And so that's another reason that permits don't get developed.

I haven't even talked about that. The environmental analysis. Now, environmental analysis is great, except it's used to delay projects and stretch them out for years and years, and that's what happened with Keystone. Its environmental analysis took all this time, and then the Obama administration came in and stopped the permit. The Trump administration then restarted the permit, and then, of course, we know the Biden administration came in and stopped the permit. So it's very susceptible to government manipulation, political manipulation, and it's unfortunate that the process in the United States for so many things, not just pipelines, roads and bridges as well, can take so many years, increase the cost so long, and give opportunities for environmental groups to sue on that environmental analysis, and also to just stop things outright. So I'm looking at Jamie Dimon at JPMorgan Chase. He wants to drill more. He said the Biden administration has been struggling to convince oil and gas companies to increase production. That's a totally inaccurate assessment.

Is that right? Well, they really haven't sent the right signals to the industry. They continue to move forward with a regulation out of the SEC that is designed to starve our industry of capital. So we have this signal, oh yeah, they want us to drill more now because they're in hot water, because voters and Americans are beating down their doors because gasoline prices are high. So they're saying to us, yes, we want you to drill more now, but we don't have any assurance that they're going to stop with all this new overregulation, and we don't have the insurance that they're not going to put future capital at risk. So that well we drill today could carry additional risk tomorrow.

And so it really is chilling the marketplace. Real quick, Kathleen, could you get natural gas to Europe quickly? Well, we're very proud that in January we delivered more natural gas via liquefied natural gas exports to Europe than Russia did through pipelines. We could export more. We did have the administration approved two LNG export terminals last week. So we take that as a good sign. But if we can't get pipelines to deliver the natural gas to those LNG export terminals on the coast, then, you know, it almost becomes a moot point. Gotcha. We need the administration to move forward with pipelines and LNG. Thanks, Kathleen. Very educational. You know, I'm pwning for you guys because you're very responsible and we need it.
Whisper: medium.en / 2023-02-15 02:09:13 / 2023-02-15 02:12:51 / 4

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