Divided government creates 'real chance' for permitting bill in 2023: API chief

Divided government in Washington provides an opportunity to build bipartisan consensus on permitting reform and other steps to unleash domestic energy production, the head of the top US oil and gas trade group said Jan. 11, while also accusing the Biden administration of pursuing policies that restrict production.

Mike Sommers, president and CEO of the American Petroleum Institute, laid out the group's policy priorities as API released its 2023 State of American Energy report.

"It won't be easy, but divided government gives us a real chance to build consensus around meaningful reform," Sommers said, adding that lasting change occurs when Democrats, Republicans and Independents work together.

Sommers told reporters it would be important to act on permitting reform in 2023, before it becomes "another political issue" in the next election cycle.

"Our focus is going to be on a bipartisan permitting bill that can actually get these projects sited," he said.

API unveiled its wish list as the new Congress kicks off with Republican leadership in the US House of Representatives, while Democrats control the US Senate. Sommers anticipated there would be a Republican permitting bill in the House, and that Senate Energy and Natural Resources Chairman Joe Manchin, Democrat-West-Virginia, would also try to advance his version, potentially setting the stage for bipartisan negotiations.

Speaking at the API forum, newly installed House Energy and Commerce Committee Chairman Cathy McMorris Rodgers, Republican-Washington, shared Sommers' view on the opportunity to act on permitting.

"This is an idea whose time has come," Rodgers said. "There is a bipartisan recognition; now we'll go to work on the details."

Export authorizations

Among API's goals is easing the regulatory path for LNG export facilities by unifying the process for export authorizations to countries with and without free-trade agreements. Currently, exports to non-FTA nations face a more extensive review by the US Department of Energy to determine whether they are in the public interest.

API has also set sights on limiting National Environmental Policy Act reviews of energy projects to two years and finding ways to cut back on judicial challenges that can slow projects.

The trade group also took swipes at the lapse of the five-year offshore oil and gas leasing program under the Biden administration, and the scant quarterly onshore leasing sales held over the last two years.

"We're going to be participating closely with our allies in Congress to make sure that we can get a five-year plan done as quickly as possible," Sommers said.

The Interior Department has proposed holding up to 10 auctions for Gulf of Mexico acreage and one for Alaska's Cook Inlet, with the possibility of zero lease sales over the 2023-2028 period. The draft plan under Biden stands in stark contrast to the Trump administration's 2018 proposal to hold 47 lease sales.

Further, Sommers called on the Biden administration to "reverse the rhetoric" the trade group believes deters investment in oil and gas.

"If the government signals more support for American energy, it will boost investor confidence in future projects to unleash supplies and strengthen infrastructure," he said.

Regulatory priorities

On the regulatory front, Sommers told reporters API is concerned about ensuring that new Environmental Protection Agency regulation on methane emissions from the oil and gas sector is flexible enough to accommodate technological developments that can help reduce emissions in the future.

And on the administration's approach to permitting, he worried a new White House Council on Environmental Quality guidance on consideration of greenhouse gas emissions could move in the "opposite direction" of the goal of cutting back on the NEPA process to ensure timely reviews.

"So, we're really focused in Congress to make sure that we correct that in the right way," he said.

Elsewhere, API is encouraging the Securities and Exchange Commission to rethink its climate disclosure proposal in order to boost investor confidence in oil and gas development.

The group would also seek to discourage the Federal Energy Regulatory Commission from performing a more searching review of whether pipeline projects are needed.

And it is urging the administration to rescind steel tariffs and speed efforts to relieve port congestion.

As they discussed priorities, API officials and the House lawmakers who shared the stage repeatedly sounded themes of energy security.

"We've learned from Europe and seen over the past year how our strong energy position is not inevitable," Sommers said. "It must be cultivated, reinforced and prioritized by policymakers and our industry."

Representative Lizzie Fletcher, Democrat-Texas, said members can help by depoliticizing the conversation around the US energy future.

"One of the best ways to do that is to talk about our national security," Fletcher said.