CERAWEEK: US must fight Putin with energy; invoke Defense Production Act: Manchin

The US must stand up to Russian President Vladimir Putin by producing and exporting more crude oil and natural gas, including invoking the Defense Production Act to expedite leasing and pipeline and LNG project permitting, Democratic US Senator Joe Manchin said March 11.

The West Virginia senator, speaking at the CERAWeek conference by S&P Global Insights in Houston, said the Biden administration lost leverage against Russia last year by not supporting American energy security enough, and that the US and the world now need more US supply of oil and LNG.

Manchin specifically called for the administration to use the Defense Production Act or other means to finalize permitting and construction for the 304-mile, 2 Bcf/d Mountain Valley Pipeline in West Virginia and Virginia. The pipeline is held up in courts with only about 25 miles left to build.

Now, Putin is using the world's — especially Europe's — reliance on Russian oil and gas as a weapon in its war in Ukraine, Manchin said.

"Putin has weaponized energy," Manchin said. "Don't take a knife to a gunfight. We have a better weapon, and, by God, we better start using it, and that's energy."

Referencing the Defense Production Act, he said, "It allows us to do certain things during very challenging times, and I don't think we've ever had challenging times like these."

Manchin said the US should not be in a situation where it is negotiating potential deals to remove sanctions on Iran and Venezuela that would allow them to produce and export more crude oil.

The administration could help lower crude oil and fuel pricing just with more "consistency and certainty" in favor of more domestic production, Manchin said, and doing it cleaner without flaring and excessive emissions.

Manchin also highlighted the bipartisan support for the new US ban on Russian oil and petroleum imports.

"But we knew there would be other parts of the world that wouldn't be able to do it," Manchin said, referring to the EU. "Maybe we can help them do it faster, and that's what I'm hoping for."

The EU plans to propose phasing out Russian fossil fuels by 2027, according to European Commission President Ursula von der Leyen, as part of measures to improve European energy security.

The White House and G7 announced March 11 a new wave of financial and trade sanctions against Russia, including plans to revoke Russia's "most favored nation" trading status, which requires congressional action.

White House Press Secretary Jen Psaki said March 10 that all options remain on the table on energy, but she downplayed the likelihood of utilizing the Defense Production Act for oil and gas.

"Let me explain to you what the Defense Production Act would do in this regard," Psaki said. "It would basically be providing money to oil companies to do something that they already probably have the capacity to do."

The White House though is asking US oil producers to increase activity and volumes. But Psaki also has repeatedly noted that US producers have about 9,000 unused permits, arguing that is all they need.

Manchin and the industry have called that misleading. The American Petroleum Institute put out a statement highlighting that many of the leases do not contain acreage that is economic for oil and gas production. API said the industry is at a 20-year high for the percentage of producing leases on federal lands, and that about two-thirds of all active leases are producing oil and gas.

Legislation and FERC

Manchin has been vilified by much of the Democratic Party for blocking and effectively killing Biden's massive Build Back Better spending plan.

Manchin argued it was too expansive, expensive, and would have further exacerbated record inflation rates.

He said he remains supportive of an "all-inclusive climate package" this year that funds renewables and clean energy infrastructure but does not demonize oil, gas, and coal.

Manchin said he wants much more transmission infrastructure support for wind and solar power, but he also wants to see more support for helping oil, gas, and coal become cleaner, including more carbon capture and storage projects.

He also addressed his ongoing conflict with Federal Energy Regulatory Commission Chairman Richard Glick and FERC's revised framework for reviewing natural gas pipeline and LNG facility projects.

"Speak up and help us, Chairman Glick," Manchin said, arguing that FERC is "throwing up so many obstacles."

"I'm not saying push them all through," Manchin said. "I'm just saying, 'Do your damn job.'"