Inhofe Questions Witnesses on Biden’s Energy Crisis, Rising Gas Prices and Need for Mining in America

Inhofe: Thank you. Ms. Sgamma, every American has been paying the price at the pump for this administration’s anti-American energy policies that they have. Keep in mind, I think it was said very well by Senator Capito in her statement that when Biden first took office the price of gas was $2.38, it is now at a record high – you hear record high all the time – but in this case you can document that the record high prior to today was $4.14 and now it is $4.25. It’s these policies that are responsible for this. This administration has opposed policies that restrict domestic oil and gas production including canceling the Keystone XL pipeline and also putting the pauses, as he has, on oil and gas leasing permits on federal land. That’s been going on and that’s very intentional and that’s what we’re talking about right now. Ms. Sgamma, do you believe President Biden’s energy agenda has contributed to the major reduction in the domestic oil and gas supply?

Sgamma: I do. His policies on a number of levels have been meant to stymy the American oil and gas producer and to buttress up the oil dictators around the world, like in Russia. So, if we talk about not wanting to be dependent on dictators, I think the president has a lot to do with that. He could back off some of the policies that make production difficult in the United States. And I’d like to answer that absolutely incorrect statement that American production has nothing to do with the price of oil globally. Because when we were able to export oil after 2015, the American producer met the increased demand globally and we helped to keep the global price of oil down. We are the major oil producer in the world. So, of course, the statement that our production does not affect prices is completely incorrect.

Inhofe: Thank you very much. What, today, what can President Biden do that would set in motion that more domestic oil and gas production would bring relief to the American people at the pump? This is something everyone is concerned about. You can’t turn on a show without people complaining about this and it’s so obvious where it’s coming from. But for today, what can we do?

Sgamma: Well, I think backing off on regulation, like the SEC rules on climate change disclosure, which are specifically meant to get to an answer of “no” on any new fossil fuel projects by elevating climate change concerns over real pocketbook issues, over real production in the United States. Because, of course, when we don’t produce it here, it doesn’t mean we don’t use it, it just means we import it from overseas. And blocking pipelines too is a major problem.

Inhofe: Well, you expect attacks on methane to lead to the increase in energy prices. You would expect that, wouldn’t you?

Sgamma: Right. The estimates are that about $9 billion cost to the economy would result from the methane tax because it is basically a tax on natural gas. And that could be as much as $85 to $240 per consumer. Taxing methane is meant to get less natural gas, and natural gas is used for electricity generation, to heat homes. Natural gas backs up renewables which are intermittent. The cost of renewables is higher because they have to have that backup when they can only operate 20 to 30 percent of the time.

Inhofe: That’s right. Mr. Matheson, America is dependent on countries like China not only for the list of critical minerals, but China controls the mining and processing for a variety of metals in the electricity sector and used in electric vehicles. Whether on the critical list or not, mandates to decarbonize the transportation and electricity sectors would increase our reliance on China. And I think we all understand that, as was pointed out by the Chairman in his opening remarks, I have chaired the Senate Armed Services Committee, I am concerned about national security in a more profound way than I ever have been before. Because we know what China’s doing, we know that back in the old days we used to talk about how America has the best of everything – and we did for a long period of time – but that’s not true anymore. That’s a very serious thing. Mr. Matheson, how can the utility sector work to ensure domestic sourcing for American mined minerals?

Matheson: Well, first of all, since I mentioned in my opening statement since Rural Electric Cooperative serves fifty-six percent of the land mass of this country, we serve most of the areas where we would be trying to secure these materials. So increased domestic production across the board for the various products you’re talking about, electric co-ops are in those areas. We would be serving those mines with electric service, and it’s an area we would value of course because it’s part of the economic opportunity for rural communities. Since we’re owned by the communities we serve, we’re always interested in those economic opportunities. But, I don’t want to diminish what you raise in terms of national security issues.

Greater domestic supply gives us greater opportunity to control the situation. I mentioned earlier to Senator Capito the supply chain challenges we are facing in the electric sector are much more pronounced for the electric utilities that are more reliant on foreign supply. A number of our co-ops have domestic supply manufacturing relationships and they still face supply chain challenges, but they’re not as severe. So, there’s no question that if we can find production of these minerals or anything else in the supply chain for electric cooperatives, a domestic source is preferable.

Inhofe: Well, you know that’s so obvious to most people. Some have a difficult time explaining why that’s not the case. Thank you, Mr. chairman.