WTI Crude
Brent Crude
Natural Gas

S&P Global Platts Podcast: Top energy advisor says Trump to bolster US oil supply

News Article Sponsored by Hanby PetroAnalysis


Written by: Brian Scheid & Richard Rubin from S&P Global Platts

Click HERE to Read Article From Publisher

The S&P Global Platts Capitol Crude podcast Monday will look at the oil policy implications of the presidential race between Republican Donald Trump and Democrat Hillary Clinton. The podcast will include highlights of an interview with North Dakota Representative Kevin Cramer, a Republican and top energy advisor to Trump.

Here is a partial transcript of that interview, which took place Tuesday.

Q: Trump has called for opening more federal lands and waters to drilling but will this motivate more production if oil prices stay low?

A: I think it’s like the production of anything, if you have access to more of it, you’re going to have more. In fact, whether it correlates to more overall production or not it certainly provides a diversity of opportunities for producers so that low market price they can pick the most productive places to drill with the greatest efficiencies. So, in many respects, production also depends of course on availability of demand, the access to demand. I think of Mr. Trump and his speech in Bismarck [in May]. It was pretty obvious, to me anyway, that when he got to the issue of federal lands, one of the things that lit him up a little bit was just the vast resource that the federal government owns. When the price is at $40/b… it equates to roughly the potential of $50 trillion worth and, of course, at $100/b I think the number was, at one point, $123 trillion worth. That’s where you saw the businessman in Donald Trump go ‘Holy moly!’ We had this $20 trillion debt and we own this $50 or $100 trillion in oil and gas? Whether it correlates to more production or not I think it’s more a matter that it’s at least available and government isn’t arbitrarily and unnecessarily putting up roadblocks to that production. That’s good for both energy security and, of course, the federal treasury.

Q: What Obama administration regulations do you think Trump will try to overturn and how much success will he have since many of these policies are being decided by courts?A: A few of these things are being stayed right now in the court and certainly a new president, a more pro-development president, could change that rather quickly with the right people at the Department of Justice and within the agencies that could rollback some of those lawsuits, assuming they’re not settled before the new president takes office. So we talked specifically about, and [Trump] has talked specifically about, the Clean Power Plan, of course. To the degree whether it’s methane emissions from storage facilities … it’s been an area of zealous [Environmental Protection Agency] regulation. He’s talked about the Waters of the US [rule], which is, again, it’s another one of those permits that gets in the way, if you will, that throws up a ‘go slow’ sign, if not a ‘stop’ sign to some development. He’s talked specifically about those things. I think in addition to the specific regulations are the specific regulators and some of it is attitudinal. I used the word ‘zeal’ earlier and clearly there is a zeal right now to use every tool in the toolbox that the administration has and all of the federal agencies. Including, by the way, what Hillary Clinton refers to or is often referred to as the Halliburton loophole, for example, on fracking regulation. In a state like North Dakota, it’s a classic example of a state that does fracking regulation very, very well and Hillary Clinton wants to federalize that. So the difference between the two is pretty stark. Donald Trump takes more of a states’ rights, or a state primacy position, versus Secretary Clinton who says we need to federalize this.

Q: But in an interview with a Colorado television station in July, Mr. Trump said he could support municipal or state attempts to ban fracking. Was that a misstatement?

A: I don’t know if it was a misstatement, but I think it’s probably more like a misunderstanding of the juxtaposition of local control and private property rights. State regulation and state primacy is one thing, sort of the checkerboard potential of municipal referendum is quite another. I have not talked to him personally about that, I’ve talked to some in his policy shop for more clarification on that issue, but I think there’s Constitutional questions, I think, about whether or not a municipality can ban [fracking]. Reasonable regulation is one thing, but banning something that violates somebody’s opportunity on their own property I think is a bigger problem. I don’t know if he’s clarified that or not, but that’s where I would encourage him to have some clarification.

Q: How much could this presidential election impact North Dakota production?

A: North Dakota doesn’t have a lot of federal land and yet we do have a lot of federal land in the sweet spot of the Bakken. So while it’s single digits in terms of the percentage of North Dakota that’s under federal ownership, there’s a core of it. Another big part of it, of course, is tribal land which has all of the bureaucracy of the federal oversight in addition to the sovereign nation. Add to that the [Bureau of Indian Affairs], another layer of federal bureaucracy. For example, there’s more flaring on the federal and tribal lands than there is on other lands because infrastructure development is so slow. We need to streamline infrastructure development, things like gathering lines, and the type of infrastructure that both produces and moves the product.

Q: Has Donald Trump’s repeated claims that the US should have ‘taken the oil’ during the Iraq war and take it from ISIS hurt his credibility on foreign and energy policy?

A: I don’t think so, because one thing he is very, very consistent on is his ‘America first’ [policy] and he applies it to everything. I think an America first energy policy applies, on the one hand, to domestic supply and production for sure, but it also applies on the geopolitical side in the sense that… we’ve got Saudi Arabia who obviously can produce oil at a lower cost than the United States, but the cartel and the monopoly practices I think require a little more oversight and a little more diligence on our part to ensure that they aren’t participating in unfair trade practices or marketing practices or, for that matter, production practices. Especially considering that our refineries buy a good share of their oil. With regard to taking ISIS oil, and I don’t speak for him on this, but when he speaks rhetorically like that I think that it does resonate with people. Why should we, on the one hand, be fighting ISIS in the Middle East and, at the same time, allowing their supply of cash, which comes in many respects from oil that they either steal or sell on the black market. That’s just a natural, national defense weapon, which is a lot better weapon than a bomb, for example. I think when we’re talking about the geopolitics of it he’s got a pretty good grasp of why aren’t we using energy resources, both ours and theirs, as opposed to more violent means, if you will. The other thing on the geopolitical side is that we’re spending billions of dollars protecting shipping lanes in the Middle East when we could be just producing more and using more right here in the United States. So I think, in the context of the globe, it maybe sometimes seems contradictory, when I think in reality it’s all just a function of him putting American jobs and American resources ahead of foreign resources when there’s an opportunity to do that.

Written by: Brian Scheid & Richard Rubin from S&P Global Platts

Click HERE to Read Article From Publisher