From the Energy Corridor

I don’t usually spend so much time on either local or political things. But what we’re facing in my newly created congressional district is a David/Goliath battle against an establishment bent on ignoring the will of the people. So, at least until the primary is over (March 1), and maybe a runoff a couple of months after that, I’ll be talking about this race. And a surprising amount of this is the actual battle for constitutional conservatism. So it may be instructive for others working toward freedom, prosperity, and civilization.

Today’s topic is, specifically, about oil and gas—and energy more generally. This new district encompasses the Energy Corridor, a section of Houston along I-10 where a lot of energy companies are located. It seems logical that such a district ought to have a representative who knows that industry—in addition to knowing how to return to our Constitution. Mark Ramsey is that candidate.

Last week he was interviewed by the Houston Chronicle in preparation for their making recommendations. The Chronicle is anything but a constitutional-conservative newspaper. You can tell that even in the questions they ask. Today they came out with their recommendation in this race—and of course it was for the Washington, DC, pick—even though that guy reinforced his reputation for never showing up by not even responding to their request for an interview. And their characterization of our candidate was—well, not very accurate.

But let’s give them credit for an interview in which Mark got to spend half the time talking about the energy business—in far more detail than the reporter could grasp, even though he should have; it was all clear enough to me.

I’m hoping we’ll have clips of the recorded interview to share. But today I just happen to have made a transcript of the energy questions. So, let’s just let that run, with minimal commentary from me.

 

Oil & Gas—God’s Gift to Mankind

Mark Ramsey—candidate for CD 38: First and foremost, I would be the best advocate for oil & gas in the entire 435-member Congress. I’m a career oil & gas engineer. I have worked and taught how to drill wells more efficiently, safely, faster, etc., cleaner, on six continents. I have seen the benefit, the actual, real-life benefit to families, particularly in developing countries, where, effectively, if it were not for the oil & gas industry, they would still be a hundred, two hundred years behind Western civilization.

Instead, because of the oil & gas industry’s effect, which— I truly believe oil & gas is God’s gift to mankind. It powers Western civilization. But I have seen firsthand how the oil & gas industry has provided good, high-paying jobs, not just in America but in—all over the world. And that in turn has led, directly or indirectly, to roads, to schools, to hospitals, to clean water, to sanitary sewer systems—things the developing world did not have 50, 60, 70 years ago.

Almost all of that good has come about because of the oil & gas industry. The abundant, the relatively low cost—in spite of today’s price of oil at $92 bucks a barrel—it’s a low-cost energy compared to all the alternatives.

And now, with technology we’ve developed over my lifetime, it’s clean burning…. People think that carbon is an issue; one of the solutions is, you do electric generation with natural gas. That’s one of the cleanest things we can generate electricity with.

 

Mark Ramsey, left; Nick Powell, right
screenshots from Mark Ramsey's personal recording of the interview

No, It’s Not Greed; It’s Supply and Demand and Overregulation

Nick Powell, reporter: Let me just ask you real quick on, you mentioned the rising prices of gas. One of the reasons gas prices are going up is because American producers have decided not to invest in the producing more oil at the moment. They’d rather have higher prices and higher prices.—

Mark: No, that’s not entirely— I can’t really let that slide, but go ahead.

Nick: Well, I was just going to say, you’d say that they bear some responsibility for higher prices in this climate right now?

Mark: No, absolutely not. The reason that we are kind of entering a bit of a scarcity—not a lot; it’s a seasonal scarcity we see every year when cold weather hits; particularly with natural gas, not so much with liquids—but the reason we haven’t actually been drilling as much: oil wells have to be replaced. They deplete. They’re not pipes into the ground that produce forever. They deplete over time. Some last a very long time—20, 30 years or more. There’s fields in east Texas that are still producing almost a hundred years after they were discovered. That’s unusual. Most fields will deplete 3, 4, 5 years after the well is drilled.

We have to continually replace those wells. What happened is, through the ESG [environment, social, and corporate governance] movement, mostly out of New York and northeastern United States, that has shut off a lot of the funding, primarily to the independent and the wildcat style, the smaller companies.

It’s been an orchestrated effort by Wall Street to shut off funding, which is required with these very expensive projects to drill wells. The technology has advanced just spectacularly. But without the funding to actually drill the wells, you’re not going to be producing as much oil and natural gas.

oil rig in Gulf of Mexico, image found here

The second thing is the Obama-era regulations that came in have almost destroyed the Gulf of Mexico. Prior to the Obama-era regulations, we had on the order of 60, 70, and sometimes even higher than that, what are called deep-water rigs. These deep-water rigs, uh, they are typically either direct personnel that are working on the rigs or indirect personnel that are working on land—those represent approximately a thousand high-paying oil & gas jobs for every rig that’s operating in the Gulf of Mexico. Today we’ve only got about 15. And that’s due to these Obama-era regulations.

What’s even more important, perhaps, than the decrease in the number and the loss of these jobs—most of them permanently at this point—is that most of the activity by these deep-water rigs is primarily in workovers, and in repairing wells that are already there. There’s not a huge amount of true exploration or even drilling in already discovered fields. So that doesn’t bode well for energy independence, which we had achieved under President Trump. And now we’re not quite as energy independent as we could.

I would add one more thing, that the nature of oil & gas prices is that, when prices go higher, that does spur more investment. There’s a time lag that ranges from 6 months to maybe a year or two. But when, prices go high, as they are right now—and that’s not President Trump’s fault; that’s not the industry’s fault; that’s a direct result of things like the Keystone Pipeline being shut down, of federal lands being off limits to drilling. We just had a judge shut down about 1.7 million acres that had been lawfully leased in the Gulf of Mexico, over a Greenpeace-type lawsuit—that’s what caused the scarcity. That’s what causes prices to go up. It’s not greedy capitalist companies. The companies are out there competing tooth and nail. If we could free up the capital to drill more wells, gasoline prices would come back down very very rapidly.

 

Alternative Energy Welcome—but Without the Subsidies

Nick: Let me just ask you this. Let me ask you, what role do you see alternative forms of energy playing in the future, given that, you know, there is a push even by oil companies, Exxon and others, to, you know, to de-carbonize, I guess? How do you see wind, solar, nuclear, geothermal factory in the future?

Mark: Welcome to the energy business. But they should not be subsidized at taxpayer expense. The problem we had with the Valentine Day freeze, almost a year ago now… was that Ercot [Electric Reliability Council of Texas] price structure was putting reliable, low-cost generating capacity—natural gas topping units, basically—it was putting them serving effectively as backup to the wind and photovoltaics. And, as you may recall, the wind and photovoltaics dropped to about 3% of installed capacity in the Valentine’s Day freeze. There’s not hardly a machine, an industry, a plant in the entire world that would be considered a success if occasionally it was only delivering 3% of whatever its product was, in this case electricity.

frozen windmills, Texas Valentine's Day freeze 2021
image found here

Some of that has been corrected with legislation in the past year. The big issue right now is that there is a federal production tax credit on photovoltaics and on wind power that is so generous to those entities that they can sell power into the grid at a loss, and they still make money, due to the production tax credits. And that’s coming out of your pocket. That’s coming out of my pocket. That’s coming out of everyone’s pocket that’s paying federal income tax in the country. That is fundamentally unfair.

If you look at what President Trump did with China, we tried to level the playing field. We tried to stop the imbalance to American manufacturers. We have the exact same situation here in Texas with the wind power. I’m all for wind power. I just don’t think that we should be subsidizing it.

Nick: I have a couple other questions I want to get to and, you know, time is a little bit tight here. But let me, so, to clarify, you don’t support subsidizing renewable energy. Do you support subsidies for oil & gas? Federal subsidies?

Mark: That’s really not accurate. There are no real subsidies for oil & gas. Oil & gas is overregulated. that’s a big tax. For example, every time BSEE [Bureau of Safety and Environmental Enforcement] comes out to inspect a rig out in the Gulf of Mexico, it’s a surprise inspection. There’s no warning. There’s no notice. Every time the helicopter lands, the operator gets a bill for about $30,000 to pay for the helicopter flight. That’s not a subsidy. That’s a penalty that’s going on. We’ve had— Unfortunately, the American government has had a war on the oil industry that dates back several decades now.

 

It's Time to Shut Off the Subsidies

There was a point in the Chronicle interview where Mark was about to tell this anecdote about solar energy subsidies but got interrupted. I think it should be included in a post about energy—and the free market. I had recorded him speaking in January at a meet & greet, and he included this story. So this is a transcript of Mark from that event.

Mark: I’ll give you a little anecdote. I used to live in Colorado. Right down the road from me was a place called the Solar Energy Research Institute. Sounded great. I was fresh out of college. You know, what could be better? Just free energy from the sun, kind of thing. So I went and interviewed with them, OK. I mean the job I had was great, but that one was even better. So I went and interviewed with them. It was an interesting interview. And at the end of the interview, they asked me if I had any questions. I did of course. One of the things I asked them was—this is back 40 years ago—one thing I asked them was, how long is it going to be until this is commercially viable without subsidies? I’ve been a conservative since a long time ago. This was actually back then, right out of college. “When is this going to be viable without subsidies.” You know what the answer was? Five years. Five years, OK. Five years.

I’m still on their mailing list. I like reading their stuff. Just recently they sent an annual report out. It was real interesting. It had something in the annual report: How long will it be until this is viable without subsidies? You know what the answer was? Ten years. Ten years. Ten years.

So that gives you an idea of where I’m coming from. It’s time to shut off the subsidies. Maybe phase them out. But get rid of the subsidies so that everything’s competing on a level playing field, and we’re not forcing oil & gas and nuclear and coal to play second fiddle to all these others.

 

Mark Ramsey, candidate for Texas Congressional District 38
image from campaign materials

The main opponent, by the way, the one who doesn’t show up—the Chronicle reports that he “acknowledges the importance of combating climate change but believes oil and gas are still critical in this transition period toward a decarbonized future.” In other words, he’ll keep subsidizing alternatives and penalizing oil & gas, including clean burning natural gas. And energy independence—which we had up until a year ago—is not even among his concerns.

The Energy Corridor is in this district. CD 38 deserves to be represented by an oil & gas expert. And it’s time Congress had an oil & gas expert among them. We can have that with Mark Ramsey.