“Americans understand and can connect the dots that if we’re limiting supply, especially at home, and we’re seeing prices go up, it doesn’t make a whole lot of sense,” said Christopher Guith, senior vice president at the U.S. Chamber of Commerce Global Energy Institute.
Guith compared current energy prices to one-year ago: diesel prices have doubled and gasoline prices at the pump have risen by approximately 60-percent.
Diesel was described as the lifeblood of the U.S. economy, because it’s how everything that is bought or sold is moved — whether it’s trucking, or rail or shipping.
A key element of Guith’s presentation dealt with natural gas and NGL. Whether in this country or around the world, the manufacturing industry relies on natural gas as one of its primary feedstocks. Current U.S. natural gas prices are at a 15-year high, and are triple what they were one-year ago.
While natural gas prices are exponentially more expensive abroad, “Our manufacturers are paying triple what they did a year ago. But their competitors around the world are paying five-and six-times” more than they did last year, Guith said.
He reminded the audience that the nation saw this same scenario in 2010 with President Obama. “He called it his shellacking; I believe the Democrats lost something like 42 seats in the House of Representatives (after that).”
In hindsight, Guith said he gives Obama a lot of credit because he pivoted on energy. Similarly, fuel prices were a major issue at that time. That was the point when the U.S. hit record gasoline prices at the pump, which were only recently eclipsed.
“After his shellacking, he went back to the drawing board and backed off of some really bad policies in Alaska and in the Outer Continental Shelf (OCS) to increase access,” Guith said.
“We’re still waiting to see if this administration can do that. But the shellacking is coming, and we’re very hopeful that it will move them in the direction of energy security,” added Guith.
The U.S. has more natural gas than it knows what to do with, but the problem is that it’s very difficult to move around, Guith explained.
“It’s almost impossible to build an interstate pipeline in this country at this point,” Guith said. “Most major pipeline companies are focused exclusively within the bounds of the state — namely Texas — moving gas, and to a lesser extent, crude (oil) from West Texas into the U.S. Gulf Coast area.”
There has not been a single lease sale on onshore federal lands during this administration. The U.S. gets roughly 20-25 percent of its crude from federal lands, so it’s not a small amount, said Guith.
The government is legally required to conduct at least two offshore lease sales per year and many dozen onshore. “They’re not following through with it, but they’re doing it at a time when it makes no sense,” said Guith.
But Guith said that the U.S. has also seen renewables grow exponentially. First it was wind in the early 2000s and now it’s solar, especially in states like Texas and California.
However, he said these energy supplies are intermittent. “There’s not a reliable storage solution yet, where you can capture those electrons when no one is using them,” Guith said. “They use them when they need them. On average across the country, renewables dispatch about 40-percent of the time.”
“You have to have steady, reliable power. What is that? That’s natural gas,” said Guith. “When the sun goes down — we don’t have solar anymore, we have natural gas. When the wind is not blowing, we have natural gas. So natural gas has been the backbone of our clean energy economy.”
Guith ended by saying, “Energy security and energy transition are not mutually exclusive. We know we don’t have the technologies to get to zero emissions, and right now we are working on them. But that doesn’t mean that we forget energy security.”
Guith presented at the recent US Downstream 2022 conference in Houston.
