©Kim Christensen
Lee College Economic Alliance event in Pasadena 2017
Lee College Economic Alliance event in Pasadena 2017 (Photos by ©Kim Christensen)
Make no mistake. While U.S. Department of Energy Secretary Rick Perry is honored to serve as a cabinet member in President Donald J. Trump’s administration in Washington, the secretary was, is and always will be a Texan.
“I am really honored to get to go up and help him and hopefully make an impact across the country, but the president sent for me and my colleagues for a purpose. And it wasn’t to get comfortable living in Washington, D.C.,” Perry said. “I tell people on a pretty regular basis that it is an interesting place to visit, and I go and do my work, but I don’t get confused about where home is or where my heart is, and it’s right here in Texas.”
Perry was also proud to have shared a prescient gift in late 2016 with the then president-elect.
“I was in his office [in Trump Tower in New York City], and he was talking to me about taking this job as the secretary of energy,” Perry said. “I gave the president a cap. He made famous the term, ‘Make America Great Again.’ But I gave him a cap and said, ‘This is what you really need.’”
The cap was emblazoned with the phrase, “Make America like Texas.”
Perry said the conversation led the soon-to-be president to say to him, “‘Look, Perry, here’s what I want you to do.’ He said, ‘I want you to do for American energy what you did for Texas.’ That really made sense to me,” Perry said, speaking to delegates attending the Economic Alliance Houston Port Region’s Gulf Coast Industry Forum held recently in Pasadena, Texas. “I understood he was talking about what we were able to do in this state from the standpoint of making Texas a place where people wanted to move.”
Perry said during his tenure as governor of Texas (the longest-serving governor in Texas history), among his top priorities was making sure “the regulatory climate was fair and predictable, and the legal system was fair as well.” Having a skilled workforce, “which basically translates into accountable public schools,” Perry said, in addition to creating a taxation system that was “fair and applicable,” were building blocks of his success as governor.
“We did all those things,” he said. “That’s the reason that Texas has become, and still is to this day, a place where people want to relocate. They want to be a part of this. It’s working together where you have a federal government and a state government that can work together.”
Perry stressed the essential importance of legislators at the federal level to understand the challenges facing legislators in the state government.
“Even more so, [it’s important] they understand what local control really means to allow the people in [smaller towns] to be able to make the decisions that affect their community,” he said.
Hurricane Harvey is a prime example of how local officials know best how to respond to emergencies impacting their own communities, Perry said.
“During Harvey, I told people, ‘Listen, I am completely biased about the state of Texas and how the state performs. For 14 years, I had the extraordinary privilege of being able to serve as governor. We put processes into place, and we were able to identify good talent,” Perry said.
He particularly praised the performances of Director of the Texas Department of Public Safety Steve McCraw, Chief of the Texas Division of Emergency Management Nim Kidd and Commissioner of the Texas Commission on Environmental Quality Toby Baker.
“This is the talent that we’ve been able to bring into the state over the course of the last decade and a half,” Perry said. “The reflection of that was during this last hurricane and how well the State of Texas [performed]. They projected calmness and thoughtfulness across the country.”
Good news ahead
Despite tragedies, natural disasters and uncertainty on the global political stage, Perry said there is reason to be optimistic.
“We have a lot of balls up in the air right now, and we’ve got a lot of issues going on,” he said. “We had Hurricane Harvey. We had Irma, and Maria was playing havoc with Puerto Rico. We have earthquakes in Mexico bringing challenges to our friends there. There’s a lot going on in the world right now. And our prayers are with folks, but together, we’ll return to as normal as we can be.
“But there’s really good news in the world, and I want to share with you the evidence of that.”
Citing data released by the Energy Information Administration (EIA) in its annual Energy Outlook, Perry said projections include the rise of natural gas supplies, along with domestic oil production.
“Based on our current policies, crude oil and petroleum imports will fall as a percentage of supplies,” Perry said. “Let me add that the EIA expects crude oil production to reach a record high next year, surpassing the previous high from 1970.”
Perry continued this good news with a report on the demand side of the energy equation.
“Despite greater movement of people and freight, energy consumption in the transportation field will fall, because fuel efficiency is going to fall even faster than consumption,” he said.
What this means for the U.S., Perry explained, is it is positioned to become a net natural gas exporter before the end of 2017 and a net energy exporter in under a decade, which will assure global energy domination.
“President Trump said, ‘Go do for American energy what you did for Texas,’” Perry said, once again recalling the conversation the two had prior to the president’s inauguration. “And we’re seeing that become a reality.
“Just think of what this new energy security means. It means greater national security as we end our dependence on supplies of energy from countries that are unstable or, quite frankly, very hostile to the United States, while we export energy to our friends and allies from abroad, freeing them from similar dependence.”
Energy security also translates to greater economic and fiscal security, Perry said, as well as lower costs to businesses and consumers, and rising incomes for Americans.
“For the petrochemical industry, our natural gas renaissance is nothing short of a revolution,” he said, noting an attitude promoted by some that the era of fossil fuel consumption was coming to a close.
“They forgot to tell George Mitchell that, and the folks who came up with the directional drilling technology,” he added, laughing.
The U.S. now has a decisive competitive advantage in the making of basic petrochemicals, Perry observed.
“As many as 310 new chemical industry projects are taking advantage of low-cost, abundant natural gas,” he said. “According to the Chemical Industry Council, low-cost, abundant natural gas has led to $185 billion in new capital investment. In May, Dow Chemical announced that it plans to spend almost $4 billion over the next five years to expand its United States petrochemical manufacturing business. Altogether, this could result in close to half a million new direct or indirect jobs by the year 2025.”
The impact of tax reform
When President Trump implements the corporate tax reform that has been proposed, it “will lower the cost of capital and will strengthen the competitiveness of our energy industry and our petrochemical industry as well,” Perry said. “Because these industries are so critical to our country and because they are so capital intensive, any substantive reform to our tax code is going to be a tremendous boon to further job growth across the country.”
Legislators in Washington “have been in the way” and “stifling economic freedom” for years, Perry said.
“It’s essential,” he continued, “to make sure they know in Washington and, for that matter, make sure they remember in Austin about local control and how regulations and taxes can stifle an economy.
“But particularly in the energy field, Washington, D.C., has been a hindrance to the growth. Washington and its leaders over the last eight-plus years said they were for America’s energy independence. They just didn’t want to drill for it, or transport it or export it. But they were for it!”
The Trump administration has taken a different approach, Perry said.
“We have encouraged economic freedom, and you know what happens then,” he said. “You unleash the ingenuity and the innovation of the American people. Breakthroughs occur in technology. Costs go down and supplies go up. Efficiencies increase and consumption levels off. And the results, while predictable, are still pretty astounding: abundant affordable energy for our country, enough energy for our needs and, eventually, the world.
“And that, in a nutshell, is our policy today in Washington, D.C. Clearly, with the path that we have chosen, we’re entering a remarkable new era for American energy. For the sake of our country and its people and, for that matter, for our friends and our allies abroad, I say let’s stay this course. We clearly see the results of that, even in this short period of time. If we remain on this pathway, we will be rewarded with a freer, safer and more prosperous nation and a more secure world for future generations.”
For ongoing industry updates, visit BICMagazine.com.
