At Super Bowl of Energy, Industry Fixates On Expanded Fracking and Lifting Oil Export Ban

We have done more as an industry to advance the cause of raising living standards across the world than any other industry I can think of…” 

If the first industry you think of when you read that statement is “the oil industry” then you were probably in attendance at CERAweek in Houston in late April, an annual gathering known as the Super Bowl of Energy.

Richard Kinder, CEO of Kinder Morgan, made the above statement while lamenting what he deemed as an unfair negative public perception of the oil and gas industry. Kinder admitted, “we don’t do a great job of selling how important what we do really is.”

Perhaps the oil industry could better achieve Kinder’s vision of selling how important they really are if they didn’t spend so much money attacking climate change science?

One of this year’s CERAweek themes was a “Turning Point for the Global Oil Industry.”  However, the turning point discussed was not how to deal with the impact of oil production and consumption on the climate, but instead on how to deal with all the new fracked oil coming out of the U.S. — and how to increase that production. 

Despite the oil friendly atmosphere, the conference didn’t completely ignore the issue of climate change.

Statoil ASA Chief Executive Eldar Sætre mentioned “the climate issues” as Reuters reported him saying, “We recognize and fully acknowledge the climate issues” but qualifying that statement with “There's no way the world is getting out of oil and natural gas production.”

This Reuters headline reached the following conclusion based on Sætre’s comments - “Statoil pushes oil industry to take bold climate steps.”

And, in the context of CERAweek, those were “bold” comments when compared to those of Exxon Mobil CEO Rex Tillerson.

“We recognize the (climate change) policy is important to the public,” Tillerson told a CERAWeek panel. “We need to somehow reflect that.”

Tillerson also used his time at the podium to portray his company and industry as overly regulated and held back by “the noise” instead of being set free by “the science.” 

Regulators must look at facts and they must look at sound science and not just respond to the noise,” Tillerson said.

Tillerson was making the case for fracking as a technology. The Midland Reporter-Telegram quoted him saying “that the federal government has never substantiated any link between the completion technique [fracking] and contamination of drinking water.”

Tillerson’s claim about the federal government is accurate. Of course numerous other studies have substantiated the link between fracking and contamination of drinking water, including an internal document from an official at the Environmental Protection Agency (EPA) and a new study released this month that confirmed water contamination in Pennsylvania.  

But to split hairs like Tillerson, the federal government has indeed failed to confirm the contamination. That’s because the study that was supposed to be released by the Environmental Protection Agency on this issue has been delayed for several years.

At a Columbia University energy conference on April 28th, the week after Tillerson made his comments, EPA Administrator Gina McCarthy responded with a single word to a question about when this long-delayed study would be released. “Soon,” she said.

Not surprisingly, at a conference where the CEO of the largest oil and gas company sees climate change as merely something “important to the public” while also advocating for fracking technology, the most popular topic at CERAweek was the efforts to lift the US ban on exporting crude oil.

A new report predicts lifting the oil export ban would result in the U.S. exporting up to 2.5 million barrels of oil a day, or approximately four times the volume of oil the TransCanada Keystone XL pipeline could potentially move.

Exporting crude would mean huge new profits for oil producers, which is why lifting the ban has been a top priority of the oil industry for the past year. And Sen. Lisa Murkowski (R-AK) has led the efforts to make this happen.

At CERAweek, Murkowski raised the stakes in the effort by promising to introduce a bill to have the ban lifted.

Murkowski and others in Washington have likely ramped up their efforts now because this issue is viewed as being toxic to politicians with the 2016 presidential election year fast approaching. If they vote to approve oil exports and gas prices go up at the pump here at home, politicians may expect voters will hold them accountable. 

Sam Margolin, an energy analyst at investment banking firm Cowen and Company, noted this at the Platts Rockies Oil and Gas Conference in late April saying, “We think the export ban has a better chance to be repealed in 2015 than 2016 because 2016 will be an election year.”

Despite the many efforts of Murkowski and others to lift the ban, at CERAweek Secretary of Energy Ernest Moniz reiterated his position that he didn’t see compelling reasons to lift the export ban at this time.

At least that is what Moniz said in public. As reported by the National Journal, the real discussions at CERAweek happen in private invite only sessions at night.

Like the one hosted by CERAweek chair Daniel Yergin and Moniz. And there is no more vocal proponent for lifting the export ban than Daniel Yergin, so we can imagine what he was advocating without having been in the room.

And while Moniz says he sees no reason to lift the ban, as reported by DeSmog, the Obama administration has already lifted the export ban on light crude oil.

The oil industry has been pushing the message that lifting the oil export ban will lower gas prices in the U.S. and the industry hopes the American public will buy into the phony idea that the oil industry really cares about poor people and “lifting living standards” everywhere.

In reality, lifting the export ban would mean the expansion of fracking in the U.S. and increased oil production and consumption that climate scientists tell us we can ill afford.

At a congressional hearing in March on the oil export ban, Charles Drevna, speaking as the president of the American Fuel and Petrochemical Manufacturers asked the members in attendance to lift the ban, making his case with a simple statement.

Turn us loose.”

And that is really what the debate about the export ban is about. Should the oil industry be “turned loose” to frack every possible bit of oil in the United States?

Or will politicians with some spine recognize their responsibility to keep the vast majority of fossil fuels in the ground to safeguard future generations? 

Image credit: Dan Holm | Shutterstock