Cross-Industry Collaboration on Methane Reductions: Policymaker Dialogue with Representative Armstrong
Joseph Majkut: Hi, everyone. Welcome to CSIS. My name is Joseph Majkut. I’m really looking forward to today’s program where we’re going to be talking about methane emissions and how we look at reducing emissions, taking the leadership the oil and gas industry has seized and applying it to agriculture, waste management, and many other sources of methane.
By way of background – oh, wait, no. Safety announcement. Excuse me. We’re going to be here all morning. There’s going to be lots of times for breaks. Colleagues who are joining online, we hope that you can stay through those there’s. There’ll be a little card announcing when we’ll return to programming. And there is, for those in person, refreshments just outside. If anything happens this morning, if there’s an emergency, if an alarm goes off – very low probability – please follow the instructions of a CSIS staffer or follow the exit signs outside. Our rally point is the square just to the right when you exit the front of the building.
For this conversation on methane, I’m going to be watching for three things today. One, I want to talk about what lessons have been learned for those groups and those industries that are already working on reducing methane emissions. And how can we make those portable? So let’s look for the stories of discovery and technology development that we think we can bring to other sectors. I want to talk about what room we have for political agreement on methane. Methane is one – methane emissions abatement is one of the places where I think a lot of the political motivations that leaders on both sides of the aisle are trying to achieve or realize can be – can be expressed. But what does actually mean in terms of public policy? We’re going to start talking with Representative Armstrong for that – on that theme specifically.
And lastly, how does methane emissions, and the U.S.’ strategy for reducing methane emissions, relate to our broader business and economic competitiveness? The world is entering a funny time, where the ability to produce energy at lower emissions, the ability to produce agricultural goods that lower emissions, is going to be increasingly part of our competitiveness. Look, no further than this morning. JPMorgan Chase announced a brand-new methane strategy that it wants its clients to be working under because they see commercial interest in being able to do business at low methane emissions intensity.
Those are the three things I’m hoping to see today. And I’m really excited to start the conversation with Representative Armstrong. Kelly Armstrong is the member at large in the House of Representatives representing North Dakota. He’s been in that role since 2019. And before that, he was a state senator starting, I think, in 2012. Is that right, sir?
Representative Kelly Armstrong (R-ND): Yep.
Dr. Majkut: Excellent. Mr. Armstrong is the vice chair of the Energy and Commerce Committee. So very clearly related to the issues that we’re talking about today. And also sits, very interestingly, on both the Coal Caucus and the Conservative Climate Caucus. So we really look forward to eliciting your view, sir, on how we can realize a productive, and maybe even an expanding, energy industry at lower methane emissions, and build into that white space of greenhouse gas emissions. Maybe I’ll stop. I’ll ask you to introduce how you think about these issues. And then we can have a little conversation.
Rep. Armstrong: Sure. I think about these issues – North Dakota is number one in two industries, our ag and energy. And nothing’s even close. You know, we always try to talk about diversifying our economy. When you live in an economy that’s based solely on commodity-based – an economy, you run through booms and busts. North Dakota’s done that throughout its entire history.
That all changed in 2008 when Bakken shale oil was developed and discovered. And we had created good incentive policies in order to get companies, mostly small companies, to come and find that oil. And it – I view all of these things in the basis of what keeps a town like Beulah, North Dakota, which is 6,000 people, around for the next 50 years. I have no affinity to coal specifically, but nothing else scales up in Beulah, Hazen, and Washburn – towns none of you all have ever heard of, but are incredibly important to the central part of North Dakota. So we look at these and how we compete.
And I think there’s a second part to this which is really important when you come from where I am. By the way, I’ve been in the oil and gas industry since before I was born. Whatever the opposite of big oil is is what my dad’s company was. Seven full-time employees, three of them had the last name Armstrong. I quit him and ran for Congress. So you not only have to view this versus, you know, pro-energy growth versus anti – versus environmental issues. But you also have to view it small business versus large business. And there’s a big difference there. And when we start talking about methane and methane regulations, and we can talk about the bill that passed two years ago in Congress, there was a very big divide in the industry between who supported it and who didn’t.
North Dakota is the geographic center of North America. The vast majority of the companies doing business in North Dakota are small independents. We were talking beforehand, every barrel of oil takes anywhere from a $7 to $12 discount for us to get it to market. So if WTI is at $87, the most we’re ever getting is 80 (dollars). So we’re at a competitive disadvantage. And we ended up being dual regulated from wellhead to market. And so we view those things in a different – in a different light.
Larger companies – doesn’t matter if it’s healthcare, doesn’t matter if it’s oil and gas, doesn’t matter what it is – can deal with more regulation. I mean, if you got to hire 13 more compliance officers at Exxon, that’s – you don’t really notice that. If you have to hire two more compliance officers at Armstrong Oil and Gas, you may not have an oil and gas company anymore. And same with banking. Same with all of those different issues. So we always view it for that, and continue to move forward based on what that looks like.
Dr. Majkut: Why don’t we actually start there? I mean, you and colleagues have worked on this – on this issue of duplicative regulation. We were talking outside, state, local federal regulation. What do you – but we also, I think, can recognize that reducing methane emissions is good for the planet. It’s definitely part of achieving any sort of climate goals over the next century. And so what do you see as the right balance between market operators kind of driving their own emissions reductions, working with their investors – where I think there’s kind of, like, a growing desire to see clean operations, working with state agencies, and working with the federal government?
Rep. Armstrong: First, I think you start with North Dakota produces the cleanest MCF of gas in the world and they produce the cleanest barrel of oil in the world. And that’s without any federal regulation. That’s without any of those different issues. Those things are true.
Secondly, from the federal government standpoint, it’s pretty simple – infrastructure, infrastructure, infrastructure. If I have another government bureaucrat talk to me about economically recoverable ethane, I’m – one of my first things I did when we were in oversight. I said, OK, so federal government at that time had a 3/16ths royalty on methane – on their federal leases. If they think it’s economically recoverable at 3/16ths, don’t you think the oil company probably thinks it’s economically recoverable at 13/16ths? We don’t have talked about the climate and all of these different issues, right, but we can all agree an oil company is pretty good at making money. If it was economically recoverable, they’d be recovering it. So you start with infrastructure, infrastructure, infrastructure.
And then you can’t get to that without permitting, particularly in pipelines. That’s how we deal with this. That’s how we work forward. If we can’t get the infrastructure in the ground, we’ll have stranded assets. Most of North Dakota’s natural gas is what we call associated gas, which means it’s coming from an oil well. I don’t know what an MCF was trading at in 2012, but it wasn’t very much. I was selling my gas for free because I was making a bunch of money on oil and gas, right? If you’re producing 1,000 barrels of oil a day off of an oil well and you can’t get the infrastructure into place, you’re going to flare your gas when you’re getting 30 cents for an MCF.
And part of the reason North Dakota is unique – we were talking about this – you know, you get into Montana, you get into Wyoming, you have these huge tracts of federal land. North Dakota, you have all these intermingled tracts of federal land. And so you have a 1280 spacing unit or you’re trying to get a pipe to Oasis’ gasification plant, you have a 40-acre federal tract that is stopping the whole pipeline. State’s done the permitting. State’s done the regulating. State’s – local counties have done all of that. And you’re waiting two and a half, three and a half, four and a half years for a 40-acre tract of which everybody else has already said is safe and environmentally sensitive.
And I think for – I mean, on the regulatory side what you have to remember I think is really important is states are more dynamic. You know, we started talking about sensors and all of these different issues. And there was these large conversations. Well, you know, when sensors don’t work? When it’s 40 below in February in North Dakota. They just don’t work. So if you’re going to put a one-size-fits-all metric in place, we have a company in my hometown that started getting into like thief hatch and dealing with this. Well, when you deal with the EPA, they require a specific thief hatch. These guys can do it better, but they don’t meet the EPA regulatory. We can meet it at the state level because we don’t care so much about the mechanism. We care about the emission.
And so allowing states – allowing states – New Mexico is a great example. Though I don’t think anybody thinks of New Mexico government is this bastion of conservative operation, they have stricter methane emissions than the EPA. So now they not only have to meet their emissions, but their regulatory regime is different than the EPA’s even though it’s more strict. So now they have to figure out how they can meet their regulations and still comply with EPA. That doesn’t make any sense. It never has made any sense. You have to figure out a way to do this. And the single best way to do it is – I mean there is a role to play. You do have the feds do what they do, the states do what they do, and the counties and local governing do what they do. But they shouldn’t be doing the same thing.
And we ran out of this locally in North Dakota on the other end of the spectrum. But we had county commissions trying to dictate what kind of liner you had in your pit. Well, that’s a little bit outside the purview of a retired insurance agent. That’s what we have an industrial commission for. But they know they can deny the permit and you’ll comply with whatever you tell them because it’s shorter than litigating it.
Dr. Majkut: You mentioned a couple of things in there that I’d love to draw out. The first is permitting – infrastructure, infrastructure, infrastructure. Infrastructure is a thing that everybody in Washington agrees needs to happen. Nobody seems to agree about the pathway forward. The Lower Energy Costs Act was H.R. 1 for this Republican conference. For those viewing online who aren’t familiar with the intricacies of Washington, this is the number-one priority for the conference. That’s how they kind of put a big sign on top of it. What do you think the path forward looks like for finding agreement on infrastructure in the next 12 to 18 months, building on what we accomplished over the summer?
Rep. Armstrong: So I think the – I mean, we obviously think H.R. 1 is the appropriate way to do this. We have less bipartisan support on that issue. I think the better issue to look at is the debt ceiling fight and the NEPA reform. We got as much negotiated permitting reform as we could in the NEPA bill that – or, in the debt ceiling bill that ended up being law. And it’s some of it is, you know, you have environmental analysis and environmental impact statements. And we put shot clocks on them. One and two years. And there’s plenty of loopholes in that which we knew. And if we’re – if anybody was honest with you, but we codified it. That’s the difference.
And I think one of the things we’re seeing in these times is you have a Democratic president who comes in and does something, you have a Republican president who comes in and rolls it all back. You have a Democratic president that comes back in and re does it. And one of the simplest ways to deal with these things is to put it in code versus regulatory, because most of the people who are doing this stuff know these are 12-, 15-, 16-year projects. And they want regulatory certainty. And there’s probably nothing more – you know the only thing unique about – there’s two things unique about the Keystone XL Pipeline, which was a northern border expansion of an existing pipeline. Only two things.
One, it was the most vetted pipeline in the history of the world. And, two, it was the only one that could be stopped with the stroke of a presidential signature. That’s it. It’s not DAPL, it’s not any of these other ones. There’s only two unique things about the Keystone XL. But what you really end up doing is starving off access to capital. Because if you know it’s a 10- or 12-year project, and you know, you’re going to have two presidential elections in between – and we take this a little personally in North Dakota. The Keystone XL doesn’t actually affect North Dakota all that much. It’s bringing oil from Canada to the Gulf, and it was about 12-15 miles into Montana.
But we share a common border with Canada. And we have – there’s 13 different existing projects. Our updates of existing infrastructure that are really hard to raise capital for if you know it’s going to take longer than four years and you come in and somebody can shut the project down. So I think regulatory certainty and infrastructure certainty are hugely important. And that’s before we start talking about transmission, which has its own set of different issues, which are – some of them are traditional, and some of them really come into the climate fight as well.
Dr. Majkut: Yeah. I mean, I don’t want to – the infrastructure piece, I think, is actually quite important, right? So for folks who may not know, if you’re producing a lot of oil, and you’ve got associated gas, the way to reduce flaring, the way to reduce leaks, is make it really easy to ship that stuff out to market. That increases the cost recovery. It makes compliance easier. And if we can’t build enough infrastructure, I think we’re going to really miss out on our goals.
Draw back to H.R. 1 for a moment. I was reading it again this morning preparing for our discussion. And, you know, a big subsection – the leading section was about increasing American energy production, export, all those things. Do you think the messaging around that bill underappreciated or underemphasized the importance of the infrastructure that the Lower Energy Costs Act was trying to allow to be built for achieving climate targets?
Rep. Armstrong: I do. And I think there’s a couple things. And I think – and this is one of the things I get frustrated with my own side of the aisle on. And some of its when you wake up every morning and you get punched in the face, you figure out who you’re going to punch back, right? North Dakota is a huge reason why the United States ended up actually being energy independent, right? We’re the only country in the world that’s both food and energy secure. That’s a tremendous advantage on the global stage.
Also, our soft power is pretty important. I use Guyana – anybody know where Guyana is? Do you know – we all know they’re going to be the richest country per capita in the entire world within a decade, right? Traditionally poor, outmigration, 800,000 people. They all speak English and they’re going to surpass Norway within a decade of being the most – the richest country in the world. And they’re in the Western Hemisphere. I mean, this is old school Monroe Doctrine stuff, right next to Venezuela. There are more college-educated Guyanese in the United States than there are in Guyana. And they’re going to be producing between 1 and 2 million barrels a day sometime in the near future.
You go to Guyana, it’s Exxon, it’s Halliburton, its Schlumberger. They don’t need a trade agreement. They’re drilling for oil. They need the Ex-Im Bank to lift their cap on their $100 million loan. Well, you know what the Ex-Im Bank wants before they lift their cap? ESG score. You know who’s going to loan them the money? China. You know what China doesn’t care about? An ESG score. And this is a traditionally poor country that is no longer going to be poor. You think they’re going to develop the asset? Of course they’re going to develop the asset. And it’s American companies that are doing it.
And I think that’s something that we don’t talk enough about, is about how American companies – whether it’s in Azerbaijan, you can talk about the Turkish pipeline, you can – I mean, and Iraqi and the Kurds. And this is where we use soft power. But more importantly, regardless if you have an EPA, regardless if you have a regulatory agency there, you have American companies that are beholden to American shareholders. And American shareholders want carbon scores. We’re going to give them a carbon score on a soybean. We produce a lot of things in North Dakota we don’t consume there. You want a carbon score? We’ll give you one. And we’ll figure out how to do it better, because we want to sell people what they want.
But we – Republicans spend too much time talking about North Dakota, and the Permian, and Eagle Ford, the Gulf to some degree or another. We don’t spend enough time talking about how we impact the global markets, and the difference between what happens with energy prices depending on U.S. policy all over the world.
Dr. Majkut: Right. Well, and I would say, again, the high practices that you see in the United States kind of amidst this period of transition, where countries, consumers, and others are more concerned about the risks of climate change, they’re trying to find ways to reduce emissions, still need energy resources amidst that time. That this becomes part of the competitive portfolio, right? Like, you know, it’s never – I don’t think it’ll be larger than price, but the ability to produce cleanly, to me, is a part of our strategic – is a strategic benefit.
Rep. Armstrong: A hundred percent. And we’ve seen it, right? We’ve seen it with the Russian invasion of Ukraine, and Europe figuring out that one guy kind of controlled the energy for their entire marketplace, and that wasn’t a great idea. And you can onboard – about a third of the LNG in Europe, you can onboard in Spain. The problem is, they don’t have the infrastructure to spread it out. So at a time where they need low-cost energy, we still haven’t scaled up the tanker capacity and the things that we need to do with LNG. And it’s even – it’ll take even longer than when we actually did oil exports. You know, the trigger to that was actually about three years later, because you had to get these tankers online and build the – build the maritime infrastructure to actually do these things.
But you have to LNG tankers circling Spain because they can’t – they can’t onboard it fast enough to get it to Europe. And so we have a unique opportunity right now because two things are true at once. Ten years from now, we’re going to drive a lot more electric cars in the world, and the world’s still going to need more oil and natural gas. Those things are both true. And they have geopolitical ramifications, right? I mean, Israel was importing coal from South America because nobody would sell them energy in the Middle East. Noble Energy, a Texas company, an American company, discovers natural gas. Israel is now an exporter of energy to Egypt.
Well, nothing else has worked for 4,000 years to try and create peace in that region, how about we – how about we provide our neighbors and our allies with something they really need cheaper than they can get it anywhere else? Is that the silver bullet that solves this? Obviously, it is not, but it’s going to be helpful. And you think from a national security perspective it helps Israel, right? They have it at home now. They can power their economy off a platform that’s right off – right off their coast, instead of trying to figure out how to protect a coal fleet coming in. Oh, and it happens to be a ton cleaner. Like, it’s significantly cleaner.
Dr. Majkut: Mmm hmm. Let me – let me draw you back to Washington just a bit to – like, to understand your view on how we realize those strategic benefits, right? So, you know, you mentioned the way to avoid this sort of seesawing between successive administrations is to is to codify, it’s use the law, right? This also, by the way, totally reduces the time to implement different regulations because congressional authority this Supreme Court views as much more authoritative than administrative decision making.
Rep. Armstrong: They’re taking up the Chevron doctrine, this term.
Dr. Majkut: You think so?
Rep. Armstrong: And whether we like it or not, they’re going to force Congress to do their job. And I think that’s a good thing. I think when you look at, historically, what the problem is, we’ve met the enemy, and it is us. (Laughter.) James Madison said – James Madison said that Congress would fight to the death to protect its article one authority. And that may have been true at the time. I can tell you, I’ve been here for five years, you know what Congress will fight to the death to do now?
Dr. Majkut: Avoid its job?
Rep. Armstrong: Maintain their membership in Congress. (Laughter.) And if that means you don’t have to take a tough vote, and you can pass it off to an agency, and you can say, hey, that wasn’t us, that was them. But that’s the simple version. The other version, which we’ve gotten really good at which is really unfortunate, is we pass a very general law, and then implementation goes to the agency. So you pass a law and then they have to implement what you pass, but you’re not specific in how you do it. And I learned this in North Dakota, because we went from laying 100 miles of pipe a year to laying 100 miles of pipe a week. We needed regulatory reform. We had to have it. But we wrote a very specific bill.
And even in a state that is pro-energy development, I got into a fight with our industrial commission because they started – they wrote rules based on the law we passed that didn’t comply with the law we passed. But I wouldn’t have won those fights if we didn’t write it the way we wanted it written. And so we got them in and we said, no, it says this on page three paragraph six, you can’t do what you’re doing and the regulatory regime. But we don’t do enough of that here. And we write these things in a way where we allow agencies to determine how they work.
Well, one, that’s not the best way to legislate. You can have the best person working on the third floor of the EPA in the history of the world, they’ve still never been elected to anything. And, two, this is where you get into the shenanigans of switching from a Democrat to a Republican, and now all of a sudden it’s the same law being absolutely implemented in a completely different way. And that’s tough for Chevron. That’s tough for Hess. That’s tough for Continental.
Dr. Majkut: It’s good for yacht salesmen in Annapolis, though.
Rep. Armstrong: Sure. And it’s really tough for, you know, Cody Oil and Gas in Bismarck, North Dakota, who has three employees.
Dr. Majkut: Yeah. So let’s maybe kind of think through that. What is – you know, in the case of methane we’ve seen legislative developments. When the Democratic – when the Democratic legislators passed the IRA, there’s a methane fee that they’ve – that they tried to implement.
Rep. Armstrong: Fee, tax.
Dr. Majkut: Tax, exactly, right. Sort of a(n) interesting design, from a policy wonk standpoint, because it’s sort of contingent on states either having a strong regulatory plan or you fall back on this federal instrument. But what do you see as the white space for things like methane if we have to go about a legislative process that hopefully would involve bipartisan policymaking?
Rep. Armstrong: I think the simplest answer in these spaces is, set a target and allow states to figure out how to develop that target. We put our own flaring rule in place in North Dakota. We got sick of 18-foot flares on stranded assets. And we wanted to keep our EPA primacy. We didn’t tell them how to meet the target. We just told them. And by the way, this didn’t matter, because some of these – I mean, one, people don’t – I don’t think most people understand the difference – the differences between natural gas and what you have to deal with sour gas, versus all of these things. But there’s going to be incredible technological developments where you can power your own rig off the natural gas you’re bringing out of the ground. We’re not there at scale yet, but we’re getting close.
But if you have a very, very immovable federal regulatory regime, you can’t take advantage of those innovations because they don’t comply with the regulatory regime. But if you set a target and you tell North Dakota, here’s your target, make it, and we’re going to hold you accountable to making it in a reasonable amount of time. You figure out how to make it. Companies will figure it out. State regulators will figure it out. Like I said, we have a guy developing brand new thief hatches that are – essentially reduce methane emissions by about 65 percent. But if you have to fit that under the federal regulatory regime, they’re not allowed even though they’re better. And so the best way I think you can deal with these issues is if you’re going to put a metric in place, do it in a way that allows for the dynamic nature of state regulatory regimes to approach it, versus a federal bureaucracy that I don’t think anybody’s ever accused of being nimble.
Dr. Majkut: (Laughs.) Right. So set standards, let states kind of see those implemented in the best way possible, and provide maximum flexibility for market actors as they try to achieve this, right?
Rep. Armstrong: Yeah. And the difference between trying to do this in the Permian, where everything’s linear, everything’s flat, everything’s close to the refining capacity, and doing it in western North Dakota, where it’s 20 below with a 30 mile an hour wind, is hugely, hugely different. Sensors might work in the Permian. We may need drones. Like there are different versions in how we deal with some of those things.
Dr. Majkut: Do you have a moment to take a question?
Rep. Armstrong: Yeah.
Dr. Majkut: If anybody – you know, audience, colleagues here in town. Sir, with your hand raised, you’re more than welcome to offer a question. I don’t know if we have a microphone. Thanks so much. The gentleman in the red turtleneck.
Q: Thank you for – thank you. My name is Ujvala Pluri. I’m at U.S. Customs Office of Trade Sustainability Division.
And my question for you is, we have this whole dichotomy, it seems, between renewable energies, oil and gas, petroleum. But is it possible to create policy so we can have a more balanced approach to energy security to, you know, powering not just the nation, but, you know, to export our energy products abroad and continue to maintain energy independence by perhaps taking advantage of our strengths in certain areas, like in oil, gas, and natural gas, and petroleum? And form partnerships with developing countries, for example, in Africa or Asia where they have a lot of critical minerals necessary for, for example, renewable energy products, production. So do you envision that perhaps in the future we could harness our advantages here to engage in a more fruitful trading relationship with those countries that have the critical resources we need for the future? And if so, how could that be done?
Rep. Armstrong: Well, the first answer is we should all get over our carbon guilt in a pretty quick hurry. My wife’s from Oslo, Norway. Very good success story. They also have – they have the highest per capita of electric vehicles in the world. But Norway has soft power, and Norway’s development with other countries is based on the fact that they have – they are the richest country in the world. And that’s not because of a shipping vessel in the North Sea. And we should also recognize that somebody fills the void if we don’t do it. I mean, if you are burning wood or cape buffalo dung in order to heat your house, you’re not particularly interested in climate. You’re interested in prosperity for your people, and for your community, and for your family.
And nothing other than democracy has lifted more people out of poverty than cheap and reliable energy. But somebody is going to fill that space. And so we should be a part of that conversation because, again, we do it better than everywhere else. And now we’re talking about critical minerals. And this is hugely important, right, because China controls 40 percent of the processed lithium in the world. Which means China controls the lithium market. I don’t care if it’s your iPhone, your ballistic missile, your electric car, the video that’s recording us today. We need lithium and we have to do it.
And this becomes really important, I believe, because we need – we need to – we need to develop – we have tremendous wealth of these natural resources here. There’s a great science project with lignite coal, and all of those different issues. But the reality is, we’ve never been particularly good at mining in the United States. So we need to near-shore this in friend-shore this. If we want more lithium, if we want cobalt, if we want these different rare earth minerals and critical minerals, we’re going to need them both. And we’re going to need a lot of them. We should be talking to not just developing countries, right, but Norway, and all of these people, and figuring out what our best solution is.
The sleeper in this whole thing – and it’s been a sleeper for two decades and we should have been paying more attention – is Australia. I mean, they produce a ton of these things. They do it better than us. And they have very strategic positioning, global and geographical reasons why they’re concerned about China. And yet most of the lithium mined in Australia ends up in China. And it also matters for human rights, right? We need more cobalt. And we can all sit around and say we don’t source our cobalt from the Democratic Republic of the Congo. This is kind of like blood diamonds. If we need more cobalt, we’re driving up the cost of cobalt, which means more 14-year-old slaves are going into a pit, whether we’re buying it from them or not.
So we should be real – but we should be – we should live in reality about this. And we should actually talk about these things in a meaningful way. Because the world’s going to need them, our military is going to need them, and we can’t allow China to control everything on it. And if we can sell somebody natural gas in a developing country cheaper than they’re buying coal from China, well, one, we’ve created a strategic relationship and excluded our biggest strategic adversary on the world stage from it. But here’s the other answer, we’ve lowered emissions just by doing that, just by doing that. By selling them LNG instead of them building a Chinese-backed coal plant, that is better for the world environment than anything else.
Dr. Majkut: I think we have time for one more, if there’s one in the audience. Going once, going twice? Colleagues from online will all be able to ask questions later in today’s program using the question box.
Mr. Armstrong, maybe one last one for me.
Rep. Armstrong: Yeah.
Dr. Majkut: We’re here in Washington. It’s easy to have –
Rep. Armstrong: For ten weeks straight.
Dr. Majkut: Yeah. I’m sorry about that. It’s easy to have this kind of long, big conversation about global issues, energy security, methane emissions, what’s going to happen at COP. How do you translate that down to North Dakota? And then from that perspective, how should our conversation in Washington here try to be more responsive to the conversations going on in the states?
Rep. Armstrong: I think the first thing is we should not do anything that solely makes us feel better because we got a $7,500 discount, or we can deal with some of these issues, and we can talk about how we’re helping save the environment at a cocktail party in D.C. or Manhattan, or wherever. The atmosphere doesn’t have borders. We need to start talking about where our place and our role is. And I think far too often what we end up doing is driving policy that makes American companies less competetive on the e world stage. And we see these – or, we see this need for these things in a place where somebody’s going to fill the need.
You know, I remember when oil is trading at negative-$26 a barrel. And I’ve got friends in my oil and gas industry telling me we should turn around Saudi Arabian flotillas. Like Saudi loaded these tankers up on the come and just sent them to the Gulf. This oil was purchased 18 months, 24 months, 36 months ago by U.S. companies in order to produce what they need. Bakken oil is about 98 percent diesel. We’re pretty proud of our sweet crude. It doesn’t make marine fuel. So but here’s the real answer to that question. And the real answer isn’t even an environmental question.
What is Saudi Arabia’s biggest fear in the world? It’s Iran. It’s been Iran forever, it will be Iran forever. Saudi Arabia is our friend. They’re not always a great friend, but they’re our friend. If we cut them off, how long before China – their phone rings, and it’s Xi? I mean, we have to live in a world that that recognizes the reality that Saudi Arabia produces something the world wants and is going to continue to consume. And if we aren’t going to – if we aren’t going to be a part of that conversation, they will get it somewhere else. It’s more so important, I think, actually in South America. And I think it’s something that both parties have neglected for a very long time.
You know, there’s three players in Venezuela for oil and gas. It’s China, it’s Iran, and it’s Chevron. Somebody’s developing that oil. Who do you I want it to be? I want it to be Chevron. Like it’s – the question isn’t, leave it in the ground or not leave it in the ground. The question is, who’s going to develop it? So we need to look at these things in the reality, we need to figure out how to do it cleaner, we need to figure out how to do it. North Dakota’s hugely impactful because carbon capture is – and 45Q, and that policy is going to be a really important solution for a lot of small towns in my community. And that’s something we actually got done in a bipartisan way.
And then the other question, which I think – and this is more on a generation side, but it’s going to become really important. We talk about all of the above. And it’s really, really important. But I’ve started having a different – what that pie chart looks like becomes really important. Because if you take whatever the utopian view of wind and solar and renewables is, let’s just say it can power the United States for 360 out of 365 days a year. That’s not currently possible – it’s not even close – but let’s assume that’s true. How are we powering the other five days? We’re the greatest country in the history of the world. Are we just turning the lights off for five days? Or are we subsidizing nuclear, natural gas, and coal for 360 days a year so we have it for the five days we really need it?
And by the way, this isn’t an esoteric exercise if you live in North Dakota in February. If the power goes out, people die. I mean, it’s 20 degrees below zero. So grid reliability, grid resiliency, and what the lowest carbon, lowest emission, efficient and resilient grid looks like should always be our goal. But we sometimes forget the affordable and resiliency part of it. Because we can’t drive up energy costs on everybody in the country in order to do this, or we’re going to suffer. And it’s the people in the communities that we don’t want to suffer the most. So we have to talk about what it looks like. I think we forget the economics of this stuff too often when we talk about climate. And if you move too far too fast, it’s going to swing back the other way. Look at Germany.
Dr. Majkut: Right. It’s a good point. You know, I’m actually grateful to hear that because we’ve, at CSIS, started working on power sector issues over the last about a year and a half, exactly for that reason. How do we build a clean, resilient grid that is affordable, and enables transition? And how do we picture it as part of our strategic advantage in the world, right? We have this huge economy. We want to be really productive. But we need to have a clean resilient grid to back it.
Rep. Armstrong: Well, and we don’t – like in North Dakota, in MISO, there’s a certain amount that is wind energy. We don’t have a ton of solar, but we have a ton of wind. But if that gets another 12 percent – if it gets to 12 percent, it better get to 60 percent in a really quick hurry, because once it gets past that 12 percent metric our coal-fired power are no longer economic. They’re just not. So they have to shut down. And then what are you doing with the space they create? And we don’t talk enough about – you can’t send it in a tweet. So we’re not having that conversation. But we should have that conversation, right?
Dr. Majkut: Well, we’ll you back for it.
Rep. Armstrong: Yeah.
Dr. Majkut: Colleagues, we have a really exciting program. If you wouldn’t mind offering gratefulness to Representative Armstrong for coming down here this morning and all the work he does on behalf of the people in North Dakota and the United States. (Applause.) We’re going to cover a lot today, from cows, to control valves, enteric fermentation, flaring. We have a really robust conversation for everyone. Just please give us a few minutes to switch the stage. My colleague Ben Cahill is going to run the next session. And we look forward to seeing you all throughout the day. Thank you very much for being here. And thank you, again, Mr. Armstrong, for joining us this morning.
Rep. Armstrong: Thank you all.