January 2021 

DOMESTIC ENERGY PRODUCERS ALLIANCE January 2021 

DEPA REPORT ON INDUSTRY, LEADERSHIP, LEGISLATION AND ENERGY REGULATION

Where We Are and What Now Written by David Crane, DEPA DC Lobbyist

or the past year we have been discussing the possibil- which initiates a series of regulatory actions to combat ity and implications of change in Washington. On January climate change domestically and elevates climate change 20th those discussions became reality as Joe Biden was as a national security priority, issuance of a Scientific In- sworn-in as the 46th President of the United States. Presi- tegrity Presidential Memorandum which “directs science dent Biden has the added benefit and evidence based decision-making of Democrat control in both the in federal agencies”, issuance of an House and Senate as the Demo- Executive Order re-establishing the crats swept both seats in the Geor- Presidential Council of Advisors on gia Senate run-off. As a result of Science and Technology and announc- a 50-50 tie Vice President Harris ing the data for U.S.-hosted Climate casts the deciding vote making Leaders’ Summit to be held on April Chuck Schumer the Senate Major- 22. ity leader. Beyond the usual line-up of energy Out of the blocks the Biden regulators the Biden Administration is Administration made clear there opening a new front aimed at limiting would be a radical shift in ap- and denying access to capital by those proach to domestic energy pro- “DEPA will be running engaged in domestic energy produc- duction. On day one of his presi- hard to bring the facts to tion. This push on divestment from dency, citing a “cry for survival fossil fuel will be lead by Biden Ad- comes from planet itself, a cry bear on the debate in ministration financial services regula- that can’t be any more desperate tors, economic advisors and fueled by or any more clear” President Washington and to keep environmental activists, large invest- Biden rejoined America to the the promise of American ments funds like BlackRock and State Paris Climate Accord, suspended Street, along with government guaran- the Keystone XL Pipeline, and energy independence.” teed money center banks like Wells ordered federal agencies to con- Fargo, JP Morgan Chase and Bank of duct a top down review and re- America. write of Trump administration environmental rules. The Interior Department quickly announced a snap-back to the While much of the Biden Administration anti-domestic Obama Administration ban on drilling on federal lands. energy agenda can be accomplished through regulatory fiat some items, such as eliminating critical tax provisions In addition, the new Administration announced that like IDCs and depletion allowance, will require legisla- January 27 will be “climate” day, highlighting climate tion. change as a top priority. Actions include issuing an “Omnibus Domestic and International Climate EO” From a legislative perspective any tax changes would certainly come as part of the budget reconciliation pro- prices hitting the most vulnerable Americans who have cess, which requires a simple majority in both Chambers. already been decimated by the COVID shutdown. Just as With the announcement by Democrat Senators Joe with the Trump Administration a top priority for the Biden Manchin (WV) and Kyrsten Sinema (AZ) that neither White House and congress is reshoring microprocessor, would support elimination of the filibuster any ordinary pharmaceutical and other critical manufacturing. Restor- legislation aimed at undermining domestic energy producing the US manufacturing base will literally impossible tion still require 60 votes to pass the without US domestic energy – Senate. In either case, moderates in particularly when China is im- both parties and both chambers will mune to the Paris Accord for the hold the keys to preserving and next decade and India isn’t even building on the success of energy a signatory. While progress independence. Along these lines a might be a-bit slower with a primary goal of DEPA in 2021 will change in power in Washington, be building a base of support among unlike proponents of the Green moderate democrats in Congress New Deal, America’s domestic based on a message of job creation energy producers have the facts and economic growth. and history on our side. DEPA will be running hard to bring the Few things hit working class facts to bear on the debate in Americans harder than high energy Washington and to keep the prices. DEPA will be making the promise of American energy in- argument on the highly regressive dependence. Simply put we will nature of the Green New Deal not be taking our foot off the gas. which would result in higher energy

Board of Director’s Meeting Friday, April 9, 11:00 am CDT

DEPA believes in seeking common ground, through common sense solutions, to the challenges facing our industry. Our bipartisan Executive Board of Directors DEPA Staff approach provides a Harold Hamm Dan Boren Peter Regan uniquely powerful voice Chairman Stephanie Canales Congressional and Alliance Liaison for our members at the Jerry Simmons Diana Chance Ed Cross David Crane state and national level. President/CEO Lobbyist Ron Ness Cynthia Simonds Don Montgomery John Schmitz Vice President Marketing and Ben Shepperd Communications Dir. Our work is critical. Berry Mullennix Brook Simmons Sarah Reece Secretary/Treasurer Administrative Services Your support is vital. Bill Stevens Manager Rock Zierman PO Box 33190  Tulsa, OK 74153  405-669-6646  [email protected]

DTwentyAY OTwentyNE- One46

Immediately following his inaugu- The Interior Department has issued ration, President Joe Biden signed a Secretarial Order that temporarily Executive Orders, as promised, that elevates review of relevant agency related to climate, jobs, and environ- decisions, including final agency ac- mental justice, while reversing the tions, regulatory actions, and energy previous administration’s policies. development. During the 60-day win- One of President Biden’s Execu- dow that the Order may be in effect, tive Orders requires the Interior De- decision-making over these matters partment to conduct a review of the will be reserved for Department lead- monument boundaries and conditions ership for the purposes of reviewing of the Grand Staircase-Escalante, questions of fact, law, and policy they Bears Ears, Northeast Canyons, and raise. Seamounts Marine National Monu- The Order does not impact existing ments in southern Utah. The order ongoing operations under valid leases directs Interior, in consultation with and does not preclude the issuance of other agencies and Tribal govern- leases, permits and other authoriza- ments, to determine whether restora- tions by those specified. In addition, tion of the monument boundaries and any actions necessary in the event of conditions would be appropriate. an incident that might pose a threat to The Executive Order also places a human health, welfare, or safety will temporary moratorium on activities continue. related to the implementation of the The President also took swift ac- Coastal Plain Oil and Gas Leasing tion to begin an urgent, robust, and Program in the Arctic National Wild- professional response to the growing life Refuge pending legal and policy public health and economic crisis review. Pursuant to section 12(a) of caused by the coronavirus outbreak. the Outer Continental Shelf Lands An additional Executive Order will Act, the Executive Order also re- help slow the spread of the virus by stores the original withdrawal of cer- asking all of us to do our part and re- tain offshore areas in Arctic waters quiring masks and physical distanc- and the Bering Sea from oil and gas ing. drilling. The Interior Department will have The Interior Department will im- additional department-specific guid- mediately begin to implement the ance in the days and weeks to come. orders, and make recommendations to the President as directed.

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 3

A Chat About The Current political state of Domestic Energy with Congressman Henry Cuellar and DEPA CEO/President Jerry Simmons Recorded January 22, 2021

Our 2020 webinars were a great success. We have decided to expand our electronic content with shorter more casual interviews without live attendees. This Don’t Miss Out! will allow us to be much more flexible with the inter- view schedule, which means getting on additional calendars. Connect with Us. So in 2021, between live webinars with energy leaders, DEPA will be recording more casual conver- YouTube: @depausa1 sations with various notable insiders to be posted to our website, social media, and YouTube channel. Facebook: @DEPAlliance You will be able to watch these at your leisure. Some of these conversations will be about the Instagram:@DomesticEnergyProducerAlliance most current events and immediate reactions. Some will be on topics that continue to be slowly evolving Twitter: @DEPAUSA issues. We hope you enjoy these videos and feel free to submit guest and topic suggestions to us at Linked-In: Domestic Energy Producers Alliance [email protected]. Why Join DEPA? We are talking to leadership and pushing your issues forward.

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February 10, 2021 Member Webinar 11:00 Am CST

Find out what DEPA Chairman Harold Hamm has to say about the current state of domestic energy.

Rick Muncrief, Devon Energy President and CEO, will join us to discuss the Devon/WPX merger, and other insights from his vantage point.

Registration is open at www.depausa.org/webinar-events Thank you to our Technology Sponsor WWW.PIVOTTS.COM

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 5

An Assault on Domestic Energy Doesn’t Equal Environmental Justice

You may not have heard, but people are freezing These actions are an all-out assault on American around the world -RIGHT NOW - due to frigid tem- energy independence. peratures and a lack of affordable, reliable energy – Look at the potential impact the federal moratori- like the natural gas that heats most U.S. homes. Not um may have on just one state. According to the just direct gas-fired heat, but according to the Energy New Mexico Oil and Gas Association, the oil and Information Administration, natural gas is the #1 gas industry supports more than 134,000 jobs and source for generating electricity in the U.S. What is $16.6 billion in annual economic activity. Taxes and the Biden/Harris Administration’s response? It looks royalties from the industry account for 33% of the like they got together and said, how can we make this State of New Mexico’s annual budget, including al- worse and be sure that every American has the op- most $1.4 billion for public schools. portunity to experience a lack of or cost-prohibitive energy. The Paris agreement will impose costs and emis- sion reductions in the U.S. and other western coun- And who will suffer first and the most? Our low tries, but the Chinese aren’t required to modify any- income and disadvantaged communities. Just think thing until 2030. Want to bet what China will do in for a moment, who is hit hardest with a rise in gaso- 2030 if they decide coal is the cheapest way to fuel line prices or increased cost of heating and air condi- their growing need for power in their manufacturing tioning and other energy? The poorest among us! industry? My money says it will be to keep building In the first couple of days in office, Biden/Harris coal plants. In the meantime, we have lost more of have reentered the Paris climate agreement, imposed our critical manufacturing and the reshoring of U.S. a moratorium on oil and gas leasing on federal lands, manufacturing jobs. and canceled the Keystone XL pipeline.

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Oil & Gas Statistics

• Colorado has one of the loudest anti-fossil fuel voices—BUT ALSO

• The Colorado State Land Board owns, stewards and leases 4 million acres of mineral estate acres

• Mineral leases have earned $1.7 billion for schools since 2008

• Oil and gas employs 33,000 Colorado residents

“Nearly 4.8 million low -income American households were unable to pay an energy bill last year, a problem that intensified during the early months of the COVID-19 pandemic. Low-income Black and Hispanic households were especially vulnerable to energy insecurity, as were households with small children or members who relied on electronic medical devices, and those with inefficient housing conditions.” - Indiana University Study

Six states accounted for more than The natural gas half of US jet fuel consumption in 2019 industry operates three million miles of distribution and transmission pipelines that stretch across the country. In 2019, this natural gas transportation network delivered about 28.3 trillion cubic feet (Tcf) of natural gas to about 76.9 million customers. Source: EIA

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 7

In Case You Missed It Some Positive Political News

Secretary of Energy Dan Brouillette recently partici- pated in a historic Abraham Accords Energy Ministeri- al with H.E. Minister Suhail al Mazrouei of the UAE, Israel's Minister of Energy Dr. Yuvaal Steinitz, and H.E. Shaikh Mohammed bin Ahmed Al Khalifa of Bahrain. This was the first Ministerial to convene Energy Ministers from the UAE, Israel, and Bahrain under the new peace agreement set forth by the 2020 Abraham Ac-

“Energy can be at the forefront of greater stability and peace. So as peace and prosperity spread, the region can become a nucleus for energy innovation and inspire new technology and efficient deployment of existing resources to meet the energy needs of the region.” - Dan Brouillette 8 Domestic Energy Producers Alliance

DOE Promoting

American LNG On December 31, DOE extended the terms of five long- term liquefied natural gas (LNG) export authorizations through 2050. This action follow several LNG export term extensions issued since October pursuant to an export term policy statement DOE finalized in July. “The Trump Administration and DOE have delivered on our commitment to ensure that U.S. LNG holds a prominent place in the global energy market,” said Secretary Brouillette. “The 2050 policy and subsequent extended authorizations lock in the long- term benefits of U.S. LNG exports and provide yet another way to support the success of U.S. LNG exporters abroad.” Additionally, on January 8, DOE announced the issuance of a policy statement that removes the requirement for long-term LNG export authorization holders to seek separate short-term authorizations to export the same volumes approved for long-term exports. By consolidating this authority in a single authorization without any increase in total approved export volumes, DOE believes this action will streamline its regulatory process. “We are increasingly seeing more sales of LNG on the spot market, and this action by DOE is allowing more flex- ibility for U.S. LNG exporters. With this policy, U.S. LNG exporters can let the market—not our regulatory process— Proud supporter of DEPA. determine which LNG cargos will be exported under long- Thank you for what you do for our country. term or short-term agreements on the spot market,” said Deputy Secretary of Energy Mark W. Menezes. “We want to have a sensible regulatory system that takes current market realities into account, and this policy statement does just that,” said Acting Under Secretary of Energy and Assistant Secretary for Fossil Energy Steven Winberg. Under the terms of this policy statement and blanket Let us help you diversify. order amending current long-term LNG export orders, long -term LNG export authorization holders will no longer need to apply for separate authorization to export the same volumes on a short-term basis. This policy statement and WWW.OMEGACAPITAL.COM concurrent blanket order also provide for LNG exporters’ pre-commercial or commissioning cargos to be authorized 918-293-3925 under their long-term export orders on a non-additive basis.

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 9

M EMBER S POTLIGHT Roger Kelley

Rusty Shaw DEPA Regulatory Committee Co-Chair

As Environmental Compliance Manager for Den- bury Resources Inc, Rusty Shaw manages all as- pects of HSE permitting, compliance, and reporting including air, water, waste, wetland permits, and DEPA Regulatory Committee Co-Chair NEPA compliance and reporting for all oil & gas operations including CO2 Pipeline infrastructure. Roger Kelley is the Corporate Director of Regulato- Roger started his career with Denbury Resources in ry Affairs at Continental Resources where he pro- 2008 as HSE Coordinator. May 2010 when he ac- vides advice and counsel on state and federal regula- cepted a role as HSE Compliance Manager. tory and legislative matters.

His early career includes employment with the Texas Starting in February 2001, Roger held various posi- Air Control Board, Sun Exploration and Production tions at Grand Gulf Nuclear Power Station in Port Company, and Kerr McGee Corporation. Gibson, MS. His work at Grand Gulf included Roger attended University of Texas at Austin where Chemistry Technician, Environmental Specialist, he received a Bachelors in Biology and Chemical and HP/Chemistry Specialist. Engineering. He then went on to The University of Mr. Shaw received a Bachelor of Science in Biology Houston for a Masters in Environmental Manage- from Millsaps College in December 1999. ment

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2021 Regulatory Meeting Calendar March 18, June 17, September 16, December 16 2:00pm CST Via Video Conference

Comments on Regulation Need a High Priority Stay Engaged. Stay Active. Stay Vocal.

The new administration has been clear about its en- tions.gov offers useful tips for those who haven’t been ergy agenda. The cabinet nominees and department involved in this process. appointees' rich conservationist/activist backgrounds • A comment can express simple support or dissent make the direction of new regulation easy to predict. It for a regulatory action. However, a constructive, is critical that companies and trade groups get serious information-rich comment that clearly communi- about keeping track of opportunities to comment on cates and supports its claims is more likely to have regulatory changes. an impact on regulatory decision making. DEPA regularly comments on issues and wel- • Comment periods close at 11:59 eastern time on comes companies or organizations that would like to the date comments are due - begin work well be- sign on to our documents. However, it is generally better to issue a statement of your own so “the fore the deadline. voice” of support or dissent is made louder. If you • Attempt to fully understand each issue; if you have would like to be alerted by the DEPA office when an questions or do not understand a part of the regula- opportunity to comment is announced, email DEPA tory document, you may ask for help from the Director of Marketing and Communications, Cyn- agency contact listed in the document. thia Simonds at [email protected], and you Note: Although the agency contact can answer will be added to a list for email updates. your questions about the document’s meaning, of- If your company has never submitted comments be- ficial comments must be submitted through the fore, there is no time like the present to learn! Regula- comment form.

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 11

• Clearly identify the issues within the regulatory action al experience in your comment, as may be appropri- on which you are commenting. If you are commenting ate. By supporting your arguments well you are more on a particular word, phrase or sentence, provide the likely to influence the agency decision making. page number, column, and paragraph citation from the • Consider including examples of how the proposed federal register document. rule would impact you negatively or positively. a. If you choose to comment on the comments of others, identify such comments using their • Comments on the economic effects of rules that in- comment ID’s before you respond to them. clude quantitative and qualitative data are especially helpful. • If a rule raises many issues, do not feel obligated to comment on every one – select those issues that con- • Include the pros and cons and trade-offs of your posi- cern and affect you the tion and explain them. Your most and/or you un- position could consider other derstand the best. points of view, and respond to them with facts and sound • Agencies often ask reasoning. specific questions or raise issues in rule- • If you are uploading making proposals on more than one attachment to subjects where they the comment web form, it is are actively looking recommend that you use the for more information. following file titles: While the agency will Attachment1_ still accept comments Attachment2_ on any part of the pro- Attachment3_ posed regulation, This standardized file naming please keep these convention will help agency questions and issues in reviewers distinguish your mind while formulating your comment. submitted attachments and aid in the comment review process. • Although agencies receive and appreciate all comments, constructive comments (either positive or neg- • Keep a copy of your comment in a separate file – this ative) are the most likely to have an influence. practice helps ensure that you will not lose your comment if you have a problem submitting it using the • If you disagree with a proposed action, suggest an Regulations.gov web form. alternative (including not regulating at all) and include an explanation and/or analysis of how the alternative might meet the same objective or be more ef- It is important to remember that while many organiza- fective. tions encourage their members to submit a form letter, this • The comment process is not a vote. The government serves as a barometer of opposition or support for pro- is attempting to formulate the best policy, so when posed rulemaking which can help guide important policies crafting a comment it is important that you adequately A single, well-supported comment may carry more weight explain the reasoning behind your position. than a thousand form letters.

• Identify credentials and experience that may distin- The Office of Information and Regulatory Affairs, guish your comments from others. If you are com- www.reginfo.gov offers great detailed information about menting in an area in which you have relevant person- the regulatory process. The top graphic on page 11 is ac- al or professional experience (i.e., scientist, attorney, tually an interactive map to help stakeholders understand fisherman, businessman, etc.) say so. the process.

• Agency reviewers look for sound science and reason- The bottom graphic is the OIRA home page which is a ing in the comments they receive. When possible, wealth of information about what is happening currently support your comment with substantive data, facts, in all the regulatory actions. Investigate these tools and and/or expert opinions. You may also provide person- join us in 2021 to be engaged, active and vocal in support of our industry and communities.

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DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 13

Fair Access to Financial Services 2021 Starts with the Office of the Comptroller of the Currency Proposed Rulemaking Request for Comments.

“On at least two occasions, the OCC has issued guid- In response to this letter, the OCC requested information ance to specifically address reports of banks refusing to from several large banks to better understand their decision provide access to financial services to entire industry -making. The responses received indicate that, over the categories engaged in lawful business activities without course of 2019 and 2020, these banks had decided to cease regard to the risk factors of the individual customers in providing financial services to one or more major energy these industry categories. ...These banks are often re- industry categories, including coal mining, coal-fired elec- acting to pressure from advocates from across the polit- tricity generation, and/or oil exploration in the Arctic re- ical spectrum whose policy objectives are served when gion. The terminated services were not limited to lending, banks deny certain categories of customers access to where risk factors might justify not serving a particular financial services.” client (e.g., when a bank lacked the expertise to evaluate the collateral value of mineral rights in a particular region “In June 2020, the Alaska Congressional delegation or because of a bank's concern about commodity price vol- sent a letter to the OCC discussing decisions by several atility). Instead, certain banks indicated that they were also of the nation's largest banks to stop lending to new oil terminating advisory and other services that are unconnect- and gas projects in the Arctic. The letter noted the crit- ed to credit or operational risk. In several instances, the ical importance of the energy sector to the U.S. econo- banks indicated that they intend only to make exceptions my, as well as the jobs, state revenue, and diplomatic when benchmarks unrelated to financial risk are met, such and national security benefits as whether the country in which attributable to the oil and gas a project is located has commit- industries targeted by the banks' ted to international climate actions. In the letter, the authors agreements and whether the pro- described as unfair the effects of ject controls carbon emissions suf- this decreased lending on Alaska ficiently. Native communities on the state's North Slope, as well as on the Neither the OCC nor banks are population of the state as a well-equipped to balance whole. The letter also stated risks unrelated to financial that, although the authors be- exposures and the operations lieved that the banks' ra- required to deliver financial tionale was political in nature, services. For example, cli- the banks had ostensibly re- mate change is a real risk, lied on claims of reputation but so is the risk of foreign risk to justify their decisions. wars caused in part by U.S.

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Fair Access to Financial Services Cont’d energy dependence and the risk of blackouts caused by ener- Bank Policy Institute gy shortages. Furthermore, balancing these risks is the pur- view of Congress and Federal energy and environmental Calls on OCC regulators. It is one thing for a bank not to lend to oil compa- to Withdraw nies because it lacks the expertise to value or manage the associated collateral rights; it is another for a bank to make ‘Fair Access’ Proposal that decision because it believes the United States should abide by the standards set in an international climate treaty. The Bank Policy Institute (BPI) called on the Of- Organizations involved in politically controversial but lawful fice of the Comptroller of the Currency in businesses—whether family planning organizations, energy a January 4, 2021 comment letter to withdraw its companies, or otherwise—are entitled to fair access to finan- “fair access” proposal, which would micromanage cial services under the law. In order to ensure that banks banks’ business decisions in an unprecedented provide customers with fair access to financial services, and way. consistent with longstanding OCC policy, a bank's decision “The OCC’s proposed not to serve a particular custom- rulemaking on fair access er must be based on an individ- to financial services ual risk management decision would create a unique, far about that individual customer, -reaching precedent in not on the fact that the customer instructing national operates in an industry subject banks, under threat of to a broad categorical exclusion enforcement action, to created by the bank.” make or not make certain loans and provide other To read the full financial services,” BPI Supplementary Information President and CEO Greg provided by the OCC visit Baer said. “This would https://beta.regulations.gov/ represent significant de- document/OCC-2020-0042- parture from how banks 0001 currently operate their businesses and the OCC currently supervises national banks.” The comments submitted by the BPI were a lengthy 27 pages. The conclusion summery The proposal would forbid banks from using sub- reads “As outlined in this letter, the OCC’s proposed jective judgment and qualitative considerations rulemaking on fair access to financial services would when they decide whether to provide a financial create a unique, far-reaching precedent in instructing service – completely inconsistent from how the national banks, under threat of enforcement action, to OCC has expected banks to manage risk. It rests on a misunderstanding of the OCC’s legal authori- make or not make certain loans and provide other ty and unfounded assumptions about the market financial services. Under the Proposal, national power of large banks in the United States. The banks could no longer consider the range of factors OCC claims to be shielding customers from politi- they have traditionally taken into account, both in the cal bias, but it is just telling banks and their boards context of applying their own sound risk management that they cannot be trusted to make sound business practices and meeting the OCC’s supervisory expec- decisions. tations, when deciding whether and how to provide a customer with financial services. This would repre- About Bank Policy Institute. sent significant departure from how banks currently The Bank Policy Institute (BPI) is a nonpartisan operate their businesses and the OCC currently su- public policy, research and advocacy group, repre- pervises national banks. Given the critical legal, senting the nation’s leading banks and their cus- practical and procedural deficiencies as discussed tomers. Our members include universal banks, above and their serious consequences, it is only ap- regional banks and the major foreign banks doing propriate that the Proposal be withdrawn.” business in the United States. Collectively, they The full document can be read at https://bpi.com/wp- employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are content/uploads/2021/01/BPI-Fair-Access-to-Financial- an engine for financial innovation and economic Services-2021.01.04.pdf growth.

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 15

DEPA Comments Fair Access to Financial Services Proposed Rule

Submitted January 5, 2021 to the Chief Counsel’s Office of the Office of the comptroller of the Currency

The Domestic Energy Producers Alliance (DEPA) is of the energy industry, devoted to the survival of pleased to submit comments on the Office of the U.S. domestic crude oil and natural gas exploration Comptroller of the Currency (OCC) Fair Access to and production. DEPA’s members are leaders in de- Financial Services Proposed Rule (Rule). DEPA rec- veloping and applying the innovative and advanced ognizes the time and energy put into this rulemaking technologies that allow our nation to add reasonably and appreciates the efforts of the OCC staff in draft- priced domestic energy reserves in environmentally ing this proposed Rule. As the OCC stated in the pro- responsible ways. DEPA is always concerned that all posed rulemaking . . . “individuals are entitled to be US energy, including oil and gas, is produced, han- treated fairly by national banks and federal savings dled, and transported in such way as to present no associations (banks). That principle is reinforced by significant threat to human health and the environ- specific laws such as the Equal Credit Opportunity ment. DEPA feels that all forms of energy should be Act, Fair Housing Act, and Community Reinvest- produced in a market-based economy on an equal, ment Act, among others. In another respect, the Dodd fair, and balanced basis. DEPA and its investors are -Frank Act’s articulation of “fair access” as a distinct concerned that all commerce be conducted so as to concept implies a right of individual bank customers, ensure that all products, goods, and services that de- whether natural persons or organizations, to have ac- pend upon energy for their production manufacture cess to financial services based on their individual and delivery are available in the most economical characteristics and not on their membership in a par- way to all Americans, for such is the foundation for ticular category of customers.” the success of productivity in the United States and competition abroad. DEPA fully supports the advancement of Executive Order 13777 “Enhancing DEPA is a unique organization with a grassroots ap- the Regulatory Reform Agenda” which established a proach to domestic onshore energy advocacy and federal policy “to alleviate unnecessary regulatory education. We are an alliance of producers, royalty burdens” on the American people. DEPA under- owners, and oilfield service companies as well as stands that OCC is interested in reviewing regula- state and national independent oil and gas associations that: tions representing the small businessmen and women

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other person” have the power to adversely affect the financial health of a large segment of that industry. Banks are required to make lending decisions based on individual risk rather than perceived risks or opinions of an entire industry which stem from the social and/or political beliefs of the principals of that insti- I. Eliminate jobs, or inhibit job creation; tution and are not founded in either science or the law. This new Rule supports this requirement. II. Are outdated, unnecessary, or ineffective;

III. Impose costs that exceed benefits; In our industry, certain lending institutions have set IV. Create a serious inconsistency or otherwise restrictions on customers that are involved in fossil interfere with regulatory reform initiatives fuel exploration and production. The new proposed and policies; OCC Rule is in keeping with a recent statement from V. Are inconsistent with the requirements of the FDIC in which they related that “the exercise of section 515 of the Treasury and General FDIC responsibilities rests on laws and regulations Government Appropriates Act, 2001 (44 and will not be based on personal beliefs or political U.S.C. 3516 note), or the guidance issued motivations”. The FDIC further stated that “the agen- pursuant to that provision in particular those cy (sic - FDIC), encourages institutions to take a risk regulations that rely in whole or in part on -based approach in assessing individual customer data, information, or methods that are not relationships rather than declining to provide banking publicly available or that are insufficiently services to entire categories of customers, as individ- transparent to meet the standard of repro- ual customers within broader customer categories ducebility; or present varying degrees of risk”. VI. Derive from or implement Executive Orders or other Presidential directives that have been The OCC has chosen to reserve this rule for large lend- subsequently rescinded or substantially ing institutions, defined as “covered banks” which rep- modified. resent a large market share and therefore have the power to affect large portions of any industry market. DE- PA supports this definition and does not recommend DEPA supports the OCC -Fair Access to Financial any limiting market share percentages be added to the Services Rule as proposed in general and offers spe- definition. In fact, DEPA does not believe that any cific comments regarding the Rule. lending institutions should be allowed to limit services The practice of lending institutions denying equal to any individual or industry as a whole, based on socio -political factors. In their January 2015 Statement on access to financial services to a particular industry Providing Banking Services the FDIC stated based on perceived environmental, social and govern- “Individual customers within broader customer catego- ance criteria borders on violation of Federal anti-trust ries present varying degrees of risk. Accordingly, the law. Large banks that fit the definition of a “covered FDIC encourages institutions to take a risk-based ap- bank” under this rule and as defined in 12 U.S.C. proach in assessing individual customer relationships 1813(q)(1) that have the ability to “(A) Raise the rather than declining to provide banking services to en- price a person has to pay to obtain an offered finan- tire categories of customers, without regard to the risks cial service from the bank or from a competitor; or presented by an individual customer or the financial (B) Significantly impede a person, or a person’s busi- institution’s ability to manage the risk.” § 55.1 (b)(1)- ness activities, in favor of or to the advantage of an- (4) of this proposed rule supports this policy.

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 17

(b) To provide fair access to financial services, bank’s legal responsibility to provide fair access to a covered bank shall: financial services. (1) Make each financial service it offers avail- Also, as the OCC pointed out in the proposed rule- able to all persons in the geographic market making . . . “Neither the OCC nor banks are well- served by the covered bank on proportionally equipped to balance risks unrelated to financial expo- equal terms; sures and the operations required to deliver financial (2) Not deny any person a financial service the services.” . . . “It is one thing for a bank not to lend bank offers except to the extent justified by to oil companies because it lacks the expertise to val- such person’s quantified and documented fail- ue or manage the associated collateral rights; it is ure to meet quantitative, impartial risk-based another for a bank to make that decision because it standards established in advance by the cov- believes the United States should abide by the stand- ered bank; ards set in an international climate treaty. Organiza- tions involved in politically controversial but lawful (3) Not deny any person a financial service the businesses – whether family planning organizations, bank offers when the effect of the denial is to energy companies, or otherwise – are entitled to fair prevent, limit, or otherwise disadvantage the access to financial services under the law.” We could person: not agree more! How can any person or entity in this (i) From entering or competing in a market or country say they are opposed to everyone being fair- business segment; or ly and equally treated by banks and financial institutions? (ii) In such a way that benefits another person or business activity in which the covered bank DEPA supports the Office of the Comptroller of the has a financial interest; and Currency in promulgating this Fair Access to Finan- cial Services Proposed Rule. The actions of lending (4) Not deny, in coordination with others, any institutions to boycott fossil fuel companies and oth- person a financial service the bank offers. ers based on socio-political beliefs and bias has created the need to take the policy of the FDIC and When a single lending intuition or a group of institu- commit it to rule of law. Thank you again for this tions fitting the description of a “covered bank” deny opportunity to provide these comments. Please feel customers in a single industry group access to finan- free to contact us with any questions. cial services, based on personal beliefs and opinions, Sincerely, assessments ungrounded in quantitative, risk-based THE DOMESTIC ENERGY analysis, and assessments premised on assumptions PRODUCERS ALLIANCE about future legal or political changes, they can affect the competitive ability of individual companies Jerry R. Simmons as well as the viability of that entire industry in that President/CEO institution’s geographical area of operation. Bank actions based on these criteria are inconsistent with a

18 Domestic Energy Producers Alliance

OCC Finalizes Rule Requiring Large Banks to Provide Fair Access to Bank Services, Capital, and Credit January 14, 2021 Press Release from the OCC

WASHINGTON—The Office of the Comptroller of the Cur- stitutions and other persons subject to its jurisdiction." The rency (OCC) today released its finalized rule to ensure fair statute expanded the OCC's mission to include fair access access to banking services provided by large national banks, separately from fair treatment following the last financial federal savings associations, and federal branches and agen- crisis during which the government had provided substantial cies of foreign bank organizations. public resources to support the banking system.

The rule codifies more than a decade of OCC guid- The rule applies to the largest banks with more than $100 ance stating that banks should conduct risk assess- billion in assets that may exert significant pricing power or influence over sectors of the national economy. Under the ment of individual customers, rather than make rule, banks still determine their product lines and geographic broad-based decisions affecting whole categories markets and are free to make legitimate business decisions or classes of customers, when provisioning access about what and whom to serve. The rule requires covered to services, capital, and credit. banks to make those products and services they choose to offer available to all customers in the communities they "When a large bank decides to cut off access to charities or serve, based on consideration of quantitative, impartial, risk- even embassies serving dangerous parts of the world or com- based standards established by the bank. Under the rule, a panies conducting legal businesses in the United States that covered bank's decision to deny services based on such ob- support local jobs and the national economy, they need to jective assessment would not violate the bank's obligation to show their work and the legitimate business reasons for doing provide fair access. However, a covered bank's decision not so," said Acting Comptroller of the Currency Brian P. to offer a specific kind of financial product or service or not Brooks. "As Comptrollers and staff in previous administra- to compete in a geographic market is unaffected. tions have made clear in speeches, guidance, and testimony, banks should not terminate services to entire categories of In finalizing the rule, the agency considered more than customers without conducting individual risk as- 35,000 stakeholder comments and suggestions. As a result, sessments. It is inconsistent with basic principles the final rule excludes section 55.1(b)(3) of the of prudent risk management to make decisions proposed rule, which would have required that a based solely on conclusory or categorical asser- covered bank not deny any person a financial ser- tions of risk without actual analysis. vice the bank offers when the effect of the denial is

Moreover, elected officials should determine what to prevent, limit, or otherwise disadvantage the is legal and illegal in our country." person: (1) from entering or competing in a market or business segment; or (2) in such a way that ben- The rule implements lan- efits another person or business activity in which guage included in Title III the covered bank has a financial interest. The agency of the Dodd–Frank Wall Street Reform and Con- determined that the requirement would have resulted in regu- sumer Protection latory burden without contributing to the primary objective Act of 2010, of the rule. Based on that analysis, the agency eliminated that which requirement to focus the rule on the fairness of the covered charged the OCC with banks' decision making processes and prudent risk manage- "assuring the safety and ment principles, as well as to facilitate the OCC's administra- soundness of, and compli- tion of this rule. The remainder of the rule is substantially ance with laws and reg- unchanged from the proposal. ulations, fair access to financial services, and fair The rule takes effect April 1, 2021. treatment of customers by, the in-

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 19

A Look at The Biden Cabinet Nominations Most Meaningful to Oil and Gas

“We know that climate change can only Secretary be solved with participation of every of the department and every community, coming together in a common purpose, Interior this country can and will tackle this Deb Haaland challenge.” Formerly: -Deb Haaland US Representative

Haaland is currently a US Representative from New nor of the state in 2014. Mexico’s 1st congressional district since 2019. The If confirmed she will be directly involved in carrying first district includes Albuquerque and most of the sub- out Biden’s energy and climate agenda, including lead- urbs that surround it. ing the effort to roll back executive orders that opened In Congress, Haaland served on the House Natural Re- mining, logging, drilling and construction. development sources Committee, chairing the subcommittee on Na- on federal lands during Trump administration. tional Parks, Forests and Public Lands, and has been a Varshini Prakash, co-founder and executive director of forceful advocate for climate change prevention and Sunrise Movement Tweeted "Haaland has been a sup- environmental preservation. porter of a just economy powered by clean energy for her entire career. Now she'll have the power & position “Our Interior Department will fight to address climate needed to further our fight for climate justice." change and environmental injustice,” she said during her speech following Biden’s announcement of her Haaland became the first chairwoman elected to the nomination. “We will empower communities who have Laguna Development Corporation Board of Directors, a shouldered the burdens of environmental negligence. Laguna-owned business created to strengthen the La- And we will ensure that our decisions will once again guna Community and its economy. As chairwoman, she be driven by science. oversaw business operations for the second largest tribal gaming enterprise in New Mexico. She served as the Prior to being elected to the House of Representatives, tribal administrator for the San Felipe Pueblo from Jan- Haaland served as the chair of the Democratic Party of uary 2013 to November 2015 New Mexico. Before that, she ran for lieutenant gover-

20 Domestic Energy Producers Alliance

Environmental Secretary Protection of Energy Agency Jennifer Granholm Administrator Formerly: Michigan Governor Michael S. Regan 2002-2010 Formerly: Secretary of North Carolina’s Department of Environmental Quality While Governor, Granholm invested heavily in renewable energy and has been a vocal advocate for its adoption nation- While generally favored by environmental organizations, wide since leaving office. In early November 2020 she Regan has clashed with the environmental movement. In penned a opinion piece in The Detroit News titled “Low- 2018, he approved permits for the Atlantic Coast Pipeline, Carbon Economic Recovery a Better Path for Michigan” though the project was ultimately cancelled. Granholm is a self proclaimed “fierce Democrat”. She told If confirmed, Regan joins the Biden Administration with George Stephanopoulos in late December that she felt there over 20 years of professional experience focused on environ- needed to be a “hair on fire” movement forward to add wind mental advocacy and regulation. Most recently, he served as turbines and solar panels to federal lands and she looks for- the Associate Vice President of U.S. Climate and Energy and ward to working with the “whole of government” to make Southeast Regional Director of the Environmental Defense sure this happens. “We have an all in strategy and we’re real Fund. He led the Environmental Defense Fund’s efforts to excited to implement” reduce the impacts of climate change and air quality pollution.

Prior to that, Regan worked with the Environmental Protec- tion Agency’s air quality and energy programs for the Clin- Department ton and Bush administrations. Before leaving the agency, Regan served as a national program manager responsible for of Justice designing programs aimed at reducing pollution, and market- Attorney based solutions to improve energy efficiency, air quality and climate-related challenges. General

Regan has served on several boards and commissions fo- Merrick Garland cused on the environment. They include the UNC School of Formerly: Law Center for Climate, Energy, Environment and Econom- Federal Appeals Court ics, Green 2.0, N.C. Commission on Global Climate Change, Judge the N.C. Energy Policy Council and the Executive Steering Committee of Envision Charlotte. Judge Garland has deep roots inside the Justice Department. He is best known for his work into the investigation of for- He has a BS in Earth and Environmental Science and a Mas- mer D.C. Mayor Marion Berry’s cocaine possession scandal. ter of Public Administration from George Washington Uni- He also was involved in high profile domestic terrorism cas- versity. es, including the Unabomber, the Olympics bombing and the “We will move with a sense of urgency on climate change Oklahoma City bombing. […] and enact an environmental justice framework that em- Garland was considered twice to fill vacated seats on powers people in all communities.” the United States Supreme Court in 2009 and 2010 before finally being nominated in 2016 by Presi- dent Barack Obama for the seat left vacant by the death of conservative Associate Justice Antonin Scalia A native of the Chicago area, Garland attended Harvard University for his undergraduate and legal education.

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 21

Secretary of State Antony Blinken Formerly: Deputy Secretary of State

Veteran foreign policy advisor Tony Blinken is considered a moderate who has already spent considera- ble time on Capitol Hill as the Senate Foreign Rela- tions Committee’s Democratic staff director. Dur- ing the Obama administration he was deputy national security adviser and deputy secretary of state. In 2017, Blinken co-founded WestExec Advisors, a political strategy advising firm, with other former In September 2016 Obama administration officials offering geopolitical while he was deputy risk analysis, market entry & expansion support, secretary of state international economics and regulatory issue assess- Antony Blinken ment, strategic advice and more. appeared on Sesame Blinken is a musician. He has two love songs post- Street to talk with ed on Spotify, “Lip Service” and “Patience. show regular Grover A pun enthusiast, Blinken writes under the name about tolerance for “Ablinken”. (To get the full affect you have to say the name out loud.) refugees.

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22 Domestic Energy Producers Alliance

The Biden Climate Team

Special Presidential Chief of Staff, White House Envoy for Climate Office of Domestic Climate Policy John Kerry Veteran Politician Maggie Thomas Political Director In 2019 Kerry was a key figure in the creation Evergreen Action of World War Zero, an or- During the 2020 Demo- ganization dedicated to cratic presidential primary, fighting climate change. Maggie served as climate The main goal of the coali- policy advisor to Senator tion is to hold more than ten Elizabeth Warren and dep- million “climate conversa- uty climate director to tions” in 2020 with citizens across the political spectrum. Governor Jay Inslee, whose Coalition participants include, Leonardo DiCaprio, Ashton campaign climate plans Kutcher, Al Sharpton, Jaden Smith and Arnold Schwarzeneg- were heralded as the “gold standard” of climate policy for ger. the 2020 presidential primary. In 2015, she graduated from In a November 23, 2020 article about Kerry’s nomination and the Yale School of Forestry and Environmental Studies career The New York Post said “We look forward to the anti- (F&ES) with a masters degree in Environmental Manage- carbon lectures from a guy who travels the globe on private ment. jets and luxury yachts.” Special Assistant to the National Climate Advisor President for Climate Policy David Hayes Gina McCarthy Formerly: Formerly: President State Energy & and CEO Natural Environmental Resources Defense Impact Center at New Council York As part of the White House Office the newly created position will have its own Having served as Interior staff with the mission of Deputy Secretary under advising the president on both Presidents Clinton domestic climate change and Obama will be back policy and lead the White House Office in Domestic Climate in the White House as part of the Biden administrations Policy. heavily staffed climate team. McCarthy was previously Assistant Administrator for EPA’s Office of Air and Radiation from 2009-13. Prior to 2009 she Hayes most recently was the Executive Director for the State held several top positions in the civil service of Massachusetts Energy and Environmental Impact Center in New York which is dedicated to helping state attorneys general fight McCarthy holds a master's degree in environmental health against regulatory rollbacks and advocate for clean energy, engineering and planning and policy from Tufts University climate change and environmental values and protections. and a bachelor's in social anthropology from University of Massachusetts at Boston. DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 23 Sr Director for Environmental Special Assistant to the Justice at the White House President for Climate and Science Council on Environ. Quality Agency Personnel Cecilia Martinez Jeff Marootian Formerly: Formerly: Co-Founder and Director of the DC DOT Executive Director, Center for Earth, Jeff Marootian was the Direc- Energy & Democracy tor of the DC DOT and served Martinez's early research on the U.S. Department of centered on nuclear ener- Transportation Agency Review gy and the effects of radia- Team for the Biden-Harris tion poisoning on popula- Transition. tions and environments. While in academia, she began work- Prior to joining Mayor Muriel Bowser’s cabinet in 2017, ing more with communities of color in environmental justice Marootian served in the Obama-Biden Administration and held policy work. Eventually, she left academia to focus more on roles at the United States Department of Transportation as the environmental justice organizing. White House Liaison, Assistant Secretary for Administration and Chief Sustainability Officer. Senior Advisor for Climate He was the Director of LGBTQ Outreach at the Democratic National Committee during the 2012 Obama-Biden re-election Policy and Finance campaign. Jahi Wise Historically, Presidential Personnel staff oversee the hiring, Formerly: dismissal, or appointment of civil and Congress-confirmed Policy Director Coalition positions within the executive departments. The office is re- for Green Capital sponsible for approximately 4,000 positions. About 1,600 of Wise helped lead development which require Senate approval. of policy and strategy to estab- Jeff is an alumnus of the George Washington University where lish the National Clean Energy he also serves as an adjunct faculty member in the Trachten- Accelerator, nonpartisan, non- berg School of Public Policy and Administration. profit specialized financing entity that will be capitalized with $35 billion of federal ap- propriations and charged with facilitating clean energy and climate infrastructure transac- Senior Advisor for Climate tions across the country. Policy and Innovation Wise is a graduate of Morehouse College, Yale School of Management, and Yale Law School. Sonia Aggerwal Formerly: Co-Founder and VP FERC Chairman of Energy Innovation Rich Glick While at Energy Innovation, Formerly: she acted as founding executive FERC Commissioner director of the Climate Impera- tive project; led America’s Glick was appointed as a FERC Power Plan, bringing together Commissioner in 2017 by Presi- 200 electricity policy experts; and directed the team that de- dent Trump. Previous to that veloped the Energy Policy Simulator to analyze the environ- appointment he served as general mental, economic, and public health impacts of climate and counsel for Democrats on the United States Senate Committee energy policies. Prior, Aggarwal managed global research at on Energy and Natural Resources. Glick was also the head lob- ClimateWorks Foundation, where she worked on the McKin- byist for energy firm Avangrid. He worked as an adviser to Bill sey carbon abatement cost curves and led research for the Richardson when Richardson was serving as United States American Energy Innovation Council. Aggarwal graduated Secretary of Energy during Bill Clinton's presidency from Haverford College in astronomy and physics, and earned a masters at Stanford University in civil engineering . 24 Domestic Energy Producers Alliance

Persistence Per-sis-tence (noun) /pərˈsɪstəns/

Firm or obstinate continuance in a course of action in spite of difficulty or opposition.

Be assured DEPA is prepared, passionate, and persistent when it comes to representing your interests in Washington, D.C.

OUR WORK IS CRITICAL. YOUR SUPPORT IS VITAL. We look forward to working with you. 2021

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DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 25

but we also lead the world in environmental quality. The Energy is so reliable six major pollutants monitored by the Environmental Pro- tection Agency have plunged 77% since 1970. Over the same period the U.S. economy grew by 285%, vehicle and available, miles traveled increased 195%, population increased by 60%, and energy use increased by 48%. The oil and natural gas industry has proven that over the long-term, we can lead the world in energy production and environmental some think stewardship.

What would it mean for consumers, the economy, and fu- we no longer ture job creation if we substantially limited exploration, development, and use of fossil fuels in America’s energy supply mix? A recent study by the Energy Information Ad- require it. ministration indicates the average American family would see their energy costs increase by $4,550 per year. It could Commentary by Ed Cross mean a cumulative loss of $11.8 trillion in the nation’s DEPA Director and President of the GDP and the loss of 6 million jobs. Kansas Independent Oil and Gas Association Recent studies indicate that if the U.S. eliminated all car- Energy is so thoroughly woven into our bon dioxide emissions immediately, it would avert 0.07 daily lives that few ever question degrees of warming by 2050. If Kansas alone elim- whether it will be there, or inated all CO2 emissions, it would avert 0.001 where it comes from. Oil- degrees of warming by 2050. How many lost based products are likely jobs is that worth? the first thing you touch at the beginning and end of each day, whether it Inexpensive energy is necessary for is your alarm clock, economic advancement by the cell phone, or even the world’s poor and for recovery from toothpaste and tooth- the staggering economic effects of brush you use to brush the COVID-19 pandemic. Ideological your teeth. As a key opposition to fossil fuels is an anti- component in heart human stance that views ordinary peo- valves, seat belts, hel- ple not as problem-solving sources of mets, and even Kevlar, ingenuity, but as only mouths to feed petroleum is saving tens of producing environmental damage. thousands of lives daily. Fur- thermore, oil and gas are key The choices policymakers make in 2021 and be- components in many medicines and yond will determine whether we build on America’s antibiotics such as antiseptics, antihista- energy progress or shift to foreign energy sources with mines, aspirin, and sulfa drugs. lower environmental standards. You can’t address the risks of climate change without America’s oil and natural gas The oil and gas industry has done such a good job of creat- industry, which continues to lead the world in emissions ing abundant, affordable, always-available energy that the reductions while delivering affordable, reliable, and cleaner world takes it for granted. Because energy is so reliable and energy to all Americans. available, some think we no longer require it. We encounter this paradox anytime we hear from those who want to end The U.S. has a unique opportunity to show the world how oil and gas production but still want to benefit from oil and energy abundance can be used as a positive force to lift gas based materials and fuels. people up, which is different than a zero-emissions world. We should work to ensure more people have access to safe, What Americans expect and deserve are the facts. Today, affordable, and reliable energy. Because to rise out of pov- the U.S. is not only the world leader in energy production, erty and enjoy health and safety, people need more energy, not less. 26 Domestic Energy Producers Alliance

How Do We Make Energy Understood Again?

The folks at Energy Strong posed an essential question on Along with Energy Strong’s serious question came posts LinkedIn this month that you might have missed if you don’t the same week with a more aggressive, albeit funny, message. follow them or frequent your Linked-In feed. As an industry, “Don’t be a hypocrite” is real advice. Why is such a high how do we communicate to the anti-fossil fuels crowd that level of hypocrisy tolerated among the anti-fossil fuel folks? the oil and gas industry is not a machine? It is people! Peo- Picture it in any other similar group- a vegetarian lifestyle ple who want safe, reliable, and low-cost energy while pro- warrior, diligent about participating on social media, and in tecting our environment and correctly utilize our natural re- local activism efforts to stop the meat industry from their sources. “slaughter” that eats all kinds of meat every day. This You can see although person sometimes brings a Dagwood sandwich to a Energy Strong is a Colora- march for livestock animal justice; maybe this caring do organization with a sig- person offers some of that sandwich to others at the nificant following on rally, and they happily share it, and NOONE thinks LinkedIn, with over 61,000 anything about it. Are you kidding me? Why is pump- people on this platform. ing gas into your car to get to your anti-fossil fuel rally From the Friday post to the different? Why is the pipeline that brings natural gas Monday screenshot, over for heat, laundry, safe food prep, and hot water some- 400 people clicked a posi- thing to be loathed, but using the natural gas is not tive reaction to this post— shunned? but only 16 replied. One commenter on this topic, on a different thread, Only five of the sixteen said he told his millennial children they had the ability replies to this post an- to shut down the oil swered the question. For and gas industry by all of them, the answer was gathering their like- basically the same, educa- minded friends to tion. boycott fossil fuels. Lisa Johnson, a Geolo- “They are a busi- gist Technician with Blue ness like any busi- Water Resources, hits it ness, I would tell right on the head with her reply. them. Don’t sup- “The energy industry needs an aggressive commercial port them with your campaign highlighting the positives and informing people of dollars. They the myths and lies they believe about the oil and gas indus- would never take try. I don’t know why they haven’t done this instead of al- me up on it.” ways defending themselves. People are being misled by the Thank you Ener- masses.” gy Strong, for get- The question looms, why isn’t marketing better for our ting us thinking industry? We have good news to tell about how our prod- about this. Lisa ucts increase the US's quality of life and the significant reach Johnson, you are we have inside developing nations desperate for safe, relia- 100% correct—our marketing departments need to get to work ble, cheap energy to provide essentials like cooking fuel and on the positive messaging. It is time to get serious about oil clean water. and gas education for the masses and making energy understood again! DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 27

DOE Releases Report on Economic and National Security Impacts of a Hydraulic Fracturing Ban Press Release from January 19, 2021

The U.S. Department of Energy’s (DOE) Office of Fossil Energy delivered a new report to the President on negative impacts of the ill-conceived hydraulic fracturing ban some have proposed. Economic and National Security Impacts Under a Hy- draulic Fracturing Ban explains why a ban would have far-reaching and severe consequences, including the loss of mil- lions of jobs, price spikes at the gasoline pump and higher electricity costs for all Americans—and the likelihood of increased CO2, SO2, and NOx emissions. A ban would end the U.S. role as the world’s largest oil and natural gas producer and would force the United States to become a net importer of oil and gas once again. It would weaken the Nation’s geopolitical influence and put our national security at risk. The report shows how consumers would bear the impacts “Hydraulic fracturing tapped the great reservoir of Ameri- of a hydraulic fracturing ban through higher electricity ca’s natural resources. That technology made the United and natural gas costs. Retail electricity costs would in- States the world’s largest oil and natural gas producer, crease by more than $480 billion between 2021 and 2025, while also creating high-paying jobs and delivering great and retail natural gas costs would increase by more than consumer savings,” said Assistant Secretary for Fossil En- $400 billion between 2021 and 2025. ergy Steven Winberg. “This report to the President details just how devastating the economic and national security And the report estimates how much higher gasoline and impacts of a ban would be. Banning this technology would diesel costs could go if hydraulic fracturing were banned. derail our recovery from recent COVID-related economic Annual average gasoline prices would increase over 100 disruptions and increase the risk of another recession.” percent to over $4.20 per gallon in 2022 and 2023, and annual average diesel prices would increase 95 percent to During 2019, U.S. LNG exports helped to reduce the trade $4.56 per gallon in 2022. Higher prices for gasoline, die- deficit and created $9.5 billion in revenue. But it is con- sel, and petroleum products would amount to $1.9 trillion sumers, in particular, who would bear the impacts of a hy- in additional, cumulative costs from 2021 to 2025 across draulic fracturing ban. all sectors.

In recent years, increased domestic oil and natural gas sup- The shale revolution created by hydraulic fracturing and ply has put significant downward pressure on consumer related technology is also responsible for a well- prices for gasoline and natural gas. In 2019, gasoline and documented U.S. environmental success record: the re- diesel prices were 40 percent and 38.3 percent lower, re- duction of carbon and other emissions to record-low lev- spectively, compared to 2012, and average end-user prices els. Natural gas is key to that environmental success be- for natural gas fell 24.3 percent in 2019 from 2008 levels. cause it fuels more than one-third of U.S. electric power

28 Domestic Energy Producers Alliance

plants and serves as an important enabler for integrating low-carbon intermittent renewa- bles like wind and solar.

“Taking away hydraulic fracturing technology from America’s oil and natural gas industry removes the primary technique needed to efficiently and responsibly extract abundant U.S. energy resources. Without new wells brought online, U.S. natural gas and oil production would rapidly fall, reversing the past decade's energy security gains,” said Deputy Assistant Secretary for Oil and Natural Gas Shawn Bennett.

From a national security and foreign policy perspective, significantly curtailing Ameri- can natural gas and oil production increases global energy dependence on Russia and the member nations of the Organization of the

Petroleum Exporting Countries (OPEC). Currently, the U.S. exports natural gas—mostly in the form of LNG—to 39 countries on five conti- nents. A decrease in LNG and crude oil exports would weaken our geopolitical standing globally and take away an important diplomacy tool.

Given the interconnectedness of the global economy, higher energy costs would reverberate across the world, affecting economic growth and the outlook from Asia to Europe. With a weakened American economy, the U.S. would experience a national security setback, becoming reliant, once again, on other nations for its energy needs.

The full extent of the economic, environmental and national security impacts of a ban on hydraulic fracturing is detailed in the report that DOE produced at President’s direction. Read the full report at www.energy.gov

DEPA Report on Industry, Leadership, Legislation, and Energy Regulation January 2021 29

Dear DEPA Members,

The DEPA charge for 2021 is persistence. The objective is to amplify the message of our essential place in modern everyday life.

We do not write many PAC checks but do try to support those members of Congress or candidates that have/will support DEPA and our political agenda. As a result, our PAC account has become pretty low, so we are seeking your support to help replenish our funds.

With the new administration’s outlook on energy and the key leaders being nominated for the cabinet positions important to our industry, 2021 will be a year of uphill battles to hold our ground. It is vital for you to help us help you! Please do what you can to support our efforts by donating to our DEPA PAC.

PAC donation rules are very stringent. Please follow the instructions on the donation card to make your contribution.

Thank you for all you do, and for your support of DEPA, and our mission.

Jerry Simmons DEPA Executive Director

30 Domestic Energy Producers Alliance DONATE TODAY! Fill out these forms and send them in with your support of our mission work in 2021.