US Producers Urge Fair Energy Policy

The Independent Petroleum Association of America (IPAA) is urging the US administration to encourage the use of all fuels equally when setting energy policy and not implement rules that favour one source over another.

In an April 18 letter to Larry Kudlow, newly-appointed director of the National Economic Council, IPAA CEO Barry Russell urged fairness in implementing policies that affect the US energy marketplace.

“You have long been aware of the key role of American oil and natural gas production to the US economy and as a means to achieve foreign policy goals through exports,” Russell wrote. “In your new role, IPAA urges you to promote policies that encourage American energy production without implementing policies that artificially advantage one fuel over other sources.”

Russell cited specifically the increased use of low-cost natural gas for power generation and the impact this has had on the demand for coal and nuclear energy. Recently, owners of coal-fired and nuclear generating stations have lobbied the US Department of Energy (DoE) for a special rule that would force electricity marketers to pay them cost-based rates providing for full cost recovery.

These efforts, Russell wrote, “would lead to bad policy and negative implications for gas-fired generators.”

In November 2017, the IPAA urged the US Federal Energy Regulatory Commission (Ferc) not to adopt the DoE’s proposed rule-making to provide out-of-market support to uneconomic coal and nuclear plants, while the Natural Gas Council, in a report last summer, emphasised the flexibility, reliability and resiliency of US natural gas systems.

“IPAA supports an all-of-the-above policy when it comes to development of America’s energy resources, a policy based on recognising the realities of the national energy marketplace,” Russell wrote. “We urge you to encourage all fuels – a result that can only be achieved by rejecting calls to artificially inflate one source over another.”