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DICKINSON — During a visit to the Western Edge on Thursday, Rep. Kelly Armstrong, R-ND, met with Fitterer Oil executives and other local leaders in the energy industry for a panel discussion on oil production at the Holiday Inn Express in Dickinson.
He made a point to thank the oil workers and entrepreneurs who’ve contributed substantial economic growth to the region over the past several decades.
“Western North Dakota went from, when I grew up, not having any jobs and opportunities here to having every kind of opportunity here. It's because a bunch of really hard working guys go to work every single day,” he said. “A bunch of companies decided to take a lot of risk and invest a bunch of capital out here. I'm glad they all did and I appreciate them all the time.”
He contended that the Biden Administration is not doing enough to approve new oil drilling permits in order to meet the high demand of the current market. He said that “when” his party regains control of Congress next month, he hopes to push legislative permitting reform that will place more regulatory authority back in the control of Congress rather than bureaucrats, as intended by the Framers of the Constitution.
“Democrats and Republicans in Congress have done this for 20 years, we've ceded too much of our authority to the agencies,” Armstrong said. “We have to take it back, particularly on things like this.”
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Armstrong pointed out that over the past year America's strategic oil supply has been reduced by approximately 200 million barrels to 416 million, the lowest level since 1984.
“You should care as a taxpayer… you’re going to pay a lot of money to refill that,” he said. “Here's the strategic problem, which is why you don't release this strategic oil reserve for political reasons. Because once you sell it, you sell it on the open market. Guess what China's doing? While we're depleting ours, they're buying it and increasing theirs.”
He went on to argue that OPEC’s decision to drop production by two million barrels per day starting in November was no surprise.
“Saudi Arabia did this 10 years ago, they started talking about market cap and market concentration more than just pure price… They're making these decisions solely based on what is best for their interests,” Armstrong said. “It was incredibly predictable. When you are decreasing the increase in production of oil over here, and you have the swings that we've had, it was absolutely going to happen. Going over there, fist bumping, begging and all of that was never going to solve it.”
Gas station gouging?
Armstrong also chastised Biden for accusing gas station owners of “gouging” consumers.
“My message is simple. To the companies running gas stations and setting those prices at the pump: Bring down the prices you’re charging at the pump to reflect the cost you pay for the product,” Biden said during a meeting in late September. “Do it now. Not a month from now — do it now.”
According to Fortune Magazine, American gas station owners typically net a profit of 3 to 7 cents per gallon of gasoline. Yet, combined state and federal tax collections average 60 cents per gallon.
Chris Fitterer is a partner in a chain of six western North Dakota gas stations called The Hub, as well as Fitterer and West Dakota Oil companies.
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“Five dollar and fifty cent gas doesn’t do anything for us,” Fitterer said.
The Congressman concurred.
“I'm convinced the vast majority of them don’t understand economics or energy markets. There’s not a gas station owner alive who wants $5 per gallon gas. No way,” he said. “Your margin decreases and people buy less Mountain Dew. It’s literally that simple."
Armstrong said he’s not opposed to alternative energy sources such as wind power, but lamented the fierce opposition among most Democrats toward what he believes are more reliable forms of energy.
“I want them to get their offshore wind infrastructure. The problem is when they're in charge, they want to do all of that. But they don't want to extend the life of a carbon molecule one more second,” he said.
During a discussion on costs of shipping oil and natural gas, he noted how a century old law increases the price of doing business. The Merchant Marine Act of 1920, colloquially known as the Jones Act, requires that all ships moving cargo between U.S. ports be American flagged, owned, built and staffed. This is why domestic shipping is sometimes pricier than international for American companies.
“You can build a South Korean tanker, manned with Norwegian equipment and cruise for about $200 million. [That] costs $700 million to build it here,” Armstrong said.
When asked, he stopped short of supporting its repeal but said he is comfortable granting legislative waivers to fill the gap in supply. Yet, he also noted that he testified against a Democrat led attempt to “sneak in” case by case Jones Act waivers into the NDAA (National Defense Authorization Act) exclusively to offshore wind projects.
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‘War on American oil’
Armstrong is not alone among the Roughrider State congressional delegation in his criticisms of the President and pleas for regulatory relief in the energy sector. North Dakota Senators Kevin Cramer and John Hoeven recently joined 19 other Senate Republicans in signing a letter urging the President to expand domestic oil lease sales.
In a press release, Cramer stated they are, “demanding the Biden Administration end its war on U.S. oil and gas.” The letter lamented the strain of inflation, high gas prices and unrelenting supply chain issues.
“It is our obligation to do everything within our power to help ease these burdens and remove this uncertainty for both Americans and our allies,” the letter stated. “One of the most effective ways we can do this is to increase future domestic oil and natural gas production through long-term leasing certainty. That is why we are encouraging 10 lease sales in the Gulf of Mexico and one lease sale in the Cook Inlet in the next five-year offshore leasing program.”
