Fact-Checking API’s State of American Energy Keynote Address

The American Petroleum Institute (API) held an hour-long press conference titled the State of American Energy on January 12, which included a keynote address by CEO Mike Sommers. It was a confident, blistering defense of an industry facing pressure to change its business model in the face of a climate crisis it helped create.

The Pipeline Safety Trust will address a few points from that address to provide context and clear up misleading claims.

What Mike Sommers said:

“First, a pipeline bringing oil from Canada to the U.S. was quickly cancelled, along with good-paying union jobs. Other energy pipeline projects face long-term delays. And we’ve seen challenges in Michigan to existing critical infrastructure like Line 5 that would put an entire region and its energy supply at risk.”

This is misleading and/or lacks context.

Sommers points to the Biden Administration’s cancellation of the Keystone XL pipeline one year ago and the union jobs that it eliminated. We believe it’s important to add context and point out the potential loss of those jobs will be at least partially offset by the union jobs created by the $1 Billion program included in the Infrastructure Investment and Jobs Act to replace publicly owned leaky distribution pipelines as well as the upcoming PHMSA rules on methane leak detection and repair on natural gas gathering, transmission, and distribution pipelines.  These programs have the benefit of not only providing high-paying union jobs, but also increasing safety and reducing climate-wrecking methane leaks.

Next, Sommers makes a misleading claim stating that challenges to Enbridge Line 5 in Michigan would put an entire region and its energy supply at risk. An independent study conducted by London Economics International found price impacts for propane from a Line 5 shut down would be negligible, around 5 cents/gallon. The study also found the potential increased cost of crude oil would be so small that it “would be lost in the noise of typical crude oil price volatility.”  On the other hand, a pipeline incident in the Straits of Mackinac could be truly devastating to the economy of Michigan and the region, not to mention an ecological disaster to the jewel that is our nation’s Great Lakes. One study estimates economic and natural resource damages of an oil spill in the Straits of Mackinac at over $6 Billion.

What Mike Sommers said:

“Our industry brings the scale and expertise to make a lower-carbon future a reality. This is about addition, not subtraction. America needs all the reliable, affordable, lower-carbon energy we can get. And we’re working to bring carbon capture to commercial scale so that America can more quickly achieve its emissions reductions targets – this industry is making it happen.”

And then again:

“This is true, above all, of ideas that apply industry expertise to environmental challenges. Responsible environmental practice is a shared value in this country and our industry. It is what Americans expect, and it’s what we expect of ourselves. And we do more than support key environmental objectives. In many cases, such as carbon capture, we have created and are providing the very technologies that make progress possible.”

This lacks context.

Before getting into our focus in this area, pipeline safety, it’s worth pointing out that carbon capture and sequestration has yet to be proven to be a viable path towards greenhouse gas mitigation on a large scale. The Petra Nova project in Texas was the first and only U.S. fossil-fueled power plant generating electricity and capturing CO2 in large quantities (over 1 million tons per year) until CCS operations were suspended in 2020. And so far, the sequestration attempts have largely been used in Enhanced Oil Recovery (EOR), which becomes a carbon additive project.  A study published in Biophysical Economics and Sustainability in October of 2020 found, “Neither of the two principal industrial carbon removal (ICR) methods being promoted and subsidized by governments meets the collective biophysical need of atmospheric CO₂ reduction, and both are net CO₂ additive as presently practiced.”

A glaring absence in the discourse around the technology of Carbon Capture and Sequestration is how the carbon gets from capture to sequestration – transportation. There are significant safety concerns with CO₂pipelines as the residents of Satartia, Miss. saw in February  2020, when a CO₂ pipeline ruptured and hospitalized nearly 50 people. When CO2 escapes from a ruptured pipeline, it is not explosive like natural gas, but is an asphyxiant. It’s also heavier than air and tends to stay low to the ground, as opposed to quickly dispersing natural gas. CO₂ pipelines are also known to carry contaminants such as H₂S, fatal at even very low concentrations. We saw the effects of both of these risks in Satartia, Miss.

On the regulatory side, a Congressional Review Service report from 2008 pointed out an alarming number of policy issues to be addressed. The report posed fundamental questions such as whether CO₂ transported by pipeline should be regulated as a commodity or a pollutant, who should set rates and how, who has siting authority, and would the framework used for oil and gas pipelines hold up in cases of civil liability for personal injury or wrongful death. Nearly 14 years later, these very basic questions have yet to be answered. We have a lot of work to do before any robust effort on a buildout of CO₂ pipelines should begin.

What Mike Sommers said:

“We support the direct regulation of methane from new and existing sources”

This is misleading.

In opposing methane fees as proposed in the Build Back Better Act, API has consistently stated it supports direct regulation of methane instead. However, their actions have not been consistent with this position. A recent report identifies the outsized role natural gas gathering lines play in the nation’s methane emissions. The report identifies the lack of regulation requiring leak surveys as the reason. Recently PHMSA published a final rule that would finally start to regulate some of the nation’s gathering lines and subject them to leak surveys, greatly reducing the methane emissions from these lines. API, along with GPA Midstream are actively fighting this rule, seeking to gut it and keep the methane leaking.

Conclusion

Instead of taking the opportunity to change its business model in the face of public and investor pressure, API’s CEO is clearly focused on finding dubious methods to keep the industry on the same climate destabilizing path. API has had ample opportunity to lead its members to new ways of doing business and they have failed. It’s time for the regulators to force them to do the right thing.