CPAC 2014 - Can America Survive Obama's War on Fossil Fuel?

That was terrific. Thanks so much, Alex. Our final speaker today is a gentleman who served with the last president who came into office after a president who allowed us to have gas lines and created all kinds of problems in the energy area. And this president was Ronald Reagan. And Perry Penley is joining us today and he's written this fabulous book, Sagebrush Rebel, Reagan's Battle with Environmental Extremists and Why It Matters Today. Ronald Reagan came into office following a president who had put us in a very difficult situation with respect to both our energy resources and the other natural resources that we have in our nation. And Perry served with him at the Department of Interior and now he's back out in the West working with the Mountain States Legal Foundation, writing and speaking and explaining to people how bad policies can be turned around when you have someone coming into government who knows we have the resources and has a good message to communicate effectively to the American people. So please welcome the author of Sagebrush Rebel, Perry Penley. The man who essentially invented the modern technological revolution called hydraulic fracturing is a man by the name of Harold Hamm. He's the richest man in America and he runs a company called Continental Resources. And he started out on the dirt floor, he started out hauling away garbage away from oil sites and today he is where he is. A couple of years ago he had the opportunity to go in and meet with President Obama. And he knew he'd have among a bunch of business leaders just a couple of minutes to say what he wanted to say to the president so he honed it down. And it came his turn to say something and he said, Mr. President, I just want you to know there's an incredible technological revolution out there in America that's totally changed the face of the oil and gas industry. And it's an amazing thing. And Obama looked at him and said, oh, no not really, we need to go green. Because Secretary Chu here tells me in five years we'll have a battery that will replace all oil and gas. And Harold Hamm walked out of the meeting and he said, well, I can't tell you exactly what he said, but what he said was, even if that were true, why would you want to get rid of all the energy, all the revenue, all the jobs that are created by the oil patch? And if you saw yesterday Karen Bullock Moreau's wonderful film about upstate New York and compared it with Pennsylvania, you'll see that this revolution, as the man from Pennsylvania just described, happens all across the economy. Every single aspect of the economy is benefited. A rising tide lifts all the boats. When Reagan came in in 1980, he faced a situation like we're facing today. 1980, 1981 was essentially 2014. We had foreign affairs problems. We had a hostile Soviet Union. We had energy problems. We were reliant on the Middle East. And we had an economic problem that we were in a basket case. And he knew the way to solve all those problems was develop America's energy. If we could solve our energy problems and solve our job problems and solve our international affairs problems, and so we went after it. And unlike almost every other president, he was deeply interested in these issues, which is one of the reasons I wrote this book, because no one had ever done it, never told this story of Ronald Reagan. And the other reason I wrote the book was because of Barack Obama. He's always bragging about how much like Reagan he is. And it's just such nonsense. And so I compared and contrast, like you do in a test question, compare and contrast Ronald Reagan with Barack Obama. It's not a pretty picture. And what Reagan said about Jimmy Carter, the second worst president in the history of this country, number one is currently serving, was what he said about Jimmy Carter, why won't he drill on federal lands? Because Reagan believed that we need to drill on federal lands, why? Because a third of the country's owned by the federal government. A third of the country's owned by the federal government. And he knew we had to drill there. The entire outer continental shelf is owned by the federal government. And President Reagan wanted to drill there. And he said about Jimmy Carter, why won't he drill there? What's he afraid of, making a discovery? And he was absolutely true. And so the Reagan revolution was on the energy issue where he let the private industry go. He believed three unique things about the industry, the oil and gas industry. Number one, it's not a monopoly. Number two, the great genius in the industry is not in the big companies, it's in the independents. And those are the men and women who are making the discoveries in Pennsylvania and North Dakota and East Texas. And he also believed, number three, that the change would come from unconventional technologies. Hydraulic fracturing. Now, we've been doing hydraulic fracturing for 60 years now. And it's not a new technology. It's been around for a long time. And Reagan knew that that was going to be the future. Let's talk for a minute about coal, because we've talked a lot about oil and gas, and deservedly so. When Jimmy Carter came in, he predicted, great wisdom predicted, that by 1990, we would run out of natural gas. You probably don't remember that, but he said, by 1990, we'll be out of natural gas, and so we've got to develop our coal. We have a lot of coal. We are the Saudi Arabia of coal, and it's true. True then, true today. And Jimmy Carter set a goal of a billion tons of coal. And then he did two things that made it impossible to get there. He refused to lease coal in the western United States, and he put heavy burdens on eastern coal. He put 500 pages of regulations on eastern coal to make it impossible. Reagan came in and leased western coal, and today, Wyoming's the number one coal-producing state in the country, and it's ahead of the next six combined. And he also relieved those regulations on Appalachia, and they started developing coal, and just after President Reagan left office, just like the wall came down, we hit a billion tons of coal. And now, of course, Obama's declared war on coal, and he wants to kill it. Now, will we survive? Yes, we will survive, but at a great, great cost to a lot of communities, especially in Appalachia. And in Ohio and Pennsylvania, a terrible price will be paid, just like the terrible price that was paid over the northern Spotted Owl and the Pacific Northwest when thousands and thousands of loggers lost their jobs. Now, we talked about private versus state, and we've got Tom's given us some great comparisons on that. Let me give you an example. You know, most of this natural gas that we've developed with hydraulic fracturing is natural gas, but there are some heavy oil fields. The Bakken is one. Bakken is primarily a North Dakota oil, in the Eagle Ford field in Texas. That's primarily oil, too. Let me give you an example. You take the Bakken, you take Eagle Ford, you double it, you add a billion, and that's still less than what's in California and the Santos Monterey. Think of that. Try to get your head around that. The Bakken, Eagle Ford, doubled, with a billion added, is less than in Santos Monterey. Why haven't you heard about Santos Monterey? Because we can't drill there. Those are federal lands. Federal leases were issued. The Enviro sued using several laws, like NEPA, the Endangered Species Act, and others. A federal judge intervened, shut down the leases, said BLM could not lease them, and the Obama administration pulled back on earlier leasing attempts. That's the craziness going on. Meanwhile, with regard to hydraulic fracturing elsewhere, the Obama administration not only is declaring war on coal, it's declaring war on oil and gas by trying to impose new regulations by the federal government on hydraulic fracturing activities. Bear in mind, this is an activity that's been underway for 60 years, and has been carefully regulated by each and every state for 60 years. Now Obama wants another layer of regulation put on top. As Secretary Salazar at Interior tried to do it, wanted to do it, now, of course, he's now out in the private sector trying to earn money and saying, oh, fracking is safe. Meanwhile, Secretary Jewell, alleged friend of the industry, now she's pressing forward with these new regulations that will add millions, hundreds of millions of dollars to the cost, and that's not the worst of it. You know what the worst of it is? When you get a permit from the federal government to do hydraulic fracturing, that is a final agency action, and what does that mean? A lawsuit by radical environmental groups. Now, we think about this craziness, this pouring billions down the rat hole that is green energy in America today, and we think, oh, this is a new thing. It's not a new thing. It started with Jimmy Carter and his synfuel projects. That was another pour billions down the rat hole and get nowhere exercise that fortunately got killed because Jimmy Carter got run out of town, but we've seen it all before. We have an abundance of energy, and yet the administration doesn't want to do it. I want to mention an additional thing, an element, and we've talked about Obama. We can't not talk about the environmental extremists, and that's what Ronald Reagan called them. He called them environmental extremists. He called them the modern-day Luddites, and let me tell you a little bit about their story. The original conservationists, the people who wanted to conserve for future generations, for water and timber and so forth, why did they want to do it? Because of the needs of mankind. The original preservationists, the John Muir types, and when I'm talking about the conservationists, I'm talking about the Gifford Pichus. When I talk about the John Muir types to save the parks, the preservationists, why? Because of mankind's unique needs for emotional and psychological and spiritual restoration. At the core of both movements was the needs of mankind, human need. It was about you and me. As Reagan used to say, people are part of the ecology too. There was a big clash between the two of them, and the big clash took place over Heth Hetchy. How many of you ever heard of Heth Hetchy? Okay, excellent. There's a big clash over Heth Hetchy, but it was not because we were trying to save Gaia or earth worship. It was about what was more important, human need for water for San Francisco or human need for a place that was like a cathedral? John Muir said, Heth Hetchy, you just as well flood the great cathedrals of the world. In the 60s and the 70s, the WACOs lost the bubble. They stopped being concerned about human need, and it was all about human is a cancer on the planet. Human is evil. We need fewer of us. That's when Reagan made the break with the WACOs, with the environmentalists. That's when they made the break with him, when they endorsed Jimmy Carter and they came out against him and how they started to lie about him then and they lie about him today, which is another reason I wrote the book, to tell the truth. You cannot really understand, and I love what you're doing on the internet with the young people and telling industry to stop stepping on their own toes and be proud of themselves and what they're doing. You can't understand the battle against fossil fuels without understanding what is at the core of the environmental movement and these environmental extremists. Three things. A couple of things. They don't believe in human beings. They're not concerned about human health and well-being. I used to think the worst thing Yoko Ono had ever done was kill the Beatles. But the worst thing, and I wasn't a Beatles fan, as you can tell, I was Johnny Cash and Marty Robbins and Roy Orbison. Those are my guys. They're just kids from London. But I used to think that was the worst thing she ever did, but I believe the worst thing she and her friends in the entertainment industry have ever done is condemn the people of upstate New York to poverty because of their opposition to hydraulic fracturing. So yeah, we're going to survive. Because of the resilience of the industry, because the resilience of human nature is like Julian Simon used to say, what was the greatest resource? The greatest resource is human beings and their ability to create and solve problems. But we need more of Reagan's inspiration in fighting these battles. We will survive, but at a great, great price, and it will have international consequences as we're seeing with this Crimea situation right now. Thank you, Becky. Thank you. Now, Perry, I believe your book is available down at the bookstore, is that correct? Correct. At the Regnery stand. Great. And I signed all of them. Excellent. And Alex, is your book available? Your first book available down there? Yeah. We're actually getting some essays for people, but then there's a book signing 10.30 tomorrow morning, wherever book signings are held. Okay. All right. Now it's time for you to participate. And sometimes when I speak to a room like this, I say, well, we're going to start right here in the front row. But we won't do that today because there's too many to allow everybody to have a question. So those of you who have questions, if you'll raise your hand, I'll call on you. Then I want you to stand up and introduce yourself to everyone, where you're from, and then direct your question to one or all of us on the panel. We'll start right here with this young man. He's from Ann Arbor, Michigan, but don't worry, he's not liberal. Okay. Can I take one crack at this? Absolutely. You know, there's an interesting thing going on. I'm going to kind of answer your question and then also get something off my chest. It's about the intermittency of wind and solar and sort of the impacts and the nuclear and sort of co-gen and how do we get these things all to work together. There's a thing called the wind production tax credit. It's a tax credit that is given to, federal tax credit given to wind producers just for the virtue of producing wind energy. It'd be like giving Apple a tax credit for producing the phone. They don't have to sell it. They don't have to put it anywhere. That's right. No matter what. So what's... Yeah, I'm going to get into that. I got the mic, so... There's this thing happening, it's called negative pricing. The wind producers in a certain region are bidding their energy lower than the mark at a loss, which is having a tremendous impact on coal fired plants and nuclear plants. And the utility industry is having to shut down coal plants in some cases and nuclear plants in some cases because of this phenomenon, because those plants are designed well to run consistently. And the cycling of coal plants is actually not ideal for the plan or anything else. And so the beef I have is, is that the wind producers are taking a federal subsidy and then gaming the market and distorting the market and causing people who are spending a lot of money to provide energy when it's very cold outside or in any other situation. Sunny California, I don't have a lot of sympathy for you, bud, but anyway. I'd ask for sympathy if I'm living in the best place on earth. And who's going to pay? We are. We're going to pay more for our energy and there will be a time, God willing, when this economy recovers and everyone is going to have the opportunity to have a job and we're going to need more energy. And guess what? It's not going to be there because you can't just turn a new plant on or a coal plant on. So it's a very, very dangerous road we're going down with some of these market distortions. Thank you very much. All right. This gentleman, and we'll move back through the room. The only two times recently that the whole global warming matter has come up for a vote was first the Kyoto Accords, which the Senate rejected, as I recall, something like 95 to nothing. And the second one was the time to put in cap and trade as a matter of legislation and that was rejected by the Senate. Our problem is that the EPA is pressing forward with it. So when it's come up for a vote, global warming will not be the issue of global warming or climate change or changing our lives because it's going to get hotter or it's going to get colder or whatever it is. It simply doesn't have the votes and they can only do it by doing it administratively. Yeah. Stroke of a pen. That's a problem. Tom, did you want to say anything and then we'll just move down the panel. All right. Alex. Let's see. All right. I want to talk about this issue of the environmental issues being scientific issues or not. Now, I think everything is properly in a certain sense, a scientific issue that is you need to study using logic, you need to go by facts. There's a question though of which science and any issue where we're dealing with politics or morality is in my view primarily an anthropological issue. That is an issue of what benefits human survival. And so when we're looking at, and I think the fact that it's not discussed this way betrays that among conservatives there's a lot of wrong thinking about this. So let me just give you an example. Typical question that you get asked is, do you believe in climate change or is climate change real or is climate change man-made, right? But why is that a question? I mean, why is that the interesting question? Because if you say, okay, climate change, obviously that's a constant, man-made climate change. The assumption behind that question and usually the assumption behind the answer of that question is that if man did impact climate, if man did change climate, it would be a bad thing. But why on earth would you assume that? Unless you had a prejudice against man, and this goes to what you were talking about earlier as the essence of environmentalism. But notice that this happens often, if you watch conservatives react on global warming, it's always, oh, we're not changing as much as you think, it's not as many degrees as you think. And it's not because there's a real fear of warming, because of course when they thought it was cooling, that was also bad. It's a prejudice against the man-made, and I call this human racism. So there's a very deep human racism behind all our discussions, and it's chemicals, everything. We assume that if something is man-made, that it is immoral, and that it's bad. And that distorts the entire quote-unquote scientific discussion. And just to wrap up quickly, one of the most important statistics in the climate issue is not global mean temperature anomaly. The important statistic is how livable is the climate, and one of the best measures we have of that is what is the rate of climate-related deaths, that is, what is your chance of dying from a climate-related thing like a flood and a storm. In the last 80 years, it's been documented by the International Disaster Database, publicized by Cato's Indra Goklani, it's gone down by 98%. So we in the world are 50 times safer than we used to be, but no one pays attention to it. Why? Because we have so much human racism in us, it doesn't occur to us that we could have made things better, and the way we made things better is because while there is a greenhouse effect, which is generally a benign effect as far as we can tell, warms it a little bit, warm is generally nice, the most important effect of fossil fuels is the energy effect. And that is my name for the use of energy to make the climate more livable by allowing us mobility to live in the best climate we can, which I think I've made the best choice, Southern California, and to thrive in any climate through building a durable and comfortable civilization. So the number one climate issue is climate livability, which is achieved through climate mastery, which is achieved through energy, which is achieved through fossil fuels. So the whole debate is completely skewed against man, and you have to watch out for human racism, and if you take an anthropocentric view of everything, you look at things very differently, and that's how I'm different, and that's why my views end up being different, because I always ask what benefits human beings, and I know that the environmentalist prejudice is always against human beings. Even when they call it science. Let me just quickly come to a brief answer to the question, which was the opportunities that present themselves right now, and they are myriad. When I look at the oil and natural gas industry in my state, and I was asked to kind of focus on Pennsylvania, our governor led a trade mission to South America last year, Kevin Harley, one of my partners, was on that trip. The thing that came back the loudest was that the Chilean government in particular, but other governments in South America, want our natural gas. So the ability to get that feasibly and economically to market and to transport it to South America, and to allow the Commonwealth of Pennsylvania and other states here in the U.S. of A. to be exporters of energy, and the job creation and economic growth that goes with that, and the better standard of living and quality of life for all Americans, is limitless in my view. I knew you would, Tom, speak up. I do think that the other thing that we all ought to do, the opportunity, is just question authority. I mean, these guys are all running around saying that this business is settled, and it is not. I mean, how arrogant is it to say that we've learned everything we can learn about something so incredibly complex as the climate? I mean, the weather guys don't even get it right half the time. So I say just question, learn, and don't let them just pigeonhole us into this notion that we're a bunch of, you know, head in the sand types. And let me add myself that in our book that we've produced, that I mentioned to you, we actually go through some of the major environmental issues facing the country today, and actually talk about what are the opportunities that we can pursue based on these principles. I'll just mention one. One of our panelists talked about offshore drilling. And frankly, the position that I've taken, I was Secretary of Natural Resources for Virginia, which we don't have much offshore, but I said, I believe that we ought to be advocates of turning all of the offshore development back to the states, allow them to permit it, and then all of the revenues that the federal government collect will be from all of the new economic activity that will occur as a result of the development of the offshore resources. There's absolutely no reason why we can't do this, and it's a great charge to take out to state officials. I've worked with both federal government officials and state officials, and there are pluses and minuses, and there are good guys and bad guys in each area. But to have people say that state officials aren't capable of permitting offshore resources is outrageous. And we know that there are resources out there. We don't even know what all there is out there, but we know there's a lot. So get this book, pick up other books, look for opportunities to actually go out and make the argument to government officials and then in the private sector to people to be more positive about the things that are happening. Okay, we're going to go right to this young man, and then we're going to keep moving. I saw you two. Let's try and be brief with our questions so we can get through as many as possible. Well, I think you've hit on one of the major holdups there, which is the regulatory process. But I think that the other side of that, when you can get through the regulatory problems, is going to be with public-private partnerships that will allow it to be expeditiously and efficiently done, because it's got to be a good business model for companies to get their product to market. Okay, this gentleman right here. We're worried about being, we hear nothing. There's thousands of jobs in West Virginia and Virginia and so forth like that. We never hear about these things. We don't want to. We don't hear them talk. All right, who wants to tackle that? Alex. I'll just say something briefly. If you look at, say, the field of marketing, when I started my business, Center for Industrial Progress, which is a for-profit think tank, I wanted to look at who are the best persuaders in the world, because we're trying to persuade people. And I thought, okay, well, let's look at the people who can actually get money. They can actually get you to open up your wallet, which is really hard to do. Look at the marketers. And one thing that you get studying really good marketing people, particularly copywriters, is that just one or two things differently in the word choices in the argument can make a huge difference. There's a whole subtle science of it. And when I look at the practitioners among our politicians, I like to grade communication between negative five and five, because every time you open your mouth, it can just as easily be bad as good. There's a lot of people in negative territory, so I would say that they need training in better ideas and better ways of communicating them, and that if they do that, it can work to their advantage. If you're just a hack using junk talking points, yeah, and it's not sincere, it's going to be a losing thing. But imagine if they were passionate. Imagine if they could actually say something intelligent about environment, like, hey, we've created a better environment. We should be really proud of it, and fossil fuel's been a big thing. If you actually say, I mean, look at Rand Paul's popularity. He said similar stuff to me on things like coal. It's because he comes across as sincere and intelligent, he has some good arguments, and I think these politicians need to have those. The other thing they need to do is they need to stop just putting the blame on the administration and complaining. They really need to exercise congressional power to do the things that need to be done to stop the lawlessness. A lot of these regulations that are coming out of the administration, not just in our office field, but across the board, are extra constitutional, and we need to hold our elected officials accountable and say, you are responsible for those bureaucrats because you have the ability to have oversight over them, and you also control the purse strings, and if they don't listen, it's called an election. All right. Next, right behind you, and then we'll go to you. Right there. Yeah. Well, that's a battle that's being fought out right now in New York. You have people who cannot keep kids on their farm. They cannot save their farm. They cannot pay their taxes. They cannot pay their mortgage, and the solution is drill for gas, and they would be saved like the people in Pennsylvania, but the people in Manhattan and the people in Rochester and the university towns and the wacko environmentalists don't want them to do it, and it is a battle for our culture. It is a battle for who we are as a country and which way we're going to go, and they want us to go backwards with fewer of us around all living with windmills, but that's the battle that we face, and I think a lot of it. You know, several years ago when this racking thing started, I got a letter from a supporter in Manhattan who liked what I was doing on illegal immigration but didn't like the fact that I supported oil and gas, and he said, do you know if they develop the Marcellus in upstate New York, it'll pollute the water in Manhattan, so I called a friend of mine with the industry trade association in Washington, D.C., I said, what do you have off the shelf that I can send to this moron, and he said, oh, it'll go away. Well, it didn't go away, and the industry was unprepared for the battle, and just now finally it's catching up and fighting back this war of wills, and the wackos are willing to lie, you know, a lie and lie and lie, and every lie is replaced with another lie once it's, so it, yeah, it's a long-term battle. You're right about that. It's not just Obama. I would say one of the things we need to think about if we ever have a president who shares our views, you would not believe how much of the American tax dollar is, goes straight to some of these environmental radical groups, and we have to cut off that pipeline and make them earn their money just like the rest of us do. Okay, yes, sir, right there, yes, uh-huh. I see that the common denominator is the oil, and the price of oil, and it's about dollars a barrel. You can't spell respect. One of the things that has to be done is, A, you have to show that this hurts about 1% of the solar power bill. That's extra money. That's expendable cash. And then educate the public as to what isn't oil. So that's a couple of guys in a rat cage, as big as a small stage, running 24-7 and making a lot of energy. So this is, there's an interesting ongoing discussion within the energy industry and a lot, a lot of money being spent on what's called energy literacy programs. And I think there's a true element to this, but there's an element that makes it bomb. And the element that makes it bomb is you have to realize that people have limited time, and we don't just, we don't just become literate in something because someone else wants us to. We have to have a reason. And so in my experience explaining energy to people, the first thing I start with is connecting it to their life, and I explain, the more they understand its connection to their life, the more the mechanics of it and the nature of it are interesting. So, for example, I often start, when I go to colleges, explaining energy in terms of calories, because you can understand that we need a certain number of calories to work, and what we, we have this amazing discovery, this amazing invention throughout history of we can, we can get machines to work for us. You know, even Michael Phelps can only use 8,000 calories a day, but, you know, we can use millions and millions of calories by delegating to machines. Then they get that, and then you say, okay, well, but imagine if the calories, like, you didn't know when you were going to get them, right? They're like, they're completely unreliable. It's like having unreliable workers. They get, yeah, I don't want unreliable workers. It's not, I don't want to bring in a bunch of homeless people to my business. I want the employees of Apple. Well, the homeless people are the unreliables, a.k.a. renewables, a.k.a. junk energy, and the Apple employees are, you know, like fossil fuels and nuclear. So, you see, you have to always start with life, and once you start with life, if you do it properly, then people are interested in the, in the means and the details that will lead to life. That's cool. Well, listen, I know there are a lot of questions. I've just gotten a high sign, so I'm going to take one more. How about from the NASA scientist? I've been leading a group of about 25 looking at the global issue. And we were very young. A NASA employee that you all know that was spouting off at the world, NASA should have let this guy do this. But I think he had some political connections that he's saying he wouldn't listen. So I've been working with your colleague, David Kreutzer, and others, to really take We've just published a book on our website, a book report. It's got 84 pages. It's very tutorial. Try to understand it. And I just urge you to take advantage of it. Our website is, everybody knows the right stuff, Google, right? But we're the right, we're not scared of that global warming. The rightclimatestuff.com? Yes. All right, very good. Well, listen, it has been wonderful here. This has just been great. I think the wonderful thing we've learned from today is there's lots of energy. We need to do a better job of getting the word out that it's a good thing. And we had a great example in Ronald Reagan who changed the way the world worked when he became president because he knew the facts and wasn't afraid to fight. So thank you all for being here. And see you at dinner. So you're in Colorado. There's a lot of action.