Discussion with the hudson institute. He weighed in on infrastructure, diversification of Power Sources and issues with the transition to clean energy. This is 30 minutes. Rep. Armstrong thanks for having me. This should be fun. Brigham absolutely. My name is brigham mccown, i am the Senior Institute of the hudson institute. I am in germany. We are part of a global seminar. You are also, by way of introduction, the vice chair of the industry and commerce committee. In the house, you are on several subcommittees, relating to regulation, food, drug safety, and energy. That makes you a very busy and popular man. Rep. Armstrong i dont know about popular, but busy for sure. Brigham yes, sir. One of the initiatives here at hudson is to try to come up with a coherent Energy Security strategy that takes a look at the Domestic Energy policy and how that policy is very important to our National Security, Economic Security as well. You know, from your perspective, starting off here, framing the issue of american Energy Security, for you, how would you define and what do you think are the important aspects of an Energy Security policy . Rep. Armstrong first of all, you start with, we are one of the only countries in the world that is energy secure. That is a tremendous strategic advantage on the global stage, it only in a place as crazy as washington, d. C. Would we try to make that strategic advantage a disadvantage, and it is all of the above, right . It really is. I grew up in the oil business. My dad started in the oil business. I got elected to the state senate in 2012. North dakota was in the middle of an oil boom. I sponsored the largest info structure in history. We rewrote all of our pipeline bills and north dakota. It is different when you are laying 100 miles of pipe week versus 100 miles of pipe or year. We want to move forward, and i think the biggest difference i have noticed particularly in energy in congress is republicans are kind of agnostic toward infrastructure and r d. We wanted for everybody. It does not matter if its pipeline, highway, rail right rail line, transmission line could we used to be really good at getting this stuff into the ground and being able to do it, and we are not anymore. Through litigation, bureaucratic morass, a thousand different reasons, and unfortunately right now, when we talk about energy transition, which i hope we can get to in a little bit, there are too many people out here that pick winners and losers. Brigham absolutely. Lets talk about vertical infrastructure. Well, let me back up just a second. Every president since the Arab Oil Embargo has talked about energy independence. For many people, they have sort of laughed. It was a throw away for a politician running for president to say we are going to become energy secure, but we became energy independent, didnt we . Rep. Armstrong and anyone laughing at texas, you might have invented hydraulic drilling down there, but we have perfected it and north dakota. In 2017, the u. S. Is the only country in the world that essentially low word climate emissions. We developed we discovered this incredible resource of oil but also this incredible resource of natural gas or you can do things at once. We just have to have policy based on the reality of what it will take to drive the world and drive the u. S. Economy over the next 50 years and not have ideological environmental policy that is really based on outsourcing. Brigham when we talk about Energy Security, i like to talk about it has to be available, secure, affordable, abundant. Would you add anything else to that definition . Rep. Armstrong exportable. We notice this right now with the war in ukraine and a lot of our European Allied friends would love a whole bunch of our liquefied national gas and to be less reliant and the infrastructure for that. I think has to be exportable, t oo. We know this because we produce really great like crude in the balkans, but we need it from the golf, and we get it from our nearest neighbor and ally, which is canada. Brigham framing that up a little bit, refiners are set up for certain types of crude oil, and traditionally a lot of the gulf coast of refineries are set up for crue oil versus the oil that comes from north dakota, right . Rep. Armstrong we are 98 diesel, and we are proud of it, but if you are making marine fuel in the golf, you want heavy crude, not like crude. Brigham with respect to export ability, you are suggesting energy as an important component of our policy strategy, helping our friends and allies as well. Rep. Armstrong absolutely appeared when you consider who controls the investment amount vast amount of Energy Supply in the middle east, in russia, and in all of the places, which, i mean, by any stretch, we have seen the things that have been going on in saudi arabia, iran, and all those different issues, when the u. S. Can provide our allies was something that they need to run their economies as well, theres two things that happen for one, no matter what dispute we are in with germany, we are not rolling tanks into berlin. Two, we do a cleaner than anybody else, and i think a lot of the rhetoric and narrative around climate over the last 15 years has negated that simple, scientific fact. Brigham as you mentioned earlier, we had a strength, energy independence, which includes helping our allies, and at least this administration, if not previous administrations, have undermined that at every turn, have given it away. Why is that . Rep. Armstrong i think for a lot of reasons. When i was in the seventh grade, the berlin wall fell, right . For many, many decades, we were the only superpower, and there is this entire, i mean, there is an entire Cottage Industry out of shutting down the fossil fuel industry. It has happened elsewhere, right . Germany is very, very lucky they had an unseasonably warm winter this year, and the problem is, the longterm Energy Policy for all of these places looks a lot different than a shortterm politics, but they have started to realize that rely on one particular country, particularly when it is not necessarily in the same ideological place as the rest of your for your energy is horribly problematic, at the same time they are shutting down Nuclear Plants because they were taken off line years ago, five years ago, seven years ago, it is impossible to turn that train around. Other places they have real access to natural gas, and to be able to do these things, they have to develop the infrastructure. Brigham it is interesting you say that, because one of the ceos of the german Natural Gas Utility Companies said we did not realize that Energy Security mattered any longer. What would you say in response . Rep. Armstrong i would say that you need reliable, resilient, affordable low power. If all of the other wind projects and other projects that exist across the world, they dont keep up with the increase in baseload. They dont replace existing baseload. They dont keep up with the increase for how are we going to do this in a meaningful way . We have other issues, we have diana in the americas, we have venezuela, which is a whole different problem, we have access to these different things, and i can use guyana as an example. The system western hammered three or, munro western hemisphere, munro doctrine stuff. Guyana does not need a trade agreement. They have natural gasket with a need is financing. I will say it, any region, look strategically where they are located on the map. That should be terribly important to the United States, and we dont get out of our own way on these policy conversations. Near enough. Brigham speaking of our own back door, china has made a Charm Offensive in central and south america, they have been doing so in africa for a while, and we have ignored our own backyard, whether it was with energy or mutual assistance. Rep. Armstrong we had a hearing today, an oversight on esg. Regardless, i mean, American Companies have duty to shareholders. We have the most sophisticated form of benevolent democracy that has existed. In 10 years, africa is going to burn more coal than they are now. I dont know why i would take ourselves we would take ourselves out of that process. We know how to do it cleaner, better than everyone else, but more portly, we are feeding developing places in the world for a climate ideology that allows somebody to come in and take over where we just failed to act. That is neither responsible nor is a very smart for our Foreign Policy or Domestic Energy and Overall National security interests. Brigham you mentioned africa. Part of this conference was a group of african nations talking about building out natural Gas Infrastructure pipelines throughout Northern Africa down to the west africa. They are investing in more fossil fuels, more pipeline, and when you ask them, well, arent you decarbonizing . They sort of laugh and say, look, this does not work, because until you can help us find something that is affordable, that is the same cost of natural gas, and it is just not physically possible to replace, tried and true energy sources, they say and energy mix is ok, and sure, we will have solar in the sahara and some other places, but the single point of focus of moving all renewables is not reasonable nor rational peer i would presume you would agree. Rep. Armstrong well, and also, from a domestic standpoint, when you are trying to lift an entire country out of poverty, two things that have lifted most people out of poverty and most of the world are democracies and cheap, reliable energy. Reliable. You have to have it. They are not interested in some 30year climate omission goal. They dont have Running Water in a lot of places. They dont have these things. To try to ask them to incorporate an urban United States version of some kind of climate ideology is just it is not going to happen, and we should not try and do it. What we should do is we should have American Companies and american investors deploying the technology that we have developed in places like the ballgame, and places like the permian, and we should be deploying those assets and that technology and that now how over there. That know how over there. Brigham recently commissioners, both public and democratic commissioners appeared before the Senate Committee and expressed real reservations about our ability to make and meet baseload power in the United States with retiring existing production facilities. What should we be doing to add to baseload instead of subtracting from it today . Rep. Armstrong well, i think, and you can look at this through the policy framework, regulatory framework, and the legal framework. Western virginia is a good case. Basically the Supreme Court said Congress Needs to do its job. That agencies cannot do the job. The problem is, any utility that has been operating under the epas reg, it is an eightyear case. We cannot decide these things eight years later. The regulatory universe will follow the original will, not wait and see what happens at the u. S. Supreme court. We can stop shutting down these executive orders that will shut down baseload fuel. The clean power plants, the vast majority of it was never enacted, right . They could never get the votes in congress. It still did a good job of shutting down coal filed coalfired power plant in the United States. This is where i think democrat and republicans actually have an ability to come together. Any one of the clean power utility plans being opposed by my colleagues on the other site of the aisle, you need 2. 5 times the structure we have now. Two thirds of all the cars in the United States elected by 2032, where are you going to plug them in . Dont take my word for it. The New York Times wrote an article too much to go about it. Texas has some unique issues, but there is a cold snap all the way through north dakota, and we were very close to having significant brownouts. I can tell you if we lose power for the same amount of time houston did in north dakota in january, we have a whole different set of real, human consequences. Brigham why is this administration picking winners and losers . Why are we investing in something with no end goal, no knowledge of how much it is going to cost or if it is even going to work . Rep. Armstrong it is really hard, and i think some of this and republicans were late to the game on the climate fight, right . The minute Climate Change was equal with global warning, it was over. We were late to the game on this fight, and we are not good at telling our story in a great way. But i think the other answer is, for far too many people, this is no longer i have had conversations with normal, reasonable, rational people that, on any other issue, you can disagree, you might come to an agreement, you might not, but you will have a normal, thoughtful conversation, but when you talk about climate, they will run out of the room with their hair on fire. So how do you do this . I think, you know, reform is a part of the conversation, but we have to figure out a way to get this infrastructure in the ground faster, otherwise we are going to run into a real texassized problem, except it is going to happen in chicago or north dakota or somewhere in january, and then i dont want to wait for than for everybody to wake up. Brigham you touched on permitting and infrastructure. I heard an article a few days ago in Real Clear Energy talking about that we have to have permitting reform, regardless of whatever infrastructure you want to put in the ground. It is broken, and it seems to be an issue that both democrats and republicans at least agreed to in principle. Why is it so hard to get this done . Rep. Armstrong well, i think, we passed hr1 over. Hopefully it is a negotiation going on. I think the real question is, i think anything we get back from the senate on this will include transmission, too. Which it should. The key question is, how do you pay for it . The pay for it has become important. 32 trillion in debt is one reason why. One thing we have a chance to get done outside of a farm bill than an ndaa, i think it is some kind of substantial permitting reform for it i think we have a chance to do it. Brigham can we talk about hr1 for a minute, because a lot of americans are not familiar with it. It is a republican proposal. What all does it do . If it were passed by the senate. Rep. Armstrong well, it was a combination of lots of different bills. A lot of them ran through natural resources. I can talk specifically about the ones that ran through energy and commerce, you know, one of my bills was in there, which is a crossborder permitting bill. We get a lot of Economic Activities going both ways across the border. This is not a keystone xl bill. Theres only one company in the world that can build keystone xl, and they scrapped the deal and made economic decisions. But there are seven or eight other crossborder projects that exist, some of them replacing existing lines, some of the new lives. The only unique thing about the keystone xl, two, it was the most vetted pipeline industry and the only one that can be stopped by the stroke of a pen. These are 12 year to 15 year Infrastructure Projects. How are you going to raise capital for these necessary Infrastructure Projects if you know you will have to come up possibly 38 president ial elections in the meantime . It is not designed to stop the pipeline as much as to solve the investment. We did some things to loosen up the bottleneck in refining. Ethanol come of her noble diesel, a ton of natural gas in north dakota. Nobody is against the blended barrels. The blended barrels a replacing traditional barrels, because we have not bought a refinery line since 1976 in louisiana. We have to figure out a way to get more Refining Capacity online, which is also, the side note, what the Biden Administration is pushing, we will lose more refining bills, because they are making economic decisions based on, you know, se ven, eightyear plans. This bill made it easier to get in for structure in the grounded by the way, it does not take away any single environmental requirement, not a one. This requires them to get done in an unreasonable amount of time, but at least it is a finite amount of time. Increased capacity. The energy side of this really truly was a linear infrastructure bill how can we allow the federal government to allow private enterprise, raise capital, and get these permits into the ground faster . We have water in the u. S. Which put north dakota 92 under federal privacy, and at the same time we are allowing liberal states to use their interpretation of federal water law to stop states like north dakota from getting the product to market. It is basically an inversion of what interstate commerce should become as we rolled a little bit of that that and there are two sides to this, right . One will help get into structure in the ground, and two, it will send a signal to markets and companies that we are actually open for business again, which will immediately stimulate capital and stimulate investment. Brigham talking about government decisions, one thing with the federal regulator is uncertainty creates risk, risk is something businesses and Capital Market tries to avoid. Do you think this administration is doing what they can to lower risk and set the scene for investment and ever structure . Rep. Armstrong the last real spike in oil prices, the first time in my lifetime, where you see a massive spike in prices this not correlate to a massive increase in drilling. First time ever. There is only one reason for it. They do not trust this administration, and they did not trust this government to allow them to get the infrastructure, we are a demographics ignorant north america, rugby, north dakota, and by the way, none of the big five are in north dakota. These are small, midlevel companies that are looking at it, and they have a duty to their shareholders, and they are looking at it in a different way, and that is totally based on government decisions. Just drilling the oilwell does not work or you have to be able to refine the project, move the natural gas, this is the first time, and i do not think it is an accident. At the same time, we are so derelict in our Leasing Program in the gulf that 10 years from now, we will have another oil crunch come if we are not paying attention. Brigham ok. Shifting gears back to legislation you cosponsored, one has to do with natural gas stones. Can you tell everybody a little but about that . Rep. Armstrong yeah. There are two things to this, a second part which i care about, and we saw a little bit of this in california. I also deal a lot with the privacy legislation that moves around in all of the spirit one of the reasons i think everybody wants everything electric is it is all logged into the internet. At the same time, everyone saying republicans are making a huge deal out of gas. There are no new issues on all new construction. By the way, they are also having a revolt internally from their own developers and their own renters and all of those different things, but, yeah, we sponsored a bill. Theres a lot of these, and some of them were in the ira and tax credit and all of these things, everything, by the way, from transformers to utility lines for gas stoves. Their time to federally regulated at a pace that makes everything more expensive for the consumer, and that simply does not make sense, and we have to continue to have a robust portfolio. It is a little bit interesting, because most of electricity is still created by carbon. They may not want it to become and when they talk about an energy extrinsic and, we have never transition away from primary energy in the country in the world come in the history of the world. We burn as much as we did 2000 years ago. When they talk about ending the stuff, it has something never happened. Transition should look like a more robust portfolio, but in order to do that, you need a transmission infrastructure. You need to be able to move weatherdependent power further if you want to have reliability and resiliency on the grid, but you also have to be able to have gasfired pyre power plants, Nuclear Power plant, coalfired power plants that are there when the wind is not blowing and the sun is not shining, and, you know, when you can put aber noble electron on the grid for cheaper than a cost to produce, it is difficult for gas to compete without your when you give renewable privacy on the grid, it is hard for power to start up and wind down quickly. We have created this environment that makes it difficult, and we have to do it. Brigham this is part of what you alluded to earlier in the conversation, that the government is intervening, picking winners and losers, through tax policy, subsidies, and other tax credits and preferences. Rep. Armstrong yeah. The reproduction tax credit or primacy on the grade, i have said this in hearings before, theres a lot of talk about how wind and solar is now cheaper to produce than coal, welcome everything is cheaper to produce when you get a tax break and subsidy. That is not unique to renewable energy. The problem is, you are starting to see this, one, you think it is hard to get a pipeline in Western North dakota . Try to get a highvoltage transmission line through a wealthy suburb in the east coast, where the minute you stick a shovel in the ground, you devalue every house in a suburb by 40 . We have to figure out a way to do this, and the answer seems to be a lot of times, well, we will just regulate it, and they will figure it out. That, in the space, is incredibly dangerous. Brigham yes, absolutely. Do you think, and i meant to ask you, the natural gas band through the billing code change that berkeley tried, that got thrown out will it have an effect outside of the ninth circuit . Is this the right ruling . Will it deteriorate anyone from moving forward . Rep. Armstrong will it . That can happen pretty quick. The ninth circuit has been a little bit of a pleasant surprised for a conservative politics for the past couple of years paid you will see more of this. You have seen this court is very willing to push back on administrative agency. They are taking up the chevron rule. If you really want to see how they force this to happen, i think this is it, and i think it has another added benefit to James Madison said congress would fight to the death to protect his Article One Authority p that may have been true get i would say currently congress will fight to the death to maintain the membership in congress, so we have abdicated our responsibility to Agency Regulation over the course of the last 40 years, and i think the Supreme Court is going to was us to do, which is to take tough votes that matter. Brigham lets talk for a second about the chevron doctrine of deference to federal agencies, for everybody who may not be aware of that. Congress delegates a lot of power to federal agencies that are quasijudicial, legislative, even that, and the way, what the Supreme Court has taken out our concerns about agencies exceeding their mandates, if eating their authority, and they are properly subjected to oversight by congress. Is that an accurate representation . Rep. Armstrong it is accurate. The rains acted as the congressional version of that were anything over i think 200 million would have to be approved by congress. But yeah, the chevron doctrine, one of the unique benefits of the entire obamacare fight in the u. S. Supreme court incision was Justice Roberts ability to look at that was to look at how obamacare went come apart at his ruling was at least a signal, at the very least, to reevaluate the chevron doctrine, and now there is a case that has been granted in front of the u. S. Supreme court. It could have a really, really positive impact on anybody who is watching this. The people you actually elect make the decision, not the people who work in a cubicle and some nameless, faceless alphabet soup agency, and it is important. We have to start taking more of that control back. Brigham what can we be doing . What should anybody watching this video, wherever they are in the country, what can they do to try to weigh in . Rep. Armstrong there are a lot of different answers, but i think being one of the things we have not done as well, and i dont know why, and i think some of it is where it is produced versus where the users use all of the stuff, is to be proud of what we do here. We always have to be better at explaining that not only is this a National Security issue, it is a jobs issue, and it is an environmental issue and we are really good at producing things the world needs, and we are really good at doing it cleaner and less expensive than anybody else. The reason we usually cannot is because of government regulation and government interference. You know, in north dakota, there were articles in the New York Times about superfund sites in north dakota. That is interesting from people who have never been there. Everyone sent their kids there, they hunted and fished there. If you dont like the outdoors, it is not the right place for you. Go to an offshore rig in the gulf and see where the fish are swimming. They are swimming around the offshore rig. They are clean. We do this better than anyone else, and we have to acknowledge the fact that it does not matter where you are at in the world, the world needs this stuff, and if we are not producing it, our strategic adversaries on the world stage are going to be the ones doing it. Brigham i think that is a very valid point, and one of the things we are researching now as we talk about america being the arsenal of democracy during two world wars, but we are also the arsenal of Energy Supply during those two world wars, we powered the allied efforts in both world wars. And im literally sitting in the former no mans land between east and west germany right now. This is where this new Convention Center was built. Parts of the wall sitting outside. Your thoughts are not lost on me. Anything else youd like to share . Rep. Armstrong i continue to sell the way i sell north dakota in d. C. I dont explain why what we do in north dakota is important to us, i explain why it is important to them. If you like to fill up your car, you like north dakota. If you like to buy wheat or corn at the grocery store, north dakota is important to you. If you like to turn the light switch and the lights come on, north dakota is pretty important to you can we have the opportunity to allow u. S. Companies and u. S. Energy in the energy mix, and we should not shirk that responsibility, we should be happy. We are in a weird place right now because of really strategic things that happened between ukraine and russia. The rest of the world has kind of caught on to natural gas and caught on to what this looks like. We just have to get d. C. To act a little quicker. Brigham boards to the wise. Thank you, sir, very much for your time today. We appreciate it. We know how busy you arcade i have personally been to your state several times and can vouch for how beautiful it is. Rep. Armstrong is a great place to be. A portrait unveiling ceremony of former u. S. House speaker. We have live coverage from statuary hall and watch on our free mobile video app or online at cspan. Org. 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