03.27.20

Hoeven Continues Advancing North Dakota Energy Priorities With Secretary Brouillette

Senator Stresses Importance of Pushing Back on Saudi Oil Price War, Ensuring Fair Value for Coal, Federal Preemption of Washington Crude-by-Rail Law

WASHINGTON – Senator John Hoeven, a member of the Senate Energy and Natural Resources Committee, today spoke with Energy Secretary Dan Brouillette to advance key priorities for North Dakota’s energy industry. These include:

  • Pressing Saudi Arabia to pull back on their oil price war.
  • Ensuring a fair capacity value for coal.
  • Federal preemption of a Washington State law that effectively blocks the transport of Bakken crude by rail.

“As we work to overcome the challenges of COVID-19, one of our many priorities is maintaining industries that are essential to our national security and quality of life, like our energy industry,” said Hoeven. “Robust domestic oil production protects us against instability abroad, while coal-generated electricity is essential to the affordability and reliability of the grid. We again made the case with Energy Secretary Brouillette that we need to maintain pressure on the Saudi regime to end its price war, while also continuing our efforts to reverse the Washington State law that needlessly undermines oil production in the Bakken. Further, we continue working to ensure coal is properly valued by energy markets across the country, maintaining access to this vital source of baseload power.”

SAUDI PRICE WAR

Hoeven has been working with the administration and his Senate colleagues to help provide stability to global energy markets and bring an end to Saudi Arabia’s price war. In addition to Brouillette, the senator has raised this issue with President Trump, the Saudi Ambassador to the U.S. Princess Reema Bandar Al Saud and the Saudi Crown Prince Mohammad Bin Salman Al Saud. The senator has repeatedly stressed the economic impacts of COVID-19 and the importance of U.S. domestic energy production to the nation’s security.

FAIR VALUE FOR COAL

The conversation with Brouillette comes as part of Hoeven’s continued efforts to ensure coal’s role as a reliable source of baseload power is properly valued. To this end, Hoeven:

  • Has been pressing the Federal Energy Regulatory Commission (FERC) on this issue.
  • Introduced an amendment, along with Senator Kevin Cramer, to repeal the one-year extension of the Wind Production Tax Credit (PTC).

Hoeven also previously secured a commitment from Brouillette to include coal country in his planned visit to North Dakota in order to build on the above efforts, as well as to advance the development of carbon, capture, utilization and storage (CCUS) technologies. The senator continues working to confirm the details of this visit given the COVID-19 outbreak.

CRUDE-BY-RAIL LAW

Hoeven has been urging the administration, including Transportation Secretary Elaine Chao and the Pipeline and Hazardous Materials Administration (PHMSA), to pre-empt the 2019 Washington State law that effectively bans the transportation of Bakken crude by rail.

Hoeven has repeatedly made the case that the law violates the Commerce Clause of the Constitution and has further bolstered this effort by highlighting a Sandia National Laboratories’ Crude Oil Characterization (Sandia Study) study that found Bakken crude has comparable physical, chemical and combustion characteristics as crude from the Permian Basin and the Strategic Petroleum Reserve.

The Washington law requires crude oil unloaded in the state to meet a 9 psi Reid Vapor Pressure (RVP), far lower than the national guideline for stable crude oil, which is 14.7 psi. The Sandia National Laboratory Study concluded that “vapor pressure is not a statistically significant factor” in affecting combustion characteristics, and their results “do not support creating a distinction for crude oils based on vapor pressure.”

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