[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


HIGHLIGHTING THE ROLE OF SMALL BUSINESSES IN DOMESTIC ENERGY PRODUCTION

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON RURAL
                 DEVELOPMENT, ENERGY, AND SUPPLY CHAINS

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                              HEARING HELD
                             MARCH 29, 2023
                               __________

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 118-007
             Available via the GPO Website: www.govinfo.gov
             
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
51-444                    WASHINGTON : 2023               
             
             
             
                   HOUSE COMMITTEE ON SMALL BUSINESS

                    ROGER WILLIAMS, Texas, Chairman
                      BLAINE LUETKEMEYER, Missouri
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                         BETH VAN DUYNE, Texas
                         MARIA SALAZAR, Florida
                          TRACEY MANN, Kansas
                           JAKE ELLZEY, Texas
                        MARC MOLINARO, New York
                         MARK ALFORD, Missouri
                           ELI CRANE, Arizona
                          AARON BEAN, Florida
                           WESLEY HUNT, Texas
                         NICK LALOTA, New York
               NYDIA VELAZQUEZ, New York, Ranking Member
                          JARED GOLDEN, Maine
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                          GREG LANDSMAN, Ohio
                       MORGAN MCGARVEY, Kentucky
                  MARIE GLUESENKAMP PEREZ, Washington
                       HILLARY SCHOLTEN, Michigan
                        SHRI THANEDAR, Michigan
                          JUDY CHU, California
                         SHARICE DAVIDS, Kansas
                      CHRIS PAPPAS, New Hampshire

                  Ben Johnson, Majority Staff Director
                 Melissa Jung, Minority Staff Director

                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Wesley Hunt.................................................     1
Hon. Marie Perez.................................................     3

                               WITNESSES

    Mr. Lucas Gjovig, President, GO Wireline, Williston, ND......     7
    Mr. Nick Powell, Chairman & Owner, Colt Energy, Mission, KS..     8
    Mr. Edward Cross, President, Kansas Independent Oil and Gas 
      Association, Topeka, KS....................................    10
    Mr. Dan Conant, Founder & President, Solar Holler, 
      Shepherdstown, WV..........................................    11

                                APPENDIX

Prepared Statements:
    Mr. Lucas Gjovig, President, GO Wireline, Williston, ND......    25
    Mr. Nick Powell, Chairman & Owner, Colt Energy, Mission, KS..    28
    Mr. Edward Cross, President, Kansas Independent Oil and Gas 
      Association, Topeka, KS....................................    31
    Mr. Dan Conant, Founder & President, Solar Holler, 
      Shepherdstown, WV..........................................    53
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Amogy Statement..............................................    60

 
 HIGHLIGHTING THE ROLE OF SMALL BUSINESS IN DOMESTIC ENERGY PRODUCTION

                              ----------                              


                       WEDNESDAY, MARCH 29, 2023

              House of Representatives,    
               Committee on Small Business,
    Subcommittee on Rural Development, Energy, and 
                                     Supply Chains,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Wesley Hunt 
[chairman of the Subcommittee] presiding.
    Present: Representatives Hunt, Meuser, Stauber, Mann, 
Perez, Schoulten, and Golden.
    Also Present: Representative Williams.
    Chairman HUNT. Welcome, everyone.
    Before we get started, if you do not mind, could you please 
stand? We will say the Pledge of Allegiance, please.
    Good morning. Thank you. That is so kind.
    Thank you all for being here. Again, I really, really, 
really appreciate it. Thank you to the witnesses for taking 
time out of your schedule to be here.
    I now call the Subcommittee on Rural Development, Energy, 
and Supply Chains to order.
    Without objection, the Chair is authorized to declare a 
recess of the Committee at any time.
    The Committee is here today to hear testimony about the 
role of small businesses in domestic energy production and the 
regulatory hurdles they face which threaten American energy 
independence.
    I now recognize myself for my opening statement.
    I have to bang the gavel first.
    The Committee meets today to hear testimony about the vital 
role small businesses play in the U.S. energy production and 
why now more than ever we need to empower small businesses to 
unleash America's energy potential.
    Small businesses have crucial, yet often overlooked, 
impacts on the health of the U.S. economy and the U.S. national 
security.
    According to the Small Business Administration, small 
businesses account for nearly two-thirds of all net new jobs 
and, in the energy sector specifically, small businesses employ 
approximately 800,000 workers. From oil and gas exploration to 
drilling, extraction, and operations, small businesses account 
for the majority of America's energy firms.
    Furthermore, small businesses are at the frontier of 
innovation, spurring the shale revolution, unlocking vast 
stores of domestic energy supply, and helping cut U.S. carbon 
emissions by 14 percent in just 10 years.
    In the oil and gas industry, small businesses are 
incredibly competitive and adaptable. Their adaptability 
enables them to innovate, focus on more marginal oil and gas 
reserves, and pursue revolutionary technologies that larger 
companies may overlook.
    Small businesses in our energy sector do not only drive our 
economy, but they also meet a critical need for American 
families.
    Hydrocarbons account for 80 percent of the world's energy 
supplies and oil powers 95 percent of all transportation of 
goods and people.
    Elected officials cannot legislate away for the need for 
oil and gas.
    Recent behavior by the Biden administration highlights the 
fact that America's need for abundant and affordable fossil 
fuel energy is not shrinking but growing. In the past 12 months 
alone, President Biden has called on oil and gas companies to 
``increase production and refining''; has plundered 180 million 
barrels from the Strategic Petroleum Reserve; and, has begged 
Saudi Arabia to produce more oil.
    In November, the Biden Administration warned Saudi Arabia 
that a refusal to increase oil production would be perceived as 
a choice to side with Russia against American interests. When 
Saudi Arabia cut production, National Security Council 
spokesman John Kirby said the U.S. should review the 
relationship with Saudi Arabia in light of the OPEC decision, 
and to ``take a look to see what the relationship is serving 
our national security interests.''
    This is a far cry from the president who, immediately upon 
taking office, cancelled the Keystone XL Pipeline, halted oil 
and natural gas lease sales, and raised taxes on the fossil 
fuel industry.
    The facts are clear; our dependence on oil and gas is not 
going anywhere.
    We must do more to invest in oil and gas production even if 
the world seems that the oil demand peak is within a decade.
    But, given the existing U.S. regulatory environment, it is 
no surprise that the oil and gas production has being outpaced 
by demand.
    The United States can make the decision to either take the 
lead, or let China and Russia displace us in yet another sphere 
of influence. The United States should be the swing producer of 
oil and gas in the globe, not Saudi Arabia or OPEC.
    If we continue to depend on countries with high 
geopolitical risk, we will only cede more leverage over our 
economic and security interests to nations who want to weaken 
the United States.
    Conflict across the globe and the battle for strategic 
reserves between the United States and countries like Iran, 
Saudi Arabia, Russia, and China makes it more critical for the 
United States to have control over energy production.
    In fact, the recent strategic partnership struck between 
China and Russia is a perfect example of why we must focus on 
policy that unleashes American energy dominance.
    In conclusion, producing energy within the United States is 
crucial for our economic stability and security, and small 
businesses play a critical role in this.
    The United States must continue to be the standard bearer 
in the production of abundant, ethically produced, and low-
emission energy.
    If we empower American small businesses, we will do just 
that.
    I want to thank you all again for being here with us today 
and I am looking forward to today's conversation.
    And with that I yield to our distinguished Ranking Member 
from Washington, Ms. Gluesenkamp Perez.
    Ms. PEREZ. Thank you, Mr. Chairman, for holding this vital 
hearing on the role of small businesses and domestic energy 
production. Over the past 2 years, rising global energy prices 
have placed a burden on American consumers and small firms. 
During the peak of inflation last June, year over year prices 
increase in energy nearly matched the previous record set in 
the 1980s. this has put a serious strain on the pocketbooks of 
Americans and the balance sheets of our local businesses. The 
rising costs hurt lower income and working class people the 
most as we spend higher proportions of our income on gas to 
heat our homes and power our vehicles.
    To fully understand the rising costs of energy, we need to 
examine the broader context around energy prices here in the 
U.S. Energy costs have risen due to a number of factors. First, 
the initial shock of COVID-19 pandemic spurred many major 
companies to significantly cut oil and gas production as demand 
plummeted. But while demand rose quickly, production is just 
slow to catch up. Adding to this was the Russian invasion of 
Ukraine which put immense strain on global oil supplies 
resulting in higher prices worldwide. Finally, we cannot ignore 
corporate greed exhibited by many major companies.
    The domestic energy producers have reaped high profits at 
the expense of hardworking Americans. Instead of investing in 
more production to ease these prices, companies opted to enrich 
shareholders with hundreds of millions in dividends and stock 
buybacks.
    The issue before us today has no simple solution. There is 
no panacea. Fossil fuels will have an important place in our 
economy. You cannot match the fuel density. Working Americans 
cannot go out today and buy a new electric car. Buying our way 
out of this is not, you know, the path. But at the same time we 
need to contend with the long-term effects of climate change.
    Just last week, an IPCC report detailed the catastrophic 
consequences of refusing to adapt our energy grid to low 
emission sources. From crop failures to famine to 
multiplication of infectious diseases, climate change has the 
potential to wreak havoc on our economy and infrastructure.
    As an aside, I work in a garage. When it is 117 degrees 
outside, bringing in hot cars, we cannot work. That is the 
reality of working class people in climate change. And we have 
to acknowledge that domestic production is only part of the 
equation. Transmission and grid security are equally important 
and often ignored.
    As someone who lives in rural Washington, I know that rural 
economies cannot reach their potential when we are lacking 
power lines to get energy from point A to point B. I would love 
to work with the Chairman to hold future hearings on 
transmission issues facing rural America.
    So, this begs the question, how do we reconcile the urgent 
need to support working class Americans who rely on fossil 
fuels to get to work every day with the imperative to 
transition to cleaner, more sustainable energy.
    The answer I believe lies in the power of small businesses 
and entrepreneurs. These individuals are at the forefront of 
innovation driving progress in the field of domestic energy 
production. They have the vision, drive, ingenuity to create 
new and better solutions to the challenges we face.
    As we ramp up production of alternative energy sources, 
small, clean energy forums are creating hundreds of thousands 
of local, good paying jobs as these firms flourish, they drive 
renewal and prosperity in many rural and working-class 
communities across the country.
    That is why I am support of efforts to ensure that small 
firms have the resources, funding, access to capital and 
infrastructure necessary to succeed in this transition.
    For instance, the Infrastructure Investment and Jobs Act 
created grants that aid in research and development for clean 
energy. And the Inflation Reduction Act created important 
incentives to revitalize domestic manufacturing for clean 
energy and work to expedite environmental reviews for drilling 
permits on public lands.
    While I support an ``all of the above'' approach to 
domestic energy production, the starting place of our proposal 
should not be fossil fuels above all approach. We need to 
empower smaller firms across the board to develop solutions 
that bring down energy prices for working families.
    With that, I sincerely look forward to hearing the 
testimony of our witnesses here today as we examine the 
important role of small firms in domestic energy product.
    Thank you, and I yield back.
    Chairman HUNT. Thank you, Ranking Member Gluesenkamp Perez.
    I now recognize the Chairman of our Committee, Mr. Roger 
Williams from Texas, for his opening statement.
    Mr. WILLIAMS. Good morning. Thank you, Mr. Chairman. I want 
to thank again Chairman Hunt for holding today's Small Business 
Subcommittee on Rural Development and Energy and Supply Chains 
hearing on the Role of Small Business in Domestic Energy 
Production.
    This is an extremely important hearing so we can shine 
light on how the Biden administration's harsh rhetoric against 
the oil and gas industry is having a very real negative impact 
on American small businesses.
    In full disclosure, I am from Texas. I just want to tell 
you that. So, on top of dealing with out of control inflation, 
supply chain issues and labor shortages, this industry must 
also deal with discrimination from the banking sector because 
their work has fallen out of political favor with my colleagues 
on the left.
    And this hearing is also especially relevant because my 
Republican colleagues are offering a solution to help these 
businesses as we speak.
    H.R. 1, the Lower Energy Costs Act, which is being debated 
on the House floor, will solve many of the issues we are 
discussing today. And specifically, this bill would increase 
domestic energy production, reform the permitting process, and 
reverse the Biden administration's anti-energy regulations that 
are crushing our nation's small oil and gas producers.
    So I want to thank you all again for being here with us 
today. I am looking forward to today's hearing.
    And with that, Mr. Chairman, I yield back.
    Chairman HUNT. Thank you, Chairman Williams.
    We will now proceed with the witness introductions.
    Our first witness this morning is Mr. Lucas Gjovig. Mr. 
Gjovig is the president of Go Wire--excuse me, of GO Wireline , 
which provides wirelines and pressure pumping services to 
customers both large and small who drill and operate wells. A 
small business based in Williston, North Dakota, GO Wireline s 
works spans for petroleum welds, to water, helium, and carbon 
sequestration wells. Through his time at GO Wireline, Mr. 
Gjovig understands firsthand the negative impacts of uncertain 
regulatory environment has on the energy industry and by 
extension, the overall economy. His real-world experience makes 
him an excellent witness. We are very fortunate to have you 
with us today, sir.
    In addition to his work at GO Wireline , Mr. Gjovig serves 
on the Advisory Board of the Energy Workforce and Technology 
Counsel and volunteers on the Legislative Committee of the 
North Dakota Petroleum Council. He is also an active Member in 
the community in his hometown of Williston where he serves as 
Chair of the Williston Planning and Zoning Commission.
    I want to thank you, sir, for being here, for testifying 
before us on the Subcommittee, and I look forward to our 
discussion today.
    Mr. GJOVIG. Chairman Hunt, Ranking Member Gluesenkamp 
Perez, Chairman Williams, and other distinguished Members of 
the Committee, thank you for inviting me to share my 
perspective on this important topic.
    I am president of GO Wireline, a small business based on 
Wilston, North Dakota. The men and women working at GO 
Wireline----
    Chairman HUNT. Mr. Gjovig, hold on.
    Mr. GJOVIG. Oh, I am sorry. I wasn't supposed to start.
    Chairman HUNT. I recognize my colleague, Mr. Mann from 
Kansas to briefly introduce the other two majority witnesses 
who are appearing before us today. So we will go through them 
first and then you are up.
    Mr. MANN. Great. Introductions and then we will wait for 
the witnesses. Thank you.
    Chairman HUNT. Thank you.
    Mr. MANN. Thank you, Chairman Hunt.
    Our next witness after that will be Nick Powell, who I am 
honored to introduce. He is the Chairman of Colt Energy, which 
is a company based in Kansas that he acquired in 1986. Colt 
Energy is an oil and gas exploration and production company 
that has operated in Eastern Kansas for over 70 years. Colt 
Energy offers a steady line of employment to small communities 
all across Kansas.
    Over his career, Mr. Powell has been involved with numerous 
other energy companies, including Overland Energy, Prairie 
Energy, and is the past president of Eastern Kansas Oil and Gas 
Association (EKOGA). Mr. Powell currently sits on the boards of 
both EKOGA and KIOGA, the Kansas Independent Oil and Gas 
Association, and he is currently the Chairman of the National 
Stripper Well Association. Mr. Powell's extensive career will 
give this Subcommittee important insight into the real world 
impacts this adminsitratino is having on the small business 
economy. Thank you, Mr. Powell, for what you do as an oil 
producer and for testifying before this Subcommittee. And I am 
looking forward to today's conversation.
    After that will be Ed Cross. I am honored to also introduce 
Ed Cross, another Kansan. Mr. Cross is the president and chief 
operating officer of the Kansas Independent Oil and Gas 
Association, a position that he has held since 2003. In that 
position, Mr. Cross serves and represents nearly 3,000 
independent oil and gas producers, explorers, and service 
providers. In addition to his work with Cuyoga, Mr. Cross 
serves on the boards of the Domestic Energy Producers Alliance 
and the Council for a Secure America. He is also an active 
Member of the Independent Petroleum Association of America and 
serves as an advisory Committee Member for the U.S. Global 
Leadership Coalition. Thanks to his extensive experience and 
distinguished career, Mr. Cross can provide a wealth of 
knowledge about the vital role that small business play in the 
domestic energy production market and the current regulatory 
state of the industry. I want to thank you, Mr. Cross, for 
testifying before the Subcommittee, and I look forward to what 
you have to say and to the conversation.
    Chairman HUNT. Thank you, Mr. Mann.
    I now recognize the Ranking Member, Ms. Gluesenkamp Perez 
to introduce the minority's witness for today's hearing.
    Ms. PEREZ. Our final witness today is Mr. Dan Conant, 
founder and CEO of Solar Holler. Mr. Conant started Solar 
Holler over 10 years ago with a vision of ensuring that West 
Virginia was not left behind in renewable energy generation. 
With some innovative practices and investments in the local 
workforce, he jumpstarted the industry in his home state while 
lowering the energy costs of local families' businesses and 
nonprofits. Mr. Conant has spent his entire career in the 
renewable energy industry. Prior to launching Solar Holler, he 
was the first employee at the largest solar company in Vermont 
and an advisor to the U.S. Department of Energy's Solar Energy 
Technology Office. He holds an M.S. in Energy and Climate 
Policy from Johns Hopkins University. Welcome, Mr. Conant. 
Thank you for being here today.
    Chairman HUNT. Thank you, Ranking Member Gluesenkamp Perez. 
We appreciate all of you being here today.
    Before recognizing witnesses, I would like to remind them 
that their oral testimony is restricted to 5 minutes in length. 
If you see the light turn red in front of you it means that 
your 5 minutes have concluded and you should wrap up your 
testimony.
    I now recognize Mr. Gjovig for his 5 minute opening 
response. Thank you, sir.

   STATEMENTS OF LUCAS GJOVIG, PRESIDENT, GO WIRELINE; NICK 
    POWELL, CHAIRMAN AND OWNER, COLT ENERGY; EDWARD CROSS, 
   PRESIDENT, KANSAS INDEPENDENT OIL & GAS ASSOCIATION; DAN 
           CONANT, FOUNDER & PRESIDENT, SOLAR HOLLER

                   STATEMENT OF LUCAS GJOVIG

    Mr. GJOVIG. Thank you, apologies, Ranking Member 
Gluesenkamp Perez, distinguished Members of the Committee. 
Thank you for inviting me.
    I am president of GO Wireline, a small business based in 
Williston, North Dakota. The men and women working at GO 
Wireline and I are proud to be part of the industry that 
provides the United States with the energy it needs to grow our 
economy, maintain our quality of life, and reduce our nation's 
emissions.
    My partners and I started this business in 2011, and have 
grown to about 200 employees working out of two locations in 
western North Dakota and one in northern Colorado. But we work 
across the region, including Montana, South Dakota, Wyoming, 
Utah, Nebraska, and Kansas.
    GO Wireline plays an important role in domestic energy 
production. Our company provides wireline and pressure pumping 
services to customers who drill and operate wells. From oil and 
gas all the way to carbon sequestration. We work on wells 
throughout their existence from when they are drilled to 
eventually plugged and abandoned.
    Our Wireline trucks have a miles-long spool of cable which 
we use to hoist tools into welds to accomplish a variety of 
tasks. This includes well integrity logging, which ensures a 
well's casing is not damaged and that cement outside the casing 
is preventing fluids from reaching water-producing zones at the 
surface. In a horizontal oil well, we perforate the casings so 
that shale formations can be hydrologically fractured and oil 
and gas can then flow or be pumped through those perforations 
to the surface.
    Small businesses like GO Wireline play an invaluable role 
in domestic oil and gas production and are vital to job 
creation and growing the economy. Small businesses like ours 
are also the heart and soul of the communities in which we 
work. Our customers are mostly domestic energy companies, both 
large and small. They have felt the impacts of the increased 
global demand for energy as the world has emerged from the 
pandemic, but energy production is not as simple as turning on 
the spigot. Increasing energy production requires more 
equipment than people, which in turn requires access to capital 
and financing. Over the past several years, investors have 
become increasingly reluctant to invest in our industry. 
Regulator uncertainty, along with a stream of negative rhetoric 
from the highest levels of government is discouraging the 
investment needed to keep up with demand.
    Greater manpower is also needed to meet increasing levels 
of demand. The antipathy communicated against the industry, 
coupled with an accurate representation of the future of our 
industry has made it challenging to recruit in the competitive 
labor market, particularly young people.
    In 2022, we spent more time, money, and effort recruiting 
new employees than we had in the last 10 years combined.
    Supply chain issues have created challenges as well. Long 
lead times, restricted supply and increased costs are all 
limiting factors on the capital we have available to invest in 
technology, equipment, and people.
    Importantly, an expanded fleet and workforce does not 
matter if our customers are unable to secure the permits to 
explore and drill new wells. While our customers are the ones 
securing permits to explore for new resources, our company is 
still impacted by the administration's moratorium on new leases 
on federal lands as future opportunities for us to work on new 
wells will fall as a result along with production.
    While the administration's rhetoric and reluctance to 
support new infrastructure are hindering our industry's ability 
to increase production, regulations such as the proposed SEC 
Climate Disclosure reporting requirements threaten to hurt our 
business directly. The proposed regulation requires disclosures 
from public companies on the entire value chain, including 
product end use impacts and supplier environmental impacts. 
This massive regulatory action would put enormous 
administrative demands to small businesses like ours, which do 
not have the resources or expertise to manage and to report 
this information to our public customers.
    GO Wireline, along with so many other small businesses 
working in this industry, stands ready to provide the services 
necessary to increase production to meet increases in demand. 
The policy decisions by the current administration, combined 
with the politicized hostility that has targeted the U.S. oil 
and natural gas industry is hindering our industry's ability to 
provide abundant, reliable, and clean sources of energy that 
both the U.S. and our allies need now to meet energy demand, 
improve standard of living, provide national security, and 
reduce global emissions.
    Thank you again for the opportunity, and I look forward to 
answering any questions.
    Chairman HUNT. Thank you, Mr. Gjovig.
    I now recognize Mr. Powell for his 5 minute opening 
remarks.

                    STATEMENT OF NICK POWELL

    Mr. POWELL. Chairman Hunt, Ranking Member Gluesenkamp 
Perez, and Members of the Subcommittee, thank you for holding 
this important hearing and allowing me the honor of testifying 
before you.
    My name is Nick Powell, the Chairman and owner of Colt 
Energy. Colt Energy's main base of operations is in Iola, 
Kansas, which has a population of approximately 5,500, and is 
located in Allen County with a population of 12,500. It is 
engaged in oil and gas exploration, production, and 
development. Colt owns and operates over 150 producing oil and 
gas leases with approximately 400 barrels of oil and 1,800 MCF 
of gas per day. Our average oil well produces a little over a 
barrel a day, and we produce about 15 MCF per day from our 
average gas well.
    Colt currently employes 39 full-time employees. That is one 
employee per 10 barrels of oil and 18 MCF a day of gas. So in 
our industry, our marginal well industry, we hire a lot of 
people for the oil we produce and we are truly a small marginal 
producer.
    Our employee wages average approximately $75,000 plus 
profit sharing, health insurance, 401(k) retirement plan, paid 
vacation, and sick leave. We and other small oil and natural 
gas producers provide an important source of good paying jobs 
in small communities throughout Kansas. We also provide tax 
revenue to counties in which we operate and to thousands of 
royalty owners, many who rely on their monthly checks.
    So why is the current administration clearly trying to make 
it so hard and expensive to stay in business and produce the 
oil and natural gas that this country will need for decades to 
come? In all my years in the business, I have never seen an 
administration take such a callous and unrealistic approach to 
energy policy. From the day Biden became president, we were 
being told that he wants to put us out of business and is 
threatening costly and confusing regulations and taxes, many of 
which we have no idea how much it will cost to implement or how 
to implement them. It used to be that previous administrations 
and Congress have tried to protect small oil and gas operators 
from onerous regulations that had no real benefit for their 
cost. Now it seems just the opposite. Trying to eliminate 
percentage depletion, removing the marginal well exemption from 
methane leak regulations and fees to be collected on methane by 
the EPA to name a few.
    The only purpose served by shutting down small producers 
while oil demand is still strong will be to ship those jobs and 
revenue and secure energy supply to many of our adversaries 
that cause much more environmental harm by their producing 
operations than U.S. companies taking us back to dependency for 
our nation's energy supply. Here is a clear example that the 
EPA is more interested in adding to our costs than lowering 
measurable methane leaks.
    The first EPA rule proposal released in November 2021 did 
not require ongoing emissions, monitoring of low producing well 
sites that emit less than three times per year. Then, in 2022, 
the DOE completed a report on the emissions profile of low 
production wells. In fact, one of our leases was used in that 
test. They came out and ran a test on our lease and that was in 
my written report, the outcome of that.
    The report shows that well sites producing less than six 
barrels a day fall below the thresholds that EPA has considered 
as low emitting sites. On November 11, 2022, the EPA advanced 
their supplemental proposed rule to regulate oil and gas 
methane emissions. The EPA ignored the third party DOE study 
and strengthened the leak detection repair requirements for 
small oil and gas wells.
    Another potential hit to our operating costs is a proposed 
methane fee of $900 per ton on operations generating in excess 
of 25,000 tons of CO2 equivalent. What does equivalent mean in 
terms of methane and how do we prove we are exempt? The devil 
is always in the detail which we don't have.
    Depending on unknown cost increases we are facing from 
regulations and fees does not take into consideration other 
costs of doing business that increased as we deal with 
inflation and labor shortages, just like everyone else. So when 
we are continuing to face some of the highest inflation rates 
we have seen in 40 years, small operators can ill afford any 
additional unnecessary costs or regulatory burdens.
    Thank you, Mr. Chairman, once again for holding this 
hearing on the serious issues facing small energy companies. I 
look forward to answering your questions.
    Chairman HUNT. Thank you, sir.
    I now recognize Mr. Cross for his 5 minute opening remarks.

                   STATEMENT OF EDWARD CROSS

    Mr. CROSS. Thank you. Good morning, Mr. Chairman, Ranking 
Member Perez, and Members of the Committee. I am Edward Cross 
and I am the president of the Kansas Independent Oil and Gas 
Association. I have worked in the oil and gas industry for over 
38 years as a geologist and now as an advocate for the 
industry, and it is my honor and privilege to serve this great 
industry that enhances life experiences and improves the 
quality of life of people around the world. And with over 3,000 
Members, the KIOGA as we call it, the Kansas Independent Oil 
and Gas Industry is a lead state and national advocate for the 
oil and gas industry in Kansas.
    We talk about small independents. Those are the folks that 
drill and produce oil and gas. We do not generate or market the 
end products. We raise our capital through the well head. We do 
not tap equity markets to get that cashflow or any of the 
cashflow that comes from the wells, what we use to drill and 
produce the wells that we have here. And many operators spend 
over 100 percent of their cashflow on drilling and developing 
those new wells.
    In Kansas, oil and gas is producing in 89 of the 105 
counties. Our average well makes two barrels of oil per day and 
23,000 cubic feet of natural gas, yet we are a 3.6 billion 
industry in a state that supports over 100,000 jobs and $3 
billion in family income and are consistently one of the top 
three industries in the state in terms of gross state product.
    Over the last 2 years, in the name of climate change, the 
federal government has done much to impeded American oil and 
gas production and these actions not only affect producers but 
they are more often more harmful to the small businesses that 
are in the oil and gas industry. President Biden and his 
supporters continue to look for every opportunity to weaken, 
attack, and destroy domestic oil and gas production, including 
carbon and methane tax proposals, unilaterally increasing the 
regulation of oil and gas production, and proposing to 
eliminate critical oil and gas cost recovery tax provisions. 
Biden's actions are making it harder for our economy to recover 
and damaging our nation's energy security.
    Because industry and infrastructure require development, 
Biden's anti-development and environmental policies are a major 
obstacle to responsible development. In his State of the Union 
speech in February, President Biden portrayed the global energy 
crisis as a problem that he is solving, but in fact, it is a 
problem he has helped cause and is making worse with his anti-
fossil fuel policies. Energy information administration says 
global oil and gas demand will increase over the next 30 years 
and nearly half of that world's energy is expected to come from 
oil and natural gas in 2045. That demand will be met one way or 
another, and if America does not meet that it will be met by 
other countries who do not share our security interests, 
environmental, or human rights values. The solutions are right 
here in America and we just need to seize upon those. It does 
not make sense to place unnecessary political and legal 
obstacles in the way of responsible American oil and gas 
production, cancel pipelines to discourage investment in fossil 
fuels, and then beg OPEC and others for more oil to contain 
inflation.
    The oil and gas industry can be part of the solution to our 
nation's energy solutions or energy challenges. Entrepreneurs 
in the private sector and smart state led policies can drive 
American energy leadership. Tax policy proposals from the Biden 
administration seem designed to punish the energy sector. It is 
key for the small independent oil producers that Congress 
retain cost recovery measures like the percentage depletion 
deduction and intangible drilling cost deduction. These 
measures are neither subsidies nor loopholes but tax provisions 
critical for American oil and gas producers to sustain capital 
availability and formation.
    The EPA flipflopped on their proposed methane rule. You 
know, first exempting marginal wells and then caving to 
pressure from environmental activists and ignoring a Department 
of Energy third-party study to make the regulations more 
harmful to small producers. The EPA proposed oil and gas 
methane rule is contrary to the congressional intent as the 
Inflation Reduction Act exempted smaller wells from regulation. 
Congress should engage EPA to ensure that the agency develops 
cost effective oil and gas methane regulations that reflect 
congressional intent and provide flexibility.
    We also have concerns about a number of issues that are in 
my written testimony, whether it be the strategic petroleum 
reserve or Endangered Species Act or environmental social and 
governance standards and more of those.
    So in closing, you know, the most pressing issues facing 
the U.S. economy in the foreseeable future are not those 
arising from climate change or an energy transition; rather, 
the factors to watch are inflation, rising energy costs, and 
security threats. America's independent oil and gas producers 
look forward to working with you and your colleagues to develop 
innovative solution to address our energy challenges in the 
coming years. Our mission is to empower people, improve lives, 
and inspire success. I thank you.
    Chairman HUNT. Thank you very much, sir.
    I now recognize Mr. Conant for his 5 minute opening 
remarks.

                    STATEMENT OF DAN CONANT

    Mr. CONANT. Good morning, Chairman Hunt, Ranking Member 
Gluesenkamp Perez, and all the Members of this Committee. I am 
honored and humbled to have the opportunity to speak with you 
today as a representative of the vanguard of a new industry in 
Appalachia.
    And I want to share with you three stories. The story of 
how we reimagined who solar is for. The story of how we started 
training the first generation of solar installers in coal 
country, and the story of what Congress can do to help further 
emission in bringing clean, renewable energy and jobs within 
reach of all of our neighbors across Appalachia.
    My name is Dan Conant. I am the founder and president of 
Solar Holler. We are based in Shepherdstown and Huntington, 
West Virginia, and I also come to you as a former advisor to 
the U.S. Department of Energy Sun Shot Initiative, as well as a 
veteran of multiple solar startups.
    For generations, Appalachia has powered American prosperity 
with our coal, and Solar Holler is ensuring that we will 
continue to power America in the 21st century with renewable 
energy.
    From the moment I moved back to my hometown to start up our 
company 10 years ago, we have relentlessly pursued innovative 
approaches that make solar the most affordable source of energy 
for all of our neighbors across Appalachia.
    Due to this dedication and approach, we are a rapidly 
growing team of incredibly dedicated, talented, and passionate 
professionals. Over the past decade, we have started the 
industry from scratch in our region and grown to a staff of 105 
people. Our team models, designs, finances, and builds 
beautiful solar projects that will last for the next two 
generations, all the while producing free, clean energy.
    Every project our team designs and builds helps families, 
nonprofits, and businesses across our region cut their power 
bills while revitalizing the economy of West Virginia.
    Our dedication to making solar the most affordable source 
of energy was shown in our very first project. A groundbreaking 
community effort with my congregation, Shepherdstown 
Presbyterian Church. That project won national accolades, 
including the interfaith Power and Light National Renewable 
Role Model Award for a first of its kind crowdfunding approach.
    Rather than passing a plate or doing a traditional capital 
campaign, we crowdsourced water heaters. Members of the 
congregation and half the businesses in town agreed to let me 
connect an internet-connected remote control to their water 
heater. And we actually connected 100 water heaters across town 
as a network, registered them as a power plant on the PGM 
regional grid, and started day trading second by second in tune 
with the fluctuations of the power grid. Using these water 
heaters, we were able to create a new source of funds to 
support solar projects at churches, affordable housing groups, 
and libraries across the state while stabilizing the power 
grid, preventing blackouts and power surges and ultimately 
incorporating more renewable energy into the grid.
    That first project with my church would have cost the 
congregation more than $50,000 at the time. Instead, it cost 
them one, one dollar. And over the next 25 years, the project 
will save the church more than $100,000 to put back towards 
their mission.
    We had to get creative with that because of the way the 
solar incentives are built that specifically discriminate 
against nonprofits. Those incentives have typically left out 
tax-exempt entities. Thanks to the Inflation Reduction Act that 
passed last year, however, all of the federal investment tax 
credits are going to be opened up to churches and schools and 
municipalities just the same as they always have been for 
businesses.
    In 2015, we relaunched Rewire Appalachia, a workforce 
development and training program in partnership with our 
friends at Coalfield Development. Through that collaboration, 
Solar Holler gave more than 40 young folks who were kids of 
coal miners the chance and hand-up into the solar industry. We 
paid for their college, for their electrical apprenticeships, 
for their solar certifications, and gave them close supervision 
under the tutelage of our master electricians, and we kept 
going from there.
    In 2020, we willingly unionized, joined up with the 
International Brotherhood of Electrical Workers and have been 
very proud to be leading the union movement in West Virginia.
    Our latest efforts are focused on high schools and 
vocational programs. This January, we launched internship 
programs with Wayne County West Virginia schools, as well as 
Boyd County, Kentucky. And through this program, high school 
seniors spend four days a week in their vocational classes 
learning electrical theory, learning drafting, and then one day 
a week they are paid interns on the job, learning how to safely 
and beautifully install solar systems. Once they graduate in 
June, they will be able to slide right into a career with Solar 
Holler and stay at home, which is one of our biggest challenges 
in West Virginia with the brain drain we have seen over the 
last 50 years.
    I am running out of time but I have got to say, things are 
going very, very well for us, especially with the investments, 
the Inflation Reduction Act is making in our states. We have 
seen a boom in manufacturing just in the past year, 
particularly around electric school buses, grid scale 
batteries. We have had five major industrial announcements in 
the past year that will employ more than 2,900 people in the 
clean energy industry in West Virignia. We are really excited 
to be able to keep pushing the envelope here and see where this 
all takes us over the next 10 years. Thanks so much, and I look 
forward to answering any questions.
    Chairman HUNT. Thank you very much.
    We now move to the Member question under 5 minute rule. I 
recognize myself for 5 minutes.
    My first question is for you, Mr. Gjovig. Your company's 
name alludes to the portion for the energy process you are 
involved in. In horizontal wells you perforate the casing so 
that shale formations can be hydrologically fractured, a 
process that is credited with ushering in today's era of 
energy, abundance, and independence in North America.
    What would a ban on fracks do to your business, your 
employees, and the overall U.S. oil and gas industry?
    Mr. GJOVIG. That is an excellent question, Chairman. It 
would obviously devastate our business as we are an integral 
part of that function of completing a well. But in turn, it 
would devastate the community in which we work, and I think 
even more importantly it would devastate lower income and 
working-class communities across the country as the cost of 
energy would rise as production would fall.
    Chairman HUNT. Excellent. Thank you.
    Mr. Powell, next one for you, sir. Turning our attention to 
ESG, regulatory burdens and overreach, would you say tha the 
regulatory environment during the current administration has 
increased or decreased your ability to access capital?
    Mr. POWELL. Well, it would certainly seem to have decreased 
capital. We have not had to go out and look for capital but I 
have people I know that it make sit harder for them. And 
certainly it does for the industry as a whole. You know, so to 
answer your question, it increases it.
    Now, for me specifically, because we do not go out and look 
to raise money, but I know other people that I talk to and it 
is a problem. And there is a concern on where this is going to 
come because you have to raise money to be able to continue to 
drill, particularly when the price of oil goes down and you 
don't have your revenues to do drilling.
    Chairman HUNT. Also, sir, you referenced the pending DOE 
methane inspection rule in your testimony and that your wells 
were part of the DOE study. To me, especially in the scope of 
small producers such as yourself, the DEO inspection and 
testing sounds like a solution searching for your problem but 
not finding one.
    In your opinion, does the proposed methane tax make sense 
for small producers? Will it hurt your business more than it 
will help your business reduce methane emissions?
    Mr. POWELL. Thank you for the question. We had one of our 
properties, producing properties were used in this DOE study 
that was done with a third party to see whether or not these 
small producing wells really produce much methane before you 
impose a lot of expensive regulations on them. They tend to be 
widespread and one size fits all we have seen in the past. And 
so the crew came out and set up their equipment on our lease. 
And they started the test, and in fact, our executive vice 
president just happened to go out there and be on site. He was 
curious to see the testing. And they stopped the test because 
they thought their equipment wasn't working because they 
weren't picking up any methane, any at all. So they checked all 
their equipment, looked around, and said, no, the equipment is 
working. There just isn't that much methane. And we knew that. 
You know, these wells when they get old and producing marginal 
wells like that all the gas is gone. That is why we do a barrel 
a day because there isn't much pressure moving that oil.
    And I was very surprised because I knew that about 60 
percent of the wells they tested were very low. So I thought, 
okay, they have paid for the money. They have run the tests. We 
are going to get this exemption. Well, they switched. And now 
some are being put into that. And I do not understand, so.
    Chairman HUNT. Yes, sir. Thank you very much.
    The last one is for you, Mr. Cross. We have got about one 
minute left, so if you can wrap it up as soon as possible.
    According to the U.S. Energy Information Administration, 
oil and gas supply 68 percent of the United State's energy in 
2022. How long would it take in terms of years for solar and 
wind to meet that level of energy share? And what would be the 
cost for the U.S. taxpayer to reach that mark?
    Mr. CROSS. Well, it is hard for me to answer how long it 
would take, the wind and solar to get there. But you know, 68 
percent, you know, I think on the world level that project that 
wind and solar by the year 2045 will make up 10 percent, 10.9 
percent or something of globally. And that is globally, not the 
United States.
    So it would take, you know, they would take billions of 
dollars to get to where they are today, wind and solar, where 
they are at today, I don't know, 7, 8 percent of energy today. 
So it would take quite some time. I don't really have an answer 
to exactly when.
    Chairman HUNT. Thank you very much, sir. I really 
appreciate it.
    And I now recognize the Ranking Member, Ms. Gluesenkamp 
Perez for 5 minutes of questions.
    Ms. PEREZ. Thank you, Mr. Chairman.
    Mr. Conant, your company has made amazing investments in 
workforce development at the local level. As somebody from a 
rural community, I really appreciate that.
    As somebody who works in the trades, I know it is critical 
for getting early training, you know, junior high, hi school. 
Can you speak about some of the benefits it provides to 
communities, particularly in some of the more rural areas to 
educate young people about the opportunities and the trades and 
jobs that exist in local areas?
    Mr. CONANT. We have made really conservative efforts over 
the past 10 times. We actually built our company around 
training up the first generation of solar installers in the 
state. Across Southern West we have just seen, like I said in 
my testimony, a brain drain over the last 7 years as the coal 
industry has declined. And if you go into McDonald County, West 
Virginia for instance, back in the 50s there were over 100,000 
folks in McDowell County. Now we are down to about 15,000. Four 
out of five buildings are empty and it is because there are no 
jobs left. People have to leave the state.
    So, that is why we have focused so critically on folks 
coming out of high school, folks early, early adult hood so 
that we can train them up in the trades, get them into the 
electrical field. We are actually 3,000 electricians short 
across West Virginia right now for just the work we need to do 
as a state. And with the benefits of the IRA coming to 
fruition, we are going to need another 4,000 electricians in 
state. So we have a 7,000 electrician gap in a state of 1.8 
million people. This is huge. And, you know, the time to do 
that is when you are in high school or when you are coming 
straight out of school. So through this partnership with Wayne 
County Schools, we are really excited to be working 
specifically with high school seniors, promoting vocational 
education at the school level and making sure that folks have a 
career path that allows them to stay at home versus filtering 
off into the rest of the country.
    Ms. PEREZ. Thank you. You know, later today I am going to 
have a 9-foot chainsaw delivered to my office that my grandpa 
used in the woods and, you know, like West Virginia, Washington 
State has been centered around a particular industry for a long 
time. You know, how has increased investment in renewables in 
the state helped bring wealth back to the communities and 
diversity the local economy?
    Mr. CONANT. I would say it is still early days. So, the 
industrial announcements that I was mentioning, those have all 
just been made in the past year, and really over the last 
several months with the new battery factories coming in and I 
think the first electric school buses are just now running off 
the line.
    But for instance, Form Energy makes grid scale batteries. 
They are locating in Weirton, West Virginia, which is an old 
steel town on the Ohio River. It has got I think 5,000 to 7,000 
folks, somewhere in that area, and this is going to be 700 jobs 
in a town of 5,000 to 7,000 people. It is absolutely enormous 
for giving folks a reason to stay, for supporting the school 
system, for really supporting the infrastructure of this town 
with a really rich history. So I am excited to see where all 
that goes. In our case, we have got over 100 families supported 
directly by the wages that we are producing. We are scattered 
all over the state. In the age of COVID, we went virtual across 
the teams so that everyone could live in their home holler and 
not have to come into the office every day. And so that is 
really spreading out the benefits across a really rural state.
    Ms. PEREZ. Yeah. Thank you so much.
    Mr. Gjovig, outside of H.R. 1 there are some bipartisan 
efforts to reform the permitting process. Could you give us 
some details as to which aspects of these bills are most 
important to lowering the cost for Americans?
    Mr. GJOVIG. Permitting reform and access to federal lands I 
think is an important part of making sure that we have a steady 
supply of American production going forward in the future. 
Today, we have work that is going on, but 5 years from now if 
permitting is not done now and access to federal lands is not 
granted now, we will see an impact on production.
    Ms. PEREZ. Mr. Powell, you mentioned in your testimony--I 
do not have quite enough time to ask this question. I will 
catch you in another round. But thank you.
    Chairman HUNT. Thank you very much.
    I now recognize Mr. Mann from Kansas for 5 minutes.
    Mr. MANN. Thank you, Mr. Chairman. And thank you to the 
witnesses and everyone for being here today.
    I represent the big 1st District of Kansas, which is 
roughly two-thirds of our state. I can assure you there is no 
tree in my district and in our state that needs a 9-foot 
chainsaw to cut down. Incredible. But we do have a lot of oil 
and natural gas. And hundreds and thousands of oil and natural 
gas wells have been drilled in our state since the late 19th 
century. And they produce 6.7 billion barrels of oil and 41.2 
trillion cubic feet of natural gas.
    In Kansas, small independent businesses account for 92 
percent of the oil production and over 63 percent of the 
natural gas production. These independent producers who own and 
run these small businesses employ thousands of people across 
the state and they are critical to the American economy.
    I am glad that we are having this hearing to shed positive 
light on this tremendous industry, these fantastic people that 
too often get told that what they are doing does not matter and 
the government instead of thanking them, which we should be 
doing, throws up more taxes, more burdensome regulations, and 
makes their life more difficult. So I appreciate you all being 
here today.
    A few questions. First for you, Mr. Cross. Can you explain 
how producers have been affected by regulatory overreach and 
the impact it has had on the oil and gas industry? And then 
specifically, what particular regulations are the most onerous 
or are you most concerned about right now.
    Mr. CROSS. Yeah. Thank you for the question. You know, our 
biggest priority in the oil and gas industry are federal 
regulations. We do have state regulations, too, that we comply 
with, but the federal regulation seems to be the most onerous. 
And so when we looked at, you know, like the endangered species 
Act where they are trying to list--well, they did list just 
this week, the lesser prairie chicken in Kansas is a threatened 
species, which we feel they have not met all of the criteria 
for listing that particular species. Those are very costly. Or 
the methane regulations that are supposedly coming down. Like I 
said, the Department of Energy third-party study which was done 
not only in Kansas but across the nation found no viable or 
significant quantities of methane or volatile organic compounds 
from marginal wells, yet the EPA decided to ignore that study 
so that they could put these, and these are very costly, for 
the producers in Kansas.
    Mr. MANN. And expand upon the methane fee. What impact 
would that have on our producers? I mean, what would that mean 
to our small businesses that are trying to produce oil to feed 
and fuel all of this?
    Mr. CROSS. Well, they have not come out with the 
regulations yet but the proposals that they have right now 
could cost as much as 30 to 40 percent of the cap X it would 
take to drill and produce a well in Eastern Kansas where they 
make less. Like Nick said, one barrel, it may be as much as 50 
or 60 percent of their Cap X on a well to comply with just a 
methane regulation itself.
    Mr. MANN. Yeah. Incredible. Thank you.
    A question for you, Mr. Powell. Can you explain the 
importance of percentage depletion and how the elimination of 
this would affect your small business and many others like it 
throughout Kansas and throughout the country?
    Mr. POWELL. Yes. Well, small producers depend greatly on 
percentage depletion. Once we drill a well and it starts 
producing, it goes into decline. And the only way to maintain 
our revenues is by continuing to drill more wells. So we have 
to use a lot of the revenue we get to put back in the ground to 
continue drilling to maintain our revenue so we can maintain 
our employees and our fixed costs. And percentage depletion 
allows that and only for small producers. It is only allowed up 
to 1,000 barrels per day. It is only on the first 65 percent of 
your income. And it also, besides allowing you to continue to 
drill wells to maintain your production and stay in business, 
it also allows the wells to economically around longer as these 
wells decline, and if costs go up--keeps more of the money so 
we can keep these wells economically alive. They produce longer 
and they produce money for the state, for the royalty owners. 
People keep forgetting about these royalty owners. There are 
probably millions of royalty owners across the country, 100,000 
in Kansas, and they rely on that monthly check. And once that 
well is plugged, it is not going to provide any money to the 
county, to the state, nor to the royalty owners. So it helps 
all those people besides us.
    Mr. MANN. The royalty owners are American, different than 
the royalty owners in Saudi Arabia or other parts of the world. 
So these dollars stay in our economy.
    Last question. I have about 30 seconds left for you, Mr. 
Powell. What decisions out of Washington do you feel like have 
harmed your business, your small business the most?
    Mr. POWELL. Oh, I cannot do that in 20 seconds.
    Mr. MANN. That is fair. That is fair.
    Mr. POWELL. But, I mean, it is a long list. You know? And 
it is not only the ones that we have to deal with, the cost, 
because we cannot hire people to come in here and take care of 
these things. It is what we look coming down the pike, you 
know, the road. It is a change. It is a change. And it is 
threatening, so we worry about what is coming down. And the 
people we want to hire, they worry about, well, are you going 
to be around as a business?
    Mr. MANN. That is the important thing. If you look forward, 
it is not just the regulations you have but all the talk of the 
regulations that are coming, how expensive that is, how bad 
that is for business on every front. So thank you all for being 
here. And with that, I am past my time so I will yield back the 
time that I do not have. So thank you.
    Chairman HUNT. Thank you, Mr. Mann.
    I now recognize Ms. Schoulten from Michigan for 5 minutes.
    Ms. SCHOULTEN. Thank you so much. Thank you to the 
witnesses today for coming and testifying on such a critical 
issue.
    The testimony that has been shared today has touched on 
different aspects of workforce and retention issues, a vital 
part of ensuring we have a strong domestic energy industry is 
cultivating a strong workforce. I rarely have a meeting or a 
conversation these days where when I ask what is the most 
critical issue facing your industry or your sector and the 
first response is not worker shortages or workforce development 
and retention.
    So, Mr. Conant, the Rewire Appalachia and high school 
vocational programs you mentioned in your testimony are great 
examples of how to cultivate a strong local workforce. What 
further measures in the clean energy space should Congress be 
paying attention to when it comes to some of those workforce 
development issues?
    Mr. CONANT. One of the biggest challenges we see is at the 
community college level, just having teachers. It is a whole 
lot more lucrative for teachers to work in the field as an 
actual electrician than it is to teach other electricians. And 
that has been seriously holding us back. Not just West Virginia 
but nationwide. So, I would say increasing teacher pay and 
making that a more competitive career so that you can enable 
all the thousands of others.
    Ms. SCHOULTEN. Thank you.
    And I have one more question for Mr. Cross. You mentioned 
in your testimony that there are ways for Democrats and 
Republicans to work together on effective energy policy 
priorities. Bipartisanship is a guiding principle of my 
leadership here. What are some of the proposals in this space 
that you can support that not only strengthen American 
production but also ensure a green future for our kids?
    Mr. CROSS. You know, we believe that we need energy from 
all forms to meet our energy needs. But that also includes oil 
and gas in that sector. So, you know, policies that do not 
penalize the oil and gas industry but support oil and gas in 
addition to supporting green are ways I think we can work 
together to get an energy policy going forward.
    Ms. SCHOULTEN. Thank you. I yield back.
    Chairman HUNT. Thank you, ma'am. I now recognize Mr. 
Stauber from Minnesota for 5 minutes.
    Mr. STAUBER. Thank you very much, Mr. Chair.
    Mr. Conant, you are involved in the solar business and the 
solar panels and what have you; right? Are there any critical 
minerals used in the production of solar panels.
    Mr. CONANT. Yes.
    Mr. STAUBER. Which ones are they?
    Mr. CONANT. I am not a chemist, so I am----
    Mr. STAUBER. But you know there are critical minerals?
    Mr. CONANT. Yes, there are.
    Mr. STAUBER. If you want to sole source critical minerals 
in the United States or foreign countries?
    Mr. CONANT. I really want to source them in the United 
States.
    Mr. STAUBER. Great. You are going to support H.R. 1 then. 
That is my bill. Thank you.
    Did you know that this administration pulled the lease in 
their banned mining in the biggest copper/nickel find in the 
world? Did you know that? The minerals for your solar panels, 
did you know that, yes or no?
    Mr. CONANT. My business is----
    Mr. STAUBER. Mr. Conant, I am trying to help you here 
because I support all of the best energy. All of the best. And 
your solar panels are going to be a part of that. What I am 
telling you, or asking you is, do you support minerals sourced 
to the United States rather than foreign companies who use 
child slave labor, yes or no?
    Mr. CONANT. Absolutely.
    Mr. STAUBER. Okay. In Minnesota, we have the biggest 
copper-nickel find in the world and this administration just 
pulled the leases and banned mining in northeastern Minnesota. 
Do you support that?
    Mr. CONANT. I think you should talk to the administration 
about that.
    Mr. STAUBER. No, I am asking you. Because it removed the 
sourcing in our country. And you said you talked about union 
labor. These were project labor agreements, thousands of union 
workers gone because of political reasons.
    And it matters to you where we source the minerals; 
correct?
    Mr. CONANT. Yes.
    Mr. STAUBER. thank you.
    Does your company get any subsidies from the federal 
government indirectly or directly?
    Mr. CONANT. Be inflation reduction Act created a number of 
tax credits for solar projects. They extended that to the tax-
exempt entities, including churches and municipalities and 
hospitals. There is also a number of incentives to target that 
development directly into historical coal.
    Mr. STAUBER. And I think one of the things that we have to 
know as we get into the solar universe and you are in the 
inception of it, we have to understand that we will never meet 
the Inflation Reduction Act Standards for Critically minerals 
mined domestically if we do not allow mining.
    Just yesterday, the Secretary of Interior asked, and she 
signed the ban. When asked if there was critical minerals in 
that mine she had no idea. Zero idea to help you manufacture in 
this country. So I am asking you to support H.R. 1, Lower 
Energy Costs, put union workers in northeastern Minnesota back 
to work using the best environmental standards, the best labor 
standards in the world.
    So thank you for supporting H.R. 1. I appreciate that.
    Mr. Gjovig, Mr. Powell, and Mr. Cross, yes or no, do you 
consider yourself big oil?
    Mr. GJOVIG. No.
    Mr. POWELL. No.
    Mr. CROSS. No.
    Mr. STAUBER. That is what I thought. And I am willing to 
bet you would take offense at such a claim.
    This gets at a larger point that we at the Small Business 
Committee, we must always keep in mind when more regulations 
are imposed or taxes are raised they have the greatest effect 
on you, the small business owners. Through it's worn American 
energy production, the Biden administration is doing just that, 
harming small businesses and threatening to put those in the 
coal, oil, and natural gas industries out of business.
    Mr. Gjovig, can you expand on the cost and time that goes 
into complying with the increased regulations you mentioned in 
your testimony?
    Mr. GJOVIG. It would require me to track our own emissions 
which is something that I do not have the staff or the 
expertise to do, but also the environmental impacts of my 
suppliers, which would require the legwork to track that down 
from my suppliers, which include small and large business. And 
then disclose that to our publicly traded customers. It would 
be a big administrative burden for us.
    Mr. STAUBER. And my time is up. And I want to thank all 
four of you for your testimony.
    Mr. Chair, I thank you and the Ranking Member for holding 
this. It is extremely important and that is why H.R. 1 is so 
important to get across the finish line. And I yield back.
    Chairman HUNT. Thank you, sir.
    And I recognize Mr. Golden from Maine for 5 minutes.
    Mr. GOLDEN. Thank you very much.
    Mr. Cross, just another opportunity to talk a little bit 
about ways that we could do some bipartisan work together to 
have an effective energy policy here in the United States. You 
mentioned supporting all types of energy but we didn't really 
get into any specifics. I just want to give you another 
opportunity. What types of investments or things could we do on 
a bipartisan basis that would help out your industry?
    Mr. CROSS. Okay. I think you saw in my written testimony, I 
have things, you know, where most Republicans look at energy 
policy as an economic issue, whereas Democrats seem to think of 
it as an environmental issue.
    Mr. GOLDEN. Well, I would not agree with that.
    Mr. CROSS. Okay. Well, those are just polling numbers that 
came out. But you know, looking at ways, and we talked about 
several of those, like the tax policy, looking at the oil and 
gas. We do not feel like any of our cost recovery mechanisms 
like percentage depletion and tangible drilling cost deductions 
are subsidies by any means because they have to spend the 
money. That is the way they raise their capital. We are not big 
oil. We do not tap equity markets. The cashflows coming from 
the well is how we do that.
    So those are critical for the smallest producers. As I 
said, the percentage depletion, the majors have not had that 
since 1975 or something so they do not really care about that. 
But that is imperative for that small producer that makes two 
barrels of oil per day.
    You know, I might add in Kansas, many of those wells out 
there in Western Kansas, they are providing 25 percent of the 
employment in accounting, 75 percent of the property tax. And 
it is critical for those. So those are the type of policies.
    Mr. GOLDEN. Thinking about tax credits and tax policies, 
are there things out there that are going to be helpful do you 
think to energy producers for making smart investments like 
more energy efficient manufacturing or emissions technologies, 
carbon capture, et cetera? I mean, are there things out there 
that you would look to take advantage of?
    Mr. CROSS. Yes. You know, we do not receive tax credits but 
like you say, cost recovery mechanisms are there. Whenever you 
talked about you said carbon capture. What was the other one? I 
am sorry. You said----
    Mr. GOLDEN. Any kinds of tax policies that would help 
manufacturers to make investments to increase their energy 
efficiency.
    Mr. CROSS. Yeah, you know, so we talked a little bit about 
ESG, for example. That does not affect directly a lot of the 
small producers because they are not tapping equity markets and 
things like that. But it does affect a lot of the suppliers. 
Some of them use suppliers and service companies that may get 
capital from companies that are trying to get capital and they 
have to comply with the ESG standard. So that greatly impacts, 
you know, in our state, labor supply is a big issue. I mean, we 
have, it was a very active year in Kansas in drilling but it 
could have been a lot more if they could have had more people 
out there drilling. So those are the kinds of things.
    Mr. GOLDEN. Yes.
    Mr. Powell, I saw in your testimony you expressed concern 
about the president tapping into the Strategic Petroleum 
Reserve. You did note that it helped drive down prices which 
obviously my constituents and probably most people out there 
appreciated. But you know, you noted some long-term concerns 
about how that is going to impact you and your business. What 
types of moves could the government make that would alleviate 
your concerns about that?
    Mr. POWELL. Well, I think that strategic petroleum reserve 
is not to be used for what they use it for. I mean, you 
artificially----
    Mr. GOLDEN. To drive down high prices?
    Mr. POWELL. Yeah, but it is artificial. It is short term. 
You all are looking at long term, I assume.
    Mr. GOLDEN. Short term relief----
    Mr. POWELL. You want to make sure that we have the energy 
we need----
    Mr. GOLDEN. I understand that.
    Mr. POWELL.--to keep this country. And if by artificially 
pumping that oil out, well, if you could keep pumping it 
another six months it will be empty. Then what do you do? And 
what do you do if you need it? So by bringing the price down 
you send a message, do not make investments. You have less 
revenue coming to drill more wells, produce more oil. And if 
you do not have that as we have seen in Europe, your price will 
go right back up and even higher than it was when you started 
to empty the petroleum reserve. So ask me this question in 
another year or two when we see where the price of oil is.
    Mr. GOLDEN. Right. You would like them to restock the 
reserve?
    Mr. POWELL. I would. In fact, President Biden said when he 
did this he said, I will pump this oil out and bring the price 
down. But do not worry. When it gets below $72 I will fill it 
back up. That is what he said. It is kind of a bait and switch 
because he did not do that. The price went to 67. Have we seen 
any oil pump back into that? He could have gone out on the 
futures market for 6 months and priced it below 72 and bought 
it and pumped it back in there. And he did not.
    Mr. GOLDEN. I have called on him to do that. So I agree 
with you about that. I disagree, obviously, when gas is $5 
bringing prices down is pretty critically important to the 
American people.
    Mr. POWELL. Like I said, 2 years from now when the effects 
of artificially bringing down the price of a product has on its 
supply in the future.
    Mr. GOLDEN. Thank you.
    Chairman HUNT. Thank you, sir.
    I now recognize Mr. Meuser from Pennsylvania for 5 minutes.
    Mr. MEUSER. Well, I thank you, Chairman, very, very much. 
And my apologies for just dropping in. It is just one of those 
busy days. I am on the Financial Services Committee as many of 
my colleagues have many other Committee hearings. So this is 
really important. That is my whole point, just to stress that I 
am sorry I missed it because it is a very important hearing and 
we really appreciate you all making the trip here.
    My district now includes much of the Marcellus shale area. 
We call it the Northern Tier of Pennsylvania. I have been very 
acquainted with that area for quite a number of years, even 
when I was not representing it only because it just has been so 
important since 2011-2012. Previously, I was revenue secretary 
in Pennsylvania so we set up oil and gas workgroups very early 
just to help the industry understand compliance and grow in a 
responsible manner. And it has made an enormous difference in 
Pennsylvania. I think we have the second or third largest 
reserve of natural gas in the world. And it is developing, 
things are going well, but it could be doing a lot better. Not 
so much because of necessarily costs and excessive taxes but 
entirely because of regulations, permitting, as well as 
pipelines very much, too. And investing as you, Mr. Cross, have 
brought up, meaning access to capital from banks, large and 
small, community, regional, and even the larger banks where 
some of this ESG mandates are coming into play. I mean, it is 
not uncommon for me to get a call from a community bank. You 
would not believe the call I just got he would say, or she, 
from the SEC warning me to watch out for my carbon footprint in 
my investment portfolio. You know, I might have to hire 
somebody to look after this. I thought I already had somebody 
good.
    So tell me, you know, there is rhetoric about it. There is 
commentary. There is real life. Today we have these 
requirements but just wait until next year. They are going to 
be even harsher so you had better maintain them even more 
stringently than you already do. Maybe you can just comment on 
that for me, Mr. Cross.
    Mr. CROSS. Yes. That is a big issue for small companies, as 
well as the big companies. And I know in Kansas, we look at our 
small banks. Many of them are small banks in Kansas. And we are 
concerned about whether they are going to use an ESG standard 
on that.
    The other thing we are worried about is insurance companies 
that have started to say that they are not wanting to insure 
companies that produce fossil fuel. So that makes a big, you 
know, I think Chubb came out just this last week or so talking 
about how they would look at maybe not wanting to insure fossil 
fuel imprints on your portfolio. And what we do in the small 
independent oil and gas industry is, you know, we just want 
them to be fair in their assessments. We are not asking for 
anything special. We just want them to look at the financial 
performance.
    Mr. MEUSER. And how the upstream and downstream, right, 
from water suppliers, to farmers, to grocery stores who buy the 
food from the farmers who use natural gas for their fertilizer. 
I mean, it seems as if an overreach is an understatement.
    Mr. CROSS. There is no doubt. In Kansas, like we say, the 
people that we have here, and this is true for small producers 
across the nation, not only Kansas but Pennsylvania as well and 
others. We are friends and neighbors. We life and work right 
where we have our product. So we care about our environment as 
much as anybody. They are wanting to protect that. They have 
for many years. So ESG standards is really nothing new. The 
industry has been doing those things for many years.
    Mr. MEUSER. I would love to hear from you afterwards. We 
always have limited time for this. What your suggestions would 
be, I can do, we can do, this Committee can do to educate the 
banks and more so the regulators in the banking community on 
what you see is best, responsible, and yet maintaining a level 
of responsibility as well as gaining that access to capital.
    Lastly, I would just like to ask our thoughts on H.R. 1 
that are coming across. This bill, H.R. 1, particularly even 
maybe comment or afterwards on how we will have the 
justification right to build pipelines across certain states 
that have kept us from doing so. In Pennsylvania, for instance, 
natural gas is about one-fifth the cost that it very often is 
in the winter anyway in Boston. And if we could pipeline across 
New York State, America energy wins, consumers' costs go way 
down, and everybody is a lot happier.
    Mr. Chairman, my apology. I am out of time. If I can get 
that at some other point I would appreciate it, your thoughts 
on H.R. 1.
    Thanks very much. I yield back.
    Chairman HUNT. Thank you very much, sir.
    I want to thank all the witnesses for being here. I really 
appreciate it. I really appreciate your testimony today.
    Without objections, Members have 5 legislative days to 
submit additional materials and written questions for the 
witnesses to the Chair which will be forwarded to the 
witnesses. I ask the witnesses to please respond promptly.
    If there is no further business, without objection, the 
Committee is adjourned. And thank you very much.
    [Whereupon, at 11:12 a.m., the subcommittee was adjourned.]

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