Highlighting the Role of Small Businesses in Domestic Energy Production (House Small Business subcommittee hearing, March 29, 2023)

Summary

Transcript of a March 29, 2023 hearing of the House Small Business Subcommittee on Rural Development, Energy, and Supply Chains, Small Business Committee Document Number 118-007, on small firms in domestic energy production. Chairman Wesley Hunt presided and the session ran from 10:01 a.m. to 11:12 a.m. Witnesses were Lucas Gjovig of GO Wireline in Williston, North Dakota, Nick Powell of Colt Energy, Edward Cross of the Kansas Independent Oil and Gas Association and Dan Conant of Solar Holler in Shepherdstown. Testimony covered regulatory hurdles for small energy producers, and the appendix adds a statement from Amogy.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

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“Highlighting the Role of Small Businesses in Domestic Energy Production (House Small Business subcommittee hearing, March 29, 2023).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/highlighting-the-role-of-small-businesses-in-domestic-energy-productio-230a16e2a8/, SHA-256 e66ecbd3e34e033807712b9cdca2e675526184194ce64258ede98b2f2db51685.

Full text

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

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 VELÁZQUEZ, 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

(II)
CONTENTS
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 Associa-
tion, 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 Associa-
tion, 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

(III)
HIGHLIGHTING THE ROLE OF SMALL BUSI-
NESS 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 appre-
ciate 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 un-
leash 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 busi-
nesses 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, extrac-
tion, 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 en-
(1)
2

ergy 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 com-
petitive and adaptable. Their adaptability enables them to inno-
vate, focus on more marginal oil and gas reserves, and pursue revo-
lutionary technologies that larger companies may overlook.
Small businesses in our energy sector do not only drive our econ-
omy, but they also meet a critical need for American families.
Hydrocarbons account for 80 percent of the world’s energy sup-
plies 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, Presi-
dent Biden has called on oil and gas companies to ‘‘increase produc-
tion and refining’’; has plundered 180 million barrels from the Stra-
tegic 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 Ara-
bia 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 tak-
ing office, cancelled the Keystone XL Pipeline, halted oil and nat-
ural 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 sur-
prise that the oil and gas production has being outpaced by de-
mand.
The United States can make the decision to either take the lead,
or let China and Russia displace us in yet another sphere of influ-
ence. 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 in-
terests to nations who want to weaken the United States.
Conflict across the globe and the battle for strategic reserves be-
tween 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 cru-
cial for our economic stability and security, and small businesses
play a critical role in this.
3

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 pro-
duction. 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 en-
ergy nearly matched the previous record set in the 1980s. this has
put a serious strain on the pocketbooks of Americans and the bal-
ance sheets of our local businesses. The rising costs hurt lower in-
come and working class people the most as we spend higher pro-
portions of our income on gas to heat our homes and power our ve-
hicles.
To fully understand the rising costs of energy, we need to exam-
ine the broader context around energy prices here in the U.S. En-
ergy 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 im-
mense strain on global oil supplies resulting in higher prices world-
wide. 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 share-
holders 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 con-
tend with the long-term effects of climate change.
Just last week, an IPCC report detailed the catastrophic con-
sequences 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.
4

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 revi-
talize domestic manufacturing for clean energy and work to expe-
dite environmental reviews for drilling permits on public lands.
While I support an ‘‘all of the above’’ approach to domestic en-
ergy 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 Wil-
liams 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 dis-
crimination 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 Repub-
lican 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
5

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 na-
tion’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 first-
hand 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 Kan-
sas 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 hon-
ored 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 op-
erated 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 En-
ergy, and is the past president of Eastern Kansas Oil and Gas As-
6

sociation (EKOGA). Mr. Powell currently sits on the boards of both
EKOGA and KIOGA, the Kansas Independent Oil and Gas Associa-
tion, and he is currently the Chairman of the National Stripper
Well Association. Mr. Powell’s extensive career will give this Sub-
committee 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 testi-
fying before this Subcommittee. And I am looking forward to to-
day’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 oper-
ating 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 pro-
ducers, explorers, and service providers. In addition to his work
with Cuyoga, Mr. Cross serves on the boards of the Domestic En-
ergy 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 experi-
ence and distinguished career, Mr. Cross can provide a wealth of
knowledge about the vital role that small business play in the do-
mestic energy production market and the current regulatory state
of the industry. I want to thank you, Mr. Cross, for testifying be-
fore 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 prac-
tices and investments in the local workforce, he jumpstarted the in-
dustry in his home state while lowering the energy costs of local
families’ businesses and nonprofits. Mr. Conant has spent his en-
tire career in the renewable energy industry. Prior to launching
Solar Holler, he was the first employee at the largest solar com-
pany in Vermont and an advisor to the U.S. Department of Ener-
gy’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.
7
STATEMENTS OF LUCAS GJOVIG, PRESIDENT, GO WIRELINE;
NICK POWELL, CHAIRMAN AND OWNER, COLT ENERGY; ED-
WARD 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, Ne-
braska, and Kansas.
GO Wireline plays an important role in domestic energy produc-
tion. Our company provides wireline and pressure pumping serv-
ices 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 do-
mestic 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 produc-
tion requires more equipment than people, which in turn requires
access to capital and financing. Over the past several years, inves-
tors 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 invest-
ment needed to keep up with demand.
Greater manpower is also needed to meet increasing levels of de-
mand. 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, par-
ticularly young people.
8

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, equip-
ment, 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 ad-
ministration’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 Disclo-
sure 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 deci-
sions 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 na-
tional security, and reduce global emissions.
Thank you again for the opportunity, and I look forward to an-
swering 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 be-
fore you.
My name is Nick Powell, the Chairman and owner of Colt En-
ergy. 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 oper-
ates 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 em-
ployee per 10 barrels of oil and 18 MCF a day of gas. So in our
9

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 commu-
nities 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 reg-
ulations 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 ex-
emption 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 out-
come 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 emis-
sions. The EPA ignored the third party DOE study and strength-
ened the leak detection repair requirements for small oil and gas
wells.
Another potential hit to our operating costs is a proposed meth-
ane 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 regula-
tions and fees does not take into consideration other costs of doing
business that increased as we deal with inflation and labor short-
ages, just like everyone else. So when we are continuing to face
10

some of the highest inflation rates we have seen in 40 years, small
operators can ill afford any additional unnecessary costs or regu-
latory 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 pro-
duction 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 domes-
tic oil and gas production, including carbon and methane tax pro-
posals, unilaterally increasing the regulation of oil and gas produc-
tion, and proposing to eliminate critical oil and gas cost recovery
tax provisions. Biden’s actions are making it harder for our econ-
omy 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
11

does not meet that it will be met by other countries who do not
share our security interests, environmental, or human rights val-
ues. The solutions are right here in America and we just need to
seize upon those. It does not make sense to place unnecessary polit-
ical 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 infla-
tion.
The oil and gas industry can be part of the solution to our na-
tion’s energy solutions or energy challenges. Entrepreneurs in the
private sector and smart state led policies can drive American en-
ergy leadership. Tax policy proposals from the Biden administra-
tion 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 pro-
ducers 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 en-
sure 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 cli-
mate 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 em-
power 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 Ap-
palachia.
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.
12

My name is Dan Conant. I am the founder and president of Solar
Holler. We are based in Shepherdstown and Huntington, West Vir-
ginia, and I also come to you as a former advisor to the U.S. De-
partment 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 ap-
proaches 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 profes-
sionals. 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, non-
profits, 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 en-
ergy was shown in our very first project. A groundbreaking commu-
nity effort with my congregation, Shepherdstown Presbyterian
Church. That project won national accolades, including the inter-
faith 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 cam-
paign, we crowdsourced water heaters. Members of the congrega-
tion and half the businesses in town agreed to let me connect an
internet-connected remote control to their water heater. And we ac-
tually connected 100 water heaters across town as a network, reg-
istered them as a power plant on the PGM regional grid, and start-
ed 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, afford-
able housing groups, and libraries across the state while stabilizing
the power grid, preventing blackouts and power surges and ulti-
mately incorporating more renewable energy into the grid.
That first project with my church would have cost the congrega-
tion 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 in-
centives 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 al-
ways have been for businesses.
In 2015, we relaunched Rewire Appalachia, a workforce develop-
ment and training program in partnership with our friends at
Coalfield Development. Through that collaboration, Solar Holler
13

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 col-
lege, for their electrical apprenticeships, for their solar certifi-
cations, 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 pro-
grams. This January, we launched internship programs with
Wayne County West Virginia schools, as well as Boyd County, Ken-
tucky. 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 sys-
tems. 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 indus-
trial 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 al-
ludes 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 ush-
ering 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 regu-
latory environment during the current administration has in-
creased 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
14

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 prob-
lem. 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 pro-
ducing 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 pro-
ducing 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. tax-
payer 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
15

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, par-
ticularly 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 ac-
tually 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 al-
lows 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
16

on the Ohio River. It has got I think 5,000 to 7,000 folks, some-
where 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 sup-
porting 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. Incred-
ible. 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 bar-
rels 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 produc-
tion. 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 govern-
ment 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 im-
pact 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.
17

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 prai-
rie 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 sup-
posedly coming down. Like I said, the Department of Energy third-
party study which was done not only in Kansas but across the na-
tion found no viable or significant quantities of methane or volatile
organic compounds from marginal wells, yet the EPA decided to ig-
nore 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 af-
fect your small business and many others like it throughout Kan-
sas and throughout the country?
Mr. POWELL. Yes. Well, small producers depend greatly on per-
centage 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 rev-
enue we get to put back in the ground to continue drilling to main-
tain our revenue so we can maintain our employees and our fixed
costs. And percentage depletion allows that and only for small pro-
ducers. 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. Peo-
ple 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.
18

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 regula-
tions 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 wit-
nesses today for coming and testifying on such a critical issue.
The testimony that has been shared today has touched on dif-
ferent aspects of workforce and retention issues, a vital part of en-
suring 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 short-
ages or workforce development and retention.
So, Mr. Conant, the Rewire Appalachia and high school voca-
tional programs you mentioned in your testimony are great exam-
ples of how to cultivate a strong local workforce. What further
measures in the clean energy space should Congress be paying at-
tention 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 elec-
trician than it is to teach other electricians. And that has been seri-
ously holding us back. Not just West Virginia but nationwide. So,
I would say increasing teacher pay and making that a more com-
petitive 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. Bipartisan-
ship 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
19

green are ways I think we can work together to get an energy pol-
icy 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 be-
cause 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 sup-
port 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 govern-
ment 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 en-
tities, 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
20

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 Com-
mittee, 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 pro-
duction, the Biden administration is doing just that, harming small
businesses and threatening to put those in the coal, oil, and nat-
ural 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 impor-
tant 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 pol-
icy as an economic issue, whereas Democrats seem to think of it
as an environmental issue.
Mr. GOLDEN. Well, I would not agree with that.
21

Mr. CROSS. Okay. Well, those are just polling numbers that
came out. But you know, looking at ways, and we talked about sev-
eral 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 mar-
kets. 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 imper-
ative 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 employ-
ment in accounting, 75 percent of the property tax. And it is crit-
ical 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 manu-
facturers 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 pro-
ducers because they are not tapping equity markets and things like
that. But it does affect a lot of the suppliers. Some of them use sup-
pliers 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 con-
stituents 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——
22

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 pump-
ing 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 mes-
sage, 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 re-
serve. 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 re-
serve?
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 col-
leagues have many other Committee hearings. So this is really im-
portant. 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 ap-
preciate 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 ac-
quainted 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 Pennsyl-
vania 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, per-
mitting, 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
23

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 com-
mentary. 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 con-
cerned 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 compa-
nies 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 peo-
ple 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 al-
ways 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 responsi-
bility 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, con-
sumers’ 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.
24

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 appre-
ciate 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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