Energy Secretary Rick Perry said Monday that he has not forgotten about the importance of natural gas, as the Trump administration considers subsidizing coal and nuclear plants.
“If there is or has ever been a better salesperson for American gas, I would love to meet them,” Perry told reporters at Energy Department headquarters. “We promote it on a regular basis. I am from a state [Texas] that is a huge beneficiary of it. I have sung its praises for a long time. Regardless if I am a punching bag, I will promote gas around the world.”
Perry is citing his gas credentials ahead of the World Gas Conference being held in Washington this week for the first time in 30 years.
The weeklong event, where Perry will speak on Tuesday, comes as the Trump administration is spooking natural gas businesses, and most everyone else in the energy industry, by promising to bail out coal and nuclear power plants as the legacy power sources struggle to compete with cheaper alternatives.
The interference in the market would punish natural gas, which, thanks to the boom in hydraulic shale fracturing, has replaced coal as the fuel used most by U.S. power plants.
Perry said Monday he has no timetable for potential action from the Energy Department, after Trump ordered him to do something to head off closures of coal and nuclear plants.
“We’re not ready to make a statement yet,” he said. “We are looking at all the contingencies and different impacts.”
But he continues to stress the Trump administration’s case for interfering in competitive power markets by helping coal and nuclear, which likely would raise rates for electricity users, saying the nation’s physical and cybersecurity is at risk from less availability of those resources. There is a shortage of pipelines to transit natural gas. And the Trump administration argues pipelines are vulnerable to cyberattacks, citing recent attacks against the data networks that pipeline operators use.
“When you think about my responsibility, it’s to make sure when this country has a need for power, it’s there,” Perry said. “Those coal and nuclear plants that have fuel on site are important to that process. The economics is secondary from my perspective. There is the potential to see some really chaotic attacks in this country. That is DOE’s responsibility to make sure that does not happen.”
A leaked Energy Department draft memo proposes using two federal laws focused on emergencies and wartime needs to save the life of coal and nuclear power plants set to retire soon.
It would subsidize select coal and nuclear plants for two years, using executive authority under emergency provisions of the Federal Power Act and the Defense Production Act.
Free-market conservatives, energy regulators, natural gas users, renewable advocates, and others have united to oppose the plan, because of its potential impact on markets.
Perry Monday said he relates to those concerns, but they won’t stop him from acting.
“Historically we have looked at power from more of the lens of the market,” Perry said. “That was fine and good. I have a history of being in that camp. I get competition. I love competition. But being the governor of Texas and secretary of energy are two different jobs. When people are out of electricity or power, people won’t be asking the question, ‘Gee did you make right economic decision? But why didn’t you act?’”
In a 40-minute briefing with reporters, Perry addressed other issues important to the oil and gas industry. Here’s a synopsis:
• Perry said OPEC’s new agreement to boost oil production by 1 million barrels per day to address higher prices may be “a little short” of what’s needed.
The 1 million barrel target translates to about 600,000 barrels per day of crude oil coming onto to the market, because of constraints facing major producers such as Iran, Venezuela and Libya.
He said he shares President Trump’s anxiety about higher world oil prices causing a spike in U.S. gasoline prices. “We are going to do everything in this country to keep gasoline prices reasonable,” Perry said.
But he said the Energy Department won’t consider releasing oil from the Strategic Petroleum Reserve to add supply to lower gasoline prices.
“That’s not what the SPR is there for,” Perry said. “It’s there for emergencies, like a massive hurricane or other natural disaster and [is] not some market manipulator.”
• Perry said he understands the backlash from the oil and natural gas industry over the Trump administration’s steel tariffs. Pipeline operators depend on foreign steel, because they can’t find the special type they need domestically. “We want to make sure we don’t restrict our ability to build timely infrastructure,” Perry said. “We want to make sure we don’t put a tariff in place so broad that we may try to hit China, but in doing that, hit folks who rely on domestic steel production capability.”
But he said he trusts Trump’s protectionist tactics and contends the U.S. has more leverage now in energy trade because of its increasing production of oil and natural gas.
“We find ourselves in this very unique situation right now, and that puts us in a different trade posture than were a decade ago,” he said. “I don’t have great angst about how the president is handling these trade negotiations.”
• Perry confirmed he will meet with Russian Oil Minister Alexander Novak this week on the sidelines of the World Gas Conference.
He described the meeting, scheduled for Tuesday, as a relationship-building affair, without a specific agenda.
Perry and Novak have met before, speaking on a panel together at the World Economic Forum in Davos, Switzerland. The energy secretary also said he hopes to visit Russia to observe its energy activity in the Arctic.
“This is a continual opportunity to get to know him, to reach out and send a message that we’re certainly amenable to creating a relationship,” Perry said. “We’ve got our issues with Russia, but I believe you need to have conversations with folks and find areas where we can work together.”
