U.S. Senator Dan Sullivan (Alaska) talks about the congressional response to COVID-19; the impact of the pandemic on oil prices and the wider economy and why Alaska is “the hottest play in the world right now” for energy in a new edition of the CERAWeek Conversations series.
In a conversation with Daniel Yergin, vice chairman, IHS Markit (NYSE: INFO), Senator Sullivan talks about leading a group of senators responding to the collapse of crude oil prices in the wake of COVID-19 and a Saudi-Russia price war; his hopes for new infrastructure legislation; bipartisan efforts to address ocean clean-up and more.
The complete video is available at: www.ceraweek.com/conversations
Interview Recorded Friday, June 12, 2020
(Edited slightly for brevity only)
On the legislative response to the COVID-19 pandemic:
“We’ve passed four pieces of major legislation, including the CARES Act, since March. These have been very bipartisan pieces of legislation, but all of this legislation has been challenged because we in the Congress and the Senate didn’t have a crystal ball. When we passed the CARES Act, we put a lot of things in there that we were anticipating, but we really weren’t sure as we saw this pandemic bearing down on our country.
“What you’re seeing now is the implementation certainly has been rocky but anytime you pass legislation that huge, it’s going to have some bumps in the road. One of the programs that I really advocated for, the Paycheck Protection Program, Treasury Department estimates at that may have saved upwards of 40 million jobs.
“It’s of course the balance between the physical health of our citizens, but also the economic health that can impact physical health. Things are starting to improve, but we’re not out of the woods yet.”
On Alaska’s experience contending with COVID-19:
“We’ve had a very low number of cases. Our governor and his medical team have been doing a really good job. But it’s this balance. Just lately as we’ve started to open up our economy, we’ve seen a number of spikes in terms of the cases with regard to the COVID-19 virus.
“We have one of the highest per capita rates of testing of any state in the country. But the real challenge, it’s not just the health challenge—our economy has been really hurt by this. Our energy sector, which was having a great season in January and February is taking it on the chin, our tourism sector, our fishery sector. We’re a tough, resilient people in Alaska. But it’s a challenging time in the great state of Alaska right now.”
Maintaining Alaska’s competitiveness in oil and gas investment in the current market environment:
“It’s a balance between what we, from a tax perspective, charge the companies, and what the state keeps. It’s also important to keep having a timeliness and certainty in our regulatory process, whether at the state level, but particularly at the federal level. The great thing about Alaska—it’s not if, but when you find big conventional fields. Some of the other independents up there, they’re finding big billion-barrel, conventional fields. Some of the smartest people I know in the oil and gas industry are rightfully saying Alaska is the hottest play in the world right now.
“There is so much happening in terms of exploration and we will get our fiscal regime right. Getting through this rough time in the energy sector is going to be critical, not just for Alaska, [but also] for America.”
On decisions by some large banks to divest from upstream projects in Alaska:
“I’m quite disappointed in some of the big banks in America. They get pressure. And they don’t get any countervailing pressure. I’ve talked to the President and his team quite extensively about this. I led a letter, 36 senators and congressmen; we wrote the president saying these big financial institutions, they certainly get a lot of federal government support…and some of them were even bailed out. Yet they are now going to decide that they can discriminate against [an] entire critical sector of the U.S. economy that’s legal, that’s credit worthy, and that’s really important to America, really important to Alaska.
“I don’t think these banks are allowed to do this. Certainly, the discrimination that is directed exactly in some of our biggest native communities in Alaska…They’ve made huge advancements in health and the economy because of the energy sector. And now we have big Wall Street banks saying they’re going to red line and not invest in this sector. I think these banks need to watch very carefully.”
The response in the U.S. Congress to the oil price collapse:
“When the pandemic hit, we obviously had this huge demand destruction with regard to the U.S. economy, the global economy, all really kind of cratering at that time. For whatever reason, the Saudis decided to undertake a price war with the Russians…Within the next couple of days, oil prices cratered an additional 30 to 40 percent globally. I did lead a group of 13 senators to write the Crown Prince in rather frank terms saying, ‘We have been strong supporters of the U.S. Saudi strategic relationship for many years, but right now you’re taking actions that are clearly aimed at and are hurting the people we represent by the thousands.’
“We worked very closely with the President, the Secretary of Energy, and their team on this OPEC deal. We’re going to continue to watch this very closely. But those 13 senators are some of the strongest supporters of that U.S.-Saudi relationship.”
On advancing infrastructure legislation:
“I hope we’re close. And I do think we’re close. I’m on the Environment and Public Works Committee. That’s where all the action is. We’ve already passed the next five-year highway bill. We had not done a five-year highway bill until the Republicans retook the Senate in 2014, for almost 20 years. It was these not very effective, just short-term extensions. We got that done. It expires in the fall. We already have another one ready to go. It’s very bipartisan, 21 to zero, out of the committee. It’s essentially the ports, harbors, bridges bill. Our goal is to combine these together and move them hopefully in a package sometime this summer. So, there’s definite action.
“Another area for me as Alaska’s Senator that I’m very passionate about is infrastructure that relates to water and sewer funding. We have over 30 communities in my great state where Alaskans living in those communities don’t have flush toilets. They don’t have running water. I think the pandemic has really highlighted the need for these kinds of things. When CDC says, ‘Wash your hands several times a day,’ and you live in a community without running water, it’s pretty darn hard to do that. I’m pressing on the water and sewer funding as well, particularly for my state, but I’m hopeful that we’re going to make progress on this.”
On leading bipartisan efforts to address ocean clean-up and plastic waste:
“I had a bill last Congress called the Save Our Seas Act. It was all about ocean clean-up, ocean debris. That passed and signed into law. I’ve talked to the President and his team about this, really pressed them to include this issue of ocean clean-up in a lot of the executive things that they’re doing. I think they’re really starting to focus on that.
“USMCA (United States-Mexico-Canada Agreement) has an entire section on fisheries, which was something that I put in the trade promotion authority legislation—a section on ocean clean-up, and this is first time in a trade agreement.
“My co-sponsor Senator Sheldon Whitehouse (D-RI), he and I, when our bill got passed, we got right to work on Save Our Seas 2.0. It passed the Senate in January unanimously. The Congressional Research Service called it the most comprehensive ocean cleanup legislation ever. It’s starting to move in the House, so we’re hopeful.
“It’s got a big component here on our own domestic infrastructure, as it relates to waste management and recycling. It’s got a lot on the area of innovation. The technology is close. The American Chemistry Council was very supportive of our bill. If we could crack the code to be able to have a plastic bottle that has fresh water in it, that if it’s put in the ocean, it could fully biodegrade, that would be very important.
“It’s got a really big component of working with international partners to help them with regard to their waste management systems, which is a great opportunity for American businesses to do business over there, to get them up to speed. This is a solvable problem. It’s targetable, solvable, and we have legislation that’s a really important progress towards doing it.
“Our goal was to get the key ocean conservancy environmental groups; to get industry; it’s about the Fortune 50 companies; a number of energy companies that have pledged $1.5 billion to clean up our oceans; Democrats and Republicans in the Congress; bringing everybody together, all those key stakeholders. We’ve done that. Now we’ve got to get the House to pass it. That’s how you did major important pieces of legislation done. And we’re doing that.”
On being a leading advocate for the U.S. strengthening its strategic position in the Arctic:
“One of the frustrations I had when I came to the Senate was nobody was really focused on the Arctic, except the Alaska delegation. The Congress has been leading on this. Every year in the National Defense Authorization Act we have been putting legislation demanding an Arctic strategy, demanding the authorization of polar class icebreakers of which we only have two right now, and one is broken. I think we have less icebreakers than Singapore. This is a strategic area of the world. America is an Arctic nation because of Alaska.
“What you’re finding is an awakening on these issues. Talk about basing icebreakers in the Arctic, that will be Alaska. I have no doubt about that. We’re way behind—the Chinese are even up in the Arctic. It’s the issues of transportation routes given the receding sea ice, resources certainly, oil, gas, minerals, the environment. It’s very important that we protect it.”
On strategic engagement with China:
“The United States has awoken to the challenge. I put forward a number of things I thought that would be important. We’re not going to have containment. We need to do things like demand reciprocity in all aspects of the relationship. We can out compete the Chinese, continue to rebuild our military, certainly strengthen and deepen our network of alliances. Finally, we have to make sure that we promote our values, particularly our democratic values abroad.”
On the social protests across the U.S. and the need for collective and individual action to address racial inequality:
“I think, like the rest of our country, watching essentially the murder, the slow-motion murder of George Floyd, was a shock and disgusting. The people who are protesting peacefully in our streets, in my view, that’s the best spirit of America over something like this. Everybody’s been struggling on in what way we need to respond to address what are clearly still big issues of racism in America. We are working collectively here in the Senate on a number of approaches, and we’ve been having discussions on this.
“I was particularly struck by my former boss’s op-ed, Condoleezza Rice. She wrote this op-ed in the Washington Post last week that I would encourage everybody to read because she lays out a couple things. She talks about if we’re going to make progress, we got to check the recrimination approach at the door and work together. She emphasizes that of course there’s a need for collective action, but everybody, every American with what drives them, what they’re passionate about, can also play a role individually.
“Just this past week we confirmed, and I was very involved with this, the new Chief of Staff of the United States Air Force. General Charles Q. Brown is the first African American ever to be a Service Chief in the U.S. Military.
“Why has it taken so long in an institution, the U.S. military that really has been many ways a leader in desegregation for our entire country, why is this taking so long? Is there something happening at the top of our military leadership that prevents very capable and patriotic and qualified minority leaders to achieve that top rank? I think what Condoleezza Rice did was challenge every American to address these issues in their own way. That’s a really constructive way to look at these challenges.”
Reflections on the underreported news in the U.S. Senate:
“The progress that you see where there’s bipartisan work, and in the Senate, almost everything is bipartisan—we just passed probably to one of the biggest lands conservation pieces of legislation in a half century last night on the Senate floor; the issues relating to the pandemic; the CARES Act was 96 to zero; my ocean legislation; the work that I’ve done on more legal services for survivors of domestic violence—these are all areas where there’s dramatic, significant bipartisan accomplishments. And yet you never read about it.
“It’s dispiriting for the people we represent, for the average American, because all they think is, ‘Wait, all you guys do is you go there, you fight, you don’t like each other. It’s all partisanship and nothing gets done.’ That’s not true. Do we have principle differences? Absolutely we do. But do we have ways that we can disagree in a positive way? Yeah, that happens all the time. Some of my closest friends in the Senate are on the other side of the aisle. I don’t agree with them on everything, but there’s a lot more bipartisanship that goes on here.”
Watch the complete video at: www.ceraweek.com/conversations
About CERAWeek Conversations:
CERAWeek Conversations features original interviews and discussion with energy industry leaders, government officials and policymakers, leaders from the technology, financial and industrial communities—and energy technology innovators.
The series is produced by the team responsible for the world’s preeminent energy conference, CERAWeek by IHS Markit.
New installments will be added weekly at www.ceraweek.com/conversations.
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