
Hamm said to be auditioning for energy portfolio if Donald Trump becomes president
Bakken oil mogul Harold Hamm, the leading contender to be energy secretary in a Trump Administration, fired a howitzer across the bow of Canada and Mexico during his Thursday speech at the Republican convention.

Hamm’s ham-handed delivery and incendiary remarks have mostly been ignored by American media, but they should be of particular interest to America’s neighbors, especially Canada, which is tightly integrated into the US oil and gas system.
“Four years ago, Donald Trump asked me to tell him about the American energy Renaissance and how we had transformed the North Dakota Bakken into the largest US oil discovery ever. I told him it was moving America from energy scarcity to one of abundance, would change the world forever and power America to greatness once again. He wrote that down. Donald Trump got it. President Trump will fuel America’s future and become the first president to achieve American independence.
“President Trump will release America’s energy potential, get rid of foreign oil, trash punitive regulations, create millions of jobs, and develop our most important geopolitical weapon – crude oil.Despite Obama’s attacks, [imports] of foreign oil have plummeted by 65 per cent. America now has more oil than Saudi Arabia or Russia. We could double US oil production again and put America in a global league of its own.” [emphasis added]
Whoa. Hold on right there. Double US oil production? Let’s do the math for Hamm.

Before the shale oil revolution began in 2005, the US produced about 5 million b/d. That number rose to 9.5 million b/d in 2015, but will probably drop to 8.5 million b/d in 2017 thanks to the price rout that started in late 2014.
Demand ranges between 19 and 20 million b/d.
When Hamm talks about doubling US oil production “again,” he means doubling total production, not the four million b/d that shale oil was actually responsible for over the past decade or so.
That’s a tall order. Russia and Saudi Arabia both produce between 10 and 11 million b/d. No country has ever produced more than that.
Increasing American oil production to 18-20 million b/d is a fantasy, according to Ed Hirs, energy economist at the University of Houston and managing director of Hillhouse Resources.
“The costs of US oil production from shale and deepwater exceed the current price of oil as set by OPEC. At the prices necessary to double US production, gasoline will cost consumers $3-plus per gallon. In essence, it was another speech of complete nonsense that is typical of politicians.”
What about Hamm’s call to “get rid of foreign oil”?

Readers may be surprised to learn that Canada, not OPEC, provides far and away the greatest portion of American oil imports, up to 45 per cent, with Mexico accounting for about 9 per cent. OPEC members provide 2.7 to 3 million b/d to US refiners, less than a third of imports.
The US energy secretary should at least be able to distinguish between America’s friends and enemies.
There are currently 31 oil pipelines crossing the Canada/USA border (and 39 natural gas pipelines), according to Natural Resources Canada. Donald Trump pledged during his May energy speech in North Dakota that one of his first actions as president would be to ask TransCanada Corp. to resubmit its application for the 830,000 b/d Keystone XL pipeline.
If anything, as the Alberta oil sands expand production by one million b/d by 2025, and Canada tries desperately to build one or two pipelines to tidewater in the West or its refineries in the East, the Canadian and American industries are more likely to become more tightly integrated, not less.
So how does Hamm square his bluster with his prospective boss’ commitment to significantly increase Canadian imports via Keystone XL?
The truth is, he can’t. Nor should a Trump Administration try.

I’ve written several columns about the Texas-based Panhandle Producers & Royalty Owners Association’s proposal to ban OPEC using oil import quotas and increase imports from Canada and Mexico. That is a scheme that can work, according to Hirs, who has written scholarly papers explaining how quotas would both support the domestic oil industry and increase American national security.
Hamm is, frankly, not qualified to be energy secretary. His focus is too narrow – Hirs says there are other important energy priorities coming up, including revamping the national power grid – and his self-interest in oil policies creates unavoidable conflicts.
“Hamm made OPEC his punching bag in his speech but really failed to acknowledge that he wouldn’t be standing there without OPEC having driven up the price of oil post-9/11,” said Hirs in an interview. “Without Saudi Arabia, the Bakken would not have been economic to develop. Mr. Hamm owes a great debt to OPEC personally and professionally.”
Hamm was given about six minutes onstage, which Hirs points out is relatively short and suggests the party and Trump wanted to downplay its importance.
Good call. The brief audition ably demonstrated that Hamm is not ready for political or policy primetime.