Why would Trump want Hamm at Energy?

By Mike Soraghan | 11/22/2016 07:09 AM EST

Harold Hamm, CEO of Continental Resources Inc.

Harold Hamm, CEO of Continental Resources Inc. Photo by Bebeto Matthews, courtesy of AP Images.

The rumor mill has consistently churned out oil billionaire Harold Hamm’s name as a potential Energy secretary in a Donald Trump administration.

But if Trump’s plan is to free oil, gas and coal from federal regulations, experts say putting Hamm atop the Energy Department is not the way to do it.

"It’s a misnomer that the secretary of Energy has authority over oil and gas," said Bill Richardson, who served as Energy secretary under President Clinton. "He may be extremely frustrated with his inability to unleash fossil energy."


If that’s what Trump wants, "then he should appoint him Interior secretary," said Paul Bledsoe, an energy consultant and a former climate aide in the Clinton White House. "That’s who decides public lands development and oil and gas leases, not the Energy secretary."

DOE, they note, deals mostly with the national laboratories, maintaining the nuclear stockpile and cleaning up nuclear weapons plants. It doesn’t implement or enforce drilling regulations.

In addition to Interior, the other main agency with power over oil and gas is U.S. EPA. Hamm has not been mentioned as a contender to run EPA.

Hamm wrote a letter to his employees at the Oklahoma City-based Continental Resources Inc. the day after the election telling them he is "committed to you, our company and the city" (Greenwire, Nov. 10). Still, last week, Rep. Kevin Cramer (R-N.D.), a Trump energy adviser, said Hamm has "right of first refusal" for the DOE post (E&E Daily, Nov. 15).

The Energy secretary does have some influence over oil and gas policy, Richardson said. He or she would be "in the meetings." And the department approves exports of liquefied natural gas and oversees the strategic petroleum reserve.

And each secretary has room to define the job. Richardson chose to lobby OPEC countries on oil prices. Still, even he was surprised by the limits on his authority on electricity issues.

"I remember going in there and saying, ‘Can’t I tell FERC to do some transmission lines?’" he recalled. "They said, ‘No. You can talk to them. But there’s a process.’"

Blunt provocateur

Hamm shares with Trump a distaste for energy regulation. And he has an up-by-the-bootstraps life story that has cemented him as the embodiment of Oklahoma’s wildcatter ethos. The 13th child of sharecropper parents in rural Oklahoma, he grew up picking cotton until Christmas or the first snow.

At 18, Hamm started a one-truck business to service oil companies in the Oklahoma fields. Today, he has a net worth of more than $13 billion. He ranked No. 30 on Forbes‘ 2016 list of the richest Americans.

As an oilman, Hamm would have few conflicts of interest at DOE. But at Interior, he’d have a lot. As the largest leaseholder in the Bakken Shale play in North Dakota and Montana, changes to regulations or payment rules would affect a significant chunk of Continental’s holdings.

Continental has an interest in the equivalent of 180,000 acres of oil and gas rights on federal land where it has yet to complete wells, according to its regulatory filings. That’s about 15 percent of the company’s net undeveloped acreage.

Trump’s oil and gas holdings include Exxon Mobil Corp., Halliburton Co., Energy Transfer Partners LP and TransCanada Corp. They are held in brokerage and wealth management accounts, according to the financial disclosure report he filed in May.

As Energy secretary, Hamm might be the first to have actively pushed for higher oil prices (Greenwire, Sept. 8). He has repeatedly predicted that the price will rise above $50 or $60 a barrel, but the price has averaged below that. Hamm would stand to gain personally from a price increase.

He has also engaged on several other issues, such as lifting the crude export ban and opposing President Obama’s call to end tax advantages for drilling. He also lobbied against the Keystone XL pipeline until a link was added to the North Dakota oil fields. He now supports the pipeline.

He criticized the renewable-energy-focused energy plan of Democratic presidential nominee Hillary Clinton as "silly" and was an energy adviser for 2012 Republican nominee Mitt Romney.

Closer to home, Hamm intervened to discourage state scientists in Oklahoma from saying that the earthquake swarms rattling the state were caused by oil-field activity (EnergyWire, March 3, 2015).

Hamm endorsed Trump in late April, in the wake of the New York primary, after Trump topped his then-rivals — Texas Sen. Ted Cruz and Ohio Gov. John Kasich — in New York.

In a short speech at the Republican National Convention in July, Hamm cast environmental regulations as enablers of terrorism and said Trump would "double U.S. oil production" (EnergyWire, July 21).

"Every time we can’t drill a well in America, terrorism is being funded," Hamm said in brief prime-time remarks. "Every onerous regulation puts American lives at risk."

He added, "Climate change isn’t our biggest problem. It’s Islamic terrorism."

Dishing out red meat like that points to another problem Bledsoe highlighted — picking blunt-spoken campaign supporters for influential posts.

"During the campaign, Trump wanted extreme levels of controversy and disruption," Bledsoe said. "When you try to run a government, those same levels of controversy and disruption can cause massive problems."