Big Sky Business
Evelyn Pyburn
Representatives of Partnership to Fuel America were in Billings, a couple weeks ago, to introduce local leaders to their program and enlist their support.
The Partnership to Fuel America functions under the umbrella of the Institute for 21st Century Energy, an organization formed by the US Chamber of Commerce in 2007, to promote "common sense" energy solutions. "The Chamber wanted a more focused voice on energy," explained Matt Koch, Vice President of the Institute. Koch said that they are asking local leaders "to be a resource" and "to speak to legislatures here and in Washington"
The Partnership has enlisted 289 members in eleven states, including the Montana Chamber of Commerce, the Montana Retail Association and the hospitality association, said Koch. Their hope for more support in Billings seemed to be well-received among the city and county political leaders, as well as economic development leaders, who attended the meeting hosted by Big Sky Economic Development (EDC).
Billings is the right place for this conversation," said Steve Arveschoug, EDC Director. "There are thousands of loc
al households here which are employed in the industry and many thousands more in related industries. Energy is really a big deal for us."
John Brewer, President of the Billings Area Chamber of Commerce, dovetailed Arveschoug's assessment, saying that the development of "shale energy has the potential to be an economic game changer for the nation." And, "that is not an overstatement."
Christopher Guith, also a VP for the Institute for 21st Century Energy, said, "We are in a very precarious position. We don't know what our federal energy policy is." In fact, the US seems to have no policy, he said. He went on to say that there are limits to what the federal government can do, and for that reason his organization promotes allowing states to come up with their own policies, "which, is useful because each state is different."
A sound energy policy that includes all energy resources and removes barriers to development is vital to a secure American energy future, states the Partnership in its literature.
Without sound policy decisions, America will be unable to meet the growing demand for energy and will be forced to become even more reliant on overseas sources of energy.
According to projections of the US Government, America will need 21 percent more energy in 2035 than it did in 2009.
Guith stated, "This is a huge energy territory. Folks here understand that better than elsewhere. We are not an energy poor country, but we have been indoctrinated to believe we don't have energy resources."
Guith itemized, "We have 500 years supply of coal. 200 years supply of oil, and 120 years of natural gas."
Those numbers are even bigger when including resources that we don't have the technology, yet, to recover, he said. The supply of coal could extend for 9844 years.
Partnership speakers focused on the importance of the Canadian oil sands and the development of the Keystone Pipeline XL to the United States.
The decision regarding the approval of the $7 billion Keystone Pipeline XL project, which is being proposed by TransCanada, should have been a "no-brainer," said Koch.
President Obama rejected TransCanada's first permit request. The company reapplied to the US State department in May 2012. President Obama wants to put off the decision until the spring of next year, said Koch. "We need it sooner," he said, "We are going to do what we can do to make it happen sooner."
TransCanada hopes to have the pipeline operational by late 2014. (Work on the Keystone has commenced from Cushing to Texas City.
Delaying the project may force TransCanada to export oil extracted from the oil sands in Alberta to Asian nations, through pipelines built to the west coast. According to Koch, this action would permanently eliminate the prospect of jobs, economic growth and a greater, secure energy supply from Canada.
Canada has the world's third largest oil reserves, with over 175 billion barrels of recoverable oil within its borders. Canada has doubled its oil production over the last two decades, and sends 99 percent of its oil exports to the United States. Production from Canadian oil sands can rise from 1.4 million barrels per day currently to over 3.5 billion barrels per day by 2025.
Koch noted that advances in technology are consistently improving recovery methods of the oil sands. Innovations have moved the extraction from one of mining to using steam to separate the crude oil from the sand and clays in which it is embedded.
Technological advances are happening in the oil and gas industry every bit as much in "clean energy," he said, "and they are not going to stop." As far as advancing technologies, "We are still at the front end of the bubble," said Koch, "We are on a fast track. It is pretty amazing and it is a game changer."
Koch also noted that 85 percent of the equipment used in the Canadian oil fields is purchased in the US.
Canadian oil sands already have created 80,000 jobs in the U.S. and have the potential to create many more. Oil sands development could support up to 600,000 jobs by 2035, from which U.S. employees could be earning $368 billion in compensation.
Discussion also focused on development of coal. Said Guith, "Most of the rest of the country doesn't seem to understand that this is coal country. We have a massive amount of coal."
When it comes to making decisions about the future of coal "we are at a big crossroads."
He pointed out that the EPA (Environmental Protection Agency)"says we can't build coal fired power plants." EPA regulations could result in the U.S. losing 40 gigawatts of power—over 10 percent of our coal-generated power supply—as a result of plant closures. These closures mean not only lost jobs, but also higher electricity rates for commerce and residents.
And the focus of EPA is not just on coal. The EPA is moving to regulate natural gas production, attempting to impose "one size fits all" regulations on oil and gas shale development despite wide variances on geology, pointed out Guith.
According to the Partnership, EPA is moving forward with 31 major economic rules and 172 major policy rules affecting the nation's energy supply—an unprecedented level of regulatory activity.
They point out that the "cumbersome" permitting process for energy projects, is responsible for $560 billion in lost private energy investment, which would have created 250,000 jobs. Improving permitting processes would also be a benefit for wind projects, underscored Guith.
The regulatory burdens don't just impact traditional sources of energy. A U.S. Chamber analysis of stalled energy projects shows that over 40 percent of them are renewable projects in areas such as wind, solar and hydropower.
According to the Chamber statistics, the average American household spent over $4,100 on gasoline in 2011, consuming 8.4 percent of the median household income. "That's the largest bite fuel costs have taken out of household budgets in over 30 years."
Stan Pence, the Canadian Consulate from Denver, said that over the past 18 months Canadians have had "a change in attitudes." "Canada has to watch out for its backside. They have no place to go with their production," without the Keystone Pipeline.
The Keystone decision "woke up" the commercial interests and government in Canada, he said. "Their reaction was 'the heck with the US, we can't depend on American markets.'" There will be "repercussions," said Pence, to not building the Keystone.
US opposition to the pipeline also "stirred up" opposition in Canada to pipelines, said Pence, but "that doesn't mean it won't be built, it will just be more of a slog. They have to get their pipeline built quickly. If they slow down, they can lose their markets" in Asia.
Pence noted that China "has its own shale gas. That is still moving in the background. Canada needs to move it [oil] out quickly."