Volume 104, Number 33 - August 16, 2007
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Mixed reaction on energy bill
Neither oil and gas advocates nor environmentalists predict significant change if a recent energy bill passed by the House on Aug. 4 becomes law. The House Energy Independence Act of 2007 tacked on a significant stipulation to the bill already passed by the Senate in June that forced automakers to build more fuelefficient vehicles.
The House’s bill included an extra requirement: that the nation's utilities get 15 percent of their power from renewable sources such as the wind and sun by 2020. Whether the bill retains these energy standards depends on decisions made by a conference committee organized to reconcile the two versions of the bill when Congress reconvenes in September.
Although the environmental goals in thehouse’s bill are unprecedented in U.S. legislation, the renewable energy bill might have minimal impact on pollution output in Wyoming or the country, said Phil Schneider, systems engineer for Creative Energies, a Lander-based company that installs renewable energy sources for ranches, homes and businesses across Wyoming and Eastern Idaho.
“I think an important part of the picture is not just having energy come from renewable sources, but using less energy,” Schneider said. “If our energy usage as a nation remains constant, which it won’t, it will go up, probably dramatically,
“I think that (the bill) would make a greatsignificant impact, but with energy going upand the dynamics of energy of the world being very unpredictable, it’s hard to say if 15 percent in 10 years is going to be a big deal or not.”
A companion bill the House also passed on Aug. 4, which the White House already threatened to veto, could potentially help, however.
The bill would repeal a $16 billion tax break given to oil companies in 2004, and provide billions of dollars in loans, federal grants and tax breaks for alternative energy programs.
“Right now, convincing someone to use solar from a purely economic standpoint is very difficult,” Schneider said, adding thatthough wind is competitive in the energy market, solar is considerably more expensive than fossil fuels, particularly in Wyoming, which offers the cheapest electricity rates from conventional sources.
The greatest impact Schneider could predict if the House bills became law would be increased research design and manufacturing of renewable sources in the U.S., which Schneider said currently produces one of the world’s smallest outputs of wind and solar energy materials, to his company’s detriment.
Although Creative Energies installs about 200 solar projects a year, vastly more than when the company began six years ago, Scheider said employees had no idea what kind of panels they would install on a home until days before the project, parts were so difficult to obtain.
Increased production in the U.S. could resultin streamlined materials and lower prices, Schneider said, adding that a small project for an individual home can cost from several hundred dollars to $1,000. “I fully support (the renewable energy bill), and I think it is an important first step on the road to figuring out what to do with our energy sources,” Schneider said.
Sportsmen from fisheries conservation organization Trout Unlimited (TU), however, listed extensive complaints of the bill’s shortcomings in addressing how drilling affects wildlife habitats in the West that are essential for hunting and fishing. “This looks like the one time Congress will take up the energy issue during its session,” said Brian O’Donnell, TU public lands director. “We think if they’re taking a comprehensive look at energy they need to look into the impact on Western public lands. In some ways, this is more of a missed opportunity, because so much more needs to be done.”
If the bill becomes law with its current content, O’Donnell predicted Wyoming will see environmental issues remain stagnant, pecifically concerning the oil and gas industry’s exemptions from federal clean water standards, which allow for drilling to potentially contaminate public fisheries, as well as the industry’s use of “categorical exclusion” to develop land without first going through environmental review.
The bill also establishes a 45-day deadline for the Bureau of Land Management (BLM) to respond to drilling applications, which TU members argue doesn’t allow enough time for thorough impact review and will only help oil and gas companies gain permits more quickly.
“There’s a rapid, rapid pace of permit approval and leases, and we think right now that’s one of the problems we’ve seen with energy development,” O’Donnell said.But Linda Baker, grassroots coordinator with the Upper Green River Valley Coalition, said there are provisions in the bill to protect impacted land that outweigh those that aren’t included.
One section of the bill would balance currentlyskewed split-estate ownership rights, in which surface owners who live or farm on a plot of land aren’t guaranteed the right to negotiate with parties that own rights to drill for minerals under the land and change the landscape for roads, pipelines and compressor stations.
“For families with several generationsworth of time and energy and labor invested in their ranches right now who face serious damages from development impacts, this would guarantee they would have a say (in how oil and gas companies develop their land),” Baker said.
Another provision would require oil and gas developers to replace lost or damaged water supplies. “That would be a good thing for everyone, because we all depend on water,” Baker said.
Some congressmen from western statesaccused Congress of attacking the oil industry with the bill, but EnCana spokesman Randy Teeuwen said the oil and gas industry is always fending off attacks from one party or another.
Unfortunately for clean-air advocates clamoring in favor of the bill, its passing won’t influence the number of rigs drilling for oil and gas across the country, Teeuwen said.
Even with a transition to using renewable energy, Teeuwen said the nation’s fuel demands steadily increase 4 to 5 percent a year, and even with renewable energy supplementing, oil and gas will remain a constant necessity.
The Department of Energy projected this year that the U.S. will consume 28 percent more oil and 19 percent more natural gas in 2030 than was consumed in 2005. An Energy Information Administration report this year further predicted that oil, coal, and natural gas will provide the same 86 percent share of the nation’s primary energy supply in 2030 that they did in 2005. Teeuwen couldn’t predict whether transitioning to renewable resources would influence oil and gas profits, even if the change initially caused mineral prices to plummet. “If prices go down, then people will want to use more because it’s a less expensive form of producing energy, and if people use more because the price is low, it will increase demand, which will bring prices back up again,” he said. “The market ultimately controls supply and demand.”
Most oil and gas representatives would say they support the idea behind the bill, Teeuwen added. “There’s no question that someday our country, our nation, our world is going to be completely dependent on renewable energy, because fossil fuels are a finite resource,” he said.
Removing oil and gas production from the equation won’t be so simple, though. “If you’re wearing anything that’s nylon or polyester, any kind of synthetic fabric, your shoes, your pants, if you own anything made from polymer, natural gas and petroleum products are involved in the manufacture of those things,” he said. “What’s the renewable source for that?”
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