The Norman Transcript

March 6, 2013

Modern energy: Facts and myths

By Caitlin Schudalla
The Norman Transcript

NORMAN — As the United States navigates a volatile, uncertain and rapidly changing era in energy production and consumption, industry professionals and experts must identify key obstacles and seek creative solutions inside U.S. borders that will stabilize the nation’s industry, economy and future.

The University of Oklahoma Energy Institute at the Price College of Business attempted to illuminate the facts and address these complicated questions Tuesday in a day-long energy symposium on the OU campus.

Featuring three panel discussions combining researchers, industry executives and government professionals with keynote addresses by Gov. Mary Fallin and Adam Sieminski, U.S. Energy Information Administration administrator, the day was an intensive analysis of U.S. potential in tomorrow’s energy arena and the pitfalls it faces today.

The day’s panel discussions tackled such complex topics as the global marketplace, challenges and opportunities for the United States, and ultimately identifying a good strategy for the future.

Natural gas — as the nation’s leading potential for a domestically produced, clean, affordable energy resource — was a major talking point, with experts commenting on its impact on job creation, vehicle production and export potential. Experts in all three panels agreed that natural gas prices need to be adjusted to better reflect production costs, though the feasibility of modifying mass-produced consumer vehicles for natural gas consumption in the near future was debated.

Another universal theme was the enormous potential within the United States for independence and renewed power in the global market, with panelists emphasizing that popular understanding of waning resources is inaccurate and expressing optimism and excitement for the unknown potential within the industry given the nation’s natural gas resources and growing technology.

The single most prominent obstacle identified by more than 80 industry CEOs was policy regulations limiting production.

Panelists described how onshore pipelines are vastly more expensive than undersea pipelines, how permits for drilling/production are very difficult to acquire and how mechanical and equipment regulations and legislation directly conflict. Panelists tangentially named negative public opinion and misrepresentation of energy companies and extraction methods as a major contributing problem.

“Fracking is criticized for water contamination, water waste and — most recently — earthquakes, and if people are going to worry about contamination of underground reservoirs, then the problem lies with drilling itself, not fracking,” panelist and CEO George Kaiser said. “As far as wasting water is concerned, using recycled water in fracking is a viable option. As far-fetched as it may seem, the most imminent concern that fracking may affect is earthquakes, as scientific evidence suggests that it’s possible the water used in fracking may act as a lubricant on faults and cause premature, smaller movements.”

Two main strategic solutions identified were implementing a more diverse market of energy resources in the U.S. (akin to Brazil’s multiple fueling options at filling stations) and adopting policies that allow equal opportunities for all fuel/energy resources in that market to thrive, rather than intentionally attempting to foster some resources and restrict others.

Fallin’s remarks detailed Oklahoma’s role as a major natural gas leader regionally, describing the state’s goal for a “win-win” arrangement with automakers and energy executives to increase CNG vehicle use.

“It’s been a win/win situation for everyone, helping create a marketplace for natural gas, and we’re currently addressing the issue of providing the infrastructure for it through filling stations,” Fallin said. “Through the leadership of retailers here in Oklahoma, we now have 72 public filling stations for natural gas, and almost 100 if you include private stations. Our goal is to have public filling stations every 50 miles by 2020.

“Alternative energy has enormous potential if we find ways to complement it with production of fossil fuels and natural gas.”

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