WyoFile Energy Report

‘American energy independence’ advocates also want to export

When the Republican party swept onto Capitol Hill in the 2010 election it was clear that U.S. Congress’ stalemate on a national energy policy was only going to become more, well, stalemated. And now here we are still propping up an energy system conceived in the Victorian-age while a globalization movement makes Wyoming’s “red, white and blue” coal look more China-red every day.

Speaking in Wyoming this week, John Dill of Chesapeake Energy said, “It just aint gonna happen, folks, it doesn’t matter who is in charge in Washington DC.”

Dustin Bleizeffer

No matter the political stripe, Americans don’t expect congressional delegates will break out of their election-cycle politics long enough to craft any national energy policy, let alone one that takes a long view on both local and international matters. As with any policy void, there’s always people, companies, industries and special interest groups eager to fill it.

“The country has waited long enough for a national energy policy,” Dill told attendees of the Wyoming Infrastructure Authority’s Tuesday meeting in Laramie. “So we’re going to take the bull by the horn and do it ourselves.”

Dill, director of Chesapeake’s, corporate development and government relations, touted his company’s plan, “A Declaration of Energy Independence,” as a no-nonsense and downright patriotic strategy for weening America off oil imports from unfriendly nations.

Chesapeake’s plan is one of dozens of plans, initiatives, reports and blueprints raining down from the oil and gas industry’s corporate headquarters. The Western Energy Alliance is pushing its “Blueprint for Western Energy Prosperity,” promising to increase domestic oil and natural gas production enough to fully ween America off foreign imports by 2020 — if only we could get rid of “redundant and burdensome government regulations and bureaucratic red tape,” according to Western Energy Alliance.

Domestic natural gas will go a long way in meeting the nation’s need to rely less on foreign energy imports — and maybe even help the nation emit fewer greenhouse gases that contribute to global warming. So what if the oil and gas industry gets what it’s asking for?

Forget, for a moment, what it might actually look like. (There will be environmental impacts; “The energy industry has environmental impacts and anyone who pretends that isn’t the case is obviously not looking closely at how drilling occurs or at what other industries do,” Dill told WyoFile.)

This rig was drilling a horizontal oil well near the Black Thunder mine in southern Campbell County this summer. (Dustin Bleizeffer/WyoFile - click to enlarge)

But what if the industry’s wish-list for environmental regulation is granted, and they get whatever else they say it would take to crank open the American-made oil and gas spigot as wide as the industry would like? Would they insist that that American natural gas and oil remain in the United States powering the American economy? These are international commodities, and big companies are beholden to international markets.

I asked Dill on Tuesday if Chesapeake would commit to not selling its American-made natural gas overseas if the company’s vision for U.S. development played out.

“Well there’s not a commitment at this point,” Dill said, and acknowledged that plans in the 1990s to build Liquified Natural Gas (LNG) ports in the U.S. for imports are now being reconsidered for exporting American natural gas.

“Chesapeake has no particular plans right now to do so, but we’re watching it very carefully because, again, an American resource that we cannot only produce here for the good of this country, but can also sell overseas, is great,” said Dill. “Probably, any effort to market this gas in other countries would be done by somebody other than Chesapeake. But we’re taking a look at it and I think it’s very encouraging from a balance of payments point of view and from a trade point of view and for building our own economy in the United States and not being dependent on other countries.”

Exporting a modest percentage of domestic oil and natural gas to high-paying markets overseas would likely be very good for our economy. Our Wyoming coal producers certainly intend to increase their export of American coal to Asia. But without a national energy policy, and left to the winds of geopolitics and international markets, how can we expect that America’s domestic coal, oil and natural gas will actually serve our “energy independence” interests?

For example, can we expect a massive conversion to compressed natural gas vehicles without the guidance of tailpipe emission standards? And with the continued uncertainty over greenhouse gas regulation for major sources, America’s utilities are slowly decommissioning coal-burning units, spurring mining companies to market our domestic coal overseas.

American citizens are being asked to accept a certain level of environmental impact and human health risk to realize these full-scale shale oil and shale gas development scenarios put forth by Chesapeake Energy, Western Energy Alliance and others. But where’s the vision and guidance to guarantee that, in return, those domestic fuels will power our middle class more than it powers China’s middle class?

— Dustin Bleizeffer, WyoFile editor-in-chief, has covered Wyoming’s energy industry for 13 years. He can be reached at 307-577-6069 or dustin@wyofile.com.

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Published on October 28, 2011

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