WyoFile Energy Report

Sen. Enzi; China wants to own our energy

While President Barack Obama was talking about the high price of gasoline at the University of Miami on Thursday, Wyoming’s senior U.S. senator paid a visit to his former colleagues at the Wyoming State Capitol and offered his own dire warnings about escalating energy costs.

On the state senate floor, U.S. Sen. Mike Enzi, a Republican, recalled the 1970s oil embargo. “The price (of gasoline) went from 25 cents a gallon to $1 a gallon overnight. … That’s where we’re going to be with energy if we don’t start developing our own energy,” Enzi told Wyoming lawmakers.

Dustin Bleizeffer

In Miami, Obama criticized his GOP counterparts for offering what he considers gimmicky solutions to bringing down the cost of gasoline.

The New York Times quoted Obama, “Step one is to drill, step two is to drill, and then step three is to keep drilling.”

Despite the fact that the U.S. is drilling more and producing more oil and natural gas than anytime during the past eight years, Wyoming’s political leaders remain steady in their insistence that the president is hobbling domestic energy production — presumably a ready-made spigot that can be twisted wide open if only it weren’t for an inherent disregard for fossil fuels in the Obama administration.

The truth is, prices at the pump in Cheyenne are influenced by international markets and politics far more than the number of drilling rig derricks in Campbell County and the Pinedale Anticline. And that’s no mystery to many folks in the Cowboy State where we’ve lived through the boom-and-bust rodeo many times over. Unlike the Powder River Basin’s sub-bituminous coal, oil has always been an international commodity.

Enzi, affable and warmly regarded by an overwhelming majority of his Wyoming constituents, also warned Wyoming lawmakers to be on the lookout for China. In particular, China’s recently acquired taste to buy up energy resources such as natural gas, oil and coal.

“China is buying energy everywhere in the world they can,” Enzi said. “And when they own it, they own us.”

It’s a compelling argument, and a scary proposition. As a Gillette native familiar with the Powder River Basin coal industry, even the notion of Wyoming coal traveling all the way to Japan, Korea and China has left a sick feeling in my stomach for two reasons:

— It’s evidence of our nation’s failure to enact an energy policy that looks after our own best interests first.

— And the enormous, unnecessary greenhouse gas footprint it treads upon international efforts to address climate change. The burning of Powder River Basin coal accounts for almost 900 million tons of CO2 emissions in the U.S. — about 13 percent of all U.S. CO2 emissions, according to the Western Organization of Resource Councils. Transporting Wyoming coal to Pacific Rim nations only adds to its CO2 footprint.

Enzi declined to clarify his comment about China owning the U.S. if it were to own our energy resources. Chances are, the statement leans toward the rhetorical. Even the Wyoming Mining Association — which represents the coal constituency Enzi aims to protect — admits the warning borders on hyperbole.

Sen. Mike Enzi (R-Wyoming) speaking in the U.S. Senate.

WMA executive director Marion Loomis told WyoFile there’s no reason to fear the growing export of Wyoming coal to China, nor the possibility of Chinese companies gaining ownership interest in Wyoming coal.

“Has it been a good thing for us (Wyoming) to sell soda ash worldwide? I think it is. So what’s the difference whether we sell coal worldwide?” said Loomis. “It’s a worldwide commodity. … Unless they (Chinese companies) would refuse to sell (coal) to us because they own the resource and they’re going to ship it all out to China and refuse to sell to us.”

Of course, Loomis and his membership have their own interests, too. They want to keep selling Wyoming coal (to whomever) at a clip of more than 430 million tons per year. And as Wyoming coal producers make gains in international exports, it more or less makes up for losses in the U.S. market.

Vehemently opposed to greenhouse gas regulation, the U.S. coal industry was instrumental in making sure that Congress didn’t even come close to a climate and energy policy that limits CO2 emissions. But without those targets, many utilities say there’s little reason to attempt financing and building new coal-based electrical generating plants that can capture coal’s CO2 — admittedly a huge cost. GE, which wants to sell its technology to utilities, for years has said, give us the targets and we’ll help utilities meet them.

Coal producers won’t relent.

“It’s hard to have a policy that would dictate to utilities what free markets can do,” Loomis said, adding that the coal industry steadfastly asserts the U.S. Environmental Protection Agency has no authority to regulate greenhouse gases (the U.S. Supreme Court, during the Bush administration, disagreed).

Yet, the uncertainty of not having those emission targets (uncertainty which the coal industry helped create) has only helped convince utilities to pull coal from their long-term electrical generation plans. As electric utilities scan the landscape today they see natural gas (despite its historic price volatility) as a cheaper alternative and a way to meet tougher emissions standards.

I asked Loomis whether the coal industry is beginning to regard its own success in blocking climate regulations as a danger to its U.S. market, and whether the lobby might consider coming back to the table to negotiate an emissions reduction schedule if it means maintaining its U.S. market.

“I don’t know,” said Loomis. “We have not done that, as you know.”

Understandably, federal regulation and inherent bureaucracy are a pain to navigate. But given the rate of domestic production, our fossil fuel industries seem to flourish anyway — even more than under previous administrations when it comes to oil and natural gas. It may cost more for fossil fuel extraction industries to do business in the U.S. (not in every instance), but our nation’s federal environmental standards are not borne of ill-intent. Human health and safety aside (I can’t believe I said that) our regulations and standards do demand innovation and employ American professionals who are hired to help meet and maintain environmental standards. And the resources they help protect are economic drivers, too.

But getting down to these complexities in a 10-minute address to the Wyoming legislature doesn’t make for a good pep-talk. And who can blame Enzi for understanding that? Keep it simple. Like the compliment he offered his former colleagues in the State Capitol on spending; “I like the way you’re appropriating.”

— Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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Published on February 23, 2012

  • wyoman

    Of course Loomis and his group are not concerned. They are getting filthy rich and could care less what happens in the future. They are going to make as much money as they can for themselves and their families future and every one else be damned!

  • Concerned Wyoming

    True fact – production has increased the past 8 years – INSPITE of Obama, not because of. Production on public lands has decreased while production on private lands has sky-rocketed.

    Thanks for supporting Enzi is a small way when you included the quote – “It’s a worldwide commodity. … Unless they (Chinese companies) would refuse to sell (coal) to us because they own the resource and they’re going to ship it all out to China and refuse to sell to us.”

    Enzi is correct – we should be concerned.

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