Sunday, June 17 , 2018, 11:04 pm | Fair 58º


Catherine Reheis-Boyd: The Key to Our Energy Future Is to Diversify Supplies

There's more consensus than you think but it will take a concerted effort to ensure safe, reliable and affordable sources

Tam Hunt may be surprised when he reads this line, but we agree on many of the points in his recent Noozhawk commentary, “The Energy Debate Will Define America’s Future.” And, we appreciate his offer to engage in a dialogue about California’s energy future.

Catherine Reheis-Boyd
Catherine Reheis-Boyd

First, we agree that energy is an important part of every American’s life, and that there will be many challenges ahead to ensure safe, reliable and affordable energy supplies.

To put it more plainly: Californians want reliable energy supplies so they can continue to have a place to work, so when they come home the lights and air conditioner will go on, and so their cars will have fuel. They want these energy supplies at a price that doesn’t break the bank. And, they want these energy supplies produced and distributed in a way that is safe and protects the environment. We agree these are reasonable goals for an energy policy.

This isn’t an abstract debate. The energy policy decisions being made now will have profound consequences on whether jobs are based in our state, whether people can afford to live here and whether there is adequate fuel for our vehicles.

Our view is that there is no single energy solution. There’s too much at stake to put all of our eggs in one basket, whether that source of energy is oil, natural gas, hydrogen, renewables, coal or alternative fuels. Meeting the goal of safe, reliable and affordable energy supplies will require a diverse portfolio of energy resources.

A sound energy policy should start with conservation and energy efficiency. Maybe that idea seems strange coming from an oil industry representative. But the most inexpensive form of energy supply management is conservation.

One member company of the Western States Petroleum Association engaged in a worldwide energy-efficiency program that reduced 8 million tons of greenhouse gas emissions. Another installed cogeneration systems at its wells in the Central Valley that doubled energy efficiency and reduced greenhouse gas emissions by almost 4 million tons.

We also agree that renewable energy is an important part of our future energy portfolio, and that includes wind and solar power. California has been moving aggressively to support solar and wind in other ways. The Million Solar Roofs program provides $3 billion in ratepayers’ funds to subsidize residential use of photovoltaics, and that’s a step toward more solar power supply.

You may also be surprised that WSPA member companies have built wind farms, solar photovoltaic facilities, geothermal power plants, and hydrogen vehicle fueling stations. Interestingly, these companies and others have learned there are some very real hurdles to building new renewable supplies in this state.

California’s high taxes and cumbersome regulatory system have delayed or stopped the growth of renewable energy here. In fact, the state of Texas has three times as much wind power capacity as California. That’s not because it’s windier in Texas. It’s because, in Texas, companies can actually obtain permits for windmills and power lines faster and cheaper than companies in California.

Solar power companies have the same problem. Many solar firms that started in California are actually shifting their manufacturing to other states because of the high cost and difficulty of doing business here.

The other important point about solar and wind power generation is that while it’s growing quickly — and that’s good — it will be a small portion of the country’s energy portfolio for many decades. The Energy Information Administration, or EIA, predicts renewable and biomass will provide about 11.4 percent of the U.S. energy supplies needed in 2035. Nuclear will provide just over 8 percent.

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And that brings us to natural gas, coal and petroleum. Most experts agree with Tam that petroleum, natural gas and coal will continue to play a very important role in providing energy to the United States for many decades to come. As the nearby EIA chart shows, in 2035 those fossil fuels will supply almost 80 percent of the energy needed to meet forecast U.S. demand.

The experts part ways with Tam over whether the world production of petroleum will be peaking anytime soon. According to the International Energy Agency, “the earth contains more than enough energy resources to meet demand for many decades to come.” That’s backed up by the U.S. Geological Survey’s most recent assessment, which put remaining discovered and undiscovered global reserves at 1 trillion to 2 trillion barrels. And finally, of the total world endowment (potential supply) of 5.6 trillion barrels of oil, USGS calculated humans had consumed just 18 percent as of 2000.

We realize that recent events in the Gulf of Mexico have shaken public confidence in our industry’s ability to produce oil safely. However, our industry’s safety record around the world, around the United States and here in California has been very good. More than 1 billion barrels of oil have been produced from offshore California in the 40 years since 1970 and fewer than 22 barrels per year on average have been spilled during that time.

The safety record in California has been achieved by a combination of strict federal, state and local laws and regulations related to offshore oil drilling, strong enforcement of those regulations by state and federal regulators, and the commitment of time, expertise and resources by the petroleum industry.

That said, we must re-earn the public’s confidence by first finding out exactly what went wrong in the Gulf of Mexico, and then apply any lessons learned that are applicable to Pacific Coast operations. Creation of an independent presidential commission to investigate what happened in the Gulf of Mexico will, hopefully, provide valuable information that can make operations off the coast of California even safer.

Summing up, there may be more consensus than most recognize on what our energy future will look like. There are many challenges ahead as energy demand worldwide increases. That’s why we need a diverse portfolio of conventional and nonconventional energy supplies that is safe, reliable and affordable.

This will allow us to keep the lights on at home and at work, to heat and cool our homes, and to maintain the great transportation mobility to which we have become accustomed.

— Catherine Reheis-Boyd is president of the Western States Petroleum Association, which represents the petroleum industry in California and five other Western states.

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