E&P

Hart Energy Conferences

Pipeline & Gas Technology

World Fuels

Rocky Petroleum Directory

Gulf States Petroleum Directory

North American Petroleum Directory

FUEL

Download the Press Release

Oil and Gas Investor’s Interview With The Sierra Club’s Carl Pope

An interview with Carl Pope, executive director, The Sierra Club, by Nissa Darbonne, executive editor, Oil and Gas Investor magazine, Feb. 28, 2008. Videography by Lindsay Goodier, online editor, Oil and Gas Investor.

Carl Pope has been executive director of the Sierra Club since 1992, during which time the organization has added some 150,000 members to total approximately 700,000, and he has been a member of the Sierra Club staff for some 30 years. He graduated from Harvard in 1967, and has been active in peace, environmental and American democratic- and social-advancement programs throughout his life. Here are his comments on the U.S. natural gas industry and U.S. energy policy.
The Sierra Club has been well known in the oil and gas industry as taking a contrarian view of energy policy on the ground. It’s now taking policy to the air—air quality, that is. On this measure, natural gas is a winner within the organization; crude oil remains out.

Oil and Gas Investor I believe you have a message today on clean-energy topics. I understand the Sierra Club is coming out in favor of natural gas.

Carl Pope Our view of the energy landscape is that we have two problems. The first and the biggest problem we have is that the way we use energy is not innovative; it’s sluggish. We’re still wasting most of whatever we use to get to work or to heat our homes, turning it into waste. Most of out utility bill goes to heat and cool the great outdoors.

But among the fuels that you can use there are clear preferences and our preference is, obviously, use all the energy that we use really well. Use renewables as much as we can. Natural gas is the next-cleanest fuel, then we have oil and then we have coal. And it all boils down to the fact that when you’re breaking bonds between oxygen and hydrogen, you’re not making any pollution we need to worry about, but when you’re breaking bonds that use carbon, you’re creating pollution in various forms. So the more carbon there is in a fuel—and there’s a lot carbon in coal, there’s a medium amount of carbon in oil and there’s not much carbon in natural gas—the more possible pollution consequences you have to deal with.

So we’re trying to make sure that, first and foremost, we innovatively and creatively use whatever fuel we burn, but second that we rely primarily on the fuels that are the cleanest. And, among the fossil fuels, natural gas is at the top.

Oil and Gas Investor Will the Sierra Club assist the natural gas industry in getting its message before Congress?

Carl Pope Our primary message to Congress is to say we need to end the system in which fuels like coal and oil that do a lot of damage to the environment actually get subsidized for the damage they do, and fuels like gas and renewables that don’t do that kind of damage actually don’t face a level playing field. So, our message to Congress is that we ought to level the playing field.
We shouldn’t be allowing people to hurt the communities in which they operate, damage their neighbors, destabilize the climate for free, because that has a cost. And, the companies that produce those kinds of heavy-carbon fuel, whether it is coal or oil, ought to be paying their full share of the cost they impose on the rest of us. So right now both renewables and natural gas are facing a playing field that is not fair, and our message is to Congress is “Let’s have a fair playing field.”

Oil and Gas Investor Are you a proponent of more natural gas drilling (domestic production of natural gas), or shipments (via LNG or pipeline from Canada)?

Carl Pope Our view is that we should actually let markets work. We should make it possible for the most efficient-energy sources to meet the largest part of our energy needs. There’s a lot of opportunity—people in the natural gas industry tell me—to produce more natural gas domestically by using new technologies, and we’re in favor of that.

On the other hand, if you look at LNG, although it may have a place in certain regions, taking a bunch of natural gas from Indonesia and moving it to the United States is intrinsically not terribly efficient, so we would rather see what we can do with domestic production here in the United States before we start substituting imported natural gas for imported oil.

We think we have enough energy resources here in the United States that if we harness innovation—if we use every cubic foot, every gallon, every Btu, every kilowatt hour—to do real work and deliver real value, we think the United States can generally be energy independent and we’d like to see that. So our focus is on domestic sources, and the most efficient and cheapest domestic sources first.

Oil and Gas Investor What are some examples of natural gas drilling onshore the U.S. that the Sierra Club has been proud of?

Carl Pope I don’t want to select out particular producers or particular natural gas fields, but the important thing to understand is that, when you go into a natural gas field, you ought to get all the gas out of it. You’ve disrupted the surface; you’ve created the infrastructure. Efficiency suggests using new technology to get every cubic foot of gas out of that field that you can.

We are not so proud, frankly, of some operators who’ve come in and gone the cheap and dirty way, in some parts of northern New Mexico, for example. There are some very poorly designed, poorly executed coalbed-methane operations that are really damaging ranchers who own the surface rights. We don’t think that’s necessary, we don’t think that’s typical of the industry. But there are people in the industry who cut corners and we need to be vigilant to make sure that we’re rewarding the good operators and not making it easy for the people who cut corners.

Oil and Gas Investor Going forward, in 2008, what do you plan to present to legislators in terms of switching to renewables and to natural gas?

Carl Pope You’ve got to recognize we’ve got the Congressional arena and the various states, and you have a different agenda in each of those states and at the federal level.

Our primary goal at the federal level is to make sure that some of the subsidies that are currently being enjoyed by coal and oil are taken away, and that the production tax credits—which enable the renewable resources, sun and wind, to compete with those heavily subsidized industries—are restored.

The second thing we’ll be looking for at the federal level is to make sure that, when there are perverse federal incentives that encourage a dirty fuel over a clean fuel, that encourage coal over natural gas, we get rid of those perverse incentives. But until we know who the—I want to be honest that for 2008 we don’t look to Washington for a lot of leadership. We think Washington is still pretty badly broken.

We’re looking forward to 2009 and our exact legislative agenda will depend on who the next president is, but at the state level in 2008, we think we have an enormous opportunity, for example, to make sure that we have in place all the transmission and transportation facilities that we need for all of our clean fuels. Whether it’s the sun or the wind or natural gas, we need to make sure that the resource can get to the marketplace.

Oil and Gas Investor Does the Sierra Club have a favorite presidential candidate, or does it take a stand there?

Carl Pope We may take a stand, but we have not yet taken a stand. We are still reviewing all of the candidates. We’re still trying to raise the bar and encourage all of the candidates in both parties to be really visionary. We think the energy economy of the 21st century looks dramatically different than the energy economy of the 20th century, and we’re looking for a presidential candidate who, in his or her core, gets that, and we haven’t chosen one yet.

Oil and Gas Investor What would be your greatest requirement from a presidential candidate to support him—or her?

Carl Pope We think the fuels of the past—the technological bottom feeders, pulverized coal—are desperately trying to use the government to keep them competitive when they’re losing out in the marketplace, and our greatest fear is that we get a president who believes we have to buy the past instead of moving forward into the future.

Oil and Gas Investor What else would you like to tell the oil and gas industry, business in general, and Americans?

Carl Pope This afternoon (at an energy program in Houston), I was listening to people in the industry talk about oil and gas, and they were making the point that they don’t really think these fuels are too expensive if you actually look at their value, and I think there is a point there.
The reason that we’re so upset as a public these days about the price of oil and natural gas is because we’re not using them very well. If I were getting 150 miles to the gallon in my car, which I should be and I could be, I wouldn’t care at all if gasoline cost $5 a gallon. I use a little bit of palladium in my cell phone. I don’t know what the price of palladium is; I don’t now what the price of palladium was six months ago. I don’t care because I’m using it to deliver value. The problem we have is that oil and gas is largely not being used to deliver the value they could.

When I turn on a heater and I’m mainly heating the street outside my house, that’s a waste. When I get into a car and most of the oil that is burned in the cylinder turns into waste heat that comes out of my exhaust, instead of turning it into power that moves my car forward, that’s a waste.

We need to have high-performance energy tools, not 20th century energy laggards.