HOUSTON -- Former Secretary of the Interior Ken Salazar came to Houston to eat crow on Wednesday as he gave the opening keynote at the Winter NAPE Business Conference. The Colorado Democrat reflected on his days as a senator and member of the Energy and Natural Resources Committee, recalling that, in 2005, he told the Senate that energy independence was nothing more than an illusion. The U.S. at the time was importing 60% of its oil, and was projected to import 70% by 2020.
“Now, things have changed,” Salazar, who served as Interior Secretary under President Obama from 2009 to 2013, told the NAPE crowd. “We are on the verge of developing a new energy independence for the United States of America. So those mirages and those illusions, those are things of the past. Industry, government and all of you are working to make it a reality.”
Salazar credited technological advances, such as hydraulic fracturing and horizontal drilling, with the trend toward American energy independence, along with advances in efficiency, such as vehicles that get higher miles per gallon (mpg) rates. But he also credited the modern legal framework with contributing to what he called the country’s “newfound energy confidence.” In particular, he pointed to the bipartisan Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007.
“It is true that Washington sometimes seems to be very broken,” he said. “But at least during that time, 2005, 2006, and 2007, we were able to work together as Democrats and Republicans to pull together energy legislation that was helpful, to help create incentives to make some of this happen.”
Indeed, Salazar spent a good portion of his speech calling on greater collaboration between government and industry.
“I do think if we’re going to sustain the path of progress that we are on, we need to look at how we have worked in collaboration to get to where we are today, and also take those lessons and apply them to some of the challenges we face in America today, and what you face as an industry,” he said. He recalled the days after the Macondo accident in 2010, in which 11 people died and 17 others were injured, and in which 200 million gallons of oil flowed into the Gulf of Mexico from the runaway well.
“It was a very unfortunate accident,” he said. “But the fact is that when you look at it now from the point of view of 2014, I think the legacy is a positive one. I think the legacy is a positive one because of the kind of collaboration that came out of what was actually the disaster and the crisis. I remember sitting down with the heads of all the major oil and gas companies operating in the Gulf of Mexico, and talking to them about the formations of the nonprofit organizations ... where we would be in a position-- if we were ever in this situation again-- of industry, with the support of government, having the responsive capability to arrest the problem when it occurs.”
Such collaboration could be an example not only at home, but abroad.
“The rest of the world watches us, and they watch the industry and they watch what’s happened in the Gulf of Mexico,” Salazar said. “And so the lesson for the future is this: What happened in the Gulf of Mexico on April 20, 2010, could in fact happen in other places around the world. It could happen in places like Brazil or off the coast of Nigeria or off the coast of Norway. Yet, through this collaboration, industry and government came together, and now we have in my view one of the safest places to explore for oil and gas in the Gulf of Mexico.”
Another, less high-profile example of industry-government collaboration during Salazar’s tenure concerned the Dunes Sagebrush Lizard, a species once marked for the Endangered Species List and a cause of frustration for oil and gas producers. Salazar worked with companies such as Apache and ConocoPhillips, and the states of Texas and New Mexico and private landowners, to come up with a system of voluntary conservation efforts to both protect the lizard’s habitat and to provide regulatory certainty to the industry.
“The question there becomes, how can we take the example of collaboration that came out of the Permian Basin with the Dunes Lizard, [and apply it to] the Lesser Prairie Chicken? How can we take that same kind of approach and make it happen with respect to the Sage Grouse? With collaboration, we might be able to solve a seemingly difficult problem.”
Salazar also took some time to address fracing, an issue that has been questioned by some groups as being environmentally unsafe.
“I believe that hydraulic fracing is safe,” Salazar said. “I also believe it has gotten us to this point … We know that from everything we have seen that there’s not a single case where hydraulic fracing has created an environmental problem for anyone. We need to make sure that story is told. We need to make sure that people know that the energy revolution that is happening right now is having a very positive impact on them, that instead of paying $5 for a gallon of gasoline they’re seeing the prices to be relatively reasonable. The same is true with regard to natural gas.”
During a short Q&A session, he expressed his support for the Keystone XL Pipeline, which just received a clean environmental impact study from the U.S. Department of State.
“I think the Keystone pipeline should be built,” Salazar said. “It would be good for the United States of America and for the economy. I believe it would be good for the relationship between the U.S. and Canada, and at the end of the day we are going to be consuming that oil. And so is it better for us to be getting that oil from our neighbor to the north, or to be bringing it in from someplace in the Middle East? I think, when we talk about the concept of North American energy independence, there’s a very significant complement of that that relates to Canada. At the end of the day, either the permit will be issued, or the permit will be denied. My view of it is that the permit could be framed in a way that is a win-win for the environment and for the energy security of the U.S.”