Let me suggest that our conversation about how to reduce CO2 emissions must begin with a few “inconvenient” realities.

Reality 1: Worldwide demand for energy will grow by between 30% and 50% during the next two decades—and more than double by the time you’re my age. (The remarks here are excerpted from a speech to Utah Valley University students.) Simply put, America and the rest of the world will need all the energy that markets can deliver.

Reality 2: There are no near-term alternatives to oil, natural gas and coal. Like it or not, the world runs on fossil fuels, and it will for decades to come. Now, I was told back in the 1970s what you’re being told today: that wind and solar power are “alternatives” to fossil fuels. A more honest description would be “supplements.” To be clear, we need all the wind and solar power the markets can deliver at prices we can afford. But please, let’s get real: Wind and solar are not “alternatives” to fossil fuels.

Reality 3: You can argue about whether global warming is a serious problem or not, but there’s no argument about the consequences of cap-and-trade regulation—it’s going to drive the cost of energy painfully higher. What would it take to cut U.S. CO2 emissions by 1.2 billion tons per year by 2012? A lot more sacrifice than riding a Schwinn to work or school, or changing light bulbs.

Reality 4: Even if America does cut CO2 emissions, those same computer models that predict manmade warming over the next century also predict that Kyoto-type CO2 cuts would have no discernible impact on global temperatures for decades, if ever. When was the last time you read that in the paper? We’ve been told that Kyoto was “just a first step.” Your generation may want to ask, “What’s the second step?”

If Americans aren’t willing to pay a lot more for their energy, how do we reduce CO2 emissions? Well, here are several things we should do.

First, improve energy efficiency. Second, we should stop wasting energy. Third, we should conserve energy. Fourth, we should rethink our overblown fear of nuclear power.

Fifth, if we let markets work, markets on their own will continue to substitute low-carbon natural gas for coal and oil. Greater use of natural gas produced in America—by American companies who hire American workers and pay American taxes—will help reduce oil imports. Unlike oil, 98% of America’s natural gas supply comes from North America.

Sixth, your generation needs to focus on new technology and not just assume it, as many in my generation did back in the 70s—and as many in Congress continue to do today. Just one example: There’s no such thing as “clean” coal, though I should quickly add that, given America and the world’s dependence on coal for electricity generation, we do need to fund R&D aimed at capturing and storing CO2 from coal plants.

Seventh, it’s time to have an honest conversation about alternative responses to global warming than what will likely be a futile attempt to eliminate the use of fossil fuels. You’ve no doubt heard the argument that, even if global warming turns out not to be as bad as some are saying, we should still cut CO2 emissions—as an insurance policy—the so-called “precautionary principle.”

While appealing in its simplicity, there are three major problems with the precautionary principle. First, none of us live our lives according to the precautionary principle. Second, the media dwells on the potential harm from global warming, but ignores the fact that the costs borne to address it will also do harm.

Third, economists will tell you that the consequence of a cap-and-trade tax on energy will be slower economic growth. Slower growth, compounded over decades, means that we leave future generations with less wealth to deal with the consequences of global warming, whatever they may be.

Let me close by returning to the lessons my generation learned from the 1970s energy crisis. We learned that energy choices favored by politicians but not confirmed by markets are destined to fail. I hope I’ve challenged your thinking about your energy future. Mostly, I hope you continue to enjoy freedom, prosperity—and abundant supplies of energy at prices you can afford!

--Keith O. Rattie

The transcript: Click here for the full, 6,000-word transcript of Keith Rattie’s “Energy Myths and Realities” remarks made on April 2, 2009, to Utah Valley University students: keithrattiespeech4209

About the author: Keith O. Rattie is chairman, president and chief executive officer of Salt Lake City-based energy company Questar Corp. He is also a director of drilling company Ensco International and of Zions First National Bank. He is a past chairman of the Board of the Interstate Natural Gas Association of America.