Unconventional speakers have several times headlined the Colorado Oil and Gas Association’s annual gas strategies event in Denver. Unconventional in that they haven’t preached to the choir.
Last year, and this year, former Colorado Sen. Tim Wirth lambasted attendees for not staking out ground on Capitol Hill. This year, keynote speaker Robert F. Kennedy Jr., senior attorney for the Natural Resources Defense Council, took the stage just weeks after he had called the natural gas industry “just completely and utterly untrustworthy” during a visit to Dimock, Pennsylvania, in Marcellus shale country. Dimock residents have filed suit alleging fracing has contaminated water wells.
At COGA, Kennedy reiterated his support of natural gas as a critical piece of the new energy economy. He railed against the coal industry, a frequent target of his lawsuits. “We have 450 gigawatts of natural gas-generation capacity and only 320 gigawatts of coal-burning capacity, but those coal plants are being used 95% to 99% of the time, while gas plants sit idle 62% of the time.”
He made some requests that likely fell on more than a few deaf ears. He asked the gas industry to support reauthorization of Clean Air Act amendments to regulate mercury, acid gases, NOx and SOx and coal ash. He listed the unofficial costs of coal—from health care costs related to mercury poisoning and asthma to the price and upkeep of 22-inch-thick asphalt roads snaking throughout West Virginia to accommodate 90,000-pound coal trucks.
“Those are the costs they don’t tell you about when they talk about coal costing 10 cents per kilowatt hour.
“Yesterday (July 8) I saw a secret white paper from the Edison Electric Institute that says these new rules would shut down 25% of coal capacity in the U.S. by November of 2014 and all of it would be replaced by natural gas. Even if the rules were weakened to 10% from 25%, that would still increase gas demand by 10% to 15% over the next three years. This is a tremendous opportunity.
“You have six times the employees of the coal industry and double its sales. Yet in all the battles on Capitol Hill, coal is winning…
“I suggest you make some new friends that understand you’re a critical part of what’s happening in this country.”
Making friends requires trust, however, and that’s the sticking point when industry and environmentalists meet. Kennedy’s remarks in Dimock weren’t only fueled by the situation on the ground—they were also fueled by the collapse of negotiations between Colorado Rep. Diana DeGette and industry to craft a compromise on the Frac Act. Kennedy believed he had the support of gas executives but, when the proposed amendment was introduced to a congressional committee, he found himself alone “after five people had told me they’d be there.”
Meanwhile, Colorado Gov. Bill Ritter told the audience he had asked DeGette to launch a comprehensive study of frac fluids rather than pursue regulation by the EPA. He said she had agreed; her office said she was looking at all options.
While these are back stories, the front story is that industry and environmentalists may be willing to talk nice, but making nice is hard work.
“Many view a federal Frac Act as another attempt to substantially reduce the drilling for domestic clean-burning natural gas,” says Peter Dea, president and chief executive of Cirque Resources LP, Denver. “It is a bit of a conundrum when environmental leaders say they are pro natural gas while their field offices oppose gas development.”
Kennedy laid out his concerns. “There is a real problem with fracing. There is a water-management issue, and methane-migration issues...Industry should be honest and say we’re going to find out why and get a portfolio of the best available technologies and go to the regulators and say we can prevent it…
“All these issues are solvable but we need dialogue…Any kind of large-scale energy operations impose costs, but that doesn’t mean I’m against solar, or gas.”
How did Kennedy’s call for cooperation resonate? Said Jay Still, executive vice president, domestic operations, for Pioneer Natural Resources, Houston, “I was impressed with Kennedy’s realization that every form of energy has an impact on the environment—with coal being the largest and completely unacceptable, since gas is a direct replacement and a cleaner fuel source with a fraction of the footprint.”
Fred Julander, COGA conference chair and president of Julander Energy Inc., says, “We’re trying to build a new energy world, which will have new parties whose interests are substantially increased. I’m confident people with a vision of what’s good for all of us will work things out.”