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s2smodern

 

It’s somewhat surprising to the world that the US has achieved energy independence, but now that it has, US Senator Steve Daines declared that the next step is global domination in the production of energy. He restated that goal many times during the Montana Energy Summit in Billings on May 30 and 31, an event he sponsored.

“When the US is energy independent and has energy resources to export, the world is a safer and more secure place,” said Daines.

He noted also that the abundance of coal and oil in the US “has driven some countries to the negotiating table,” and that China has become the world’s largest oil importer, replacing the US.

“Our energy abundance and to be globally energy dominant gives us opportunity to find peaceful solutions to world problems. Energy dominance means jobs,” added Daines.

Several speakers heralded the fact that on the day of the summit the first shipment of natural gas was being exported from the US for the first time since the US government imposed restrictions on oil exports almost 40 years ago.

Recognizing a new era for exports, Kelly Ayotte, former US Senator and Senior Advisor for Citizens for Responsible Energy Solutions, said “We are exporting freedom, for every molecule of fuel that we export.”  She said that US exports do not have the strings attached that were there with imports from Russia.

Referencing countries like Poland and Lithuania, another speaker pointed out, “It has taken away power that was held over them for decades … It is giving other countries freedom; they are no longer under the Russian thumb.”

For Montana — with some of the lowest per capita wages in the nation — the change in the world energy landscape can mean higher paying jobs, said Daines, adding “This will not happen if we do as the signs of protestors demand, to ‘keep it in the ground.’”

Introducing a panel of representatives of transportation businesses that serve the energy industry, was US Senator John Brasso, Wyoming, chairman of the US Senate Committee on Environment and Public Works. In talking about energy, Brasso said, “We need it all. You cannot do it with one source alone, but there is a gap between renewable and carbon fuels. Coal needs to be available and reliable.”

“We will be using 1.3 times more coal in the future than now.”

Regulations and permitting processes stand in the way of the production of carbon fuels.

“It all comes down to who gets elected to make the decisions. We need to make sure energy – American energy — continues to dominate — to power our country, the world and freedom,” said Brasso. He made the point, “Who is in the majority makes a big difference…who gets to make the decision?” He was talking about decisions that are drug out for years, slowing down if not completely blocking projects. “It took more than 12 years for a road project to get permitted that took only two years to build.”

Terry Spencer, President and CEO of ONEOK, called the piling on of regulations, “the pancake effect.”

Matthew K. Rose, Executive Chairman, BNSF Railway Company, said that his company has invested many millions to be able to move products to Asian markets. It’s a vote of confidence in the future… “Our challenge is potential trade wars,” he said.

It was asserted during the conference that the greatest issue facing the industry, and perhaps all industry in the country, is that one state has presumed to make decisions regarding the whole country’s trade policies, in the process they impose on permitting export terminals. Washington state’s permitting process has gone from assuring the efficacy of a port to passing judgement about the commodities to be traded through it.  It is reflective of a greater trend of the opponents of industry, using the permitting process to halt the economic and business development.

Rose said “I have never seen such an aggressive approach,” by the opponents of energy development as is being demonstrated in their newest strategy: “going after permitability of localizedprospects. It’s an aggressive approach against getting products out of this country.”

The primary example is what is happening in Washington state where three port projects were at one time being proposed. Environmental opposition has pushed two off the table and only one export facility is still struggling to get permitted. The permitting process for the port in Longview, Washington was started in 2012, and is still going on.

“What we have is a state, Washington, choosing winners and loser. They are acting like our trade representative…. like our commerce department,” he said, “We have an individual state saying, ‘We aren’t going to allow exports.’…We have never seen this in our history, where we are using permitability to control”…. They are using review processes that “were never intended to deal with these things,” to control markets.

They are proclaiming, “We like to export certain products and not others.” They don’t like oil and coal now, what’s next? Perhaps they will decide they don’t like GMO agriculture products and refuse to ship them?

Also part of the panel was Everett King, President & Chief Executive Officer of Lighthouse Resources, Inc., which owns and operates two coal mines in and around the Powder River Basin: the Decker mine in southeast Montana and the Black Butte mine in southwest Wyoming. Additionally, Lighthouse Resources Inc. is developing the Longview, Washington port, Millennium Bulk Terminals. In January the company filed suit against the Washington state government for blocking the development of the coal export terminal.

The permitting process has been “weaponized,” said King. It shouldn’t take six years and $15 million dollars to get a permit. The permitting process is no longer about the project but “some kind of judgement about a commodity.”

Litigation has unfortunately become part of the process,” said King. “We know we will prevail… we can’t have one state saying what is acceptable.”  Had the port been permitted as it should have been “there would be $3 billion in trade going on.”

Montana Attorney General, Tim Fox, was also part of a panel discussion. He noted that Montana has filed an amicus brief in the case filed against Washington State for blocking the building of ports that would enable trade. “It’s not a case they are likely to lose,” said Fox, “because what Washington State is doing is unconstitutional.”

Masana Ezawa, Japan’s Director of Clean Coal Division, Agency of Natural Resources and Energy, Ministry of Economy, Trade and Industry was also on the panel, talking about the importance of coal – especially Montana and Wyoming coal, to his country.

Following the earthquake in 2011 that destroyed the Japanese, Fukushima Daiichi nuclear plant, the country is moving to coal as the most efficient and most clean alternative. It was noted that Japan does not have room for wind or solar production.

Senator Daines pointed out that whether Japan gets its coal here or from elsewhere in the world they will be using coal. And, he said, “You can’t be dominant in a technology that you aren’t going to use”… so since Japan is pursuing clean coal technology, they are likely to be able to take the lead in developing technology.

Rose added, “If you are really worried about the environment, we ought to burn coal. Do what Japan is doing, refine technology. The rest of the world is only going to increase the coal they burn and they will not be doing it with technology as good. … We should lead with technology and then give that technology away to the rest of the world… and we will have a better world.”

But for all the complaints from the carbon fuels industry representatives about the “pancaking” of regulations and dragging out of permitting processes, Mark Klein, co-owner of VK Clean Energy Partners, LLP, had a different story to tell. He thanked the state of Montana for its prompt responses, “We accomplished in one year what would have taken two or three years in other states.”

“Montana is our single largest effort,” said Klein, about his company, which is based in Sandy, Utah. The company builds solar projects and have three in Yellowstone County. Montana Sun, Meadowlark Solar, located four miles north of the airport, and another project near Broadview. They are investing $500 million to $700 million to generate 500 megawatts of power. They anticipate exporting 400 megawatts out of state.

Harold Hamm, founder, chairman and CEO of Continental Resources, said that America moving to energy independence “is just tremendous.” “It is something that only a few of us had our dream set on. And, it happened even though there for a while the government had a foot on our neck.”

“Everybody thought we were running out of natural gas and we would have to import LNG, and now we are exporting it. We have found 100 years supply, some think 200 years supply. It is tremendous.”

Hamm said, “We are celebrating 51st year with Continental Resources… we have been using fracking all that time.”

“We are using diversion techniques…and having tremendous success. The children wells are better than the parent wells.”

“What does global energy dominance mean for our children and grandchildren,” asked Daines of Hamm.

Hamms replied, “Not having to be over there defending those supplies in the Middle East is a tremendous thing for America …. it totally changes the situation for America… today that is not the case…  it has been a great thing… in trade, national security, and soldiers’ lives.

Daines then asked, “Why do you think the government gets it wrong on energy so often?”

“Energy is hard to understand; it is complex… it is a little bit unpopular,” said Hamm, “Also they didn’t treat it as a good thing… it was a bad thing.” With a change in attitude and in seeking energy dominance, he continued, “We will start getting it right again. The last administration got punitive with regulations. They wanted to stop everything. That was part of the plan.”

“What about global greenhouse emissions?”

Hamm: “It has been a wonderful thing. The abundance of natural gas has allowed us to drive it down to 1990 levels. Emissions have come down. It is easier to refine and there are less emissions. We don’t need all the regulations that came with scarcity.”

The fate of the coal fired power plants at Colstrip was frequently mentioned, with Daines calling the facility the “backbone” of the state.

Public Service Commissioner Tony O’Donnell said that the bleak outlook for the plants and the future of the community of Colstrip shows “the damage that can be caused when you cherry -pick science… when they use it for their own bludgeoning purposes without regard to the damage it causes.” Quoting one native American leader, O’Donnell said, “a war on coal is a war on coal families.” 

In speaking of renewable energy, O’Donnell said that just the term ‘renewable’ says “they are not very reliable. The system has perversities built into it. For every megawatt of renewable you have to make to have a megawatt of firm.”