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Front Page » November 4, 2008 » Opinion » Guest editorial: American energy reality
Published 1,990 days ago

Guest editorial: American energy reality


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By DAVE LITVIN and LEE PEACOCK
Utah Mining Association
Utah Petroleum Association

While Congress has been busy with the financial markets crisis and the election, the crucial debate over drilling and energy exploration both offshore and in western states like Utah has been temporarily set aside. Soon the debate will return, and its outcome matters here in Carbon County.

Oil shale deposits here in the Mountain West contain approximately 1.2 to 2.0 trillion barrels of oil equivalent. This is nearly eight times current Saudi reserves, and enough to meet 266 years of current United States petroleum consumption.

Projections are that global energy demand will increase at least 50 percent by 2030. Skyrocketing worldwide demand means our energy future will be much more challenging than the past. We are already facing the possibility of "rolling electricity blackouts" here in the West by 2009, if nothing is done. We cannot afford to ignore our own resources of oil, oil shale, coal and gas any longer.

Before the campaign season the U.S. House passed an energy bill, which stalled in the Senate. While the bill passed by the house is seriously flawed, Congressman Matheson deserves praise for adding an amendment that would open federal lands in Utah to responsible oil shale development. With a new congress will come new attacks on access to federal leases and on things like clean coal technologies.

The American people, up to 80 percent, strongly support greater development of domestic energy resources. With high gasoline prices bound to return, voters recognize the need to loosen the stranglehold of foreign oil by developing our own nation's resources in environmentally sound ways.

The two biggest flaws in the bill passed by the house are billions in new taxes on offshore energy producers, and the minimum 50-mile offshore limit -- far beyond coastal horizons -- that restricts drilling where the most viable reserves are located.

This pending measure grants small increases in offshore exploration and drilling, while tagging on excessive "no drill zones" and new taxes on offshore oil/energy producers. It is as if some in congress are saying, "We'll allow you to drill offshore, but not where there is any oil or gas, and we'll tax and fee away any financial incentives to drill." The agenda for some appears to be the near term elimination of fossil fuels, such as Utah's oil and oil shale, coal and natural gas.

Things have changed temporarily since the bill passed the House, partly due to public pressure. The bans on offshore drilling and oil shale leases on federal lands were allowed to expire. The bailout package did hike some oil taxes, but not to the extreme levels some politicians want. Both issues will be back on the table after the November elections. We are calling upon Utah's delegation, especially our senators, to continue to fight for low energy taxes and responsible energy development in Utah.

Imposing new energy taxes leads to a simple question: who do you suppose will really pay them? Every consumer knows who will pay, and it's not the energy companies. If you wish to reduce the supply of a good or service, tax it excessively. Such taxes will mean lost jobs, less available energy and higher prices. It makes no sense to single out domestic energy producers for punitive treatment. Every gallon of fuel produced domestically means one less gallon imported from abroad.

As to developing oil shale here in Utah, false rhetoric from environmental extremes abounds. The latest oil shale technologies greatly reduce water usage and carbon emissions over older technologies. Today's oil shale technologies are superior to the much heralded corn ethanol processes on both counts, and are improving. Senator Hatch has worked especially hard for oil shale development and its potential vast economic benefits for America and Utah.

Much has been said in this election about renewable energy sources. While wind and solar are needed, the notion that they will somehow "solve" our near-term energy problems without expanded production of domestic oil, gas and coal is unrealistic. Together they only provide around two percent of our current energy. Neither wind nor solar is commercially viable or available on a sufficient scale to meet industrial electricity needs.

We applaud urgent efforts to develop renewable energy for tomorrow, while insuring America's energy future and Utah's economic prosperity by exploring and producing all possible energy sources today.

Our associations and all our member companies call upon Senators Hatch and Bennett, along with our congressmen, to continue their vigilant efforts on these essential issues.

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