Discussing Energy Economics on the Internet

Exploiting the Interior

Posted in Climate,USA Federal by Cheryl Morgan on the December 5th, 2008

The lunch speaker here today was C. Stephen Allred, the Assistant Secretary of the Interior for Land and Minerals at the Department of the Interior. He gave us a fascinating insight into the mindset of the Bush Administration, and its current drive to open up as much federal land as possible to energy exploration before Mr. Obama gets into office. The Allred doctrine was basically as follows:

  1. 1. There is an urgent need for the US to establish energy independence, because too much of the world’s energy supplies is controlled by Communists and Muslims (though he didn’t put it quite that bluntly);
  2. 2. Renewable energy is unlikely to ever account for more than about 10% of the total energy usage in the US; and
  3. 3. The federal government can make lots of money by leasing land to energy companies.

Allred did have a very good point in that even renewable energy development has a substantial effect on the environment. For example, solar farms cover a vast acreage of desert (and the DoI currently has planning applications for around twice the amount of land that it has available to lease). Also if you site wind and solar farms out in the desert then you still need to build transmission lines to bring the power to population centers.

On the other hand, some of what he said was a little suspicious. Allred made a big point of wanting consistency between federal policies on land use and the policies in place on neighboring private lands. I believe that is code for, “if private land owners allow their land to be exploited than the government should be allowed to do so too.”

There are also questions to be asked about the potential effects of some of this hydrocarbon search. One of the biggest potential sources of energy is the collection of oil shale fields in Wyoming, Utah and Colorado. However, if Canadian experience is anything to go by, exploiting them could cause an environmental disaster.

Being a polite lot, none of us was willing to challenge Mr. Allred on what he said, though a gentleman from Platts did ask Allred if he thought he would still be employed under the Obama Administration. Mr. Allred said he was looking forward to retirement.

On the other hand, the final plenary session of the day was about energy policy, and being something of a troublemaker I asked the panel to comment on Allred’s speech. John W. Jimison, who is a Counsel for the Committee on Energy and Commerce at the House of Representatives gave a very succinct answer: the Obama Administration, he said, is all about change.

More generally the panel agreed with Allred’s point 3 (which is fairly obvious) and with point 2, though they did note that the low proportion of renewable use did not preclude reductions in carbon emissions due to efficiency programs and so on. However, unlike Mr. Allred, the panel was firmly in favor of international trade in energy, and of developing carbon emission abatement systems that could usefully be exported to the rest of the world. Obviously none of them speak for the Obama Administration, but the panelists were chosen because of their insights on policy issues.

(The other panelists were Shirley Neff, President & CEO of the Association of Oil Pipelines, and Jim Sweeney, a Stanford professor and policy adviser to Governor Schwarzenegger.)

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