Vail Valley: There must be profit in the energy business
EAGLE COUNTY – The Stone Age did not end because we ran out of stones, and fossil fuels won’t fold because we run out of dinosaur wine. It’ll end because we come up with something better, said Arun Majumdar, a former top official with the U.S. Department of Energy.
Speaking earlier this spring at the Vail Global Energy Forum, Majumdar said the energy industry’s primary function is the same as any other – to make money.
Since the Industrial Revolution, we’ve burned about 1 trillion tons of fossil fuel, Majumdar said. We have about 3 trillion tons of reserves. By providing it, companies will make tens of trillions of dollars.
“You cannot tell them not to earn that money. It’s a false choice,” Majumdar said.
We’ll keep burning dinosaur wine – oil and natural gas – until we come up with something else, Majumdar said.
“The job of research and development is to create options for businesses to use to make money,” Majumdar said.
Kerosene made whale oil obsolete, and fossil fuels will suffer a similar fate, but not for a while, Majumdar said.
For now anyway, we have more natural gas than we can burn, about 100 years worth. That’s because the natural gas industry is a modern technological marvel, said Jim Brown, Halliburton’s Western Hemisphere president.
“Drill down two miles, drill horizontally two miles and hit a target the size of a coffee can. That’s amazing,” Brown said.
Most of the innovation in the natural gas industry came from a combination of competitive interplay and some federal funding, said Tom Petrie of Petrie Partners.
“They learned with every failure and eventually they figured it out,” Petrie said.
Gov. John Hickenlooper said that back in the 1970s and 1980s, federal research money helped the oil and gas industry create revolutionary new ways to harvest those minerals. Hickenlooper said we’d do well to be more supportive of government funding for renewable energy, even when they go Solyndra on us.
Hickenlooper and Oklahoma Gov. Mary Fallin traveled to Detroit to pitch auto industry executives on manufacturing vehicles that burn compressed natural gas. For starters, it’s a dollar and a half cheaper per “gallon equivalent” than gasoline, Hickenlooper said.
Now, 23 states are pitching that idea, Hickenlooper said. He urged governments to buy natural gas vehicles to help create a market.
“Governments at all levels have fleets, not just state governments. Imagine school buses running back and forth on natural gas, and how much money that could save school districts,” Hickenlooper said.
Colorado is a split estate state. You buy the land, but someone else likely owns the oil, gas, coal and other minerals under it.
Longmont recently banned fracking, hydraulic fracturing that releases oil and natural gas trapped in rock deep under ground.
In 1993, Greeley banned drilling. The state sued and Greeley lost. Greeley now embraces the oil and gas industry and the jobs it generates, Hickenlooper said.
“I’m as big of a backer of local control as there ever has been, but you can’t let assets someone has paid for be taken away by government,” Hickenlooper said.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or firstname.lastname@example.org.