Speakers at Third Annual Okla. State Univ. Energy Conference Highlight Great Energy Policy Divide
Davis, KirLee, THE JOURNAL RECORD
Expect no quick-fix solutions to America's energy crisis.
Executives speaking at Tuesday's Third Annual Oklahoma State University Energy Conference couldn't even agree on what the problems are.
Despite ominous U.S. government projections of future natural gas shortfalls, Samson Investment Co. Chairman and Chief Executive Stacy Schusterman said new and emerging fields will allow production to not only exceed future demand, but accomplish that at ever-lower costs.
Simmons & Co. International Chairman Matthew Simmons challenged such thought, citing decades of population and consumption data to warn that most consumption forecasts may fall far short of reality - even as he quoted 60- to 75-percent first-year decline rates from shale wells.
"Steep initial production declines do not create sustainable growth," said the Houston executive, author of the best-selling book Twilight in the Desert.
Harold Hamm worried openly about long-term wounds to the energy industry from misguided policymakers embracing alternative fuels, all in a bid to lower carbon greenhouse emissions while boosting America's energy independence and security.
"Some alternative fuels take almost as much energy to create as you use," said Hamm, chairman and CEO of Enid-based Continental Resources.
While Simmons agreed, he said oil and gas executives must make great changes in their business practices and strategies, equating the industry's problem to a tightrope walker.
"We need a 'call to arms' to prepare for a post-peak flow of oil and gas," he said, giving the world less than a decade to find a solution to long-term needs.
Oklahoma Secretary of Energy Robert Wegener saw promise in cellulose-based biofuels, which maximize the state's tremendous capabilities in agriculture and energy.
State Department of Commerce Wind Development Specialist Kylah McNabb touted the state's potential benefits under President Barack Obama's targeted expansion of wind power generation.
But Wegener warned the power grid supporting these electrical systems remains several decades behind the times - with existing utility and regulatory structures making upgrades very difficult.
That represents just one element of a far bigger problem - the energy sector's rusting infrastructure, said Simmons. Replacing just 70 percent of the aging support systems, from rigs to pipes, could cost from $50 trillion to $100 trillion, he said.
"I've seen the industry saying 'we'll solve that problem,'" he said. "We keep ignoring these things and now we're in the hole we're in."
Schusterman pointed to one area where the energy sector employed breakthrough technology: tapping American and Canadian shale basins. She said those drilling and refining improvements opened up new sources of clean fuel estimated to exceed two centuries of demand - an environmental benefit the industry has failed to capitalize on with politicians, executives acknowledged - while dynamically cutting the cost of delivering them. …