Powerful forces determine our energy future
The results are in. The list of Fortune 500 companies was released Monday, and the results are not surprising. Of the top five companies (based on revenue) three are petroleum developers and distributors, although they prefer to be called energy companies. Exxon Mobil tops the list; Chevron and Conoco Phillips are third and fourth respectively.
So can we cut off the gas and oil subsidies now?
Maybe not, if D.C. lobbyists have their way with Congress. The oil companies are saying their whopping revenues were due to high gasoline prices. Whole countries want this to continue (think Russia), while U.S. politicians running for reelection want the price to drop, which would be a welcome relief for struggling American families. If the price drops significantly, politicians will try to take the credit even though oil is traded on the worldwide market and is subject to pressures from commodities traders. And of course OPEC controls the supply.
President Obama says the country must use “all of the above” strategies for developing a comprehensive mix of energy sources, allowing us to import less oil from countries with whom we are not particularly friendly. But virtually all of these options have a significant downside, mostly environmental risks.
For instance: automotive vehicles, including hybrids, use gasoline or a mix of gas and electricity. The gas is formulated according to state mandates and is tied to the Clean Air Act. Prices vary with the amount and type of additives, such as ethanol, that are required.
Plug-in electric vehicles are using power generated by everything from coal, natural gas, geothermal and hydroelectric to wind and solar.
Every power source has its advocates and detractors. Texas oil magnate T. Boone Pickens promoted wind farms to produce electricity, ostensibly for cars, and natural gas to run big trucks. The success of wind turbines, however, is dependent on transmission lines, which must be built across private land, much of it owned by unwilling ranchers.
Natural gas, said to be abundant and relatively inexpensive, seems to be found in deep rock formations. This has given rise to the process of hydraulic fracturing, or “fracking.” This process requires huge amounts of water and uses chemicals which companies are not required to disclose.
Last week, Interior Secretary Ken Salazar said new rules will require companies drilling for oil and natural gas on public and Indian lands to disclose the chemicals used in fracking. The new regulations will also set standards for wastewater disposal and well construction. Under consideration for more than a year, the rule has been softened by industry groups to allow drilling companies to frack first and file later, after work is completed.
The bulk of shale exploration, however, is on private land and is not affected by the new rule. Salazar has said he hopes state regulators will follow the new model.
Meanwhile, the Keystone XL pipeline proposal is back with TransCanada refiling its hotly debated application with the U.S. State Department for the northern section. The U.S. Army Corps of Engineers will decide permits for the southern section, from Oklahoma to the Texas Gulf Coast, within 45 days. The new northern route will avoid more of Nebraska’s sensitive Sandhills region but will still cross the Ogallala aquifer, the largest source of fresh water in the country (and possibly the world). The pipeline will carry tar sands bitumen, believed to be the dirtiest and most corrosive of oils and the most likely to seep or spill, polluting groundwater and sandy soils.
That leaves coal, plentiful and cheap, but definitely not clean. EPA rules require scrubbers and new technology to clean smokestack emissions from new coal-fired power plants. Old plants were grandfathered in under the Clean Air Act except when upgraded or enlarged.
A federal judge last week blocked the EPA from releasing data about the Colstrip power plant in southeastern Montana at the request of operator PPL Montana, which claims the data contains trade secrets exempt from the federal Freedom of Information Act.
The power generator began operation in the mid-1970s with two units of the 2,000-megawatt plant. In 1984 and 1986, two more units were added. Colstrip, like many older plants, was expected to be retired, but instead was upgraded and expanded, without the pollution controls required of new plants, environmentalists say.
So where do we go from here? Our energy future is at the mercy of industry, which seeks profits, and politicians, who seek reelection. And federal agencies are caving under the pressure.