At this conference, the audience was filled with decision-makers. They were the center of attention. The presenters’ reward was not the applause they earned today, but the regulations the nation will get going forward.
Discussions at the National Association of Regulatory Utilities Commissioners summer committee meetings covered nuclear waste disposal, consumer affairs, electricity, energy resources and the environment (ERE), natural gas, telecommunications, and water.
The opening day general session was on hydraulic fracturing (commonly called 'hydrofracking' or 'fracking'), the controversial method used by the oil and gas industry to develop unconventional reserves in shale deposits across the country.
Fracking is “pumping water into the ground to break rock,” explained QEP Resources CEO Charles Stanley, who then launched into a lengthy explanation of how long fracking has been in use and how safe it has always been. There are, he eventually added, chemicals in the water.
To the surprise of some listening commissioners, U.S. Department of Energy Deputy Assistant Secretary for Oil and Gas Christopher Smith did not challenge Stanley’s assertions about fracking’s safety but simply noted that the immense natural gas supplies it has produced have caused “a tectonic shift in the way we think about energy.”
American Water CEO Jeff Sterba didn’t contradict Stanley either, but instead noted that “every advancement has consequences,” adding that there has not yet been adequate testing of the process or collaboration of regulators and producers around the issue. His company’s goal, he said, is to help get the benefits of natural gas without the compromise of water quality.
Each presenter was actually speaking less to the question of fracking than to the audience of regulators. Stanley was reassuring them. Sterba was telling them American Water is prepared to deal with it. And Smith was saying the Obama administration is prepared to move ahead with an all-of-the-above strategy and the neutral political ground it wins.
New Jersey Commissioner Jeanne Fox attempted to confront Stanley about fracking’s greenhouse gas emissions and induced seismic activity, issues raised by recent studies. Stanley eluded the specifics and talked instead about the shortcomings of the movie Gasland, about methane in groundwater, about how minor the significance of the seismic activity is.
Fox did not follow up. California Commissioner Timothy A. Simon reinforced Stanley. “In California, we don’t put our cocktails down if it doesn’t register at least a four on the Richter scale,” he said.
The audience of commissioners left the session reassured that fracking is probably safe. Later, a veteran policy adviser to one of the commissioners noted confidentially to GTM that few regulators will likely have time to rethink the presentations and realize the critical studies’ authors were not present to question Stanley’s advocacy of fracking.
On the ERE track, a session on financing renewables followed. It was less controversial but no less commissioner-centric. One commissioner asked how to stimulate renewables investment in Kansas. Another asked how to do so in New Mexico.
Each answer was customized to the questioner. For Kansas, as for all the states from Texas to the Dakotas where wind is one of the richest energy resources this side of Saudi Arabia’s oil, the answer was all about financing turbines. For New Mexico, where wind and sun assets have developers like Element Power experimenting with co-locating utility-scale installations of both, the discussion had more dimension.
The day ended with a debate between Penn State University’s Dr. Frank Clemente and Environmental Defense Fund attorney Vickie Patton on the question of whether Environmental Protection Agency regulations are moving the U.S. “beyond coal.”
Clemente and Patton could have been on separate stages. Each addressed a different question and aimed at a different emotion.
Clemente showed graph after graph proving predictions about natural gas have been misguided in the past and that those foreseeing it to be cheap and abundant going forward could just as easily be wrong. It was as convincing an anti-natural gas statement as any renewables proponent could make, but the message to the listening regulators was clear: Forsake coal for gas and risk blackouts. A regulator has no worse nightmare.
Patton showed no slides, but talked about the comfort EPA regulations have brought to mothers tucking in their babies at night. The message: Regulating coal is keeping faith with the future. And, she assured the regulators, moving away from coal comes with more economic benefits than costs.