CODY STEWART ENERGY ADVISOR GOVERNOR GARY HERBERT Presentation to the UPMRA 2012 Convention and Trade Show August 16, 2012.

CODY STEWART

ENERGY ADVISOR

GOVERNOR GARY HERBERT

Presentation to the UPMRA2012 Convention and Trade Show

August 16, 2012

Why I Love My Job

JOB DESCRIPTION:

Promote and Increase energy production in the state of Utah.

Create energy independence for the US and help drive down prices.

Energy is Hot One of four cornerstones of Governor Herbert’sAdministration

Major initiative as Chairman of the Western Governor’sAssociation.

ENERGY – Lifeblood of the economy and to modern society

“There is no substitute for energy. The whole edifice of modern society is built upon it…It is not “just another commodity” but the precondition of all commodities, a basic factor equal with air, water, and earth.”

E. F. Schumacher, 1973

Utah is Four Cornerstones Strong

Governor Herbert’s Priorities Energy Education Economic Development Self-Determination

“No other state can offer what Utah can. We are uniquely positioned in the Western Energy Corridor.

Utah has a rich abundance of diverse natural resources, both in terms of traditional fuels, and renewable and

alternative energies.”

~Governor Gary R. Herbert

Office of Energy Development

Created in 2011 by H.B. 475 Operating for approximately 500 days

Promote Energy Development Single point of contact Development of all energy resources Shape and implement policy Assists industry and citizens Streamline processes with state and federal

agencies

Utah Office of Energy Goals

1. Meet Projected Energy Growth Demands Over the Next Decade

2. Ensure Continued Economic Development Through Access to Our Own Energy

3. Develop New Cutting-Edge Technologies Particularly Utilization of Natural Resources

4. Create New & Support Existing Manufacturing Job Opportunities in Utah

5. Modernize Regulatory Environment For Power Generation, Transmission & Conservation

Utah Office of Energy Goals (cont.)

6. Promote Energy Efficiency Conservation and Peak Consumption Reductions

7. Facilitate Responsible Development Traditional, Unconventional & Renewable

8. Pursue Opportunities to Export Fuel Electricity and Technologies – Regional & Global

9. Enhance Relationship Integration Industry, Universities, Government &

Communities

10.Collaborate with Other Western States Unified Voice for Federal Agencies & Public Lands

Western Governor’s Association (WGA)

Governor Herbert 2012 WGA Energy Initiative

 1) Energy Education 2) Regional Plan for Energy

Independence3) Transmission Issues4) Energy Efficiency5) Alternative Fuels

High Gas Prices

What the public thinks

Utah Prices vs. National Average

US Gas Prices by State (8-14-12)

Gas Prices in Utah

Oil ProductionRefiners = Lower Gas Prices

Utah Energy Use - 1960 to 2010

Figure 5.2 - Net Generation of Electricity in Utah by Energy Sources, 1960-2010

0

10,000

20,000

30,000

40,000

50,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010*

Gig

awat

thou

rs

Coal Petroleum Natural Gas Hydroelectric Other

Utah Energy: Doing Alright

Utah ranks as the 15th largest producer of coal

Utah ranks as the 12th largest producer in crude oil

Utah ranks as the 8th largest procuder in natural gas

Need for Basic Energy Education

Renewable Energy More than half of Americans cannot identify one specific

type of renewable energy

Fossil Fuel Nearly 40% cannot identify a specific fossil fuel

We need your help educating the public!

Western Governor’s Association (WGA)

Governor Herbert 2012 WGA Energy Initiative

 1) Energy Education 2) Regional Plan for Energy

Independence3) Transmission Issues4) Energy Efficiency5) Alternative Fuels

The Campaign Against Oil

U.S. ENERGY CONSUMPTION

The Myths of Energy Shortages

“ . . . H U R R Y, B E F O R E T H I S W O N D E R F U L P R O D U C T I S D E P L E T E D F R O M N AT U R E ’ S L A B O R AT O R Y ! ”

A D V E R T I S E M E N T F O R “ K I E R ’ S R O C K O I L” , 1 8 5 5 ( F O U R Y E A R S B E F O R E T H E F I R S T U . S . O I L W E L L W A S D R I L L E D )

“ . . . T H E P E A K O F [ U. S . ] P R O D U C T I O N W I L L S O O N B E PA S S E D - - P O S S I B LY W I T H I N T H R E E Y E A R S .

D A V I D W H I T E , C H I E F G E O L O G I S T, U S G S , 1 9 1 9

“ PA S T. . . P R O P H E C I E S O F “ R E S E RV E S R U N N I N G O U T ” H AV E B E E N

N O T O R I O U S LY E R R O N E O U S , B U T F I N I T E R E S O U R C E S H AV E B Y D E F I N I T I O N A F I N I T E E X I S T E N C E . P E R C E P T I O N S O F I M P E N D I N G

S H O R T FA L L W I L L C A S T A S H A D O W F O R WA R D, W E L L I N T O T H E P E R I O D B E T W E E N N O W A N D 2 0 2 0 . “

W O R L D E N E R G Y C O U N C I L , E N E R G Y F O R T O M O R R O W ' S W O R L D , 1 9 9 3

No More Oil?

“THE U.S. IS RUNNING OUT OF NATURAL GAS—PRODUCTION IS DECLINING AND

DEMAND GROWING—SO THE EXPECTATION IS THAT THE IMPORT LEVELS WILL GO FROM 3 PERCENT TODAY TO ABOUT 24

PERCENT IN 2020.”

PAUL HANRAHAN, CEO OF AES POWER, JAN. 2007

No More Natural Gas?

“PEAK COAL LOOKS LIKE IT’S OCCURRED IN THE LOWER 48.”

D AV I D H U G H E S , G E O L O G I S T F O R T H E G E O L O G I C A L S U R V E Y O F C A N A D A , 2 0 0 7

“STUDY: WORLD’S ‘PEAK COAL’ MOMENT HAS ARRIVED”

N E W Y O R K T I M E S , S E P T. 2 0 1 0

No More Coal?

America’s Energy RichesThe United States is Energy RichBut How Rich?

• The U.S. has 110 years of natural gas

• The U.S. is the world’s #2 coal producer

• The U.S. has over 450 years of coal

• The U.S. is the world’s #3 oil producer

• The U.S. has over 200 years of oil

• The U.S. is the world’s #1 natural gas producer

North American Oil vs. World Oil

Source: Institute for Energy Research, North American Energy Inventory

Technically Recoverable Oil Resources

Can fuel every passenger car in the U. S. for 430 years

Can fuel all oil demand in the U.S. for 250 years at

current usage rates

Contains almost twice as much oil as the proved reserves of all the OPEC nations

Contains more than 6 times the proved reserves of Saudi Arabia

The United States is energy rich, but policy poor

A recent Wood Mackenzie study found that accessing U.S. oil and natural gas currently off-limits could create more than 500,000 new jobs and generate $150 billion in new government revenue by 2025.

In Utah, more sensible oil and gas energy policies could result in at least 26,000 created by 2015 and nearly 50,000 jobs created by 2020.

This would mean an average of $255 million of new revenue to the state every year through 2030.

Resources Blocked

*Includes tribal ownership. Land ownership data from ESRI Federal and Tribal Land shapefile available at http://www.baruch.cuny.edu/geoportal/data/esri/esri_usa.htm. Meant for visual illustration purposes only.

Not an official map. Produced March 2012, GOPB.

This map illustrates lands within the United States that are in federal or tribal ownership.

Federal Lands of the United States

Federal Lands

State Boundaries

*Based on percent of land in federal or tribal ownership compared to total land area. Land ownership data from ESRI Federal and Tribal Land shapefile available at http://www.baruch.cuny.edu/geoportal/data/esri/esri_usa.htm. Land area calculated using industry-standard Geographic Information System (GIS) software.

Meant for visual illustration purposes only. Not an official map. Produced March 2012, GOPB.

This map illustrates how the United States might appear if states were condensed to include only lands that are in federal ownership.*

Federally Owned United States

Portion of State Federally Owned

Actual Land Area

*Includes tribal ownership. Land ownership data from ESRI Federal and Tribal Land shapefile available at http://www.baruch.cuny.edu/geoportal/data/esri/esri_usa.htm. Meant for visual illustration purposes only.

Not an official map. Produced March 2012, GOPB.

This map illustrates how the United States might appear if the states were condensed to only include federally owned lands.*

A balanced approach to federal lands?

Why my Job (Title) is a Farce

Projected Coordinate System: USA_Contiguous_Albers_Equal_Area_Conic_USGS_version

Juan Palma, Utah Director of the Bureau of Land

Management

Controls 42% of Utah land

Utah Governor Gary Herbert

Controls 31% of Utah land

Final Note

“…over the long run, societies that expand and improve their energy supplies overwhelm those that don’t. The paramount objective of US energy policy should be to promote abundant supplies of cheap energy and to facilitate their distribution and consumption.”

Peter Huber and Mark Mills, 2005