JACKSON — U.S. Secretary of Energy Ernest Moniz told western governors in Jackson on Monday that nobody predicted how quickly low natural gas prices would upend the coal industry.
Speaking at the Western Governors’ Association annual meeting, Moniz said the looming question for experts had been whether low gas prices would affect renewable energy industry — not coal. Proliferation of hydraulic fracturing has uncorked a surfeit of natural gas upsetting the traditional energy market’s fuel mix.
“Are low natural gas prices going to drive out renewables?” Moniz said of the conventional thinking. “The facts are, [the energy industry sectors] low natural gas prices have actually hit hard are coal and nuclear.”
Moreover, change came quickly. “No one predicted the speed we have seen,” he said.
The tide won’t reverse, Moniz warned. “There is essentially an inevitability in this direction,” he said of the move toward cleaner and low-carbon fuels.
Nevertheless, the Obama administration recognizes western governors’ desire to advance carbon capture and storage projects. The association wrote key U.S. Senators earlier this month supporting the responsible use of carbon dioxide in enhanced oil recovery.
“We are putting a strong emphasis on innovation in carbon capture and storage,” Moniz said. “Fossil-fuel use, nuclear, along with renewables and efficiencies, all will remain prominent in our portfolio. There’s no way around the fact we are on the pathway to a significant transformation. Our job is to turn this into opportunity.”
“It would be crazy for us not to emphasize our innovation edge,” Moniz said.
Gov. Matt Mead asked whether the Department of Energy’s loans and grants were going toward renewables or fossil fuels.
The remaining $40 billion authorized in the Loan Programs Office for the next five years is earmarked largely by legislation, Moniz said. About $8.5 billion is dedicated for fossil fuel research and only $4.5 billion — the smallest amount — for renewables and efficiency. Sixteen billion dollars are proposed for advanced technology vehicles manufacturing and $12 billion for nuclear research.
Gov. Mead also quizzed Secretary of the Interior Sally Jewell on her agency’s review of the federal coal leasing program. Noting that some environmental impact statements take 10 years to complete, he wondered whether her three-year goal for a coal document was realistic.
One wind-energy company has spent $100 million, Mead said, “and they haven’t done anything but go through the regulatory process. Similarly, coal mines — “they don’t make investments overnight.”
Mead disagrees with the review process, he said. Since it is underway, “the timing is important to us.”
Jewell said she believes the three-year deadline can be met. She noted also that there is a 20 year supply of coal already leased and mechanisms in place for emergency provisions.
Jewell said states can help “in not delaying” the federal review. “We are reluctant to extend comment periods [in order] to keep on track,” she said.