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MARGARET WARNER: And for more on the president’s call for expanding the development of fossil fuels we turn to Ken Boyd, a petroleum geophysicist and oil and gas consultant. He’s former director of the division of oil and gas for the state of Alaska. Christopher Flavin, president of the Worldwatch Institute, an environmental organization; William Fisher, a geologist and professor at the University of Texas; he was assistant secretary of the interior for energy and minerals during the Ford administration. And Phil Sharp, a lecturer on energy policy at Harvard University’s Kennedy School of Government; he’s a former Democratic congressman and longtime member of the House Energy Committee. Welcome, gentlemen.
Ken Boyd, beginning with you. The guts of the president’s plan, whole energy plan, is to increase the production of fossil fuels. Is that the right emphasis in your view?
KEN BOYD: Well, yes, Margaret, I do. But I have to say that as a long time Alaskan one thing I want to say, from your introduction, is I really would like to see Alaska back in first place in production and beat out the Gulf Coast.
MARGARET WARNER: Done.
KEN BOYD: But certainly as the vice president said, the future — at least for the foreseeable future — is going to be in fossil fuels whether it’s gas or oil or coal. I’m more familiar with gas and oil. I mean, clearly our domestic oil production has dropped over 50 percent. We are importing over 57 percent of our oil. We have a lot of unexplored or under explored areas in the United States and certainly here in Alaska, that’s true. I believe that the president’s plan gives us the opportunity to do this kind of development in these areas in a responsible way.
MARGARET WARNER: Chris Flavin, what do you make of the emphasis on the president’s plan?
CHRISTOPHER FLAVIN: Well, the idea that the past should be our guide to future, if that were the case with other areas we wouldn’t have automobiles or computers or a lot of other things. I think I agree with Mike Bowlin, the CEO of ARCO Oil who has said, quote, we are in the last days of the age of oil. Perhaps I would say the last decades, but clearly this is going to be the century of new technology, of renewable resources.
I agree with the little words that are in the background where President Bush is talking about his energy plan. You see words like technology, efficiency, conservation, renewable resources. That is not only I think what we need to have a strong energy system. The markets are already moving in that direction. I think if you look at the incremental investment rather than the existing base of what has been in place in the past, much of the new equipment may well be in what we now call alternative technologies and if the U.S. doesn’t begin to move more rapidly, we’re going to lose out on these big new markets.
MARGARET WARNER: Professor Fisher, do you think he’s right, that there’s too much emphasis on the old technologies here?
WILLIAM FISHER: Well, I wouldn’t call it old technologies by any means and so on. It’s quite modern technology that is being applied to the fossil fuels. I don’t disagree with Chris and… in the support of technologies that will lead to greater development of the so-called non-renewable resources. But inescapably over the next few decades we are going to have a strong component of fossil fuels, and I think with increasingly greater reliance and dependence on natural gas, which is one of the cleanest of the fossil fuels.
MARGARET WARNER: And are there large enough reserves? I mean, are there really reserves there to be tapped in these areas?
WILLIAM FISHER: Unquestionably in the case of coal, I don’t think anyone argues too much about the resource base on coal. The constraints there, as you pointed out earlier, involve the way we use it and trying to use it in an environmentally… clean way. In the case of natural gas, a couple of decades ago we were absolutely convinced the resource base was rapidly depleting, but really again with new technologies and a rethinking of that resource base over the last several years, the consensus is quite broad that there’s an ample resource base, in fact, enough to increase the production of U.S. domestic natural gas by 50 percent.
And that would be a very substantial move amongst the fossil fuels. In the case of oil, I don’t think anyone contends that we could probably go to full sufficiency in oil. We are, as already has been pointed out, importing a good portion of what we use, but we could stabilize and probably increase that production somewhat. And that’s important, I think, from a variety of ways not the least in terms of adding natural gas because 20 percent of the natural gas that we get in the U.S. comes associated with oil. So that’s important in that regard.
MARGARET WARNER: Phil Sharp your view on this emphasis on fossil fuels.
PHILIP SHARP: Well, first of all I think it’s absolutely true that over the next 20 years they are going to continue to be a critical share of our supplies, whether it’s for electricity or for transportation fuels or heating fuels. And in particular, we expect natural gas to expand, which has already been pointed out is the cleanest of those fuels. The question I think is a matter of emphasis here.
I give the administration high marks for taking a position quite different, for example, from the Reagan administration in the sense that they have called for an active federal role in terms of trying to get more efficiency, more technology, more renewable energy. But my own belief is they haven’t done enough on that score in their recommendations so far. And we should remember many things are yet to come out of this report. They haven’t given us a lot of the details yet, understandably so. So it’s a matter, it’s an argument about emphasis not either/or.
MARGARET WARNER: Chris Flavin, the central argument that the president makes and is making and we ran a clip of him saying it is that — as he put it — the environment and energy production are not competing priorities. That thanks to new technology, these fossil fuels can be developed in an environmentally sensitive way. Is he right about that?
CHRISTOPHER FLAVIN: I think though we can do a much better job if we work at it, particularly if we de-emphasize coal and move more towards natural gas. I agree with Dr. Fisher that that is the direction we should move in. But I think the idea that we’re going to emphasize expanded use of coal, which is really a 19th century energy source, is full of all kinds of very nasty chemicals that are at best very expensive to take out. To do that cleanly I think is simply not realistic. And I think if you’re really going to balance the environment with energy, you also need to invest much more heavily in conservation and in renewable resources in order to minimize that environmental damage.
MARGARET WARNER: But when you look at the president’s plan, do you see it steering the country in a direction that would develop these fossil fuels in the environmentally sensitive way — in other words, if you look at some of the things he’s calling for?
CHRISTOPHER FLAVIN: I think not — particularly given the effort to ease off on the regulatory burden. The emphasis here is clearly to move towards more use of fossil fuels with environment being a secondary consideration. I think frankly that the markets are going to resist the move, particularly the move back to coal, and I think it’s interesting if you look at the way the administration has rhetorically positioned its plan in the last few days. Even they seem to recognize that the public really wants a plan based on renewable resources and on efficiency.
MARGARET WARNER: Ken Boyd, tell us about the technology that the president is talking about. What does he mean when he says that technology can make it possible for us to develop these fuels in an environmentally sensitive way?
KEN BOYD: Yeah, I mean Alaska has really been in a sense a showcase for some of these new technologies and a laboratory because the return on investment of using these new technologies is so high. Certainly the most important technology in my view has been the use of three-dimensional seismic.
MARGARET WARNER: Explain that.
KEN BOYD: Three dimensional seismic… Go back to two dimensional seismic, the sort of older technology, where you shot a series of lines that were spaced maybe several miles apart and you worked on a very course grid. It gave you a very imperfect picture of the sub surface. Although they found a lot of oil through 2-D seismic. But 3-D seismic is a whole new thing where the lines are spaced very close together in a very tight grid and it produces a cube of data. The way you can think of this — although the analogy is imperfect — is the difference between an x-ray and a CAT scan.
With an x-ray everything is sort of squashed into one plane. And it’s difficult for the doctor to make distinctions what’s in front and what’s in back. With the CAT scan you’re able to rotate your… I always use my left knee. You can rotate the knee and see what’s inside to give him a better picture of what to do or how to fix your knee. The same thing with the 3-D seismic. The explorationists, the geo physicist has a cube of data. He’s able to pinpoint very much more accurately in the sub surface where oil and gas deposits — but not oil itself — but where the deposits may lie. The upshot of this environmentally is that you drill fewer wells. The companies have much more confidence in their drilling. The technique is much more accurate.
Another very important technology– and that technology is used everywhere. Another important technology is extended-reach drilling. Again go back 25 years and no matter where it is — I’ll use Prudhoe Bay as an example because it’s something I’m familiar with — in order to tap an oil reservoir under the sub surface you had to drill a whole bunch of straight holes. That’s all you knew how to do was to drill a hole straight down. So to get to the oil in the hole reservoir you had to drill a whole series of wells. Therefore you left kind of a big footprint or left a lot of mark on the ground.
But with the extended reach drilling you’re able to sit in the same deposit, say, you’re able to sit in a central hub and drill from that central hub and like the spokes of a wheel you’re able to drill a bunch of wells from the center of… the hub through the spokes and then tap the whole deposit. This allows several things. First it decreases the size of your footprint — in other words, the mark in the ground by about 90 percent. It also allows you to stay away from sensitive areas. If an area is particularly sensitive, say, a stream, you’re able to set back, you know, quite a bit from the stream. In Alaska, you’re able to drill off-shore deposits from on-shore. In Alaska — which currently has the North American record — they’re out about four miles.
MARGARET WARNER: Let me just get Phil Sharp to comment on this. Does that… should those kinds of technologies make environmentalists feel better about continued exploration and fossil fuels?
PHILIP SHARP: Well I have… I think we have to distinguish where we’re talking about drilling. Some areas, as the environmentalists would argue, like ANWR, they would argue should be off bases no matter what the technology is. I think all of us would find some areas in the country where it’s just the answer is no. But unquestionably, Ken is right, that we have improved our capacity to reduce the imprint to see that we do not put toxic fuels in places that they shouldn’t be.
So we’re getting better at that and we should do the best we can. I’d like to point out very importantly here that that 3-D seismic capacity was developed by federal funds along with private research working on that issue, just as has it on super conducting in electric wires, just as it has on windmills, just as it has on solar panels. And this is a critical role which I’m glad to see the Bush administration is willing to accept even though in their first budget proposals before they came out with their plan, they were ready to cut back on some of these things.
I think now they’ll turn around on this as they have begun to examine it more carefully. But we always have a lot of critics out there, both right and left, who want to cut back on the government investment in this, and yet we’re seeing the evidence of why it matters for energy and why it matters for the environment.
MARGARET WARNER: Professor Fisher, finishing up with you, how long can the United States continue to rely heavily on fossil fuels? In other words, take us in the out years. Everybody here has been talking about 20 years or 30 years. What are we really looking at here?
WILLIAM FISHER: Ultimately I think the trajectory in terms of energy use is heading us increasingly as we’re now entering into a methane economy eventually into a hydrogen economy — hydrogen being the most efficient and kind of fuel that we can use. There’s lots of problems with it. There’s a lot of challenges with hydrogen. And most of the people that look at that see a trajectory somewhere about the middle of this century.
MARGARET WARNER: Excuse me for interrupting you. But is that because we would run out of reserves, domestic reserves or other reasons?
WILLIAM FISHER: I don’t think so. Well, natural gas we can sustain ourselves at a 50 percent increase in current levels of production and probably do that pretty well into the middle part of this century. Coal, depending on our ability to develop clean coal technology and work that through, is another story. Natural gas again we can stabilize or I mean, I’m sorry, with crude oil we can stabilize the production of that over four or five decades, well into the time when we transition basically out of fossil fuels.
MARGARET WARNER: All right. Well, gentlemen, thank you all.