State, industry officials disagree on timeline to regulate energy development


International energy competition

The consequences of delaying or preventing U.S. companies from developing domestic energy resources could be dire, said John Harpole, president of Mercator Energy, a Littleton-based natural gas brokerage company.

"We're in the midst of an energy war with China and India," he said, "and I really believe we're asleep at the switch."

Harpole said every resource should be utilized, from traditional fossil fuels to wind and solar power.

"I think we need to realize we're after every (British thermal unit of energy) possible, and conserve," Harpole said.

Energy demands increase every year in the U.S. and abroad he added. To keep up the production to reserve ratio the U.S. has, Harpole said, companies will have to increase their pace of drilling.

Other countries are not slowing down, he said.

Russia's Prime Minister Vladimir Putin has consolidated much of the natural gas market in north Asia under the Russian government-owned Gazprom company, Harpole said.

Putin also has met with leaders from Iran, Algeria and Venezuela in efforts to form natural gas trade agreements, which Harpole described as the beginning of a natural gas cartel.

Russia, Iran, Algeria and Venezuela collectively hold about half of the earth's total natural gas supplies, Harpole said.

With the weakening of the U.S. dollar, and increasing demands from Europe and developing countries, Harpole said U.S. companies will "never" be able to outbid their foreign counterparts for stable natural gas supplies from foreign producers.

- Collin Smith/staff

— Energy industry officials cried foul at the prospect of increased state regulations during Friday's Fueling Thought Energy Summit 2008 at the Holiday Inn of Craig.

Although industry officials may be unhappy, said Harris Sherman, Colorado Department of Natural Resources executive director, the state has to balance several competing industries for the well being of Coloradans.

"I would say, without question, the energy sector today is going to play a very key and important role in (Colorado's) economic future," Sherman said. "No doubt about that."

Colorado is the epicenter for oil shale development, which may prove to be one of the most lucrative resources the U.S. claims, Sherman said.

The natural gas industry, he added, is going through the most expansive growth the state's energy industry has ever seen.

Coal, which runs thick through part of Colorado, also is an important and cheap source of energy the country likely will continue to use for a long time, Sherman said, adding that if companies can perfect clean-coal technology, the industry's future is "very bright indeed."

However, Colorado is a complicated state, he said, and state officials should carefully weigh possible consequences to development.

"Colorado has a more diverse and complicated economy than almost any other energy-producing region in the country," Sherman said. "It is unusual in regulating with regards to energy development to also have agriculture, hunting and fishing, tourism, a robust retirement population and an emerging energy economy.

"We have extraordinary environmental resources in Colorado that I think all Coloradans want to protect. It is really important for the state to try and find a balance."

Without that balance, Sherman said, communities could face a severe depression when the natural resources are gone. Northwest Colorado should carefully allow its tourism and wildlife resources to coexist with industrial development so those resources can be utilized after energy development is gone.

Energy industry officials said, however, the country will not be able to take its time discerning energy policies while prices escalate and American residents compete with foreign countries for energy supplies.

U.S. companies should be allowed to develop domestic energy resources to provide affordable energy and a stable supply, they said.

"I think as we have some tough economic times, the public is going to have a lot more interest in its utility bills," said Stan Dempsey, Colorado Petroleum Association president. "It's going to look different now that we perhaps are in a recession than it did when we were in good times."

The Colorado Oil and Gas Conservation Commission's recent draft rules regarding heightened wildlife and health regulations on energy drilling also may prevent the state from seeing as many dollars as it could.

Meg Collins, Colorado Oil and Gas Commission president, said the industry is more and more nervous about investing in Colorado because companies are unsure about the future regulatory climate.

"The industry is not loath to be regulated," she said. "But we think there is a great deal at stake for this state we all live in and love to get (the rulemaking process) wrong."


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