Energy interests square off over US heartland

With plentiful natural gas and cheap electric rates during election year, Oklahoma renewables struggle for traction.

OKC skyline
Devon Energy Corp's new 52-story headquarters towers over the Oklahoma City skyline [Ben Piven/Al Jazeera]

Oklahoma’s imposing State Capitol building, designed in a Greek Revival style similar to the US Capitol in Washington, is perched above the centre of Oklahoma City.

But this state’s legislative meeting place – unique for the 21st century – lies above an active oil field, and next to two imposing derricks on the north and south sides.

While energy and Oklahoma state politics go hand-in-hand, there is policy dissonance with the current White House.

The “reddest state in the country” is unambiguously anti-Obama. In 2008, the president did not win any of its 77 countiesin the contest against John McCain.

Ahead the November 6 presidential election, Obama said along the campaign trail that domestic oil production has increased during his term, and that foreign oil imports have decreased every year.

For their part, oil industry leaders attribute increased production to new horizontal drilling techniques and hydraulic fracturing – commonly known as “fracking”.

Mitt Romney has promised to speed up new offshore drilling projects and exploration of federally owned land for fossil fuel extraction.

And he said he would – despite clear bureaucratic obstacles – cut back across the board on environmental regulation, build new coal power plants, throw out Obama’s proposed power plant emissions standards and swiftly approve the Keystone XL pipeline from Canada.

Some local renewable energy advocates in Oklahoma say the substance of any future Romney administration’s policies might not be that different from Obama’s.

One key area where the candidates clearly diverge is support for the wind energy production tax credit, in effect a $1bn subsidy for the generation of electricity by wind turbines, which is set to expire at the end of 2012. A separate production credit for solar, biofuel, biomass and geothermal energy is also set to expire, but at the end of 2013.

’18-year payback’

Groups such as the Oklahoma Energy Resources Board and the Oklahoma Independent Petroleum Association lobby for conventional oil interests, but a host of new groups is advocating a fresh plan.

Bob Willis, owner of Sunrise Alternative Energy, is also the president of Oklahoma Renewable Energy Council, an organisation that promotes alternative fuel sources.

The public-private alliance is based in Norman, the windy college town and most storm-prone place in the Tornado Alley region – which not coincidentally hosts the National Weather Center.

Aerial view of Cushing, OK oil tank farm [Google Maps]

“This isn’t our first election,” Willis told Al Jazeera. “Whatever happens, happens. Regardless, we’d like to see more [clean] power generation and distribution, more solar on rooftops, more energy efficiency.”

For Willis, the priority is spurring economic development and “educating the populace where energy comes from”.

He summarises that task facetiously: “That little thing in your wall – it doesn’t make it hotter or colder … The power you get in your house comes from a power plant somewhere – coal, natural gas, hydroelectric.”

But underscoring the difficulty of this awareness campaign is the fact that utility rates are cheap in Oklahoma – just eight cents per kilowatt-hour, Willis says. So, there is an “18-year payback for solar right now. It’s hard to sell those [panels], though energy efficiency is easy to sell.”

By his logic, consumers will not make high-risk household investments in more environmentally friendly technologies until the price is right.

Willis also says there is not as much antagonism from the energy companies as liberals might suggest. “It’s not as much about oil and gas guys pushing back, losing out on profits. There’s plenty to go around, since big wind and gas work well together,” he says.

“People are using enough electric that they’re not going to cut back. We got ’em addicted to central heating and their iPads. Everyone is watching the game on TV.”

Natural gas giant

Famous for a depressed Dust Bowl economy of the 1930’s – and for an oil industry collapse in the 1980’s oil glut -Oklahoma’s energy industry is one of the largest sectors of a robust state economy and amounts to one-third of the gross state product.

The state is second in the nation for total natural gas production, and also has the second-greatest number of oil-drilling rigs – around 84,000.

Aviation, transportation, biotechnology and food processing are other strong industries in a state whose land is full of cattle and wheat. Oklahoma also has a very low cost of living, and rapidly growing incomes.

With plentiful fossil fuels, energy costs are the eighth lowest in the nation, leading the state to rank thirteenth in per capita energy consumption. Still, the state ranks seventh in net electricity generation from wind, harnessing 2171 megawatts at 19 farms.

Screen shot from graphic for the state Republican party on

“I love renewables, but they can’t stand on their own two feet,” says Jeff Peters, political director for the Oklahoma Republican Party. “Everybody talks about drilling, but we’re dependent on the Middle East and OPEC for our energy. We want to be able to produce our own in North America.”

“Oil and natural gas are what we have here,” Peters tells Al Jazeera, glancing up at the map on congressional districts on his wall. “A lot of jobs are reliant on that industry. Companies like Devon, Sandridge, Chesapeake – and then lots of mom and pop oil fields that have been family businesses for 100 years.”

But Peters also notes how the local electric company, OG&E, is using more wind power, despite relatively higher costs.

Land use conflicts

Stan Cox, a senior scientist at The Land Institute just across the border in Kansas, links the energy economy to the regional difficulties in the agricultural sector.

“Back in 2008 the [politicians] were claiming increased use of corn for ethanol didn’t really affect grain prices in the economy at large,” Cox told Al Jazeera.

“But this year there’s a huge battle between ethanol producers and livestock people, who think government should do away with renewable fuel standards because it’s driving up corn prices – especially with drought and low stocks of corn. Here in Salina – the bull’s eye of the Kansas drought – rainfall is way below normal.”

“Renewable energy is an industry that hasn’t really developed, and it needs some measure of government intervention to make it happen

– Charles Brummer, Noble Foundation

“If you look at the tier of states going from the Dakotas down to Texas, it’s solid red. But one thing that both Democratic and Republican [local] politicians in this part of country are awful about is maintaining farm-friendly programmes, which often turn out to be more agri-business friendly.”

Cox says Obama “was big supporter of biofuels from the very beginning and hasn’t wavered from that”. He adds that Romney will “not be so worried about developing the renewable energy and would probably, like Bush, be more friendly towards the energy industry and fossil fuels – even though Obama isn’t especially unfriendly”.

The president proposes an all-of-the-above approach to domestic energy independence, despite objections from both sides of the aisle.

“Renewable energy is an industry that hasn’t really developed, and it needs some measure of government intervention to make it happen”, says Charles Brummer, senior vice president at the Noble Foundation.

“Especially with the global economic crisis, the price of oil has fallen. So trying to get a new energy sector going is an uphill battle right now,” Brummer told Al Jazeera. “There’s not much interest from either party in stimulating bio-energy, until the economy turns around and starts using more petroleum. There’s no real [sense] in trying to get farmers to crow crops for an industry that is a sketchy non-starter.”

‘Energy security matters’

While state Republicans seem interested in certain progressive environmental policies, Romney has pledged to fight some of the popular ideas.

Oklahoma office of Mitt Romney for President [Al Jazeera]

“But frankly we’ve not heard much from either of the [presidential] candidates on the emissions front,” says Dorothy Barnett, director of the Climate and Energy Project.

“Romney has also said doesn’t want the [wind] production tax credit extended,” Barnett told Al Jazeera. “His idea is: not picking winners or losers and letting the market decide what types of energy we use.”

Barnett added there is no parity between renewables and the oil and gas industry, which she said receives some $2bn per year of subsidies.

Oklahoma’s conservative Governor Mary Fallin has come out in favour of subsidies for renewables to put them on “equal footing”, and to continue “the huge increase from the last five years of turbine parts made in the US”.

Barnett said if natural gas prices go up to $5 or $6 Mcf [per 1,000 cubic feet] – even without the credit – wind will be the most cost-effective renewable energy source.

“Energy security matters, and domestic resources are a priority”, she said, adding that Congress should make the tax credit long term. 

“This region doesn’t always embrace new things, but we have embraced wind,” Barnett concludes. “The atmosphere doesn’t care what we believe, but what we emit.”

Follow @BenPiven on the #RedStateRoadTrip through Kansas, Oklahoma, Arkansas and Tennessee.

Source: Al Jazeera