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Energy's mix depends on market, policy signals

The fate of Wyoming’s energy mix in the next few decades depends a lot on what kind of signals the energy industry receives from either the market and policy-makers. Two experts assembled for the final presentation of the University of Wyoming/Casper College Energy Futures lecture series said how we deal with carbon emissions will have a great deal to do with Wyoming’s energy future.

The fate of Wyoming’s energy mix in the next few decades depends a lot on what kind of signals the energy industry receives from either the market and policy-makers.

Two experts assembled for the final presentation of the University of Wyoming/Casper College Energy Futures lecture series said how we deal with carbon emissions will have a great deal to do with Wyoming’s energy future.

Series moderator Anne MacKinnon noted that Wyoming’s energy business has been hugely impacted by such signals in the past. For example, the Clean Air Act created a market for Powder River Basin coal, as power plants sought alternatives to the hotter-burning but sulphur-rich coals of the Midwest and the East. And, she added, Wyoming’s Sen. Al Simpson helped negotiate a trading scheme that helped Eastern and Midwest power plants reduce their sulphuric acid emissions.

Andrew Logan, director of an environmental investment coalition called CERES, said half of the nation’s top 10 power companies have asked for federal guidelines on how to treat carbon emissions for the long-term.

Logan noted that CERES has only been in existence for three years, but already manages some $4... more [truncated due to possible copyright]  

The fate of Wyoming’s energy mix in the next few decades depends a lot on what kind of signals the energy industry receives from either the market and policy-makers.

Two experts assembled for the final presentation of the University of Wyoming/Casper College Energy Futures lecture series said how we deal with carbon emissions will have a great deal to do with Wyoming’s energy future.

Series moderator Anne MacKinnon noted that Wyoming’s energy business has been hugely impacted by such signals in the past. For example, the Clean Air Act created a market for Powder River Basin coal, as power plants sought alternatives to the hotter-burning but sulphur-rich coals of the Midwest and the East. And, she added, Wyoming’s Sen. Al Simpson helped negotiate a trading scheme that helped Eastern and Midwest power plants reduce their sulphuric acid emissions.

Andrew Logan, director of an environmental investment coalition called CERES, said half of the nation’s top 10 power companies have asked for federal guidelines on how to treat carbon emissions for the long-term.

Logan noted that CERES has only been in existence for three years, but already manages some $4 trillion in assets around the world. He said the group, which includes investment banks, mutual funds, insurance companies and hedge funds, takes global climate change very seriously as a long-term investment risk.

Logan further cited a recent study by the British Treasury, which estimated that it would cost the world economy 5-20 percent of its gross domestic product annually if nothing were done about carbon emissions, while possibly raising the globe's temperature by up to nine degrees Fahrenheit.

That same British Treasury study estimated that carbon emissions could be brought under control at the annual expenditure of one percent GDP, he said.

 Economists said well-prepared companies would profit from reducing their emissions, he added.

“So what are the implications for Wyoming?” he asked. Prices in the natural gas market are driven by weather, and another warm winter could depress prices and demand. Wyoming coal has not been proven to work in advanced Integrated Coal Gasification Combined Cycle (IGCC) power plants, said Logan, which offer the best promise for reducing carbon emissions.

“Wyoming could be left behind,” he warned, if it turns out that IGCC power plants can’t use Wyoming coal or operate at Wyoming’s higher altitudes. Wyoming has huge resources in coal, natural gas and uranium, so there’s market flexibility, he said. “But what if you wind up competing with biomass or wind energy?”

Logan warned that coal is sustainable financially, only if climate change is kept under control. Then again, he said, wind plus clean coal technology could be Wyoming’s future.

Logan believes that Wyoming should welcome controls on carbon emissions, so the state can make a gradual and less painful transition to a low-carbon economy.

“You don’t want Wyoming to wind up on the wrong side of the energy equation,” said Logan, adding that carbon controls could dramatically increase the potential for Wyoming’s natural gas.

Rutger Huijgens, the Wamsutter field asset manager for BP, said rapid change in the industry could come from policy-makers and their signals to industry. Otherwise, he said, industry tends to keep doing what it's doing, with little deviation.

He said he sees the nation’s energy mix trending from more oil-based to more natural gas-based energy sources, adding in wind and solar.

Huijgens said BP sees a correlation between carbon emissions and global climate change. The company believes it is prudent to lower emissions and develop alternative energy sources, he said, investing $1 billion annually in that effort.


Source: http://www.jacksonholestart...

NOV 17 2006
https://www.windaction.org/posts/5854-energy-s-mix-depends-on-market-policy-signals
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