Sep 02 - Charleston Daily Mail

The president and chief executive officer of one of the nation's largest energy companies warned that the United States is heading toward "an energy train wreck" unless it immediately begins work on projects that will take years to finance and complete.

Thomas Farrell, president and chief executive officer of Dominion, issued the warning Thursday to business leaders attending the 2006 Business Summit at The Greenbrier.

Dominion has 1,500 employees and an annual payroll of more than $100 million in West Virginia.

The company has invested more than $3 billion in the state and has operations in 41 of the state's 55 counties.

"As anyone who suffered through Economics 101 can tell you, bad things - such as shortages and high prices - happen when demand outstrips supply," Farrell said. "That is precisely what is happening now in the nation's energy markets as homes, factories and businesses crave more electricity, gas and oil."

The nation's policymakers and politicians have not led the nation toward a comprehensive energy policy and the public has not been given enough incentive to conserve or care about the energy they use, Farrell said.

"They have been living under the illusion that energy is an entitlement; that abundant, cheap gasoline and electricity are a birthright," he said. "They have done what consumers do: They have consumed, often with abandon."

"I recognize that it is difficult to focus only on energy with all the other urgent national issues," he said. "Nevertheless, we must concentrate on the right agenda - promoting conservation and additional domestic supplies of oil, natural gas, electric power and the infrastructure that carries energy where it is needed.

"In short, the job remains undone," he said. Farrell offered six suggestions:

* Recognize that renewable energy, combined with conservation and greater energy efficiency, will play a growing role in the future. "But we frankly should not expect too much from either renewable power or conservation," he said.

* Open up more offshore waters to energy exploration and production. "Federal estimates project that more than 630 cubic feet of gas reserves could be recovered from the outer continental shelf," he said. "That is enough to support the United States' natural gas needs for more than 30 years."

* "Government and industry also should do everything in their power to promote the continued growth of onshore gas resources, such as those here in West Virginia," he said.

* Liquified natural gas should be given an increasingly important role in supplying energy.

* "Nuclear power is another important part of the fix," he said. "There is no reason the U.S. should not streamline and simplify the process for building new nuclear power stations."

* "Better use of coal is another obvious solution. It is an abundant, domestic fuel supply. We have 250 years of reserves. Its price is less volatile than many other commodities. Its role in electric generation is indispensable. Steps have to be taken to sustain and increase its use."

One way to do that is to utilize clean-coal technologies, Farrell said. Dominion, along with several other utilities, is currently exploring construction of a new fluidized bed coal power plant in southwestern Virginia, he said.

"Clean coal technologies are the prime reason why investors in this decade have built or proposed more than 150 coal-fired power stations, potentially worth over $100 billion," he said. "This includes five proposals in West Virginia worth $3 billion."

Farrell said several things need to happen to sustain the renewed interest in coal, including government and industry joining forces to proclaim that coal projects can be made environmentally sound and investing more money in advanced clean-coal technologies research.

"Change does not happen overnight in the capital-intensive, heavily regulated energy business," Farrell said. "If we could wave a magic wand and adopt every policy I have discussed by unanimous consent, there would still be years - decades - between the go- ahead vote and online operations."

Dominion owns Dominion Hope, a natural gas distribution utility headquartered in Clarksburg that serves 116,500 homes and businesses in 32 north-central West Virginia counties.

The Richmond, Va.-based company also owns and operates the Mount Storm Power Station and North Branch Power Station in Grant County and is 50 percent owner of the Beechurst Avenue power plant in downtown Morgantown.

The company also owns Dominion Transmission, formerly CNG Transmission, Clarksburg; and Dominion Exploration and Production, Jane Lew.

Contact writer George Hohmann at business@dailymail.com or 348- 4836.

(c) 2006 Charleston Daily Mail. Provided by ProQuest Information and Learning. All rights Reserved.