Energy panelist: 'We're not broke -- we're crazy'

Aug 22 - The Edmond Sun

"We're not broke -- we're crazy," Gary Palmer said Tuesday as he told a story related to the national debt and the nation's abundant natural resources.

Palmer, president of the Alabama Policy Institute, spoke on the subject of "Energy & Federalism: EPA vs. the States," part of a national policy summit on the subject hosted by the Oklahoma Council of Public Affairs at Devon Energy Corporation's new corporate headquarters.

The stated goal of the summit was to encourage national dialogue between OCPA members and members of other think tanks from key energy states. Oklahoma ranks fourth in the nation in natural gas production, fifth in crude oil production.

Last summer, when the national debt was $14.3 trillion (it stood at $15.9 trillion Tuesday according to usdebtclock.org), Congress reached an agreement that called for several trillion dollars in savings, raised the debt ceiling through the end of 2012 and established a committee to recommend long-term fiscal reforms.

About that same time, Palmer was in Washington on Capitol Hill and he walked into the office of a congressman who asked if he was there to talk about the debt limit. Palmer said as a matter of fact he was.

Palmer picked up the story from there. "He said, 'Do you have $1.5 trillion?' And I said, 'No, but you do.' And he looked at me all perplexed and I said, 'Mr. Congressman, we have 1.4 trillion barrels of recoverable oil. We've got 249 years' worth of coal that's available with current mining technology. We have 280 trillion cubic feet of proven natural gas reserves. There's 800 billion barrels of recoverable oil in oil shale in the Green River Formation in Colorado, Utah and Wyoming. The federal government owns 80 percent of the richest part of that deposit."

That's when Palmer zinged the congressman with his "we're not broke" line, evoking applause from some in the Oklahoma convention auditorium audience.

Palmer said he suggested that Congress attach an amendment to the debt ceiling vote that would let the federal government access the vast mineral resources that the nation possesses. He said the argument could have been that it would lower energy costs and reduce dependence on foreign oil.

Additionally, royalties the federal government would have earned from allowing access to its mineral resources would be about $19 trillion, enough to ensure stability of Social Security and Medicare, Palmer said.

"It is insanity to continue policies where we have these enormous resources and we don't tap into them," he said.

During his presentation, Carl Graham, CEO of the Montana Policy Institute, discussed a slide of U.S. rotary rig distribution and rigs by state as of July 27. It showed that Oklahoma had 193 active rigs, same as North Dakota, and Montana had 20.

"Why is there so little relative activity in Montana?" Graham said, citing a previous slide detailing Montana's vast natural resources. "These are policy issues that are causing this as much as anything else. And those are the ones we can address."

EPA regulatory trends include greenhouse gas tailoring which is on hold but creates an enormous amount of uncertainty, ozone national ambient air standards, native lands compliance, greenhouse gas reporting requirements which increase overhead costs, and water quality requirements, which are affecting the drilling technique known as fracking, Graham said. The federal government is writing a new set of rules for reservations, he said.

Graham said about 30 percent of Montana is federal land. Federal lands leasing trends include restrictions on numbers of leases, increased comment periods, increased resource management plan requirements, no additional compliance resources and new quasi-wilderness designations, he said.

Montana could be the richest state in the nation with all of the natural resources it has, including an abundance of coal, but the nation is putting that at risk, Graham said. Meanwhile, government has grown by almost 60 percent in the state during the last 10 years.

"We want to get the government working for us instead of against us," he said.

The best solutions are local solutions, Graham said. Now the government is the avenue of first resort, he said.

David Schnare, director of the Center for Environmental Stewardship, Thomas Jefferson Institute, worked for the U.S. Environmental Protection Agency for more than three decades.

"This is the way a lot of people at EPA see our nation and this is the way I see it," Schnare said. "This is a union of states and it is the states that created the nation; it is not the nation that should control the states."

Schnare referred to two maxims 1) Those who control energy control the economy and the nation; and 2) when states share power they abandon it. He then referred to a third maxim: The only limit to U.S. energy independence and the consequential economic growth is environmental regulation, mostly imposed by the EPA, but to a lesser extent by the U.S. Department of Energy.

The EPA has lost its way, now seeking a zero-risk, centrally managed society, regardless of cost to the economy or its citizens' freedoms, Schnare said.

Trent England, vice president of policy for the Freedom Foundation, spoke about the history behind federalism and what has happened to it.

marks@edmondsun.com -- 341-2121, ext. 108

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