Western Governors Show How State Policy Can Direct Energy Industry Investment
What will be the future of energy production—fossil fuels or renewables? Governors from the Mountain West spoke recently in Washington, DC, at Politico’s 10th Annual State Solutions Conference about the role energy production can play in their states’ future and showed how state policy can direct industry investment.
In some states, government is adopting a free market approach to energy by promoting competition among conventional and fossil fuels with a goal of lowering both emissions and consumer prices.
“I am a big proponent of not just green energy but all energy,” said Utah Gov. Gary Herbert (R), adding that he wants to see all states become energy independent, while market pressures are urging utilities and manufacturers to adopt more sustainable practices.
“The market wants cleaner, sustainable, and affordable [energy]. I like the fact that as a country we are becoming more independent and are no longer being held over the barrel of the Middle East,” he said.
Since Utah, like Colorado, struggles with air quality, this approach helps address both energy security and environmental concerns. Utah is also transitioning from using coal to natural gas as a generation fuel.
These goals are far more modest than Gov. Jared Polis’ (D) aggressive renewables plan for Colorado. Polis ran on a plan to push Colorado to 100 percent renewable energy by 2040 and is currently working with Xcel energy, the state’s primary utility company, to reach 80% carbon reduction by 2030. In his remarks, Polis made it clear that he did not want to rely on carbon capture to meet these goals.
“We don’t see fossil fuels as renewable,” Polis said. “Certainly, we encourage carbon capture [and] we want to make sure that that is encouraged and reflected but I think that the future is low-cost renewable energy.”
Polis’ comments show that his administration is not focused on promoting energy production in the state. When pressed on the role oil and gas production play in Colorado’s economy, Polis replied that it depended on “international commodities” and offered a tepid explanation.
“Oil prices are still sufficient for the successful extraction in Weld County,” he said. Polis explained that his administration had attempted to “dissipate tensions” by increasing the role cities and counties play in siting oil and gas development but did not endorse production himself.
“There is a climate impact to the extraction process, and we have been very attentive to that,” Polis added.
In contrast, North Dakota Governor Doug Bergum (R) spoke with pride of his state’s spot as the second-highest oil producer in the country.
Even though energy production is largely determined by geography and geology, government policies can significantly impact a region’s competitiveness.
Bergum described how, during a trip to Canada in August, Alberta oil producers told him they felt attacked in their own country, a political environment that made it more difficult to operate. Though he expressed sympathy for their situation, the governor did see a silver lining for North Dakota.
“We obviously support our neighbors to the north, but we’re also up there saying, ‘Hey if you’ve got capital to spend and you want to put it in a state that’s got hardworking people and focuses on innovation and has a business friendly climate, why don’t you move your capital down to North Dakota?’” he said.
“Capital will move to places where it can solve the problem,” Bergum added.
This pro-production attitude has led to significant investments in energy infrastructure in North Dakota, which has seen production surge in recent years. It is also a sign of the sorts of discussions being had between the governments of neighboring states. As Polis recounted discussing with neighboring states’ governors the transmission infrastructure needed to “green the grid,” Bergum is pushing for expanding fossil fuel infrastructure needed to take energy to market.