Co-authors

§ From the Press Release of Staff, University of Wyoming, December 16, 2020

Professor Tara Righetti, in the University of Wyoming College of Law and School of Energy Resources (SER), and Kris Koski, an SER associate lecturer, co-wrote an energy industry study with the United States Energy Association (USEA).

The collaborative study is titled “Study on States’ Policies and Regulations per CO2-EOR-Storage Conventional, ROZ, and EOR in Shale: Permitting, Infrastructure, Incentives, Royalty Owners, Eminent Domain, Mineral-Pore Space, and Storage Lease Issues.” The full report can be found here.

“We are exceedingly proud to have our faculty members at the forefront of a decisive topic in energy development and working proactively to support Wyoming and its economy,” says SER Executive Director Holly Krutka. “This publication is an important step to bridge the gap between our energy research efforts and commercial implementation.”

The report — in collaboration with West Virginia University colleagues — is a strong example of faculty research directly supporting Wyoming’s economy and the energy industry, Krutka says.

The study evaluates laws, policies and regulations governing CO2-EOR (carbon dioxide-enhanced oil recovery), associated CO2 storage operations, and geologic storage across 12 states and onshore federal lands. The study principally includes two regions: the eastern region, composed of the Illinois Basin and the Marcellus shale region; and the western region, composed of the Permian Basin and Rockies regions.

In anticipation of expanded interest in CO2-EOR as a result of the amended 45Q (carbon capture) tax credit and recently released draft treasury regulations, it is increasingly important for legislatures and policymakers to understand legal and regulatory challenges to more integrated and widespread implementation of CO2 storage, according to the study.

“With the recent expansion of the 45Q tax credit and passage of House Bill 200 requiring carbon capture use and storage retrofits to power plants, we expect increased interest in the legal and regulatory requirements for CO2-EOR and geologic storage,” Righetti says. “This report summarizes and illustrates the comparative completeness of Wyoming’s regulatory framework as well as identifying opportunities for additional legislative and agency action.”

The project provides comprehensive and comparative analysis of four dimensions of CO2 law, regulation and policy: land use, mineral, water and pore space rights; regulation of CO2-EOR and CO2 pipelines; eminent domain; and geologic CO2 storage and incremental storage regulation.

The study suggests opportunities to harmonize energy policies and address regulatory gaps and inconsistencies. The goal of the study is to facilitate better understanding of the legal underpinnings that frame risk, uncertainty and investment in CO2 use and storage infrastructure and projects; and to provide a roadmap for changes that are conducive to regional project development.

Koski says the report also will benefit private entities seeking to engage in energy development incentives.

“Taking a look at the interstate and federal legal and regulatory landscape is the first step in any potential CO2 enhanced oil recovery or long-term storage project,” Koski says. “This research not only helps identify regulatory gaps that legislatures can tackle to incentivize such development, but it also may be helpful and save substantial time and money for private enterprise in the planning for such projects.”

In addition to the important contributions to the state, the report provides much-needed support to UW students interested in working in the energy sector, according to Koski and Righetti.

“In a transitioning energy economy, with an increased focus on limiting CO2 emissions, potential CO2 injection projects could bring substantial revenue to Wyoming in the form of severance tax and mineral royalties while, at the same time, providing job opportunities for our university’s Professional Land Management Program students,” Koski says.

Research students at the UW College of Law and West Virginia University College of Law also were involved in the report. Third-year Wyoming law student Marissa Pridmore, of Limon, Colo., was one of eight law students providing support for the project.

“Working on the USEA project prepared me to work and interact with others in an online, COVID-informed environment,” Pridmore says. “During the project, I also developed an interest in how the energy industry navigates federal regulations, and I have continued to research and write on this area of the law.”

USEA hosted and recorded a webinar Dec. 3 for parties interested in summary results of the study. The authors discussed their work and presented possible pathways forward with the information.

Secretary Thrasher removed from Commerce

From an Article by Brad McElhinny, WV MetroNews, June 19, 2018

CHARLESTON, W.Va. — Executives from China Energy who had been set to attend a petrochemical conference canceled their visit because of ongoing strain over trade, said Brian Anderson, director of the WVU Energy Institute.

Weeks ago, those involved with the potential $83 billion Chinese investment in West Virginia natural gas projects had hoped the executives would be able to make a specific project announcement during their visit, Anderson said.

“Backing up a couple months we really were hoping we could have a project to be announced on this visit. It wasn’t a cancellation of an announcement, but it’s not at the point a project can be announced with the leadership canceling their visit,” Anderson said today on MetroNews’ “Talkline.”

Anderson first described the cancellation of the visit by China Energy executives during his own presentation at the Northeast U.S. Petrochemical Construction Conference in Pittsburgh. His comments were picked up by trade journalists who were covering the conference.

The comments also set off a buzz among those in attendance, said Curtis Wilkerson, president of Orion Strategies, which performs communications and marketing services for West Virginia’s natural gas industry. Wilkerson is attending the conference.

“That’s probably the buzz that’s going on the most here,” Wilkerson said this morning. “People then questioning the total investment and how that’s going and what are the possibilities. They’re not exactly saying it’s not happening. They’re just raising questions.”

State officials made a splash last November by announcing the possibility of an $83 million investment in West Virginia over 20 years.

Then-Commerce Secretary Woody Thrasher traveled to China to sign a memorandum of understanding with China Energy while President Donald Trump looked on.

Gov. Jim Justice spoke with excitement about the sheer amount of the potential investment. “For crying out loud, it absolutely takes your breath,” Justice said.

But the investment has also been shrouded in mystery. State officials have been unwilling to release the memorandum of understanding, and they also said they could not elaborate on specifics of the projects, saying they would evolve over the 20-year span of the agreement.

The current tit-for-tat over tariffs lays more uncertainty onto the agreement. President Trump on Monday threatened to impose additional tariffs on $200 billion worth of Chinese goods. That followed last week’s announcement of a 25 percent tariff on $50 billion in Chinese imports.

Chinese officials accused the United States of “extreme pressure and blackmailing” and vowed to retaliate.

West Virginia’s deal with China Energy was hatched during President Trump’s trade mission to China, when the president was advocating for greater investment.

Last week, while being questioned about state Commerce Secretary Thrasher’s forced resignation, Justice said the deal would be safe because of the governor’s own good relationship with Trump.

“I can tell you just as simple as mud how it happened,” Justice said. “It happened through a friendship with myself and Donald Trump. Donald Trump realizes wholeheartedly that we have a terrible trade imbalance with China and he is on those people and on those people like stink on you-know what.

“And absolutely he is pushing them to invest and do things to bring that trade imbalance in line. So how does West Virginia come into being. I mean, do we really think it came into being with our Commerce department? Of course it didn’t. It came into being because of the relationship between the two of us and the president really trying to help his friend and help what he loves and he loves West Virginia. That’s how it came in line. Well, we haven’t lost one thread of that. We’ve still got a president, we’ve still got your trade imbalance and you’ve still got your governor.”

But the current situation has made moving forward with decisions a challenge, Anderson said. “It’s certainly not a road block. Right now it’s a bit of a speed bump. If it lasts too long it could certainly be a hurdle,” Andersons said on “Talkline.”

He said China Energy is continuing on due diligence such as project identification and site selection. But, because the company is partially state-run, its executives would find it difficult right now to give a project official approval or to appear at an American petrochemical conference.

“These issues surrounding the pending trade war are causing some concern among the leaders of China Energy,” he said.

“It has not slowed the development. The development teams are still pursuing the project. However, the timing of the leadership of China Energy and that coinciding with the trade war was going on was just not something the leadership of China Energy was going to do.”

Anderson believes the project still has great potential in the long-term. “I’m still optimistic. In the end, I think economics win out,” Anderson said. “West Virginia is still the right place on the globe for them to invest.”

Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association, hopes that’s true. “We’re obviously disappointed to hear that it’s been put on hold, I think is the most positive light to put on it,” Blankenship said this morning in a telephone interview.

She hopes that once international relations straighten out, the deal with China Energy will continue moving forward. “Clearly that’s what we would want,” she said. “Things will continue to progress but that large amount of investment money is the best case scenario to move forward. That is encouragement to private investors to come to the table as well, which all needs to happen as well.”

Social Darwinism in the energy business

Commentary by S. Tom Bond, Resident Farmer, Lewis County, WV

Darwin’s theory characterized as “red of tooth and nail,” by some of the clergymen of the time, influenced something called “Social Darwinism,” which claims evolutionary processes explain a lot of the world’s social inequality.

This worked into the fabric of social science. The justification of one business establishment succeeding another is that the replacement provides a product that better meets the needs of society. It is cheaper, does the intended job better, lasts longer or has some characteristic the public wants, and that’s why it “won.”

For decades it was the excuse for stepping on other people, other races, other nations, usually less developed. Now, in our century it has lost its respectability. People who think about it are too sophisticated to accept the idea. Simple superiority does not explain differences in societies.

In economics, however, mutation of accounting accomplishes the same end. You can justify an initiative by not counting all the costs. Then you claim the product is good for society.  I have talked about “externalized costs” previously, that is the business man putting off costs of a business initiative on other people. If your neighbor grows pigs in his back yard, near your house, you have to tolerate the smell of his pigs without benefit to your family. Zoning is based on such considerations.

Energy is the principal “food” of industrial society, it’s what makes it run. Everyone is desperately dependent on it. But burning hydrocarbons is not the only way to get energy. And, certainly not the best way to get it. Pollution of many kinds, particularly caused by fracking, as opposed to conventional extraction, results in environmental disruption in a time when the demand for food and clean water is rising rapidly. The fracking causes demands on services such as roads, legal services, permanent records provided by the public, uglification of the drilling fields, and global warming never enter the accounting.

The fundamental idea in accounting is that the benefits are hopefully greater than the costs. The mutation of the cost side of the ledger by leaving out these costs is required to justify some enterprises. Sure we need energy, but at what cost? Like the famous Indian snake, the head is swallowing the tail of industrial society.

Perhaps the only industry more free to avoid the rational consequences than the hydrocarbon industry, is the financial industry. The relatively rapid return from investment in early fracking is strong encouragement to loan to it. Buildings, roads, airports, etc. take decades. Fracking takes only two to four years.

And like the subprime housing boom that went bust in 2008, the investors get their profit first, and when the householders couldn’t pay off, the taxpayer did (because we the public have to be able to borrow money). Government bailed the big banks out with tax income, i.e. the public’s taxes. Banking is thus, as they say, “a ‘purty’ good job if you can get it!”

Actually, government has been bailing out the fracking industry since it began.  Largely ignored in the story as it is usually told, the key research for fracking was done at the Morgantown Energy Research Center, Morgantown, WV. Then George P. Mitchell received government subsidy to try it, and it worked commercially. Mitchell is a hero of fracking, but without government subsidy it would never have happened. Slowly everybody and his brother climbed on the band wagon, each with a slightly different technique.

Every effort was made to keep regulation in the individual States, keep the Federal Government out. The industry was afraid of honest research and regulation, and as was expected, states were ductile, easily drawn in the shape wanted by industry. (West Virginia and Pennsylvania notoriously so.) Lobbying was a business expense.

There never had to be any kind of accounting, just simply the will to drill and the resources required. The accounting had to satisfy investors, and externalized costs were always ignored. State legislators are not full time, and most of their political effort is in getting reelected. They don’t have time to study issues beyond the surface, and largely respond to pressure. States are strapped for money, for reasons we can’t get into here, and any promise of money to a state is very attractive. However legislatures are willing to forgo any but a pittance from production to keep an industry in their state.

Between some states the effort to get fracking is like the phrase in boy’s books about Pirates, “Every man for himself and devil take the hindmost!? Or “All’s fair in love and war.” Pubic relations have paid a large part, too. Ads buy newspaper support, and smooth speakers don’t get much critical analysis from the Chamber of Commerce.

A lot of effort originally was to find hot spots, highly productive areas. Estimates of ultimate production are based on what drillers are getting now. It is certain that ultimate reserves are only a guess and must be considered a maximum. Something like 92 percent of the gas or oil is left in the ground, with no technique in sight to get the rest. The rock must be broken to extract oil or gas, when conventional oil or gas can flow through pores in the rock, so secondary and even tertiary recovery is possible. There is an immense amount of toxic waste produced by fracking.

Although the U. S. is now the leading producer of oil, it is unlikely that U. S. independence of imports will ever be achieved. We are still importing far too much to have the difference made up at home. The “independence from imports” phrase is hoopla. And with the situation in the previous paragraph considered, how long can U. S. production be kept up?

Both wind and solar power is increasing in efficiency, lowering cost. They make more and better jobs. Increases in efficiency by frackers result from longer horizontal runs and the fact they have been able to beat suppliers of goods and services down to lower prices. Recovery is only marginally better, if any at all. Shouldn’t government support go to research on new improved carbon free methods that don’t hurt water supply, poison people, require pollution be pumped underground?

Global warming is now as conspicuous as the nose on your face. Burning coal, oil and gas and exhausting the carbon dioxide in the atmosphere is a primary cause of it. The student product of a good high school chemistry course can calculate that twelve tons of carbon puts 44 tons of carbon dioxide in the atmosphere. How much cost is attributable to that? Nearly 6 billion tons of carbon dioxide a year. How does it go into the accounting? In fact, it doesn’t.

So the accounting for burning oil and gas is tremendously skewed. The public story is skewed. Darwinism is the explanation to those affected – “You have to break an egg to make an omelet.” And if you live in the fracking zone, or own property in the fracking zone you happen to be the egg.

Social Darwinism applies to you. Consider the loss of your assets, including your health and capacity to work being lost to society. Darwinism, red of tooth and nail.