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March 24th, 2009 - Jim Roth

Industry Expert Q&A



Jim Roth, attorney with Phillips Murrah P.C., alternative energy department

The words "clean" and "green" are often used to describe alternative energy. What are the main sources of alternative energy and how "green" are they?

JR: Alternative energy is an umbrella term that refers to any source of usable energy intended to replace fuel sources without the undesired consequences of the replaced fuels. Typically, official uses of the term - such as qualification for governmental incentives - exclude fossil fuels and nuclear energy, whose undesired consequences are climate change and difficulties of radioactive waste disposal.

Green energy is the term used to describe sources of energy that are typically considered to be environmentally friendly and nonpolluting, such as geothermal, wind and solar power. Green energy sources are often considered "green" because they are perceived to have lower carbon emissions and create less pollution, which also describes clean-burning natural gas.

Which of these alternative energy sources holds the most potential for Oklahoma?

JR: Oklahoma's wind power is legendary, and its deep reserves of abundant natural gas also provides Oklahoma a great combined opportunity. National wind studies suggest that Oklahoma is home to some of the most consistent, reliable wind power of anywhere in the country and that our state may ultimately provide as much as 9% of all of America's wind power. Our similar blessings in natural gas give us a great advantage because natural gas is a necessary partner to wind power generation, for those days and times when the wind doesn't blow enough.

How likely is it that gas will overtake oil as the world's top fuel choice by 2025; and what does that mean for Oklahoma?

JR: Most of Oklahoma's energy leaders recognize that "peak oil" has occurred in America - around the 1970s - and perhaps has also occurred in the world, as a whole. "Peak oil" is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. That reality, coupled with recent amazing discoveries of abundant, American natural gas, has Oklahoma well-positioned for a future involving greater use of natural gas. Further, since natural gas is a low-carbon fuel, it is also more attractive in a world where carbon costs add expense to coal and oil as a fuel source.

Clean energy sources such as wind and solar power are gaining popularity, especially in Western Europe. Why is the United States slow to embrace it?

JR: Americans have provided the world with the greatest in innovations and industry throughout our history. Only recently have commodity prices and world threats risen to the level to capture our country's attention (and political will) to solve this "energy crisis." Europe has led the way with energy diversification - like wind, solar and biomass - out of need, as they confronted high energy prices decades before America. Even countries like Brazil have been pioneers to seek new energy opportunities like compressed natural gas to fuel their cars and trucks. America is now engaged and will soon lead the world in these issues.

What can our state do to encourage its energy companies to lead the nation in developing these new, environmentally friendly energy sources?

JR: Bold action and big thinkers have built Oklahoma's energy sector into a leader for America. Today, it is estimated that Oklahoma provides significant amounts of America's domestic energy production: 4% for oil and 10% for natural gas. We can be that leader in all new forms as well: wind, solar, biomass, cellulosic technologies, CNG mass transportation and beyond, if we dare to prepare our state. That will involve a Legislature that incentives investments for exploration, production, transmission, smart building codes for commercial and home construction, as well as a genuine openness and intellectual curiosity for what potentials lay ahead. We can't look back; we must look forward and dare to prepare for the next Oklahoma energy century.

What effect will the economic crisis have on emerging alternative energy companies?

JR: It's tough to be green when money is tight. Today, access to capital is a stranglehold on any growth, especially in emerging alternative energy opportunities. These new energy "widgets" require financial modeling that is more open to research and development and costs that will help prove out the best technologies. For the individual citizen, state and federal enactments will likely incentivize consumer behavior to help drive the powerful American economy in these new directions.

 
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