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A Texas Oil and Gas Attorney Examines the Pros and Cons of Alternative Energy

Although I am primarily a Texas oil and gas attorney, I am interested in all energy sources, and I am especially interested in the ongoing national discussion about what are called alternative energy sources. One of the hottest topics in the world of energy is the discussion of alternatives to fossil fuels. While the definition of “alternative energy” has changed over time, the discussions today center on energy sources other than oil, gas and coal, and include such energy sources as solar, wind, biomass, hydrogen, and geothermal energy. These discussions are presumably driven by concerns over America’s dependence on imported oil and the effects of allegedly manmade climate change. Often, advocates of alternative energy sources make extravagant claims when touting their alleged benefits when compared to fossil fuels. One alternative energy website says that alternative energy sources “have no undesired consequences”; in fact, some people claim that alternative energy sources “are renewable and are ‘free’ energy sources.” The move from traditional to alternative energy sources is not only touted as the solution to a whole host of environmental problems, but the Obama administration says the “green jobs” resulting from this shift are a key to economic recovery and the basis of a strong middle class.

Alternative energy sources seem to offer the world a future environment free of the deleterious effects of obtaining and burning fossil fuels and an economy growing rapidly and unfettered on the back of unlimited and free (e.g. no cost) energy and a green jobs revolution. It sounds almost too good to be true.

The question is: is it? Is alternative energy a “no cost” solution to all our environmental, energy, and economic problems? Well, as Robert Heinlein popularized in his classic science fiction novel, The Moon is a Harsh Mistress, TANSTAAFL (“there ain’t no such thing as a free lunch.”). Everything comes with a cost-even in the Brave New World of alternative energy. These costs seem to get lost in the hype.

With the advocates of alternative energy taking center stage, having defined the terms of the argument and putting themselves in the position of driving current energy policy in this country, any attempt to objectively discuss the supposed benefits and possible consequences of the different forms of alternative energy is sure to be met with skepticism. But if our elected officials are going to invest billions of dollars of our tax money in the development of alternative energy sources, we should spend a good amount of time looking carefully at the claims we are being asked to accept.

I got to thinking about these issues after reading a speech by Keith O. Rattie, Chairman, President and CEO of Questar Corporation. Given to a commencement at Utah Valley State University on April 2, 2009, Rattie recalled that 33 years earlier, after he graduated with a degree in Electrical Engineering from the same university:

I made a decision to go to work for an oil company…on what turns out the have been a false premise: I was convinced that by the time I reached the age I am today that America would no longer be running on fossil fuels.

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Not everyone reading this will remember the energy scare of the 1970s, when everyone was convinced we were running out of fossil fuels. By the 1990s, there would be no more oil, coal, or natural gas. If we were to insure our future, we had to conserve what energy we had and engage in a crash program to develop alternatives. President Jimmy Carter declared solving this energy crisis the “moral equivalent of war,” putting forward a National Energy Policy that included reducing gasoline consumption by ten percent and using solar energy in two and one-half million homes by 1985. Energy conservation was on everyone’s mind as people turned their thermostats down (or up depending on the season), bought smaller cars, and looked into installing solar panels on their houses. Everyone got into the act; even Walt Disney’s beloved characters Mickey Mouse and Goofy taught the nation’s children about energy conservation in a comic book.

This is the background to Rattie’s comment. Three decades later, he pointed out to his audience:

Today, you students are being told that by the time you’re my age America and the world will no longer be running on fossil fuels.

Thirty years ago our nation’s leaders told us we were running out of fossil fuels and that our salvation lay in developing alternative energy sources such as solar and wind (and Jimmy Carter’s ill-advised attempts to curb fossil fuels created a major recession). Today, our nation’s leaders are telling us that we are running out of fossil fuels (plus destroying our planet) and that our salvation lies in developing alternative energy sources such as solar and wind.

Same song, different key. Given the fact that the predictions were wrong then, are we going to accept them-and the offered solutions-now? Or are we going to look objectively at the facts before we commit our nation’s resources to yet another alternative energy program.

In the next few blogs, I am going to examine the major energy sources being pushed as alternative to oil, gas and coal-solar, wind, geothermal, biomass (including ethanol), and hydrogen-and look at the pros and cons of both. I’ll examine the relative economic costs of developing the new sources, and examine the possible downside of each. Finally, I’ll look at the possible place each of these alternatives has in our energy future.

It is not my goal to advocate for or against alternative energy sources in general. But it is critically important that we look at the facts so we can make an informed decision based on hard realities instead of speculative prophecies of doom. Otherwise, one of those graduates Rattie spoke to may make a similar commencement speech to the Class of 2042.

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