A conversation with Winston Porter

10/28/2012 12:00 AM

08/08/2014 10:12 AM

Winston Porter likes to talk energy.

He is a consultant who will speak to the Wichita Downtown Rotary on Monday on his favorite topic: America’s energy now and in the future.

Porter, 74, has consulted on energy and environmental issues for more than two decades since leaving as assistant administrator of the U.S. Environmental Protection Agency, where he ran the Superfund program in the Reagan and first Bush administrations. Before that he was head of the environmental department of global construction giant Bechtel Corp.

How big a deal is the surge in U.S. oil and gas production from horizontal drilling and fracking?

There is no silver bullet, but the nearest thing is shale natural gas. That is the real game changer. Although I can’t guarantee what’s going to happen in 20 years, it looks like manna from heaven. The biggest concern on fracking is the management of water. It takes several million gallons of water and a bunch of chemicals to frack a well. Some environmentalists say we should just stop doing it. And some people are getting a little exercised by the impact on infrastructure, the roads and such. My own view is the price of (natural) gas in this country has fallen from $10-12 per million BTUs to $3 per million BTUs in a period of a few years. That’s a 70 to 80 percent drop and that’s really significant. We have found a way to produce gas that we haven’t before. I’ve seen estimates that we have 100 years worth of gas using this technique. We have to make it work. Managing the water is not rocket science.

But what about the environmental concerns about fracking?

The chemicals are pretty benign. What people get nervous about is when you can’t tell them what’s going on. It needs to be a little more than self-reporting, but there is room for disagreement among rational people. The regulations should require a fair amount of information on the chemicals. And I don’t want to say exactly how it should it be done, but some states have said they can be reported to regulators, but not made public.

What about oil and the increase in U.S. production?

Oil is still a very key fuel. It’s 95 percent of our transportation fuel and what’s happening in the near term is we are producing a lot more oil. We may pass Saudi Arabia in the amount of barrels we produce in a day, so we will be in good shape in oil. But it’s a world price and that means prices here won’t go down like they have with (natural) gas. We are going to keep churning along with petroleum, and hopefully we’ll see a lot more coming from Canada. But the price and how much we import or export will depend on the markets at the moment.

What will be the impact of the Obama administration’s big push to increase car fuel efficiency?

I think it will have some impact. But as you get to 40 to 50 miles per gallon, the improvement is not as great as moving from 10 to 20 mpg or 20 to 30 mpg. Each increment you go up gets more and more expensive. And as you go higher, you get lighter cars, and there will be some safety issues. And I don’t want to have to drive a tiny car. It’s kind of amazing to me that this whole thing, the move up to 50 mpg, happened without more debate. I guess it happened when he had all that support in Congress.

Won’t the price of natural gas rise again pretty soon?

I think you will see liquefied natural gas plants start being reconfigured from importing to exporting, and the gas prices will come up some. And you will see the prices rise if you run vehicles on natural gas. The more demand there is for it, the more likely prices are to rise. But it won’t go back to $10 to $12 like it was a few years ago.

What is the future of coal?

Shale gas is replacing a lot of coal in power plants, and we’re seeing, maybe, a 15 to 20 percent drop in coal use and a commensurate increase in gas the last three to four years. What happened is the law of unintended consequences. On the good side, air emissions are going down quite a bit as you trade coal for gas … It used to produce about half our electricity, but it’s now down to about 35 percent. Coal people have had two body blows. The first is that it has always been the least expensive energy source, and that’s not true with the price of gas where it is. And the second is that there are quite a few EPA regulations on the books or are being discussed for coal. These tend to be things that are very, very hard on coal. The latest thing I’ve seen is we will retire about 10 percent of our coal power plants in the next four or five years, where they’ll either be shut down completely or mothballed. The other thing is that a lot of coal is now being exported. China is building a power plant every two or three weeks. So, that’s another example of the law of unintended consequences. Environmentalists have forced a lot of exporting of coal to countries where they don’t do as good a job of controlling emissions as we do.

What is the future of nuclear?

In Georgia there are two plants under construction, and there are two planned next door in South Carolina, so it’s creeping ahead. I think there will be a very moderate rate of growth in nuclear in the U.S. But there is a powerful anti-nuclear movement. And Germany is phasing out nuclear, and the Japanese would like to keep the nuclear they’ve got and not grow it.

What about renewable sources?

Where wind is 1 to 2 percent now, there are some projections that it will double or triple in the next 10 to 20 years, but it won’t be the kind of thing that will solve our power problems. I don’t think it can compete with coal- or gas-fired power plants. One the problems with wind and solar plants is they don’t have a high operating factor. Solar can’t run at night, obviously. Wind and shale gas can work together. You have to have some backup to wind because it doesn’t blow all the time.

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