Energy execs question regulations
Express concern about effects on price, gas-drilling project
Jon Reimann, a manager at AES Corp.'s coal-fired power plant in the Town of Somerset in Niagara County, is concerned about how a proposed federal cap-and-trade system aimed at reducing greenhouse gas emissions would affect power producers and the price of electricity.
Gary Marchiore, a vice president at Constellation Energy in Amherst, thinks the natural gas-drilling potential of the Marcellus Shale region in northwestern Pennsylvania and the Southern Tier could be an economic boost for the Buffalo Niagara region. But he is worried that environmental and regulatory barriers could hinder its development.
The push and pull between the energy industry and environmental concerns took center stage Monday during a gathering of area energy industry executives arranged by Rep. Chris Lee, R-Clarence.
The trick, Lee said, is finding the happy medium that balances the environmental concerns with the push to make the United States less dependent on foreign oil, while developing domestic energy sources, like the Marcellus Shale, as well as solar and wind energy.
"We have ample resources in this country. The Marcellus Shale is a wonderful example," Lee said.
Environmentalists, however, are concerned that the millions of gallons of water, mixed with sand and chemicals, that drillers use to unlock the natural gas deposits in regions such as the Marcellus Shale could pose a threat to the safety of the water supply.
The state Department of Environmental Conservation last month proposed new regulations on the use of a process, called hydrofracking, that injects 3 million to 5 million gallons of water and chemicals into a well to crack the rock formations and free the natural gas trapped within it.
Energy industry officials have raised concerns that the proposed regulations are too restrictive, while some environmentalists have said the proposed rules don't go far enough. Environmentalists fear that the vast amounts of chemical-laced water would make its way through the watershed and imperil the safety of the water supply.
Marchiore sees the Marcellus Shale as a great economic opportunity for the Buffalo Niagara region, even if the wells themselves will be in the Southern Tier and northwestern Pennsylvania. Local companies could support the drilling activity, including companies like National Fuel Gas Co., which has extensive drilling plans for the region and plans to expand its pipeline network there, as well.
"This is an economic growth engine and proven technology," Marchiore said. "We've got to get out of our own way."
Lee also raised concerns about climate legislation approved in June by the House of Representatives and currently under discussion in the Senate. The proposals, which differ somewhat, aim to reduce U.S. greenhouse gas emissions by 17 percent to 20 percent and would impose a cap-and-trade system that would issue permits for greenhouse gas emissions.
Companies that meet environmental standards could sell permits to companies that are not in compliance, with the government gradually reducing the number of permits to lower the level of emissions allowed.
"We view them more as environmental bills than energy bills," Reimann said. "We really need to understand the impact to the consumer" and the supply of electricity.
Lee criticized the House bill for not encouraging the development of nuclear power, which he believes is the best way for the nation to reduce greenhouse gas emissions.
He also fears that the proposed climate legislation would drive up energy costs and make it more expensive for U.S. manufacturers to operate, driving even more factory jobs to countries, like China, that have less-restrictive environmental laws and already have a cost advantage over American factories.
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