Platts Energy Week Exclusive: U.S. Energy Secretary Moniz Backs Fracking, Exports and Coal Shift
Washington - July 1, 2013
The Obama administration is not waging a "war on coal," as many congressional Republicans and industry representatives argued recently, but rather ushering in a new era for the fossil fuel, said U.S. Energy Secretary Ernest Moniz on Platts Energy Week in his first TV interview since taking the post.
But coal's future in the U.S. energy mix will largely depend on the much-maligned industry's ability to evolve with new limits on carbon pollution and U.S. Department of Energy's (DOE) ability to develop lower-cost technologies to capture and store CO2, Moniz said on Platts Energy Week, an all-energy news and talk show program.
"Going forward, there are still opportunities for higher efficiency with coal, and we all expect, the president expects, that coal is going to remain a substantial contributor for some time," Moniz said.
The in-depth interview came the same week that President Barack Obama announced the details of his long-awaited plan to combat climate change. That plan calls for new greenhouse-gas emissions standards predicted to severely hamper domestic coal use.
Moniz's statements on coal during the interview will likely do little to quell industry criticism as the secretary blamed the commodity's recent downturn squarely on market forces, rather than Obama policies.
"Clearly there have been a whole bunch of coal plants that have closed, and that's been market forces," he said. "It goes back to the natural gas availability and relatively low prices."
But Moniz did seem to align himself more with other widely held energy-industry views, indicating that he was working to approve pending applications to export liquefied natural gas (LNG) to new markets as quickly as possible, and even indicating a preference to leave regulation of hydraulic fracturing to states, rather than federal officials.
"I think in the end there has to be a very, very strong state role there," Moniz said. "The situations are different in different states, the geologies are different."
Moniz downplayed environmental concerns over fracking, claiming that incidents, such as methane leakages, are "relatively small" when compared to the number of wells being drilled.
"I think the issues in terms of the environmental footprint of hydraulic fracturing are manageable," he said. "They're challenging, but manageable."
On LNG exports, Moniz indicated many of the pending applications to export to countries with which the U.S. does not have free trade agreements (FTA) could be ruled on shortly.
"We're getting to the point now, I think, of beginning to look case by case at the applications, and I expect to handle those expeditiously, and I've made very clear I expect to reach a number of decisions in this calendar year," he said.
However, he cautioned that even if the DOE grants an application to ship LNG to a non-FTA country in the near term, it could be years before LNG finds its way into those markets. Additional reviews by the U.S. Federal Energy Regulatory Commission are expected to take at least two years, while financing agreements and contract negotiations may further delay full U.S. entry into the global gas market.
"A license given today does mean that exports will start tomorrow," Moniz said.
During the interview, Moniz also reaffirmed his support for nuclear power, referring to it as a "zero-carbon tool in addressing climate change."
However, he said the future of the U.S. nuclear industry will depend on how the construction of new nuclear reactors in Georgia and South Carolina progresses.
"We need to know, in the United States, what does it cost, can it meet schedule. ... We will know when we build these new plants," he said. "That will inform the marketplace, utilities, the investors, the equipment manufacturers, what's the reality. I think that will probably be the most important factor in terms of the trajectory of nuclear power."
The full Moniz interview may be viewed here.
During Sunday’s “Market Spotlight” segment, Andrew Moore, transportation editor for Platts Coal Trader, explained why the Western Canadian ports that have historically provided shipping points for U.S. coal exports to Asia are becoming less available with new Canadian coal mines coming online.
Platts Energy Week airs at 7:30 a.m. U.S. Eastern time Sunday mornings on W*USA TV 9 in greater Washington, D.C., in Houston at 1:30 p.m. U.S. Central time on KUHT HoustonPBS (Channel 8), at 3:30 p.m. CT on San Antonio, Texas’ PBS-KLRN, and in North Carolina at 5:30 p.m. ET on North CarolinaPBS (digital channel UNC-MX). The program also airs Tuesdays at 6:00 p.m. ET in North Carolina on PBS (digital channel UNC-MX), and is available on other PBS stations throughout the United States. For online viewing, the program is accessible at www.plattsenergyweektv.com.
The program follows an interview format featuring guests from the energy industry Obama administration, Congress, government agencies, think tanks, and the investment community. Host Bill Loveless is the long-time editor of Platts’ Inside Energy and brings nearly three decades of energy journalism experience to the anchor chair.
Platts Energy Week is produced by Platts, the world’s leading source of information and intelligence on energy and related commodities and a division of The McGraw-Hill Companies [NYSE: MHP], and W*USA-TV, the Washington, D.C., CBS affiliate and flagship television station of Gannett Company. [NYSE: GCI]. While the program is US focused and produced in Washington, it reflects the global vantage point of Platts, whose correspondents are stationed in such major capitals as London, Dubai, Singapore, Tokyo and Moscow.
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