Day 2 - Energy
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President Bradley Woods
Joe Ronan - Calpine
Sr. VP Government and Regulatory Affairs
Jan Smutny-Jones - IEPA
Germán Loperena - EAEC
North America Energy Market Overview
Dan Ripp spoke about the dramatic change in the pace of the regulation in the United States since 2005. He also mentioned many of the current trends in energy such as an increase in petroleum production, and an emphasis on renewable fuels. Energy production from renewable sources has risen 72% in the past ten years, showing its importance in the energy market. Throughout his presentation, Ripp really stressed the significance of America’s energy independence and how it will continue to impact the future of the American economy.
Dan Ripp, recreated his company’s research product to focus on the specific investment implications of US federal government policy and geopolitics. After taking the helm at Bradley Woods, Mr. Ripp redefined the firm’s client purview to include investment managers, corporate clients, and other professionals with a financial stake in the nation’s policy outcomes. Drawing on years of international experience, he provides insight into the various policy approaches different governments take, with regard to energy production and consumption.
“American energy independence is what’s driving in large part the American energy sector. It’s an aspect of our culture. It impacts the political climate, which in turn impacts the ability for the sector to keep experiencing its growth.” – Dan Ripp
Panel on Energy Production in the United States
Ronan began his presentation by giving an overview of Calpine’s, mentioning that it operates the largest single renewable geothermal power resource in the world. His presentation though, focused mainly on energy production in Texas. He touched on the four trends he thought were relevant to today’s energy sector. The first trend he spoke about was decrease in gas prices. Because of Marcellus Shale, gas prices have dropped significantly, which has also affected electricity prices for consumers in the US. The second trend he mentioned was an increase in environmental regulation, stating that the Environmental Protection Agency (EPA) has been cracking down on greenhouse gas emissions. Third is the economy, which has been down for several years, but is now in recovery.
Smutny-Jones spoke about opportunities in California energy. He mentioned that California is the most populated state in the United States and has become the eighth largest economy in the world. The statewide energy consumption reached about 280,000 GWh in 2012, making it one of the largest energy consumers. Of the power being consumed, approximately 70% of it is being produced within the State of California, while the other 30% is imported. With so much energy consumption, California has turned its focus towards increasing renewable energy and becoming a more energy efficient state. He also mentioned that California’s energy growth is being driven mainly by climate change, which creates many opportunities for investors. Some of these opportunities include developing/building renewable energy projects, renewable integration products, new gas plants, distribution generation, enhancing transmission system, marketing demand response projects, and several others.
Smutny-Jones has represented Independent Energy Producers (IEP) since 1987, and has been a pivotal player in the California restructuring efforts, market reform and global climate change policy.
Opportunities in Natural Gas in Pennsylvania and the Northeast United States
D’Amico - President of the Pennsylvania Ind. Oil & Gas Producers Association – spoke about the opportunities for investment in Pennsylvania and the United States as a whole. Of the 350,000 vertical wells that have been drilled in Pennsylvania, about 100,000 of those remain in production today. The Marcellus Shale formation rests about a mile below the earth’s surface and stretches over approximately 95,000 square miles. In comparison to the largest oil field in the world (Saudi Arabia), Marcellus and Utica could exceed those reserves.
D’Amico stated that the Marcellus Shale has become the largest producing natural gas field in the United States and still continues to grow. Natural gas is the cleanest burning fossil fuel, emitting 30% less CO2 than oil and 45% less than coal. With the conversion of coal fired electric generation to natural gas, the United States has been able to reduce greenhouse gas emmissions by 450 million tons.
D’Amico said that the United States is very welcoming to international investment, the US is a stable and safe destination for international business, and that Pennsylvania, in particular, offers many investment opportunities in shale development and beyond. He also mentioned how easy it is for European companies to acquire land in order to start developing and drilling without involvement of US companies, facilitating the opportunity.
“Because of the low price of natural gas, and what we see as a continued low price of natural gas, we are going to have a competitive edge over much of the world in energy supply and cost.” – Louis D’Amico