This month Utah Business partnered with Holland & Hart to host a roundtable event featuring energy leaders to discuss energy demands during the pandemic, emerging technologies, and workforce recruitment. Moderated by Brooke Tucker, deputy director of the Utah Governor’s Office of Energy Development, here are a few highlights from the event.
How has COVID-19 impacted the energy industry?
Ed Hatch | VP of Business Strategy | Big West Oil
COVID immediately had a demand hit to our industry. We saw fuel demand down from our refineries’ perspective, which ultimately pushes back into crude oil production and the demand for crude oil. And we watched it go back and forth between what refineries could take and produce for end-user demand versus what crude production companies wanted to actually produce and supply to refineries. We also saw really volatile crude oil prices. Never before had we seen the marker for crude oil go negative on prices, which it did for a day.
Alex Moyes | Director of Geoscience & Engineering | Dominion Energy
We are seeing natural gas demand pick up to where we would expect it to be going into the heating season. One year ago we had about 900 rigs operating in North America. We’re down about 600 rigs in oil in North America right now, and on natural gas, we’re down about 95 from one year ago.
What will be key for a strong economic recovery?
Ed Hatch | VP of Business Strategy | Big West Oil
The sign that we’re watching for in oil [and fuels] production is stability. Oil producers have started to experience stability in oil pricing and that helps them because they can start to make production plans again. I don’t know that we say that we expect everything to go back to how it was. We think that things could be different going forward. There may not be the full demand there was for our product as there was before COVID, we’re watching that closely to see what happens.
How do you see Utah’s and/or the West’s infrastructure changing in the near future?
Jon Cox | VP of Government Affairs | Rocky Mountain Power
It’s too early to tell. When we look at our demand, especially from our larger customers, we have seen a decreased demand in the oil and gas industry. That goes beyond just COVID. There are other issues at play in the global oil and gas market that are impacting the industry.
Jody Williams | Partner | Holland & Hart
I know that Rio Tinto Kennecott has really done a remarkable job in decreasing energy costs with its goal of being carbon neutral by 2050. That’s really profound.
Stephen Sands | Director of Energy Strategy | Rio Tinto Kennecott
I think Dominion Energy may have a similar goal of carbon neutrality by 2050. If you analyze enough alternatives and options, you can actually find solutions that are sensitive to your input costs and then also help achieve carbon reduction. It’s not a trivial undertaking. It’s pretty complicated to actually work through different alternatives. And with some of the price volatility we’ve seen with some of the demand impacts people have been talking about and changes to input costs, sometimes lower energy costs can actually work against trying to get parity with some of these alternative energy solutions.
Alex Moyes | Director of Geoscience & Engineering | Dominion Energy
Our goals by 2030 are to reduce our methane by 65 percent from 2010 levels, 2040 at 80 percent, and being net-zero by 2050. And we’re well on our way with a $500 million deal with Smithfield Foods to capture methane that would otherwise be vented to the atmosphere. So we’re looking at ways of adding more infrastructure, connecting some of these hog farms, dairy farms, and landfills.
The other thing we’ve been spending a lot of time on is really monitoring our infrastructure. We’ve seen some very big developments over the last few years with methane detection technology, whether it’s truck-mounted or aerial, and worked to the point where this technology can actually quantify the emissions of methane coming from our infrastructure. And so we’re able to see it much quicker than we ever have before, get it repaired, and get that line back into service.
Jon Cox | VP of Government Affairs | Rocky Mountain Power
Right now, we are working on finishing up a massive $3.1 billion wind and transmission project that is primarily in Wyoming but will serve our customers in Utah as well. Right now we are in the middle of an RFP in the market on additional resources. The planning process that we released late last fall called for an estimated 3,500 megawatts of new wind generation and associated transmission. And then approximately 3,000 megawatts of new solar as well by 2025. By comparison, the total amount of rooftop solar in the State of Utah is a little over 300 megawatts. So this is a significant amount of energy here.
One thing that we’ve worked on is transmission development. There are projects out there that are well situated, strong renewable projects throughout the rural parts of our state in particular, but you need transmission. It’s the superhighway to the market, so to speak. And so as a key piece of that new development, we anticipate approximately $6 billion of new investment total for transmission.
What emerging technologies are you all most excited about?
Elissa Richards | President | National Energy Foundation
A lot of this education reflects current movements, and one of them is an electric vehicle charging infrastructure and how that’s growing across the state and country. And we have a really, really strong robust electric vehicle program that we’re developing. We’re deploying it this fall. We’re piloting with some utilities across the country, and it’s a primarily middle school, high school. It’s a great education program to let them know what an electric vehicle is, how it works, how it gets charged, and what the electric generation mix is.
Jon Cox | VP of Government Affairs | Rocky Mountain Power
It’s an exciting time in Utah right now for electric vehicles. During the last legislative session, Rep. Lowry Snow sponsored Bill 396 that allows for up to $50 million of investment to go towards electric vehicle charging infrastructure throughout the state. And the intent there is to essentially reduce and eventually eliminate range anxiety for potential electric vehicle drivers so that they could purchase a vehicle and feel comfortable that no matter where they are in the state that they can find a charge and be just fine. That is a significant investment.
Stephen Sands | Director of Energy Strategy | Rio Tinto Kennecott
There are some long-standing programs that both Dominion and Rocky Mountain Power have around the demand side efficiencies and looking at making businesses and residential homes more energy efficient. It can have some air quality benefits as well. Jon and I both sit on the UCAIR board and we’re always trying to make that linkage between energy and the impact on emissions and inversions in the airshed. So I think continued development of LED lighting and other types of efficiency technologies, more efficient natural gas burning equipment that also has the benefit of reducing emissions is really quite important.
Alex Moyes | Director of Geoscience & Engineering | Dominion Energy
Yeah, so I would say one of the things that’s emerging, per se, for much of the tech community with natural gas and oil production, is just managing large amounts of data. We’re seeing a lot more innovative tools and software that let us analyze real-time production from our wells. We’re controlling production set points from our office now, so a lot more of that type of automation. Again, we’ve talked a little bit about what it’s going to take to be competitive and harnessing data and finding those little gems in there that says, “Okay, we can drill a well two days faster than we used to."
What has Utah been doing right with energy education and what gaps do you see?
Elissa Richards | President | National Energy Foundation
Utah is doing a lot of things right. I feel like we were such a resource-rich state and we have the secret sauce in Utah and more of that needs to be shared. It’s not in the curriculum, so it needs to be shared by organizations like us. Anytime you share that information with a teacher, that teacher is a champion and shares that with their students. And I know the state of Utah has partnered and provided a lot of teacher professional development. Because when you train a teacher, you train all of them, and that effects of all the students.
So in high school, and then post-high school, I think the state of Utah really should continue to focus on highlighting the great careers that are in energy. It’s just challenging to get those messages out to students. So we need to continue to try, from whatever perspective our organizations are working from to try to enhance those opportunities.
What does workforce and recruitment look like for your organization right now?
Alex Moyes | Director of Geoscience & Engineering | Dominion Energy
We’re very much looking for students who are educated in STEM backgrounds. Natural gas extraction and delivery are very technical. We’re looking for good engineers and it’s been mentioned, part of the problem is in the K- 12 education. There’s not a lot of education to get the students excited about what it might look like to work in natural gas.
I’m a geologist by background and so whenever I talk to students about “drilling these wells 7,000 feet deep into sandstone, and that sandstone used to be a beach." And that’s something they can relate to. They’re like, “Oh, what do you mean it used to be a beach?" And then I can get into how natural gas is formed and that you have an offshore shell deposit, that’s rich in organics and then it gets buried and it generates hydrocarbon.
Ed Hatch | VP of Business Strategy | Big West Oil
From an oil and gas perspective, especially refining, technical is always a difficult piece to fill. Utah isn’t necessarily the largest refining hub in the US and new students are always excited to be where all the action is, and that action is usually in the Gulf or West coast. And so attracting the right technical talent to Utah for refining is very difficult. We anticipate it will continue to be a difficult thing to face. And as I consider how we improve that going forward, this data is important for students, for people new into the workplace to understand that all of these solutions need to work together in what I view as a big transition phase.
Stephen Sands | Director of Energy Strategy | Rio Tinto Kennecott
I was pleased when Kennecott didn’t cancel their intern programs. We had about 40 interns this past summer and we’ve got an active graduate program where they rotate young graduates, recent graduates every six months across four different assignments. So their first two years, they have four different areas in the operations that they’re working in, operations or technical teams. So there’s some good broadening for building that pipeline for the future workforce.