Energy Policy:

Utah official Nelson says clean coal technology not definite for Frontier Line project

In an attempt to help California meet its energy demands, several Western states have joined together to help connect the energy-rich Rocky Mountain West to The Golden State. During today's OnPoint, Laura Nelson, energy policy adviser to Utah Gov. Jon Huntsman (R), addresses environmental concerns associated with the Frontier Line. She explains that much of the project, including its primary clean-power technology, is still in the development stages. Nelson also talks about how the Frontier Line will benefit the state of Utah.

Transcript

Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Dr. Laura Nelson, energy policy adviser to Governor Huntsman of Utah. Laura thanks for joining me.

Laura Nelson: Thanks for having me Monica.

Monica Trauzzi: I wanted to first start out by getting a basic overview of the Frontier Line Project. What is it and who's involved?

Laura Nelson: Sure, excellent question. The Frontier Line Project really came about as the result of a vision of the four governors of Utah, Nevada, Wyoming and California, in recognition that there is a need for additional transmission in the West. But a vision that we could plan and get transmission done differently than we have in the past. That we could have major regional infrastructure developments that could deliver benefits across a wide swath in the region, in particular, these four states in this case. And that's different than the way transmission has traditionally been built. Traditionally local utilities looking to serve local loads have simply built transmission to connect a specific generation project to meet the demand in their area. And the difficulty with that is twofold. One is that transmission is difficult to site. And so when you've got several individual utilities out there working piecemeal you've got all of that broken up and so it becomes much more complex. Additionally you don't get access to as many remote resources, which might be lower cost that could deliver specific benefits to your customers in the terms of lower priced energy. So it was very visionary. It came about as political support for this type of effort, this type of endeavor for planning and development of a regional infrastructure project. And right now we are at the point where we're doing a feasibility study for the project.

Monica Trauzzi: And you're in town testifying before Congress about Western power grids. What are you looking to achieve in front of Congress? And how are you hoping that legislators will respond to what you have to say?

Laura Nelson: Well there were two main things I would say from my perspective today. One was to give them more information on the Frontier Line, to answer questions that they have about the Frontier Line. And also, as you noted, to talk about how they can help. The Energy Policy Act, which was passed in 2005, I think, has really helped support a lot of our efforts, a lot of our initiatives. Part of that was section 368, which was the designation of energy corridors across federal lands. We think that having greater certainty around siting, which this process potentially could provide, is beneficial in the sense that it sends a better signal to developers who are interested in designing and developing this project. And also I think, from an environmental perspective, there's a lot of benefits to that if you can specifically identify where the potential corridors will be. And as you get down to various projects, you'll work on the granularity. But you can have a better idea about what types of mitigation you would need to do to preserve the environment. So the economics, the development and the environment don't have to be mutually exclusive. And the greater certainty you have the more aligned you can make the interests and balance those.

Monica Trauzzi: The project will greatly benefit California. What's the net benefit for Utah? What's in it for you guys?

Laura Nelson: Another really good question. We have, in the last few years, added more gas-fired generation because we are in a transmission capacity constrained bubble, so to speak. And so natural gas-fired generation can, one, be built quickly and, secondly, it can be sited very close to load. And we're entering a phase where you simply, because natural gas prices are going up and you're also running out of places where you can site facilities close to load, you have to look for more remote options and you need transmission to do it. And so Utah is in a position where we really need additional transmission. Also there are benefits from accessing resources outside of the state and also providing opportunities to develop and export resources within the state. And that includes a vast array of renewable resources. Utah has a lot more wind potential I think than we have historically understood and I think than many others have understood. And one thing that my governor has said is that he really looks at this project as being a renewable development enabling project. In fact it is, in my estimation, the largest clean energy enabling infrastructure project ever proposed.

Monica Trauzzi: But one of the major technologies that would be used would be the clean coal technology. It's pretty complicated and cutting edge. Is it really feasible that it can be done on a large scale?

Laura Nelson: If you're referring to the integrated gasification combined cycle, I think that's the question that we're looking to answer. Right now you certainly have those that are selling the product, so to speak, supporting that, yes, this can be done on a large scale. But we haven't seen any. There are a couple of very small plants around the country, under 300 megawatts, which is a fairly small facility. And we're looking at one large scale plant, 500 megawatts or larger and to some extent at high altitudes in the West. And those things are untested. And so what you need is you need the technology, in terms of the transmission, there that can support, I should say the infrastructure there that can support bringing that technology along. And so I think once the transmission is in place we're more likely to see some of those gasification facilities get constructed because it's going to reduce some of the risk that there's a load in which that power can be delivered.

Monica Trauzzi: Along those lines, Governor Freudenthal of Wyoming was quoted as saying, "Near zero emissions is just not realistic. We'd all like that, but it's like saying I'd like to have a teenager I don't have problems with." So it doesn't really sound like there's much hope and much promise for having this clean technology that has zero emissions.

Laura Nelson: Well I'm not familiar with that particular quote by Governor Freudenthal and I certainly don't want to guess what he was saying there, but let me just give you a little insight. I think that there is real potential here to greatly change our emissions profile. As you bring more renewables on that can in fact displace some old generation that might be adding pollution that you otherwise wouldn't want, but you've got to run the plants to meet the load. If you can get new cleaner resources on, and coal is probably going to be part of that and how people define clean coal varies from state to state, but if you can get new cleaner facilities on, if you can get more renewables on I think that there is an incredible opportunity here to actually improve our emissions profile and improve our greenhouse gas profile.

Monica Trauzzi: There are many environmentalists that are strongly opposing the project saying it could damage air quality and water for the next 50 years. Are you at all concerned that you could be damaging one of the most pristine areas of the United States?

Laura Nelson: In Utah our fundamental goal is to balance what I call the three E's; economy, environment and energy development. We need energy. Fundamentally we need it to support our economy. It's critical to our way of life. We saw what happened last year. If we just look at natural gas, when natural gas prices went up last year it was really the low income populations that suffered. And energy prices are going up. And so to assist those and provide a better future in terms of prices we need energy development. But it doesn't mean you do it at all costs. You have to take into consideration what the environmental impacts are and we will do everything that we can to mitigate those. And we think that in the West we're pretty good at it. We've gotten very, very good at mitigating environmental impacts from energy development.

Monica Trauzzi: I wanted to touch a bit about Montana's involvement in the project and some things that Governor Brian Schweitzer has said. He's really been lobbying hard for Montana to be included in the project. And he's basically said that they're either going to be part of it or they're going to be competitors of it. And he has spoken about running electricity through the northern route and he could probably get that to California much faster than the Frontier Line could. Do you see this as a threat to the project? How is this playing into things?

Laura Nelson: You know, I think that to the extent that the Frontier Line has fostered so much interest in transmission development in the West is incredibly positive. And I think that there are a lot of complementary opportunities out there. And I definitely think that opportunities in Montana can be very complimentary to what we're trying to accomplish with the Frontier Line.

Monica Trauzzi: The project now lies in the hands of seven major utilities and they're basically saying that, or they're basically studying the financing behind it and whether this program is actually really necessary. So how much of the future of the Frontier Line lies in the hands of these seven utilities?

Laura Nelson: Well, the agreement that we entered into with the seven utilities was that they would do a feasibility study. So they'll look of course at the engineering aspects, which I think for the most part people, we can build it. I mean we've got the capability to build it. But what are the benefits? Are there really benefits from building this type of project? Well our governors believed that, yes, there are benefits and you have to look at that from the global perspective in terms of the states that are involved. But they've also invited in utilities from Arizona and from New Mexico with the recognition that the benefits of this type of project could expand to other high-growth load centers in the West. So brought them in and so taking that regional perspective, but also looking locally, what are the delivered benefits within each state? And that, I think, is ultimately going to determine how this project gets constructed as we move into the next phase, which will be the financial planning phase.

Monica Trauzzi: I wanted to switch gears quickly and talk about nuclear energy. Governor Huntsman has strong opinions about the storage of nuclear energy in his state. What is his opinion about that and what is he doing about it?

Laura Nelson: Well, I think I'll just defer to what you've probably read, which is that he is concerned about storage in the state when the state didn't directly benefit from the production of the nuclear power. If I had to categorize it another way and in my own terms is that it's very difficult when you look at the massive transportation involved and the risk involved in storage. We don't fully understand yet. Shouldn't it be, for now, that the nuclear waste is stored where it's produced? And hypothetically, if, let's say, Utah developed a nuclear power plant, and I'll just note that I'm actually required to study that under our legislation, what is the potential for Utah to have a nuclear facility? We would look at storage on-site at the facility. That would be my recommendation. So those are my words. I don't want to speak for the governor since he's not here. I think that his arguments have been made and people have read those.

Monica Trauzzi: OK. We are out of time.

Laura Nelson: OK.

Monica Trauzzi: Thanks for joining us.

Laura Nelson: Thanks Monica.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

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