Is the Energy Market a Zero Sum Game Where Various Sources "Go Negative" in Order to Capture Market Share from Competitors?

During the past few days, I have spent several hours watching videos recorded during the Rocky Mountain Energy Epicenter 2010. That conference was jointly sponsored by the Colorado Oil and Gas Association and the Rocky Mountain Association of Geologists. The videos have fascinated me; they provide support for my theory that activism and legislative efforts to hamstring various energy sources can be best understood by viewing them as battles over market share.

I never did find a really good “smoking gun” example in which someone described their battles against nuclear power plants as a way to sell more natural gas. Colorado does not have any operating nuclear power plants – perhaps that explains why that particular elephant in the room was never mentioned during the several hours of conference proceedings available on the web.

I found an excellent example of one company’s decision to fight coal fired power plants in at least five different states as part of its natural gas marketing strategy. Thomas L. Price, the Senior Vice President for Corporate Development & Government Relations for Chesapeake Energy described that strategy. Here are excerpts from his talk.

This is an exceptional opportunity for us to talk about the benefits of partnerships. We have actually been involved in a number of these effort to try to stop the expansion of coal plants around the country. We began actually about four years ago in Texas where we developed a campaign called “Coal is Filthy.” It was a real subtle and very much appreciated campaign in Appalachia and Wyoming. (Audience chuckles)
. . .
We were able in Texas to stop the building of more than a dozen new coal plants and we got involved in Oklahoma and rolled out a program called “Know your power.” Again, it was pretty much Chesapeake and an alliance that we put together there. We did the same in Kansas and stopped a plant from being expanded. We got involved in Arkansas and then we saw that, thank goodness, we had an opportunity to come to Colorado and there were already existing partnerships that had been developed and all we had to do was provide a little bit of financial support and some of the various SWAT team members that we have as a part of our group. 

We’ve got about 125 rigs active across the country. It’s been said before, but the demand side of the equation is extremely important right now. I mean this really is a zero sum game. I think that there are certainly a number of very progressive utilities out there that recognize the challenges that they are facing not only from climate change but also the Transport Rule, the Clean Air Act and various others.
. . .
When I developed this department many years ago, we decided that we were going to get out early and try to be as proactive as possible. I’ve got about a hundred people in the department now. What they do is get out in advance and meet with people who are stakeholders in communities. Talk with them and engage try to understand what their concerns are.

During the same panel discussion, I heard about the long term coalition building efforts that resulted in a successful two week press in which the state legislature debated and passed the Colorado Clean Air – Clean Jobs Bill. Martha Rudolph, the Executive Director of the Colorado Department of Public Health and Environment proudly described the efforts and the stern task masters that put the groups together and told them they could not leave until they came up with an agreement.

Some people have accused me of being “conspiracy theorist” when I describe how powerful people work together to get things accomplished that suit their interests; please watch the video and listen to Ms. Rudolph. She does a much better job that I do in making it clear how movers and shakers get things done in closed door meetings. (Ms. Rudolph’s talk starts just a few minutes after the introduction; she is the first speaker. )

Unfortunately, I have failed in my attempt to clip the specific sections of the video out so that I could share them with you without you having to watch the entire session. Here is the link to the
Colorado Clean Air – Clean Jobs Act Panel.

If you have lots of free time, I highly recommend a visit to the Energy Epicenter 2010 web site where you can also find a video of a luncheon speech by Robert F. Kennedy, Jr. and a strategy talk by former Senator Tim Wirth, who was following up on a similar talk provided at last year’s COGA conference.

If you click on the links and do not find any videos, I apologize. If that happens, I hope it means that someone figured out that there were some people who were using the inside views as a way to understand what is really happening in the current push to convince Americans that there is an abundance of natural gas and that it really is clean enough.

Update: (posted at 8:44 pm on October 5, 2010) One of my favorite commenters asked a great question. She was confused by the nature of the politics in the discussion because she knows that Colorado also has a coal mining industry. Interestingly enough, there was an audience comment at the very end of the panel discussion that brought up that very point. Here is a quote from that audience participant.

My name is Craig Meis. I am a Mesa County Commissioner, also Club 20 Board of Directors. 

I want to provide just a touch of a west slope perspective to the conversation because I appreciate the conversation that you are having here. One of the things that you’ve talked about is whether it (the Colorado Clean Air – Clean Jobs Act) is transferable or how it relates to other areas and how it might move. I hope that one of the lessons learned through this process which could be gained here today is by expanding the tent. What Ms. Rudolph talked about. From the standpoint of especially those of us in Western Colorado, I have to say would have very much liked to have been a part of that tent discussion.

We appreciate that front range has air quality issues to address. I hope that front range also appreciates that we have 10% unemployment on the Western Slope. We fully support clean air, clean environment, clean jobs.

We also like to HAVE jobs. Needless to say northwest Colorado is blessed with abundant natural resources being coal, being natural gas, being uranium, many others. Water, we can all talk about water here as well. But we would hope that future discussion would expand that tent to include these local areas which are blessed with both of these natural resources.

And I have to tell you, I think the bottom line is that we could have achieved the same outcome without making a mortal enemy out of a brother in the coal industry as well as those of us in local government in these areas that are not going to have to try to deal with some of the potential job layoffs as a result.

Moderator: Thanks for the comment.

(Otherwise, nervous silence from the panel.)