Up in the air
Enterprise Reporter Juliana Keeping, far right, joins the energy chat to talk about her climb to the top of a wind turbine.
The Oklahoman’s energy reporters, Adam Wilmoth and Paul Monies, were joined by Enterprise Reporter Juliana Keeping on Tuesday for the monthly energy chat. This is an abridged transcript of that conversation. To see the full transcript, or to participate in next month’s energy chat, go to NewsOK.com.
Keeping: I’m here because I climbed 262 vertical feet to get to the top of a wind turbine. I paid with my sweat. On the climb, I got a glimpse of what life is like for wind technicians, the caretakers of our turbines. (Note: The article was in the July 2 newspaper.)
Q: Juliana, do you feel like the wind techs appreciate the largesse heaped upon them by the state’s and nation’s taxpayers? Or are they completely oblivious to this ongoing boondoggle?
Keeping: The techs and I didn’t talk tax credits. Did I sense they were happy to have steady labor jobs in a growing industry? Yep.
Monies: We can go round and round on the merits of tax policy, but these wind farms cost on average $300 million to $400 million to build. On the state side, lawmakers ended the zero-emissions tax credit for new wind projects July 1, although those projects qualifying before that will still be able to take the credit for up to 10 years. The federal production tax credit is more generous but will be phased out by 2020. Q: What real impacts are being felt in the energy
industry with Scott Pruitt at the EPA?
Monies: I think there’s some optimism from the oil and gas sector and the utility industry that EPA will take a breather on writing new regulations. Right or wrong, there was at least the perception that the Obama administration had gone too far in putting new regulations out there for greenhouse gases that went beyond the law. That said, Pruitt has already had some legal setbacks in turning back Obama-era rules, and those lawsuits won’t stop.
Q: Are there new wind farm projects still starting or current projects still moving forward?
Monies: I think the new project pipeline for wind is slowing down in Oklahoma. Developers have plenty of potential sites put together, but in talking privately with some in the industry, they note the posture of the Legislature. Lawmakers in the past couple of sessions have curtailed the incentives for wind projects, including getting rid of the 5-year property tax exemption for wind and putting an early sunset on the zeroemissions tax credit. The industry can just as easily build projects in Kansas and Texas, so I think some developers are taking a wait-and-see approach to what might happen in the next legislative session.
Q: What’s going on with oil prices?
Wilmoth: At the first of the year, many in the industry expected — or at least hoped — that prices would gradually increase throughout the year. Instead, they have slowly declined. Because companies have continued to cut costs, most say they can still be profitable at today’s price of about $46 a barrel, although Continental Resources CEO Harold Hamm this week said the industry would have to cut back on drilling if the price dropped below $40.
Oil demand has been strong so far this year, but the problem continues to be that the industry has gotten too good at producing oil. OPEC, Russia and other large producers have tried to boost prices by cutting back on production, but U.S. production has continued to grow. We should get a better picture over the next few weeks about how energy executives are feeling. The major integrated oil companies are scheduled to release their second-quarter earnings later this month, and the state’s largest publicly traded oil companies are set to release their information in the first week of August.