Power Engineering - Paper advocates market-driven energy policies

OKLAHOMA CITY, April 25, 2002 -- National and state governments would benefit from removing subsidies to the energy sources of coal, oil, natural gas and nuclear, deregulate energy markets and apply environmental standards fairly, a new report states.

Robert A. Hefner III, Owner and Managing Partner of The GHK Company, a private natural gas exploration and production firm, issued the report Thursday.

The report, "Energy and the U.S. Marketplace: Toward Environmentally Sustainable Economic Growth," analyzes the long-term negative effects in the energy marketplace that were a result of well intended but flawed government interventions.

The report shows how interventions, enacted in the 1950's through 1970's, particularly the Fuel Use Act of 1978, recarbonized our economy by pushing us away from cleaner natural gas toward more environmentally polluting coal.

The report asserts: "Had the Fuel Use Act never existed and two-thirds of the coal-fired electric generating capacity added since 1979 been fueled instead by natural gas, U.S. CO2 emissions would have been reduced by over one billion metric tons. America would be producing about 4% less CO2 annually and would already be on its way to meeting Kyoto emissions targets. And, we would have done so without government intervention, legislation or excessive financial burdens to any sector of our economy."

America's energy history demonstrates that energy substitution occurs over the long term and that the energy marketplace has always tended to decarbonize by choosing cleaner and more efficient fuels, but that as a result of a series of government interventions (1950's - 1970's), our energy system was recarbonized over the ensuing 30 years.

"Unfortunately, in today's proposed energy bills, the big winner is coal," Hefner said. "If passed, it appears that coal once again will receive multibillions of dollars in taxpayer subsidies and, coupled with the proposed relaxation of clean air and water standards, these policies will add decades of life to the most polluting coal generation facilities. America's energy systems will once again for decades be recarbonized and set back environmentally. Conversely, without these new government interventions, the marketplace will continue to choose natural gas, because natural gas is environmentally superior to coal in every way, is economically affordable without taxpayer subsidies, is globally abundant and, unlike oil, is geographically diversified," Hefner maintained.

Robert A. Hefner III is Owner and Managing Partner of The GHK Company, a private natural gas exploration and production firm with offices in Oklahoma City. Hefner appeared 18 times before Congressional committees testifying on energy matters in the 1970's and 1980's and was influential in bringing about constructive changes in Federal policy related to natural gas pricing and deregulation.

The GHK Company, founded by Hefner in 1959, is known for its pioneering deep, high pressure natural gas development in the Anadarko Basin of Oklahoma, where the company led the industry in technological innovation to successfully drill and produce many of the world's deepest and highest pressure natural gas wells and the 1997 discovery of a large natural gas field -- the Potato Hills field -- in the Ouachita overthrust of southeastern Oklahoma.

Additionally, Hefner is Chairman of the Board and CEO of Seven Seas Petroleum Inc., a publicly traded (Amex: SEV - news) oil and natural gas exploration and production company with offices in Houston, Texas and international operations in Columbia.

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