2012 Energy Summit

by Governor Gary R. Herbert

A few months ago, I had the opportunity to visit the site at Camp Williams where the National Security Agency is building its first Comprehensive National Cyber-security Initiative (CNCI) Data Center – which will be called, simply, the Utah Data Center when it is complete.

TheUtahDataCenteris a nearly $2 billion investment in our country’s national security infrastructure.  Thousands of local construction workers have been engaged to build this 1.5 million square foot facility.  You could fit 10 Cabela’s stores inside a 1.5 million square foot building, just to give you some perspective.

It is the first facility in the world expected to gather and house a yottabyte – or one thousand trillion gigabytes – of data.  More importantly, the Utah Data Center will also house up to 200 high-paying jobs. Utah was picked over 37 other locations to house the data center.

Utah’s technology infrastructure, its transportation infrastructure, and its industrious, highly-educated, and bi-lingual workforce were all identified as reasons why Utah prevailed in the fierce competition to house the NSA data center.  However, perhaps the most significant factor in the NSA’s choice was the cost and availability of electricity.  As one NSA official put it,Utahoffered “an abundant availability of low-cost power.”

The Utah Data Center will require an estimated 65 megawatts of electricity for its operations – enough electricity to power 40,000 homes or the nearby city of Riverton. One expert estimated that the NSA could end up spending up to 95% less on electricity in Utah than if it had built the data center at the NSA headquarters compound in Maryland.

Even if the NSA were willing to pay Maryland’s high electricity rates, it was unlikely that Marylandcould have provided the needed power in any case. The Baltimore Sun began reporting all the way back in 2006 that Maryland utility companies were having trouble keeping up with the NSA’s power demands.

With the Utah Data Center, our “abundant availability of low-cost power” has brought billions of dollars of investment, thousands of jobs, and millions in ongoing revenues to our state. The Utah Data Center is a dramatic example of the direct, tangible benefits which Utah’s energy supplies bring to our state – but it is hardly the only example.

Utah’s stable and affordable energy gives us a major competitive advantage over other states, and is one of the major reasons companies are choosing to relocate and expand in our state. Last November, Forbes ranked Utah as the best state for business for the second consecutive year.

Forbes specifically mentioned Utah’s energy costs – an impressive 31 percent below the national average – as one of the major factors in our repeated number one ranking. In order to protect Utah’s energy advantage, we must secure our supply of stable, low-cost energy, and we must do it now!

My administration is aggressively promoting responsible energy development in Utah. Last year, I released Utah’s first 10-Year Strategic Energy Plan.  To create my Energy Plan, I brought together a task force of the best and brightest minds from industry, academia, government, and advocacy groups.

This diverse group of stakeholders was tasked with creating a framework to secure our energy independence. The plan they created is not a static document, doomed to live on a shelf, but is designed to evolve with time.  It is, however, also a document which has action items which we are already implementing, and goals which we are on our way to achieving. And, in order to ensure that we stay on track, my Energy Task Force – many members of which are here with us today – continues to meet and to guide the implementation of our plan recommendations.

I would like to touch briefly on a few of the plan recommendations which we are currently pursuing.  First is to develop a strategy to keep public lands open for responsible energy development.

One of the major challenges for energy development is that many of Utah’s natural resources must be extracted from federally-managed public lands. While we have made some progress in persuading the federal government to site and permit oil and gas wells, there remain great challenges ahead.

This is evidenced by the fact that, just a week-and-a-half ago, bureaucrats from the Department of Interior took nearly 1.8 million acres of Bureau of Land Management land off the table for oil shale and tar sands development. The BLM director said it wants to encourage “research and development” first – and I am as big a fan as anyone of R&D.

What the BLM is really doing, however, is asking industry to invest millions of dollars of their hard-earned capital to develop a resource which the BLM itself might never make available. The oil shale and tar sands in Utah, Wyoming, and Colorado have the potential to be one of the greatest energy resources in the world.

In his last State of the Union address, President Obama called for greater development of our domestic energy resources.  How that is to be accomplished when energy producers are shut down and shut out by bureaucratic fiat remains unclear. We have demonstrated – in the Uintah Basin and elsewhere – that developing our energy resources and being good stewards of the environment are not mutually exclusive propositions.

We cannot – and we will not – let the federal government halt responsible energy development in Utah. I will continue to work with our Congressional delegation, our Legislature, and my fellow Governors to fight for our rightful access toUtah’s energy resources.

Another recommendation of my 10-Year Strategic Energy Plan is to enhance technology advancement. Because we owe it to our children and their children, we must innovate safer and cleaner ways to extract our natural resources and utilize energy. As Governor, I am calling on the private sector and our major universities to lead out. Our goal is to create an “energy research triangle” that launches Utah into a new era of energy technology innovation.

I have often said that Utah’s greatest natural resource is its people. I firmly believe that no state has a spirit of innovation or a culture of industry to match Utah. Hence, Utah will be the incubator of technologies which will allow us to extract, conserve, and produce energy in a more efficient, safe, and environmentally-friendly way than we ever have before.

We are already seeing commercially-viable energy technologies emerge from our research universities and from our public-private partnerships.  Some of those technologies are already making a difference both here at home and in countries around the world. Securing our energy future means that not only will Utah continue to be in position to export energy, but Utah will also be poised to export homegrown energy technology.

A third plan recommendation is to reduce energy consumption statewide.  As noted in my plan, energy efficiency is our cheapest and most readily-available resource. Utah is already making progress in our energy-efficiency efforts. We were recently recognized by the American Council for an Energy-Efficient Economy (ACEEE) as one of the “most-improved” states in the nation, and the highest-ranked state in the region.

Promoting reduced energy consumption also helps with one of the major challenges we have with energy development in our state – the issue of air quality. We cannot control the weather, but neither can we ignore the human and economic consequences of poor air quality.

Just over two weeks ago, I announced Utah’s first statewide air quality initiative – the Utah Clean Air Partnership or U-CAIR. U-CAIR will bring together government, business, and households on a voluntary basis to set achievable and vital air quality goals. The simple message of U-CAIR is this: Everyone can do something to improve Utah’s air. And one of the simplest things everyone can do is to reduce their energy consumption.  Reduced energy consumption leads to reduced demand for energy production and reduced emissions.

Another way we can reduce our emissions and improve our air quality is, of course, to increase the use of alternative and renewable energy resources. I believe that we would be short-sighted and foolish not to explore the possibilities and potential which alternative and renewable resources present. And, in fact, we have wind, solar, hydroelectric, and geothermal resources currently functioning and producing energy in Utah.

However, I also believe that all solutions and opportunities must be based on the principles or free markets and free enterprise. We cannot continue our energy independence – not secure our energy future – on the back of technologies which cannot compete without taxpayer subsidies and which have not solved the problems of intermittency and storage.

Again, I believe thatUtah’s human resources will lead the way to unlock the potential of alternative and renewable resources to compete in the free and open market through continued research and innovation.

To conclude, I want to issue both some commendations and some challenges. First, I want to commend you – those here in this audience and those who you represent – for your contributions to our state.

  • There are over 16,400 people who are directly employed in energy jobs in Utah.
  • Those energy jobs pay, on average, 191% of the state average wage.
  •  There are over 800 energy firms currently doing business in Utah.
  • 2.5percent of Utah’s total wages are from energy jobs.

Last fiscal year, direct revenues to the state from the energy sector totaled more than $267,500,000 – money which was used to fund critical needs like education, transportation, and human services. The energy sector is a vital part of our state’s economy, and a vital part of the lives of Utahns in so many ways. Thank you.

I would also like to leave you with three challenges:

  1. Use your collective and individual influence to advocate for responsible energy resource development in our state.I have committed to doing everything in my power to fight for Utah’s right to responsibly develop our natural resources, and I ask you to join me in that fight.
  2. Promote policies and practices for improved air quality. I invite each of you to become a U-CAIR partner – and to encourage your friends, businesses, industry groups, and local governments – to become U-CAIR partners.  As I mentioned, everyone can do something to improve Utah’s air. You can find more information on the U-CAIR program at ucair.utah.gov
  3. Aggressively pursue technology innovations in energy efficiency and development. Some of you in this audience are doing research to develop those technology innovations.  Some are funding that research. All of us can create a demand for those technology innovations through our individual and collective actions. The choices we make in the free market will either create the demand which will fuel the technology innovations of tomorrow, or will reinforce the status quo and put us on a path of diminishing returns and decline.

I am optimistic aboutUtah’s future.  I am confident that, by working together, we can preserveUtah’s competitive advantage now and into the future. By doing so, we can also preserve Utah as the best state for business in America, and create opportunity and prosperity for Utah’s citizens

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