This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
In its Tuesday editorial, The Salt Lake Tribune questioned whether the state of Utah should focus on the continued development of "waxy" crude in the Uinta Basin. Here is why it is important to have a discussion about this key energy resource.
In the last decade of the 20th century, global car sales averaged about 39 million per year. Just over a decade later, in 2013, global car sales had more than doubled, reaching 82.8 million. While electric vehicle market is growing at a respectable pace, the vast majority of vehicles sold in coming decades will be gasoline-fueled vehicles. Gasoline, diesel and jet fuel account for about 80 percent of the end-use of a typical barrel of oil, the other 20 percent of which is used to create a great deal of other products (plastics, cosmetics, synthetic rubber, medicine, cleaning products, synthetic fabrics), none of which promises to see reduced use in the coming years as the global population continues to grow by 70 million people per year.
In contrast, over the course of the past decade newspaper circulation has fallen 17 percent, and revenue has fallen more than 50 percent, leading to a flurry of consolidations and layoffs. The result is an understandable decline in many essential elements of news reporting. This situation sometimes leads to a decline in substantive reporting, with fact-based articles taking on the aura of opinion pieces, and opinion pieces sometimes reading like emotional Facebook posts. The Tribune's April 18 editorial titled "Utah should not count on a future built on waxy crude" is an example of the change in newspaper industry.
There is a certain irony that a business struggling in decline is expounding on how to manage the growth of a critical resource that helps to enable our state's economic well being.
While the popular dialogue regarding our energy resources can be contentious (and often naive), experts employed by oil companies and renewable energy groups alike have long agreed that a diverse energy portfolio is as important to energy reliability and affordability as it is to overall economic opportunity. Utah's leadership, recognizing the importance of energy and economic diversity, has taken concrete steps to support all forms of energy production, with an emphasis on renewables.
Just as conventional energy resources, including paraffinic or "waxy" crudes, are subject to commodity price variations and regulatory challenges, renewable resources are also subject to the same market and policy ebbs and flows, not to mention the fundamental challenge of their intermittency. Given these cycles and impediments for the entire energy industry, the federal government, and state governments like Utah, provide a variety of types of support including tax incentives, public-private partnerships, research funding, and the occasional symposium or "workshop."
And to further correct the record, the April 14th "Waxy Crude Workshop" was sponsored by two other state agencies, not by the Governor's Office of Energy Development, as suggested by Tuesday's editorial. The office was, however, proud to provide content and logistical support for the important event. Speakers at the workshop educated us on Utah's crude oil resource, making it clear that technically all crude is "waxy" crude (crude oil is composed of anywhere from 15-60 percent paraffin/wax, by weight). Utah's resource is more on the "paraffinic" end of the spectrum.
In other words, waxy crude is not a marginal or boutique resource. It is the resource that has elevated the Uinta Basin economy and fueled our vehicles along the Wasatch Front for generations. Speakers also highlighted the logistical challenges of transporting Utah's high-value paraffinic crude oil, discussed new technological and infrastructural options, and envisioned a future with new market opportunities. How to strengthen and sustain one of the state's most important industries was the positive content of the event.
Oil and gas production and refining accounts for approximately 12 percent of the state's GDP, and rural communities like Duchesne, Roosevelt and Vernal have played a critical role in delivering resources and vital funds to the state. We are enthusiastic in our support for these industries and the communities in which they operate, and at this challenging time for commodity markets we are committed to partnering however possible to ensure a robust and sustainable economic and environmental future for the state's citizens.
Dr. Laura Nelson is executive director in the Governor's Office of Energy Development.