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THE SHALE REVOLUTION

OKLAHOMA CITY, OK – If the states serve as incubators and laboratories for innovation, one needs to look no farther than Oklahoma for a comprehensive national energy plan.

World-Gen was invited to attend the 2011 Governor’s Energy Conference held in the Cox Convention Center where Governor Mary Fallin unveiled the Oklahoma First Energy Plan.

“Today the nation is undergoing an energy revolution,” Fallin told the 400 delegates. “Unprecedented new supplies of natural gas, a renaissance in oil production, and a newfound ability to economically capture energy from the wind are redefining the energy landscape.”

Her agenda is built around the belief that we must continue to improve, not replace, traditional energy sources like oil and natural gas, and that effective energy policy does not rely on federal subsidies or mandates, but instead allows the private sector to grow and flourish.

She continues to aggressively support the construction of the Keystone XL Pipeline that will link Oklahoma to new markets. The pipeline represents an investment that could result in $1.2 billion in increased business activity in Oklahoma and an increase in personal income of $874 million. Her support of safe hydraulic fracturing is unwavering. Fracking is an essential process to the future of Oklahoma’s energy industry. “Oklahoma companies have been doing it safely for over 60 years. So to show the rest of the nation that fracking is a safe and essential process, I’m asking our policy makers and the energy industry to support public disclosure of chemicals on the Oklahoma-originated website, FracFocus.org,” she pledged.

The Oklahoma City-based Ground Water Protection Council (GWPC), working in conjunction with the Oklahoma Citybased Interstate Oil and Gas Compact Commission developed the nationally acclaimed FracFocus (www. fracfocus.org) voluntary disclosure database for chemicals used in hydraulic fracturing.

Wind
Oklahoma’s wind resources are ranked 8th in the US for wind production. Wind energy provides 3,000 jobs throughout the state and contributes to more than $13 million a year in property tax and land lease payments. In the Panhandle alone, the state could develop more than 8,400mw’s of wind generation capacity, leading to as much as $38 million in land payments and $1.2 billion in wind electricity generation. The Oklahoma Corporation Commission recently approved utility status to Plains and Eastern Clean Line to build 800 miles of HVDC transmission. Between 2020 and 2025, the Southwest Power Pool expects its nine-state region to produce 8,500 mw’s of wind power, with more than half coming from Oklahoma. The US Department of Energy predicts that by 2030, Oklahoma could be the second- largest generator of wind power in the nation. According to the Oklahoma Wind Power Initiative (OWPI). Oklahoma has about 2.3 times more wind energy potential per square mile than Texas. Michael Revak, vice president of Siemens Wind Power Americas’, spoke of Siemens commitment to Oklahoma. Siemens provided 44 SWT-2.3-93 wind turbines to Oklahoma Gas & Electric and the University of Oklahoma for the OU Spirit Wind Farm located near Woodward. Additionally, Siemens supplied 442.3-93 units for the Keenan I farm and 66 SWT- 2.3-101 units to CPV Renewable Energy Company’s 151.8mw Keenan II Wind Farm. Siemens is also providing 95 SWT- 2.3-101 wind turbines and three units of the SWT-3.0-101 direct drive wind turbines for OG&E’s Crossroads Wind Farm located in Dewey County. Siemens announced plans for a new wind service warehousing operations in Woodward. Construction of the two facilities is expected to be completed by the end of 2011. With a total of 64,000 sq. ft., the combined main component, tooling and spare parts facilities will be Siemens’ largest wind power service distribution center in the US, creating up to 40 “greencollar” jobs

NGV’S
Fallin announced a new initiative launched jointly with Governor John Hickenlooper of Colorado designed to increase the use of natural gas vehicles (NGV’s) in state automobile fleets. Other states, including Wyoming and Pennsylvania have also signed onto the agreement. The MOU lays the groundwork for the formation of a Multi-State Request for Proposal, where the states would prepare a formal request to automobile manufacturers to design an NGV and sell it in bulk to participating states.

HB 1909
The Governor’s plan was shepherded by C. Michael Ming, Oklahoma’s Secretary of Energy who was appointed to his first government position by Governor Fallin in January, 2011. Over 200 stakeholders participated in the year-long energy working group. The centerpiece of the First Energy Plan was H.B. 1909, the Shale Reservoir Development Act of 2011 that repealed the 100 year old Oklahoma vertical well case law to adopt advancements in horizontal drilling. John Richels, CEO and president of Devon Energy, called it “The Shale Revolution” in his morning address. There’s been a “geological paradigm shift” and we are no longer chasing structural and stratigraphic traps. Shale gas now represents greater than 25% of domestic supply, with estimates of 100 years of supply. US gas reserves have increased by 55%. Oklahoma produced more than 1.8 trillion cubic feet which accounted for more than 80% of the state’s overall energy production. Oklahomans consumed only one-third, leaving about two-thirds for export. Oklahoma currently boasts nearly 23 Tcf in reserves. Its energy supplies vary slightly from the US average primarily due to the absence of nuclear generation. In 2009, the state produced almost 2.6 quads of energy, ranking the state eighth in terms of total energy production.

R & D OPPORTUNITIES
Both private and public investments in R&D programs play a key role in positioning Oklahoma at the forefront of the emerging energy industry. The US Energy Independence and Security Act requires the production of 35 billion gallons of ethanol by 2022. Nearly half will come from cellulosic feedstocks. Oklahoma can play a key role. If Oklahoma were to dedicate 35% of the farm land in the state to biofuels feedstocks, it could supply the US with as much as 49.5 million tons of switchgrass used to generate these biofuels. The EPA estimates that, by 2022, 85% of the biofuels produced from switchgrass in the US will come from biorefineries located in Oklahoma. At the Oklahoma Bioenergy Center, a consortium between the University of Oklahoma, Oklahoma State University, and the Noble Foundation, researchers specializing in energy and agricultural development are working to advance the next generation of renewable alternatives for petroleum-based transportation fuels. Conservative estimates suggest that the state’s $15.4 million investment into the center has already resulted in an economic development impact of nearly $97 million. In 2011, through a project made possible by the Oklahoma Bioenergy Center, researchers at the Samuel Roberts Noble Foundation uncovered a gene responsible for controlling the growth density of plant material. The discovery, termed “biomass densification,” has been heralded as a key advancement in biomass feedstock research.