Presentation to the UPMRA 2012 Convention and Trade Show August 16, 2012

1. Presentation to the UPMRA2012 Convention and Trade ShowAugust 16, 2012 Cody Stewart Energy Advisor Governor Gary Herbert

2. Why I Love My Job • JOB DESCRIPTION: Promote and Increase energy production in the state of Utah. • Create energy independence for the US and help drive down prices. • Energy is Hot • One of four cornerstones of Governor Herbert’s Administration • Major initiative as Chairman of the Western Governor’s Association.

3. ENERGY – Lifeblood of the economy and to modern society “There is no substitute for energy. The whole edifice of modern society is built upon it…It is not “just another commodity” but the precondition of all commodities, a basic factor equal with air, water, and earth.”E. F. Schumacher, 1973

4. Governor Herbert’s Priorities Energy Education Economic Development Self-Determination Utah is Four Cornerstones Strong “No other state can offer what Utah can. We are uniquely positioned in the Western Energy Corridor. Utah has a rich abundance of diverse natural resources, both in terms of traditional fuels, and renewable and alternative energies.” ~Governor Gary R. Herbert

5. Office of Energy Development • Created in 2011 by H.B. 475 • Operating for approximately 500 days • Promote Energy Development • Single point of contact • Development of all energy resources • Shape and implement policy • Assists industry and citizens • Streamline processes with state and federal agencies

6. Utah Office of Energy Goals • Meet Projected Energy Growth Demands • Over the Next Decade • Ensure Continued Economic Development • Through Access to Our Own Energy • Develop New Cutting-Edge Technologies • Particularly Utilization of Natural Resources • Create New & Support Existing Manufacturing • Job Opportunities in Utah • Modernize Regulatory Environment • For Power Generation, Transmission & Conservation

7. Utah Office of Energy Goals (cont.) • Promote Energy Efficiency • Conservation and Peak Consumption Reductions • Facilitate Responsible Development • Traditional, Unconventional & Renewable • Pursue Opportunities to Export Fuel • Electricity and Technologies – Regional & Global • Enhance Relationship Integration • Industry, Universities, Government & Communities • Collaborate with Other Western States • Unified Voice for Federal Agencies & Public Lands

8. Western Governor’s Association (WGA) • Governor Herbert 2012 WGA Energy Initiative 1) Energy Education 2) Regional Plan for Energy Independence 3) Transmission Issues 4) Energy Efficiency 5) Alternative Fuels

9. High Gas Prices • What the public thinks

10. Utah Prices vs. National Average

11. US Gas Prices by State (8-14-12)

12. Gas Prices in Utah Oil Production Refiners = Lower Gas Prices

13. Utah Energy Use - 1960 to 2010

14. Utah Energy: Doing Alright • Utah ranks as the 15th largest producer of coal • Utah ranks as the 12th largest producer in crude oil • Utah ranks as the 8th largest procuder in natural gas

15. Need for Basic Energy Education • Renewable Energy • More than half of Americans cannot identify one specific type of renewable energy • Fossil Fuel • Nearly 40% cannot identify a specific fossil fuel • We need your help educating the public!

16. Western Governor’s Association (WGA) • Governor Herbert 2012 WGA Energy Initiative 1) Energy Education 2) Regional Plan for Energy Independence 3) Transmission Issues 4) Energy Efficiency 5) Alternative Fuels

17. The Campaign Against Oil

18. U.S. ENERGY CONSUMPTION

19. The Myths of Energy Shortages

20. No More Oil? “...Hurry, before this wonderful product is depleted from Nature’s laboratory!” advertisement for “Kier’s Rock Oil”, 1855 (four years before the first U.S. oil well was drilled) “...the peak of [U.S.] production will soon be passed -- possibly within three years. David White, Chief Geologist, USGS, 1919 “Past...prophecies of “reserves running out” have been notoriously erroneous, but finite resources have by definition a finite existence. Perceptions of impending shortfall will cast a shadow forward, well into the period between now and 2020.“ World Energy Council, Energy for Tomorrow's World, 1993

21. No More Natural Gas? “The U.S. is running out of natural gas—production is declining and demand growing—so the expectation is that the import levels will go from 3 percent today to about 24 percent in 2020.” Paul Hanrahan, CEO of AES Power, Jan. 2007

22. No More Coal? “Peak coal looks like it’s occurred in the lower 48.” David Hughes, Geologist for the Geological Survey of Canada, 2007 “Study: World’s ‘Peak Coal’ Moment Has Arrived” New York Times, Sept. 2010

23. America’s Energy Riches The United States is Energy RichBut How Rich? • The U.S. is the world’s #1 natural gas producer • The U.S. has 110 years of natural gas • The U.S. is the world’s #2 coal producer • The U.S. has over 450 years of coal • The U.S. is the world’s #3 oil producer • The U.S. has over 200 years of oil

24. North American Oil vs. World Oil Source: Institute for Energy Research, North American Energy Inventory

26. Technically Recoverable Oil Resources Can fuel every passenger car in the U. S. for 430 years Can fuel all oil demand in the U.S. for 250 years at current usage rates Contains almost twice as much oil as the proved reserves of all the OPEC nations Contains more than 6 times the proved reserves of Saudi Arabia

27. The United States is energy rich, but policy poor A recent Wood Mackenzie study found that accessing U.S. oil and natural gas currently off-limits could create more than 500,000 new jobs and generate $150 billion in new government revenue by 2025. In Utah, more sensible oil and gas energy policies could result in at least 26,000 created by 2015 and nearly 50,000 jobs created by 2020. This would mean an average of $255 million of new revenue to the state every year through 2030.

28. Resources Blocked

29. Federal Lands of the United States This map illustrates lands within the United States that are in federal or tribal ownership. State Boundaries Federal Lands *Includes tribal ownership. Land ownership data from ESRI Federal and Tribal Land shapefile available at http://www.baruch.cuny.edu/geoportal/data/esri/esri_usa.htm. Meant for visual illustration purposes only. Not an official map. Produced March 2012, GOPB.

31. Federally Owned United States This map illustrates how the United States might appear if states were condensed to include only lands that are in federal ownership.* Portion of State Federally Owned Actual Land Area *Based on percent of land in federal or tribal ownership compared to total land area. Land ownership data from ESRI Federal and Tribal Land shapefile available at http://www.baruch.cuny.edu/geoportal/data/esri/esri_usa.htm. Land area calculated using industry-standard Geographic Information System (GIS) software. Meant for visual illustration purposes only. Not an official map. Produced March 2012, GOPB.

32. A balanced approach to federal lands? This map illustrates how the United States might appear if the states were condensed to only include federally owned lands.* *Includes tribal ownership. Land ownership data from ESRI Federal and Tribal Land shapefile available at http://www.baruch.cuny.edu/geoportal/data/esri/esri_usa.htm. Meant for visual illustration purposes only. Not an official map. Produced March 2012, GOPB.

34. Why my Job (Title) is a Farce

35. Projected Coordinate System: USA_Contiguous_Albers_Equal_Area_Conic_USGS_version

36. Juan Palma, Utah Director of the Bureau of Land ManagementControls 42% of Utah land

37. Utah Governor Gary HerbertControls 31% of Utah land

38. Final Note “…over the long run, societies that expand and improve their energy supplies overwhelm those that don’t. The paramount objective of US energy policy should be to promote abundant supplies of cheap energy and to facilitate their distribution and consumption.”Peter Huber and Mark Mills, 2005