DOE’s Gant: Shifting Energy Policy to Stewardship of Abundance

July 2015, Vol. 242, No. 7

Richard Nemec, Contributing Editor

Although we are already 15 years deep into the 21st century and women working at the top rungs of professional life no longer turn heads, when it comes to the “hard” numbers-crunching parts in the global economy – science, technology, engineering and mathematics (STEM) – women still get asked why they selected this way to earn a buck.

This same question is occasionally put to Paula Gant, holder of a doctorate degree in economics and the deputy assistant secretary for oil and natural gas in the federal Department of Energy’s (DOE) Office of Fossil Energy.

But once a listener hears Gant’s answer they know right away she chose the right line of work. “Technology generates progress; energy powers our quality of life, and technology provides for the transformational advances that propel our standard of living. What is there not to be excited about in being part of [STEM]?” Gant responded in a DOE website post.

“Transformational” is exactly the descriptor Gant uses for the U.S. energy landscape in 2015, and she is convinced a collaborative effort between industry and government at all levels can help boost the health of the nation’s economy, security and environment. An impossible dream? Gant believes not.

Since assuming her oil/natural gas position at DOE in September 2013, the former university professor, Duke Energy executive and staff professional at the American Gas Association (AGA) has continued to try to make sense of the fast-changing U.S. energy sector as it has transformed from a mindset of scarcity and uncertainty to a new-found age of abundance and economic growth. At the same time, she has tempered the natural enthusiasm generated by the oil and natural gas sector’s technology advances surrounding hydraulic fracturing, horizontal drilling and the unlocking of shale, with the need to protect the environment in the process.

While praising the work of the DOE National Energy Technology Laboratory in studying six hydraulically fractured, horizontal shale gas wells in the prolific Marcellus play in Pennsylvania that showed no groundwater impacts, Gant also cautioned in a writing that it was still important to recognize that “the results of the study are not the final word on surface impacts from [fracking] operations. But the findings are consistent with prior observations about fracturing operations related to Marcellus development…”

This scientific and political balance is the strength Gant has brought to the Obama administration’s DOE, which in the nation’s capital always experiences an uneasy relationship with Capitol Hill, while enjoying good working relationships with the industry and other federal agencies whose missions overlap, such as the Department of the Interior and the Environmental Protection Agency (EPA).

For some close observers of the national energy scene the global oil price crash entering 2015 was likely to color everything related to U.S. energy policies and activities. While offering consumers a respite at the gasoline pump, conventional wisdom says it will make the life of energy policymakers that much more difficult.

Gant doesn’t necessarily buy into conventional wisdom. She is convinced market developments will trump global and domestic politics that arise in the wake of a more than 50% nosedive in the price of oil and its economic consequences around the world.

“The most powerful drivers are market forces,” she said. “They are dominant here and continue to be driven by our technology and ability to develop that technology and refine it to outstrip our imagination.”

Gant sees the market and technology as the prime drivers for fossil fuel development in the United States. “But we’ll need to continue to demonstrate to the public we can develop these resources in a responsible and safe manner,” she added.

During her first months with DOE, Gant immersed herself in the field, searching out DOE and private-sector researchers who are quietly making a difference in the energy world, not unlike four decades ago when the Office of Fossil Energy collaborated with a guy named George Mitchell and others in the oil patch to upgrade fracking and horizontal drilling to a level that ushered in North America’s shale revolution.

She remembered finding collaborative, constructive relationships ongoing among industry, state, international and academic research partners tied to DOE, and specifically the Fossil Energy Division. At the time, the COO at the national technology lab opened her eyes to work in and around Houston that left a lasting impression.

“The oil and natural gas employees I met, whether industry or government, ran the gamut, from young women engineers to senior men with years in the industry,” she recalled later in a presentation to a DOE group. “But they all shared a common denominator – pride in what they are doing. These are researchers and project developers who are making a real difference.”

Although major environmental groups criticized her appointment, characterizing Gant as too close to the oil and gas industry, she puts nearly all of her comments in energy, economic and environmental consequences, and the need for balance. Nevertheless, groups such as the anti-fracking Food and Water Watch allege Gant can’t be an objective policymaker.

“Any energy outlook anywhere in the world realizes that we are going to be using hydrocarbons for decades to come, and therefore, we have a strong, vested interest in ensuring we are producing them in a prudent fashion,” Gant said. “That means two things – we’re producing the resources efficiently, and we’re minimizing the impacts on other natural resources, such as air, water and the communities in which these resources are developed.”

Gant sees the need to ensure resources are developed efficiently and in the cleanest ways possible, along with efforts to maximize the efficiency of energy consumption, whether through fuel economy standards for cars or home appliance standards.

Although her critics and citizens with no ties to the energy industry may not appreciate it, Gant thinks the nation’s energy highways – the natural gas and electric grids – need equal attention with supply-demand considerations. The economy and the environment will suffer if the nation does not update infrastructure with the latest technology, Gant readily points out.

“We need to ensure that our [gas and electric] transmission systems are modernized,” Gant said. “We need to make sure we have a 21st century energy delivery infrastructure. It is needed for a 21st century economy – whether it is the electric grid or the transmission pipeline network.”

Gant is a vocal advocate for more investment in the nation’s pipeline infrastructure, recognizing that part of “the great American story of our abundance” is not just about “great rocks,” but also about the nation’s world-class pipeline and storage infrastructure system.

“We have a very robust pipeline network in this country that allows us to move those resources where we need them. Combined with our rocks and engineering, it all makes us the envy of the world,” she said. “We need to make sure we are making the investment to expand and modernize the system.”

At the start of 2015, the administration issued its broad methane plans for the oil and natural gas industry to reduce emissions from new and modified sources by 40-45% below 2012 levels by 2025. The plan touched several federal agencies and could be interpreted by some sectors as another layer of unwanted regulation. But in some quarters it is seen as an avenue for continuing fossil fuel use, particularly natural gas, albeit with stricter controls of emissions.

Gant’s former colleagues at AGA initially reacted with a litany of the industry’s voluntary efforts in reigning in methane emissions, citing a 22% drop in overall emissions in utility distribution systems since 1990, during which the industry added over 600,000 miles of distribution pipelines. Total natural gas customers rose by 17.5 million during that time, AGA pointed out.

The Interstate Natural Gas Association of America (INGAA) decided to “reserve judgment” on the White House plan, noting as AGA did that considerable voluntary industry work is already being done, counting a 94% reduction of the number of leaks along its members’ interstate transmission pipeline during the past three years in which heightened attention has been paid to pipeline integrity and maintenance programs.

INGAA CEO Don Santa cited his members’ ongoing development and refinement of Directed Inspection and Maintenance (DI&M) guidelines. He said they are “a well-established and EPA-recognized tool for detecting and mitigating leaks in a cost-effective manner.”

Gant said the Obama methane program that was still taking shape earlier thi0s year has spawned multiple programs, such as the ones DOE is working on with the Federal Energy Regulatory Commission (FERC), the national association of state regulators (NARUC) and with the Pipeline Hazardous Materials and Safety Administration (PHMSA) in the DOT.

“This is where [my office] plays a role because we have a new R&D program focused on the infrastructure piece, targeting operational efficiency and reducing methane emissions in terms of technologies for remotely detecting and measuring leaks,” Gant told P&GJ.

“There are a lot of technologies that detect the emissions, but the challenge for everyone centers on remote measurement,” she said. “This aspect allows for the prioritization of the work, and we’re looking for the right technology pathway there.”

Gant said the second piece of the infrastructure methane puzzle is finding alternatives to having to blow down pipelines [hydrostatic test] to complete inspection and repair work. Hydrostatic tests are a major source of methane emissions, she noted.

“The industry has told us if we can develop a way to do it without having to evacuate the pipe to do the testing, we’re eliminating a very large source of methane emissions. So we’re focusing on the technology piece where we can help the understanding of the efficacy of what’s out there,” she said.

“Pipelines are in the business of keeping gas in the pipe, so [DOE is] very well aligned here. For the federal government, it is a question of how we move technology along so it gives operators better information in a timelier manner that they can use to make better decisions about where they are allocating capital and their work crews. They’re already spending money on these things every day, so how do we help them get more out of their money, and understand how the practices to deploy new technology can be improved?”

The methane initiative prompts broader questions for officials like Gant about: (a) DOE’s appropriate role longer term in fostering technology advancements; (b) whether markets or politics will dictate future energy policy; and (c) what are the remaining impacts of the administration’s energy agenda likely to be? Rather than shy away, Gant embraces these areas of discussion.

DOE does the basic science type research, and it does research on pre-commercialization of processes and products, said Gant, citing the Mitchell-DOE partnering in 1978. Basic research can be on materials and processes, she said. When the economic drivers are not completely aligned, DOE, working with the industry, can do the work needed to make technology marketable, according to Gant.

An example of what she sees as DOE’s ideal role is found in the futuristic look today at methane hydrates, ice-like solid compounds that form at low temperature and high pressure and are found in sea-floor sediments and the arctic permafrost. DOE, the state of Alaska and Japan are collaborating on basic research using onshore hydrates in Alaska.

“There is still a lot to be understood about the location and behavior of the resource in trying to produce it before we are even close to commercializing it,” said Gant, noting this is a potential global resource looking two or three decades into the future.

Most recently, DOE sent a $41 million grant to the University of Texas-Austin, as part of a $58 million research effort studying methane hydrates under the Gulf of Mexico (GOM). In addition to the UT Institute for Geophysics, researchers from Ohio State University, Columbia University, the Consortium for Ocean Leadership and the U.S. Geological Survey are participating in this DOE-backed research effort. Researchers are looking to unravel an in-depth understanding of hydrate bearing, fine-grained sediments and whether they have the potential some think for hydrate-based gas production.

Gant said she thinks this has the potential to be the world’s next massive shale play. “The exciting thing is that methane hydrates are found practically all over the planet. This could have some astounding impacts on some of our biggest trade partners, such as Japan.” She said this is an example of the basic science role for DOE as opposed to its pre-commercial projects.

To the question of markets vs. politics in driving future U.S. and other nations’ energy policy, Gant unabashedly sides with markets. “The market forces are dominant here and they continue to be driven by our technology and our ability to develop that technology and refine it to outstrip our imagination.”

Gant is unworried that perceived heavy-handedness by some of the federal environmental agencies championing the president’s climate change initiative might prevent the ultimate fulfillment of the administration’s legacy in gas and oil. Where the focus is science, DOE has partnerships with EPA, BLM, USGS and others, she noted. They’re all using the same playbook, she claimed.

Supporters and skeptics alike will have to wait several years to decide what the legacy turns out to actually resemble. Paula Gant is ever the optimist about what eventually will be revealed.

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