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FEATURE

Keeping Utah's Energy Portfolio Secure, Robust, and Diversified

Utah enjoys some of the lowest electricity and natural gas prices in the country. The state’s energy sector is hot. Oil and gas exploration and development are booming in the Uinta Basin, the Richfield area, and other parts of the state. And Governor Jon Huntsman’s new energy advisor, Dr. Dianne Nielson, would like to keep it that way. She’d also like to see it diversify.

Nielson, a geologist with a PhD from Dartmouth College, assumed her new role in June after the resignation of Dr. Laura Nelson. Energy security is the mantra, and Nielson is promoting diversification of the state’s energy portfolio with the intent to develop all of Utah’s energy resources.

“We recognize that energy security is a critical issue,” she says. “Our objective is to continue to provide low cost energy, from a diverse base, that will sustain or economy and guarantee future generations will have dependable, affordable energy resources, with the least amount of impacts on the environment.”

It is self evident that oil and gas exploration are booming. Beyond that, Nielson says her office is actively involved with all aspects of energy development and diversification, including the development of renewable energy resources. Biomass and wind generation are promising, she says, and geothermal energy is getting a fresh look. Indeed, a proposal has been made for additional wind generation in Spanish Fork Canyon, and another wind generation system north of Milford. The state has been testing potential for wind generation by placing towers at various locations to collect wind data, and is currently creating wind maps to provide base-level information so that interested commercial concerns can determine if Utah’s wind resources are sufficient to bring them into production.

With regard to geothermal energy, Nielson says the state has also been mapping geothermal potential with the same intent: to provide industry concerns with sites where geothermal resources exist and base-level information for use in energy production analysis. Solar energy also has huge potential in the West, she says, with new technology being developed that promises huge breakthroughs in the costs and maintenance of solar power.

What’s more, Nielson says a number of companies are scrutinizing Utah’s vast reserves of tar sands and oil shale with some confidence that extraction and production can be economically viable. None of this, she cautions, is meant to minimize Utah’s coal production. Coal-fired generation accounts for 95 percent of Utah’s power generation. Nonetheless, there are concerns about the environmental impacts of coal, so a lot of research has gone into possible methods to capture pollutants and create cleaner generation. Nielson says the energy bill before Congress contains funds for the sequestration and capture of greenhouse gases relative to Utah’s coal fired power generation, and she is hopeful the USTAR initiative will spawn cleaner coal generation technology for use within the power industry.

The state’s energy policy also includes provisions for energy efficiency and conservation. With Utah’s hot summers and more homes turning to central air conditioning, the demand for electricity is becoming more and more intense. Nielson says one of Governor Huntsman's top priorities is increasing the energy efficiency of state-owned buildings, reducing overall energy consumption, and saving taxpayer dollars. On April 26, 2006, the Governor released his comprehensive energy efficiency plan "Advancing Energy Efficiency in the State," and the Governor has set a target for the state (public and private sectors) to be 20 percent more efficient in energy us by 2015. “This will being accomplished through the construction and of more energy efficient buildings, more energy conscious retro fits, energy-efficient building codes, and conservation efforts,” she says. The state’s two major energy suppliers, Rocky Mountain Power and Questar Gas, are encouraging customers to conserve energy and improve efficiency by buy energy-efficient appliances. The Western Governor’s Association is also sponsoring a conference July 17 and 18 regarding energy efficiency in building construction, and the Utah Geological Survey is holding workshops to help inspectors at the city and county level understand the new energy efficiency requirements in building codes.

“As you can see,” Nielsen says, “the energy policy involves a lot more than resource exploration and development, but also emphasis on energy efficiency of buildings, reduced costs of operation, and the reuse of energy—that’s the bottom line. What we have realized is that conservation is also critical to the security, dependability and affordability of our energy resources.”

Before her appointment as the Governor’s energy advisor, Nielson served as executive director of the Utah Department of Environmental Quality. Before that, she served as the state’s director of Oil, Gas and Mining, on the Utah Board of Oil, Gas and Mining, and as chief of economic development for the Utah Geological Survey. Nielson hails from Elgin, Illinois, but says the West is a superb place to be a geologist.

Interesting energy facts from the Utah Geological Survey:

• The number of oil and gas drilling permits in Utah reached 2,062 in 2006, over 6 times the number from 1999 (Table 3.3).
• Utah refineries received record amounts of crude oil in 2006, with 20.2% coming from Canada (Table 3.15).
• The value of Utah’s natural gas reached a record high in 2005, even when adjusted for inflation, at more than $2.1 billion (Table 4.16).
• Utah’s average price of residential natural gas in 2005 was only $9.71 per thousand cubic feet, the second lowest in the nation behind Alaska (Table 4.18).
• In 2006, 89.7% of the electricity generated in Utah was from coal-burning power plants (Table 5.12).
• Sales of electricity in Utah increase an average of 4.6% each year (Table 5.19).
• Utah's average price of electricity in 2006 was only 5.99 cents per kwh, the sixth lowest in the nation (Table 5.21).
• Utah is one of only four states to produce electricity from geothermal sources (Table 6.1).

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The EDCUTAH Economic Review is a weekly publication of the Economic Development Corporation of Utah. It is distributed to EDCUTAH partners and selected other government and civic organizations interested in Utah's economic development. If you prefer not to receive this newsletter, please use the link below. Subscribe or Unsubscribe Your comments and suggestions regarding this newsletter are always welcome. Click here: Comments

IN THE NEWS

Economic Development Headlines

Forbes Magazine Ranks Utah #2, CNBC Ranks Utah #3 Among Top Places to do Business

Utah received back to back accolades from two of
the top business media organizations on Wednesday. Forbes Magazine ranked Utah the No. 2 Best State for Business, up from No. 4 last year. At the same time, CNBC rated Utah the No. 3 Best State. Each report recognized Utah’s high quality of life and superior workforce available to business.

Governor Jon Huntsman touted the newest rankings as a continuing trend, “The recognition of our business-friendly climate is evidence of a state on the move. In the long term, a strong economy is the best way to ensure a solid foundation for our future.”

According to the Governor’s Office of Economic Development (GOED), fiscal year 2006 and year-to-date 2007 data shows 28 companies were recruited to the state, resulting in $3 billion in new wages being paid in the
next 10 years to 8,000 new Utah workers. New business capital investment will exceed $2 billion during the same period.

“If market conditions remain strong over the next 10 years, new state tax revenues could grow an additional $4 billion from current economic development initiatives,” said Jason Perry, Executive Director, GOED. “The strong business growth has been helped by
economic incentives and assistance funds available through GOED programs.”

Utah’s job growth continues as the fastest in the nation at 4.5 percent, while the national average is 1.4 percent since January. Combined with its young labor force, among the largest in the country, businesses can expect to find a highly educated and hard working
workforce for decades to come.

Utah has also been recognized as No. 5 for business friendliness by Pollina Corporate Real Estate and the Kauffman Foundation as the No. 1 most
dynamic economy in the country.

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Salt Lake in Top 10 Best Markets for Small Business

- Bizjournals ranks Salt Lake City eighth on its list of the ten best markets for small businesses.(BizJournals) 

Ogden Bounces Back, Edges SLC in Luring Recreation

- The 2002 Winter Olympics had Salt Lake City's name, but the Games' economic legacy may belong to Park City and, suddenly, Ogden. (Salt Lake Tribune) 

Kentucky Company to Introduce Hyatt Place Hotel Brand to SLC

- Corporex Select Service Hotels has purchased 2.8 acres in the Salt Lake International Center where it plans to build a new 123-room Hyatt Place hotel.
(SL Enterprise) 

Work Begins on America-Themed Amusement Park in Lehi

-  Liberty Land Fun Center, an approximately 2.5-acre, USA-themed amusement park, has broken ground in Lehi. (SL Enterprise)

Work to Begin on 185-Acre Mixed Use Development in Pleasant Grove

- The Grove, an approximately 185-acre mixed use project to be located on three of the four quadrants surrounding the new Pleasant Grove I-15 interchange in Utah County is set to begin vertical construction in September. (SL Enterprise)

Former Manufacturing Plant to Become Recreational Center

- Bear Creek Country Kitchens manufacturing plant in Heber City has been sold to a Utah firm that plans to sell the bulk of the facility to Wasatch County for use as a recreational center and to launch a privately held fitness and wellness center next door. (SL Enterprise)

SLCC Biotech Leader Tapped as Science Adviser

- Tamara Goetz has been named as the state's new science adviser, according to the Governor's Office of Economic Development.  (SL Tribune)

Ogden Bounces Back, Edges SLC in Luring Recreation

- The 2002 Winter Olympics had Salt Lake City's name, but the Games' economic legacy may belong to Park City and, suddenly, Ogden. (SL Tribune)

North Ogden Experiencing Flurry of New Retail Stores

- More and more places to shop are starting to dot Washington Boulevard and its subsidiaries in North Ogden. (Standard Examiner)

Cottonwood Mall to Get a New Look

- For Utah residents who don't have either the time or the money to go to Europe, in a few years Europe will come to them in the form of the new Cottonwood Mall.
(Morning News here and here) (SL Tribune)

Mall Dreams Scaled Back

- The plan was to reshape the struggling Valley Fair Mall. Build condos on top of mid-box retailers, stow the parking in an underground terrace and create a walkable gathering place in the midst of a new, transit-oriented city center. But those dreams, like sticker prices on a post-holiday clearance table, have been drastically reduced - to the dismay of city leaders. (SL Tribune)

Developer Promises to Make the Neighborhood "Family Friendly"

- Six months ago, Sugar House businesses like the Blue Boutique, Sugarhouse Coffee and Orion's music got eviction notices. They had until this month to move out and make way for a major development.(KCPW)

County Growth Shared With SL, Weber

- While Davis County is seeing big strides in commercial growth and development, that is being shared with major projects in Salt Lake and Weber counties. (Clipper Today)

Barnes Aerospace to Expand Operations in Ogden, Utah

- Barnes Aerospace, a business segment of Barnes Group Inc., (www.barnesgroupinc.com) announced the expansion of its fabrication operations in Ogden, Utah, with the planned opening of a new state-of-the-art, 120,000-square-foot manufacturing facility to produce precision aerospace components for use in a wide range of aircraft engine and airframe applications.
(American Machinist)

Business Conditions Called Healthy in Utah

- Utah's overall business conditions "soared" from May and indicate strong economic growth in future months, according to survey released Monday by Creighton University. The Utah Business Conditions Index, based on a survey of supply managers and business leaders, rose to 68.2 from 65.4 in May and 67.7 in April. (Morning News) 

Highland Gets Retail Project

- Highland residents soon will have more shopping options beyond Kohler's in their backyard. Highland Marketplace, a new $40 million grocery-anchored retail development, is being built at the northwest corner of Highway 92 and Alpine Highway. (Daily Herald)

County’s Economic Picture is Changing

- Davis County has gotten to be a bigger player along the Wasatch Front in recent years. But even as its population is nearing the 300,000 mark — at 286,000-plus in just-released federal estimates — it being the smallest county geographically, means land is filling up fast. (Clipper Today)

Davis Grows, But its Wages are Shrinking

- Population and jobs are up but wages are down in Davis County, according to a study by the University of Utah Bureau of Economic and Business Research.  (Morning News here and here