SNAPSHOTS: 60 Seconds… With Larry V. Parman, Secretary, Oklahoma Department Of Commerce
By the Business Facilities Staff
From the January/February 2014 issue
BF: Oklahoma has launched 20%x2020, an initiative to reduce energy consumption in state buildings by 20 percent by 2020. How will it work?
LP: The first step is that departments across all Oklahoma government agencies will review their assets and operations, including policies and behaviors, to identify possible savings and areas where costs can be reduced and existing resources recycled and repurposed. Second, metrics will be created so agencies can establish base-line performance, set target goals and measure progress. Third, agencies will designate energy managers who will be responsible for monitoring the program. The managers will be trained to identify and implement behavior-based energy efficiency initiatives within their agencies. Finally, the state has hired a firm to assist with training, planning, and the roll-out of the program.
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RIDING THE WIND
The temporary loosening of eligibility rules on federal tax credits for wind power projects spurred billions of dollars worth of new wind-power investments in a series of year-end project announcements.
Before last year, utilities had to make sure their projects commenced commercial operation by Dec. 31 in order to trigger a federal tax credit (PTC) worth 2.3 cents a kilowatt-hour for the first 10 years of production. A temporary fix as part of a 2012 budget deal made projects eligible upon signing of an agreement before the end of 2013.
Among the mega-deals announced as the deadline approached were a $1.9-billion project by MidAmerican Energy, an Iowa-based utility, and the long-awaited Cape Wind project in Nantucket Sound. Siemens AG will supply 448 giant turbines (with the capacity to generate 1,050 megawatts of power) as part of largest economic development project in Iowa’s history. On Dec. 23, Siemens and developer Energy Management Inc. announced a deal on the Cape Wind project, which will erect 130 turbines in Nantucket Sound. We wish we could tell you this good news will continue. Unfortunately, Congress did not act on another extension for the PTC, which expired on Jan. 1.
BF: Macy’s is putting a national distribution center in Tulsa, creating 1,500 new jobs. Is Oklahoma a major logistics/distribution hub?
LP: Oklahoma is a major logistics/distribution hub and the Macy’s decision to locate here only added to that portfolio. Oklahoma has many infrastructure assets serving each mode of transportation (road, water, air, rail and pipeline) that help our existing distribution companies thrive. These capabilities are the basis for why a distribution/logistics company should consider locating in Oklahoma. For example, Oklahoma is America’s trucking hub, at the crossroads of 3 major interstates: I-44, I-40, and I-35. Fed Ex, UPS, Melton, and Yellow all have hubs in the state. In addition to ground/trucking, we have an excellent proposition in air, rail, water, and pipeline distribution including 3 major airports, two with 9,800 ft. runways; one with a 7,800 ft. runway. Oklahoma is served by three Class 1 Railroads—UP, BNSF and Kansas City Southern—utilizing over 2,500 miles of Class 1 rail lines and over 3,700 total miles of rail.
BF: The energy revolution driven by breakthroughs in horizontal drilling (fracking) is spurring economic development efforts in several states. Will new sources of low-cost energy yield new growth in Oklahoma?
LP: Oklahoma is at the forefront of this new energy revolution in America (and) many of the technologies for horizontal drilling were pioneered in Oklahoma. Oklahoma is home to a number of major energy players—including Devon Energy, Chesapeake Energy, Sandridge, Baker Hughes and Continental Resources—and GE has decided to locate its Oil and Gas Global Research Center in Oklahoma City. Natural gas and low energy costs will fuel growth and inward investment from industries that have high energy needs and that use components of natural gas as part of their manufacturing process. We expect to see significant growth in our data centers, manufacturing, and processing sectors. We also expect our exports to rise in pipes and valves, and more foreign direct investment from companies who want to leverage our low energy costs.
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