Patrick Sullivan Says State Can Have a Global Energy Impact

Patrick Sullivan Says State Can Have a Global Energy Impact

Mississippi Business Journal conducted a Q&A with MEI President Patrick Sullivan in their June 28, 2013 issue.

Patrick Sullivan is president of the Mississippi Energy Institute in Jackson, an energy policy and research and development hub dedicated to helping Mississippi compete in the global energy sector. The institute was founded in 2009 under the Mississippi Economic Council, but is now a standalone, privately funded business. Its mission is to develop policies and strategies to encourage more energy production and attract energy-related investment in the state.

Q — What kind of work does MEI do on the energy policy side?

A — Since energy directly affects the economy, jobs growth and quality of life, our work is focused on finding ways to not only encourage production of more energy locally but to use our energy strengths to leverage economic opportunities in Mississippi. Part of this is monitoring the global energy sector to ensure Mississippi’s business policy environment remains competitive and forward thinking.

A key task is establishing contact and developing relationships with key energy players outside of the state to market Mississippi’s strengths and receptiveness to energy related-investment. On the policy and strategy side, we believe the most important part is identifying realistic opportunities. So much in energy is extremely capital-intensive with long lead times for development, and the full value chain is extensive. Understanding the parts and technologies that potentially meld with Mississippi’s assets is important.

The energy economy is largely a global one, and the amount of additional energy required to supply large developing economies like China and India over the next several decades is staggering. So not only do we need to be thinking about our own energy security, but we need to consider how Mississippi can benefit by supplying national and global energy demands. This could be exporting, manufacturing, technology development or all. The objective is to understand Mississippi’s unique characteristics and advantages to determine achievable targets for development.

Q — Is there a particular type of fuel used to make energy (coal, natural gas, etc.) that holds particular promise for the state?

A — From a development perspective, we should talk about energy in three categories – electric power, transportation fuels and heating. Electric power comes from a mix of fuels, and almost all in Mississippi comes from either natural gas, coal or nuclear. All are cost effective and scalable, and maintaining a mix of these in electric power is important for long-term stability. Virtually all transportation fuels in Mississippi come from oil, and natural gas makes up most heating fuels, with propane gas used for heat in many rural areas.

A major strength for the state is in our infrastructure, notably pipeline infrastructure. According to America’s Natural Gas Alliance, Mississippi has more volume of natural gas flowing through the state than any other state. While oil and natural gas production adds many quality jobs to the state economy, Mississippi actually uses more oil and natural gas than is produced. Production is limited by geology. Our supply strength is in our infrastructure and transportability.

Another unique, fuel-related strength worth mentioning is utilization of carbon dioxide for oil production. With an extensive pipeline system, Mississippi is at the center of one of only two enhanced oil recovery regions in the U.S. This industry alone has boosted oil production and related employment in Mississippi over the last decade and continues to grow. Carbon dioxide is regularly talked about as a liability, but in Mississippi, it’s an asset-adding value.

Long-term (two to three decades), I see enormous opportunities for Mississippi in the nuclear power industry if U.S. nuclear power policy is improved. Much of these opportunities will be about public perception, and so far, Mississippians have understood the economic benefits and good record of energy projects and have been receptive.

Q — What is Mississippi’s current role in the race to produce more energy?

A — Mississippi is an energy producing state as a net exporter of refined petroleum products (thanks to Chevron Pascagoula) and electric power. As mentioned, much of the country’s energy passes through Mississippi via pipeline. As energy demand in the Southeast U.S. and around the world steadily increases, Mississippi should seek to play an even greater role in adding value to energy resources by manufacturing for export the end use products, like fuel and electricity. These types of project yield high-quality economic results.

Q — What should that role be moving forward?

A — The importance of energy to Mississippi’s economy cannot be overstated. With jobs paying twice the average private sector wage, the energy sector provides the family-sustaining jobs Mississippi developers and communities are seeking. Technology will continue to impact both the way we produce energy and the way we use it more smartly and efficiently. In addition to seeking value-added manufacturing and production and greater extraction of Mississippi’s geologic resources, the state should seek technology related activities. Inherent in technology development and commercialization is risk, but technology activity also yields high-quality development. In energy-related technology, Mississippi has played a limited role. More aggressively leveraging strengths at Mississippi research universities to match with “horizon” technology opportunities and attract private R&D capital is a development option worth consideration.