“My name is Tom Ridge. I am a recovering politician,” he clucks as he delivers the warm-up for the dozens of speeches he gives each year.
Honorable Tom Ridge
Honorable Tom Ridge, former Governor of Pennsylvania (1995-2001), first assistant to the President, then US Secretary of Homeland Security (2001-2005), and now a private citizen and international business consultant, recently spoke to Canary about the importance of shale and renewables development, environmental responsibility, and an engaged US presence in energy diplomacy worldwide.
“I’m not recovering [from politics],” he acknowledged as he talked to us in his Washington, DC, offices. “There is nothing to recover from….I’m still engaged, intellectually and sometimes emotionally, in the issues of this country,” he began.
At present, he’s seeking Congressional passage of the UN Disabilities Treaty, an international agreement that would give some 50 million disabled Americans broadened opportunities and rights to serve, study, travel, and work abroad. He’s also led his firm, Ridge Global, in strategic planning for energy firms working in the Marcellus shale. “I’m interested in the geopolitical impact of shale gas, and the mess in the Middle East,” he continues. “Energy is fascinating, but it’s more than ‘drill baby drill.’ It’s ‘drill smartly, baby.’ Shale [energy] is a treasure, but we have to use it in a way that’s sensitive to the environmental impacts.”
Roots in Pennsylvania, Engagement Worldwide
Ridge was born in western Pennsylvania, a hilly, green paradise renowned in the early 19th century for nearly 29 million acres of pristine forests. By 1900, 60% of Pennsylvania’s forests had been clear-cut for agriculture, timber mills, mines, and the railroad boom – so much so that naturalists sometimes called Pennsylvania a desert of stumps.
Methane and acids from coalmines subsequently contaminated aquifers and rivers – a problem that exists today. It took a century of eco-management to restore much of the Commonwealth’s original beauty.
That’s the reason that Ridge and his fellow Pennsylvanians are keenly mindful of the balance between producing useful energy and work for thousands while maintaining natural resources.
“Let’s be very clear,” he said. “There are certain environmental risks associated with tapping into this [shale] treasure. There are spills on the surface, there’s methane gas, and I’ve even seen reports of seismic activity. At the end of the day, it’s a very complicated and sophisticated industrial process. We ought to be in the position – and the industry needs to be in the position – of working with the states to continue to embed best practices and work diligently to address the risks.”
The American Story
Ridge is especially protective of his home turf, but he is also fiercely engaged in all of America’s relationships worldwide. He exhibits the towering 6’3” physique of a football player, the brains of a self-made Harvard graduate, and the courage of a Vietnam War combatant who earned the Bronze Star.
Improbably, Ridge also embodies the American story. He initially lived in veterans’ public housing in Erie, Pennsylvania, after his father returned from the Navy in World War II. He earned scholarships and worked his way through Harvard doing construction jobs. After Vietnam service as a staff sergeant, Ridge completed his degree at Dickinson School of Law. He soon became the first Vietnam combat veteran who served as an enlisted man (staff sergeant) to be elected to the US House of Representatives (1983-1995).
Thereafter, he never lost an election. In 1994, still little known outside of northwest Pennsylvania, Ridge ran for Governor as a pro-choice Republican candidate and won. He was reelected in 1998 with 57% of the popular vote in a four-way race.
One of his signature contributions was pushing for open competition among the state’s electric utilities. He advocated for tough crime measures, including the death penalty and an expedited “three strikes” law. He also emphasized strong conservation and ecology, separating Pennsylvania’s environmental regulatory and conservation programs into two agencies.
In Washington, DC, Ridge was tapped by George W. Bush as the Assistant to the President for Homeland Security, later the first Secretary of the US Department of Homeland Security, after the 9/11 terrorist attacks. His job was impossible: Ridge and his team had to prevent further attacks while streamlining and consolidating 22 government agencies and 180,000 people. “He has the scariest and most difficult Washington job you could possible imagine,” wrote Ann Gerhart of The Washington Post in November 2001. But Ridge worked effectively, even against political brinksmanship in the intelligence community at the top. His department helped strengthen US borders, implemented new protocols for air and port safety, and applied new technologies and vaccine protocols to protect the public against an array of “WMDs” (weapons of mass destruction), including threats of anthrax post-9/11.
When he resigned from his Homeland Security job in February 2005, the country was arguably safer and more prepared to meet terror threats than before.
Today, as CEO of Ridge Global, a Washington DC-based strategic consulting firm, Ridge maintains an energetic schedule. He and his executive team offer risk management and security counsel, along with best practices, regulatory and economic advice to governments, Fortune 500s, and energy and maritime companies.
Ridge is also the author of a 9/11 memoir, The Test of Our Times: America Under Siege…and How We Can be Safe Again (with Larry Bloom, St. Martin’s Press, 2009). He recognizes shale not only as a nationwide treasure, but as a starter gun in a renewed “all in” energy policy for America. He believes that shale – along with conventional sources and renewables – can not only stimulate the US and global economy, but also make the world more stable and secure.
Below are excerpts from our two-part interview.
On International Engagement – or Withdrawal?
Canary: Now that you are in the private sector again, you have had time to reflect on your life as a public servant. How do you define yourself now? How do you envision our national security, especially in light of the two wars we fought in Afghanistan and Iraq, the aggression of China in the South China Sea, and what’s happening with Vladimir Putin in the Ukraine?
Ridge: That’s a good question because the totality of my experiences in public service has impacted me in such a profound, positive way that I am still engaged in the issues that affect this country. [Those issues include] safety, security, and the economy. So while I may jest about being a “recovering politician,” in fact I’m not recovering. There’s nothing to recover from. I’m still engaged privately and publicly in the issues of this country. Most recently I have been working with Senator Bob Dole to secure Republican votes in the Senate to support the UN Convention of the Disability Rights. Cybersecurity is a focus of my personal concern and consulting business as well. Also, I’m interested in the geopolitical impact of shale gas, and the mess in the Middle East, the chaos and carnage in the Middle East.
Canary: Could the chaos have been avoided?
Ridge: I think there was a failure of this Administration three years ago to be a lot more engaged with Syria’s Bashar al-Assad. I see a similar failure in the mindless approach we’ve taken to nuclear negotiations in Iran. We just keep talking and the Iranians keep spinning centrifuges. I see an unwillingness of my President – and he is myPresident, though I didn’t vote for him – to face down Vladimir Putin one-on-one during the initial Ukrainian invasion or to respond to Assad’s use of chemical weapons in Syria.
Whether the President likes it or not, both our friends and our foes expect us to be engaged. But when America withdraws from the situation, our enemies take advantage of the vacuum. I am disappointed in the President’s failure to sustain America’s international leadership role.
Canary: Is it a question of commitment? Is the President reluctant to embrace “the moral high ground,” as other US presidents have done in the past?
Ridge: There are so many things we could be doing to offset the countervailing conduct and pressures [of hostile nations]. And I’m not talking simply about the military. I’d say, “By the way, Mr. President, we always try to maintain the moral high ground, and we always try to align values and interests, but sometimes they just don’t align.” That doesn’t mean you walk away from [conflict]. Because there may be times when your interests will seem inconsistent with your values, but there may be longer-term interests you must consider. For example, we didn’t like Hosni Mubarak; we threw him under the bus, and now look at the mess in Egypt! Whatever happened to the Arab Spring? It disappeared from the conversation. We’re in Libya and we’re out of Libya, and Assad is continuing Syrian civil war. The list goes on and on. Between Hamas and Israel, I can’t imagine what Netanyahu and the Israelis think of us now. Our “reset” with Putin is meaningless, and the Chinese continue to act aggressively with no meaningful response from the US.
Canary: But what about shale energy? Now we have this incredible discovery that can affect world events.
Ridge: A treasure.
Canary: Shale has turned our energy situation around. By 2015, US oil production will exceed Russia’s and Saudi Arabia, and we will be able to be a net exporter of LNG if we choose to.
Ridge: If we’re smart enough.
Canary: So how do you see a national energy policy today in light of shale’s contribution to “energy independence” if that’s the right word? Since we are so interconnected in global energy trade, shouldn’t we define “independence” more as “energy security” rather than independence from other countries?
Ridge: First of all, presidents since Nixon have given speeches about energy independence, but no president has proffered a comprehensive view as to what that means or how we achieve it.
I’ve never felt that “energy independence” means we terminate relationships with our friends and allies. Why would we want to be independent of our friends in Canada? So “energy independence” is a misused term.
We don’t need to be energy-independent. We need to be energy-smart. Energy independence in my mind means a comprehensive “all in” approach from nuclear, oil, and gas to solar to biomass, you name it. We’ve got the brainpower, intellectual capital, and the resources to come up with a comprehensive smart energy policy rather than be fixated from time to time on one or two sources. We should have a “mixed energy” policy in the US.
Canary: There has been a lot of talk of creating an energy block with Canada, Mexico, also Brazil, which is doing a lot in gas. President Obama has talked about an “all in” energy mix.
Ridge: There’s a difference between saying it and doing it.
Canary: So how should we do it? That is, how should we execute this policy of promoting energy alliances? And how will that affect OPEC? They’ve acknowledged that they are a little worried about us.
Ridge: They should be. Why should we be worried about OPEC?
The fact of the matter is [a national energy program] is a matter of will, not a matter of capability. Do we have the will to say to ourselves as a country, do we want to be energy-smart?
You do not want to rely on certain sources of energy from unreliable and unstable countries. Just in terms of natural gas, for example, Iran and Russia were salivating six or seven years ago to build their own natural gas cartel. Too bad about that! They understood the economic impact; they understood – as Russians have demonstrated now – you don’t have to have as large an army if you can control the energy of potential adversaries.
Let’s talk Ukraine and Western Europe. Iran is an enemy, and Russia is not an ally. Russia is a problem. They are heavily dependent upon the high price of natural gas and market share [to Europe and other countries], so if you reduce the price of natural gas and cut back on market share, there’s enormous domestic pressure, geopolitical pressure [on them]. How that ends up affecting their relationship domestically with the rest of the world remains to be seen, but we shouldn’t be terribly worried about it.
Energy Diplomacy and LNG
Canary: What would be the impact of US exports of liquefied natural gas (LNG), assuming Department of Energy approvals and expedited building of LNG terminals?
Ridge: There would be a lot more be pressure on them to become a more responsible member of the global community. Maybe. Who knows? The fact of the matter is the market is the market. It’s global.
If we start exporting LNG, the geopolitical impact on some of our adversaries will be significant. We’d have to think carefully how to deal with that – but we can’t control the global marketplace. What would be in our interest in protecting their markets? They’re not interested in protecting ours. I’m not worried about Iran or Russia dealing with a competitive natural gas marketplace.
Canary: But putting up the money for these LNG plants, as much as $10 billion per plant, is going to an issue for the United States, since it would require huge private investment. Should the US government be subsidizing LNG in some way?
Ridge: I think [help for LNG] is every bit as important as putting money into the Export-Import bank. Let’s not kid ourselves: We find different ways of subsidizing American business all the time. Boeing gets a great benefit from the Export-Import bank. If you want to be energy-smart – and to have a positive impact on the international market and support your friends – there is no reason we can’t create public-private partnerships to expand our energy resources.
Canary: How would these different energy partnerships operate?
Ridge: Take a look at some Southern states. This is what I mean by an “all-in” energy policy: For states like Arizona, New Mexico, and California, solar is potentially a very significant source, although not a baseload source.
I am convinced that public and private investments, changes in the tax code, and Presidential leadership could make energy and all related aspects a huge and sustainable economic catalyst for growth – including hundreds of thousands of jobs.
Canary: We haven’t had a coherent national energy policy ever.
Ridge: [On The Daily Show], John Stewart did a monologue on energy policy. And you’d bust your gut laughing. Both Republican and Democratic presidents have talked the talk, but nobody has walked the walk for years.
[Editor’s note: You can watch a clip here.]
Ridge: Right. And now we’re so fixated on natural gas, and we should be: It’s a treasure. But why aren’t we moving on nuclear? If we’re worried about emissions – as we should be – then why don’t we, as a responsible global partner, build new nuclear power plants? If the President had just taken a small measure of [the stimulus package] and embedded it in an overall scheme of energy capacity building across all verticals, what a profound long-term job creation impact that would have been. It would have affected the balance of payments, created jobs, and generated tax revenues – just like natural gas has done in Pennsylvania.
Canary: Do you ever see the US using oil and gas as a geopolitical weapon, as Putin has in the Ukraine?
Ridge: I don’t think America would ever use it the way Putin has. He uses it to intimidate Western Europe and Ukraine. We would use it to support our allies.
Canary: If a country that wasn’t a friend or enemy said, “We need your gas,” would we sell energy to them?
Ridge: Yes. Again, it depends who it is, but they don’t have to be allies. I happen to think one of the foundations of long-term positive relationships with countries can be built upon mutually beneficial economic ties including energy.
Canary: Do you see us withdrawing from any oil and gas exports from OPEC?
Ridge: Yes. It’s not as if OPEC won’t have an alternative market in China, India, and elsewhere. We only get 10% of our energy from Middle East now. With shale oil production up, that OPEC number will still go down.
At the end of the day, though, OPEC still has a cartel. They’re a major player – but frankly, you know and I know [oil] is a global price. If there is another significant source of supply, there’s a chance we can moderate the price. I think lower global energy prices would clearly benefit all economies.
More On China
Canary: How would you alter policy to address China? Do you think we have a role in either exporting our energy or technology to China, or withholding it from them because of their human rights record?
Ridge: This is an excellent example where, on most fronts, our values and interests as a country do not align with the government. China certainly doesn’t reflect our values. [The government] is repressive, not just in the arena of human rights. The Chinese never met a patent they didn’t reengineer or a copyright they wanted to respect. They’re flexing their muscles in Vietnam and Japan. We understand the geopolitical complexities of the relationship; however, the fact is they have a billion-plus people, a burgeoning army, navy, and air force. China is a major player whether we like it or not. And we have to deal with it.
In that complex equation, regardless of human rights, I do think we have to try to find some common ground on a couple of issues, knowing full well there will still be discord, possibly for decades to come. That doesn’t mean you don’t work with them on global issues. Is China in our interest, our global interest? China wants to be part of a global community, but it’s still not acting like a responsible global citizen. One of the challenges is China’s use of coal-fired power plants. How do you deal with them? That ‘s why I think China is one of the most important diplomatic postings in the 21st century, and I don’t get the sense that this President and State Department are doing anything other than paying lip service to the relationship. Let’s be serious about the relationship with China, understand its complexities, talk publicly about common interests, and work privately to address the many issues that divide us.
Canary: China just signed a $400 billion deal with Russia’s Gazprom, which is going to bring them closer to Russia, and they are having problems with their shale because the geology is buckled, and they have to drill as much as four times deeper to get to oil and gas. They’ve also had a lot of explosions searching for shale.
Ridge: Another example where sharing best practices and collaboration could enhance our long-term relationship.
Marcellus Shale: Money vs. Environment?
Canary: Let’s go back to Pennsylvania and discuss the Marcellus shale. Exploration is booming, but we have two issues unresolved: taxation and the environment. One issue that’s controversial is the severance tax for removing energy. In Pennsylvania, the shale companies don’t pay a severance.
Ridge: The industry understands that they’ve got to pay a price.
Canary: Pennsylvania’s current governor, Tom Corbett, collected an impact fee of $225 million last year, but that’s still the lowest tax of any top-producing state. Do you anticipate that the tax rate will change, or should change?
Ridge: If it’s not changed by Tom Corbett, it will be by the Democratic governor if he succeeds him after the election.
Canary: Do you think the taxation structure should change?
Ridge: Let me give credit where credit is due. The industry has independently put in a billion dollars in infrastructure in Pennsylvania. They’ve generated three quarters of a billion dollars that’s gone into local communities because of the shale “impact fee.” I don’t want Pennsylvanians to think energy companies are simply extracting natural gas without paying for it. They are.
But the fact of the matter is that [shale companies] are paying substantially higher rates in other states, and given the fiscal situation Pennsylvania is in – Tom Corbett has almost righted the state’s fiscal ship by cutting spending – I wouldn’t be surprised, nor do I think industry would be so alarmed with a modest increase. As long as the regulatory environment is fair, responsible, and consistent, I don’t think there would be strong opposition.
Canary: Then there’s the environmental issue.
Ridge: That’s important.
Canary: The PA Department of Environmental Protection just reported that, since the beginning of 2008, 209 private water supplies have been impacted by oil and gas drilling, both conventional and shale. More than 20,000 wells have been drilled since 2008. The federal government has denied that a single contamination of a well has occurred, but in Pennsylvania, reports of contamination are well-documented. Should states be in charge of dealing with their own pollution? Are the standards tough enough?
Ridge: Since the potential problems are back home, that’s where the regulatory environment should be. Let’s be very clear: There are certain environmental risks associated with tapping into this treasure. There are spills on the surface, there’s methane gas, I’ve even seen reports of seismic activity.
At the end of the day, it’s a very complicated and sophisticated industrial process that can generate millions in revenue, hundreds of thousands of jobs. But we ought to be in the position – the industry needs to be in the position, working with the states – to continue to embed best practices, and to accept the notion that there are environmental risks and work diligently to address them as they drill. The industry is doing so, but the average guy in the street doesn’t believe them. That’s part of the public information [challenge]. And that’s why I say the industry has to do a better job with its public communication efforts. Citizens understand there are more, high-paying jobs. There are multiple other benefits that are not highlighted. And of course, I do not believe they do enough to demonstrate their commitment to the environment as they drill.
Canary: Gasland?
Ridge: Pennsylvania historically had no regulations around the drilling of water wells wells. So wells were dug through the naturally occurring methane gas deposits. Occasionally, some escapes and flows to the surface along with the water. The lighted water faucet has nothing to do with fracking!
Canary: What’s stopping regulations from being passed?
Ridge: One of the challenges of contemporary politics, in my judgment, is that people on both sides of the aisle either play to their strengths and ignore the weaknesses, or they focus on weaknesses and ignore the strengths [of a particular technology or issue]. At the end of the day, that’s not how you govern, and that’s not how you lead.
Shale is a treasure we can’t afford not to use, but we have to use it in a way that’s sensitive to the environmental impacts.
Canary: What is a shale company’s responsibility when there is likely contamination of a well because of drilling or fracking?
Ridge: If there is a spill or demonstrable evidence that they’ve contaminated drinking water or a well, the important thing is to admit it. The most important element is transparency: to identify the cause, do what you can system-wide to makes sure it doesn’t happen elsewhere. And then absorb the cost of righting the wrong. It’s really easy for me. You don’t run away from responsibility.
Canary: Pennsylvania’s Center for Sustainable Shale Development is bringing industry and government together to develop shale drilling best practices. They’re recycling as much as 90% of the frack water that comes up.
Ridge: This is a noteworthy and important partnership. The one issue I’m sensitive to, and Pennsylvanians are very sensitive to, are environmental issues because companies have already extracted a lot from our bosom, and there have been problems. For example, we’ve clear-cut forests – then we got smart about that. Then we’ve had coal extraction. There are probably hundreds of streams still dealing from acid mine pollution.
I’m not saying we’re more sensitive to our environment than the people of Nebraska, Oklahoma, or Texas. But given the beauty and bounty of Pennsylvania – and our experience with coal when we didn’t have the science to tell us that it would be disruptive of our environment – well, now we have that science.
So let’s take advantage. Let’s take the opportunity associated with our ability to extract natural gas, but let’s not ignore the science that says you may have some problems in this industrial process. Instead of waiting to deal with the aftermath, let’s be preemptive rather than reactive.
