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June 27: The future of the oil industry, fraud in Utah

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In this Sunday Edition, KSL's Richard Piatt discusses the impact of the recent oil spills in Salt Lake and the Gulf with the president of Utahns for a Healthy Environment, Dr. Brian Moench and president of the Utah Petroleum Association, Lee Peacock.

In addition, Michael Hines, director of Enforcement for the Utah Division of Securities and attorney Brent Baker joined us for a conversation about the growing number of fraud cases in Utah.

Segment 1: Oil Spill Impact on the Industry

It's been nearly two weeks since a Chevron pipeline broke in Salt Lake City, sending some 33,000 gallons of toxic crude oil into Salt Lake Valley waterways. Since then, crews have worked every single day to clean up the spill. So far, it's going well.


The oil spill in the Gulf has now surpassed the two-month mark. The environmental and economic impact of the spill is yet to be seen. The question arises: what now? Are these two spills a wakeup call to America about its addition to oil?

""I think this is an opportune time for that," says Peacock. "This certainly will facilitate the industry taking a real hard look at the way we do things and at our safety and environmental records. I am sure that we'll improve at the end of the day. What that means onshore is a real question too, for what that will make the industry here, on land, look like in the future."

Some have suggested a tax on gas could curb Americans' use of oil. But Dr. Moench says it will take more than just an increased tax to change people's habits.

"I would certainly say that our public policies should stir people into that direction. There are so many reasons for us to cut down on oil consumption," explains Dr. Moench. "If we have public policy that really makes it or offers people viable alternatives to the model of one person, one car, driving 50 miles a day to and from their job, if we offer them a real alternative to that, then yes, we can cut down significantly. But public policy has to be changed in order for that to happen. The one way to do that is increase the gasoline tax. Another way to do it is to start diverting funds from the existing tax into mass transit infrastructure."

Peacock has some concerns about adding taxes in an effort to fix the problem.

"We do have some concerns about trying to alter the way people live their lives through tax policy. As an industry, we think that the best energy, the cleanest energy, is the energy that isn't used. So conservation really is an important part of our energy future," he says. "I don't disagree that we need to be cautious about how much we drive, but again it's our job as an industry to provide the resources that people demand. And right now there is a strong demand for gasoline and petroleum products."

Drilling for oil not only has an effect on the environment, but as Dr. Moench explains, it can also endanger people's health.

"With the rate of the increase in oil and gas drilling in the interior west, by the year 2018, the amount of air pollution just from the exploration for oil and gas in the interior west of the United States will be the equivalent of about 13 million cars," he says. "That's not sustainable in terms of allowing us an atmosphere where we can remain healthy. The air pollution consequences of that will be tremendous. That will add tremendous amount of pollution burden to our overall air shed in the Wasatch Front."

Segment 2: Fraud Cases in Utah

Utah has been among the top states in the nation when it comes to the number of fraud cases. Last year alone, 4,000 Utahns lost an estimated $750 million to fraud. In many cases, the victim knows and trusts the person conning them.

""The fraud is bad," says Hines. "The state government has been successful in the investigation, prosecution, conviction and incarceration of white-collar criminals. Unfortunately, we haven't been very successful at returning money to investors. Now we need to go, ‘How do we stop investors from losing money, how do we educate, how do we prevent?'"

Many people believe these kinds of crimes cannot happen to them. Baker says there are simple rules to follow to keep yourself safe.

"One of the most basic things, if you don't understand the investment, if whoever presenting this to you tells you what they are going to use their money for and you don't understand it, don't invest." Baker advises. "Often times the rate of return is something that far exceeds what you can earn in a regular legitimate investment. Greed factors into it, but these people out there are reading you. They're watching for signs and they tailor their pitch accordingly. You have to realize that you can be a victim. You have to understand you need to arm yourself. You need to take the extra step. Think twice and invest once."

Utah Valley University is hosting a fraud college conference Tuesday, June 30. It's free to the public. The seminars will include comments from ex-cons, who give insight about how they 'size up' victims.

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