This story originally ran in the Monday, July 12, 2010 edition of the Blue Ridge Business Journal. The Journal ceased publication in December 2010. Visit roanoke.com/bizjournal to browse an archive of BRBJ stories. For business coverage from The Roanoke Times, visit roanoke.com/business.

Virginia Natural Resources Secretary Doug Domenech calls himself a "granola Republican" who loves the outdoors.

But he also is a self-professed climate change skeptic and is not reluctant to decry what he calls "shocking" behavior by his regulatory counterparts at the federal level. Domenech had a wide-ranging conversation recently about jobs, energy and the environment.

You oversee the state agencies that are charged with the responsibility to protect our land, our air and our water. At the same time, the governor has made it clear that his primary goal is economic development and jobs creation. Can you talk about how the administration strikes the balance, and how protecting the environment and growing jobs can be reconciled?

The reality is rich societies are the ones who can best protect the environment. So as our economy and our society become more wealthy, we have the kind of disposable income it takes to live in a more environmentally consistent way. For example, part of the argument about drilling for oil in the United States -- where some say we should not drill because it hurts the environment -- well, the reality is that all that does is take drilling from a highly regulated, environmentally regulated atmosphere over to other countries that really have no regard for environmental conservation of any kind. And so, having solid economic legs to stand on is what we need to help in terms of our environmental issues.

I went to school primarily from my interest in the outdoors. But as I developed my own personal, economic and political philosophy, I realized that if I was going to use paper, it was inconsistent for me to be upset about a logging contractor. Or, if I'm going to turn my lights on, it's inconsistent for me to be mad about coal development when so much of Virginia's electricity -- something like 57 percent, I think -- comes from fossil fuels. So it's not being honest when you admit, "I like having air conditioning, I like having lights in my office and my computer turned on," to deny that there are environmental trade-offs that have to happen.

Overall, what's your view of the condition of Virginia's environment? Good? Improving? Holding its own? Needs help?

I think it is good. I'm sure there are areas that are a problem, but we enjoy living in a glorious state. And I think that's what attracts a lot of business and investment and employment in the commonwealth: the fact that we have such a good standard of living, that we have a nice place to live and work, whether from the ocean and bay to the mountains, it's nice. I think at the same time, we have an obligation to keep all of those things up so that we can continue that legacy that has been built over many, many years.

What do you see as your biggest challenge or problem?

I think one of the most significant challenges we have is our relationship with the [U.S.] Environmental Protection Agency. The EPA is really leaning forward in a shocking way with its regulation on the Chesapeake Bay as well as its regulation of greenhouse gasses and mountaintop mining. And there are lots of other new rules coming down the pike. Recently a company shared with me a graphic that they had, showing all the rules that they were tracking that are due to come out in the next 10 years. And it's one of these charts you can't even read because there's just so much happening, all of which are related to EPA.

I'm not trying to say that some of those regulations aren't needed. I'm just saying it will have a big impact on the business climate and every company that employs people in the Commonwealth. The thing that frustrates me is that we don't seem to have the capacity in this country to take the economy into account and say, "Is there a way we can slow this down until we can pull ourselves out of this very bad economy?" These things are coming at us in a way that people will lose their jobs, and that scares us more than anything else.

Virginia governors since 1983 have agreed that restoring the health of the Chesapeake Bay is a major priority. What's your assessment of the health of the bay?

I'm kind of a forestry-hiking-camping-outdoors kind of guy as opposed to an environmental protection guy or a water guy. So I didn't know that much about the bay when I came in. I knew there had been lots of effort to clean it up, but I wasn't completely aware of all the details. So when we sat down with the staff for a briefing, I really did expect to be told that the bay is dying, that it's a horrible catastrophe, that it's an urgent situation, that we've failed for decades, and so on.

But that was not the picture that was drawn for me by the scientists. What they said was that we measure three basic pollutants in the bay: phosphorus, nitrogen and sediment. And when you actually look at the targets set by EPA and how Virginia is performing, we essentially have met our phosphorus numbers. There's a maximum amount of phosphorus that can go into the bay from Virginia and we are not behind on that. We are hitting that target right now. And for nitrogen, we're about two-thirds of the way there and we're making improvements.

And all of this was done primarily through voluntary efforts made by the agriculture, forestry and development industries. And I give lots of credit to the last administration and its effort to comply with the EPA through this process and do it on a voluntary basis. And all of these industries have stepped up to the plate and have performed well.

So, all of these voluntary efforts are working. Then comes the EPA about a year ago and decided they were done with voluntary efforts and they were going to start working towards [mandatory] regulation, and slowly forcing all six of the bay states, including Virginia, to comply with certain kinds of pollution levels by a certain deadline.

So, our fight has been with EPA taking a sudden turn from cooperative efforts with the states to a more adversarial approach. And that's what our big concern is. They are forcing certain changes that eventually will have an effect on anyone who does business in the bay watershed. And that's all the way over into the Shenandoah Valley and about two-thirds of the state.

Air quality is another area that will affect us statewide: They're going through a process [at EPA] that will set new ozone rates for the states. They're doing a new nitrogen dioxide rule that's supposed to be final soon. There's a new sulfur dioxide rule that's coming up. And there are probably another 10 of these rules that are working their way through the process, all of which are going to have an impact on almost any manufacturing in the state.

No one is going to say they want dirty air or dirty water, but to try to impose these new rules while the economy is suffering is like kicking a man when he's down. And it seems to us to be the wrong time to be ratcheting down on all of these new rules on industry instead of waiting until the economy improves.

Gov. Bob McDonnell says he wants Virginia to be the energy capital of the East Coast and laments the fact that Virginia is second only to California in the amount of electricity that we need to import to meet our needs. Do you agree we need to generate more power within our boundaries?

Yes, and this is a major focus of the administration. We're in favor of the "all of the above" approach to energy: more energy from coal, gas, oil, nuclear, wind and solar sources. We've gone to Washington to meet with [U.S. Interior Secretary] Ken Salazar. We've been supporting Dominion's effort to build a new nuclear power plant at Lake Anna, and we're an original signer of the off-shore wind consortium to promote wind power. We're trying to clear the bureaucratic impediments to doing wind generation in the western part of Virginia.

We are going to need more energy. We need energy to grow. There's going to be huge demand for energy in the future and the governor feels there's going to be so much demand we should not rely on any one source.

What do you think of the idea of "clean coal?"

Well, I'm hoping that smart people can figure out how to do that. I'm all for renewable energy sources, but I would say to you that the science behind climate change is not settled. I know there's a lot of debate about it. But the reality is we should do all we can to promote all these energy sources without having Washington impose a fake economy on us. If they pass a law that taxes carbon or taxes certain types of emissions, that impedes the marketplace and keeps it from working correctly.

So we would love to have wind. But wind is very, very expensive. And we would love to have biomass energy, but there are a lot of trade-offs in that renewable energy space. So we're doing everything, including off-shore wind. Virginia has a uniquely shallow off-shore shelf, so it's a good place for wind power generation. We see it as an economic driver for manufacturing as well as generating power.

And at the same time we're supporting ethanol production and coal production. Of course, some folks are talking about solar power and that would be great. But remember: All of these renewable energy sources have an environmental impact of their own. For example, it takes hundreds of wind turbines to produce the same amount of energy as one gas platform. That's a huge footprint.

It's the same with solar. We all like the idea of running our houses on solar or wind power, but that's not going to help you at night or when the wind doesn't blow. You still have to have base load capacity, all that other energy infrastructure to pick up the slack when the sun doesn't shine and the wind is still.

So, in general, you see the need to make more energy, as opposed to telling Virginians they have a responsibility to use less power?

We strongly believe in energy efficiency. In fact, the governor is about to do an executive order on energy efficiency for the government. We're very interested in promoting that, in weatherization programs to help people use less energy in their homes. But at the same time, we're going to need more energy. We're going to need cheap energy to promote business, and that's what we're about.

Jim Babb's interview with Doug Domenech continues in the next issue of the journal with more on the secretary's views on climate change, off-shore drilling and conservation easements. See "Related" above.