Last week the EIA reported that natural gas-fired power generation will increase by as much as 17% in 2012, while coal is expected to decrease 10%. This shift away from coal and toward natural gas is largely tied to gas’ low price, as well as projections of the impacts of increasingly strict federal regulation on power plants.
In March, natural gas spot prices averaged $2.18MMBtu, their lowest level since 1999. Then on April 11th, the NYMEX May gas futures contract settled at a 10-year low of $1.984/MMBtu [EIA].
Despite low gas prices, some utilities express hesitancy about over-committing to gas-generated power. Last week at The New York Times energy conference, Duke Energy President and CEO Jim Rogers said, “Our greatest challenge is to avoid all gas, all the time.” [The Barrel]
How is natural gas reshaping the power industry? Why might utilities such as Duke Power want to avoid “all gas, all the time”? What assurance is there that plentiful natural gas will be available at low cost?
Even before the EPA announced their new carbon dioxide emission standards, power plants were shifting towards natural gas, leaving coal by the wayside. Natural gas is a cheap alternative to… Read more »
I would add a geological analogy to Stephen’s comments. If you have ever crossed the Atchafalaya Basin on Interstate-10 you will have seen how Henderson Swamp, an enormous back water… Read more »
The discussion continues to confuse “either or” to the paradigm shift in how things will be done going forward. The arbitrage of feedstocks isn’t nearly as consequential as the ongoing… Read more »
“Sometime or other this will transition into a stable environment that both producer and consumer will thrive in. Will there be a completely green answer someday? Maybe, but the immediate… Read more »
In support of Ron’s analysis, devising an energy policy is not the making of permanent choices from a set of options, it’s a process. That it must someday enable a… Read more »