Domestic natural gas production continues to expand, while natural gas spot prices are at historic lows. Many utilities are responding to these changing market dynamics by building gas plants or “fuel-switching” existing power plants from more expensive fuels to gas. As a result, coal generation continues to fall. Due in part to price competition with natural gas, some Congressional “clean energy” subsidies may not be renewed.
EIA projections suggest that domestic production will continue to increase, and that natural gas prices faced by electric utilities will remain below $7.00/mBtu, through 2035. [Source: EIA]
What does near- to mid-term domestic natural gas availability suggest about America’s energy future? With affordable natural gas apparently abundant through the next several decades, what reasons are there for government support of other energy sources? To which energy policy issues does domestic natural gas offer a solution? To which issues does it not?