Some Capitol Hill lawmakers and energy experts believe theUnited States may be setting itself for another energy crisis 10 to20 years down the road by relying to heavily on natural gas to fuelnew power generation facilities.

“I believe that [heavy dependence on gas] is a path that’spretty dangerous for America…,” warned Sen. Pete Domenici (R-NM)during an Senate oversight hearing into U.S. gas demand and supplyon Thursday.

“I think…..some other sources of energy for electricity haveto enter into this mix or we will find ourselves at some point withthe demand being so high for natural gas that it, too, will reach avery high market value, and then we’ll be wondering why we weren’tmore concerned,” he told his colleagues on the Senate Energy andNatural Resources Committee.

“I think one of the most interesting questions before ourcountry is what is going to happen now in the next 20 years withreference to electricity because as of now the only power plants weare adding to our national grid come from natural gas…..There’sno nuclear power, and there’s no other alternative. And coal iseven no long being used for new power plants. To the natural gasenthusiast, that sounds great.” But to Domenici, following asingle-fuel path is risky.

William Martin, chairman of the Washington Policy and AnalysisGroup, echoed this sentiment. He believes there’s just “too muchgood news for natural gas” now. Although he acknowledged thatnatural gas is going to be the fuel of choice for the “next many,many decades,” Martin believes there’s a need to “balance” out thefuel sources for electricity.

The Energy Information Administration (EIA) estimates that about780 new generation plants (average size of 300 MWs) will be builtover the next 20 years, of which 92% will be fueled by natural gas,said EIA Administrator Jay Hakes. He noted that “purerestructuring” of the electricity industry has motivated companiesto lean towards gas-fired generation facilities, which he said havelower capital and operating costs.

However, Hakes said the EIA sees coal becoming more competitivewith natural gas as a generation source in the out years — around2020. “We believe that the coal industry will continue to be ableto reduce the costs of coal whereas this heavy demand for gas isgoing to force exploration into more difficult areas, so the pricedifferential between coal and gas will be wider than it is today,”he told the Senate panel. Gas still will have an edge then, Hakessaid, but coal will be more competitive.

Susan Parker

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