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Gas Seen as Most 'Environmentally Friendly' Fuel

A majority of executives and managers from utilities and other industry organizations say natural gas is the most "environmentally friendly" fuel, according to a survey conducted by Black & Veatch.

"This is first time natural gas has taken the top spot in this category, indicating gas as an economical and environmentally attractive bridge toward a lower carbon future -- particularly since survey participants believe shale gas will be available at a reasonable price for the next 20 years," according to the consulting firm, which found that nuclear was still slightly preferred within the utilities subgroup. Nuclear had held the top spot overall in Black & Veatch surveys dating back to 2006.

"The displacement of nuclear with natural gas is consistent with respondents' rising concern about nuclear waste disposal and cost," Black & Veatch said.

Shale gas prices are likely to remain "reasonable" for years to come, despite possible upward pressure from hydraulic fracturing (fracking) issues, according to the more than 700 respondents who participated in the survey.

"A vast majority of IOUs [investor-owned utilities] and municipalities felt that shale gas would remain available at a reasonable cost," the consulting firm said. "In the longer term, municipalities were slightly more bullish; 53% of municipal respondents stated shale gas would be available at reasonable costs beyond 2030, while 49% of the IOUs agreed."

And while fracking was seen as a "major impediment" to shale gas by 24% of all respondents, 45% said fracking would not be a major problem.

"However, they did expect the issue to create some upward price pressure," Black & Veatch said.

More than 70% of respondents agreed or strongly agreed that energy and commodity prices will rise significantly over the next five years, and the survey found a growing awareness of the nexus of water and energy, according to Rodger Smith, president of Black & Veatch's management consulting business.

"For the first time, water supply has become the top environmental concern among survey participants and water management was rated as the business issue that could have the greatest impact on the utility industry," Smith said.

Survey results indicated that respondents believe the lack of a national energy policy is impeding investment in new energy technology. When asked what factors most motivate the industry to invest in new technology, the two highest rated responses were "regulatory requirements" and "government incentives."

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