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Senator Cautions Against Too Much Gas Reliance

Senator Cautions Against Too Much Gas Reliance

Some Capitol Hill lawmakers and energy experts believe the United States may be setting itself for another energy crisis 10 to 20 years down the road by relying to heavily on natural gas to fuel new power generation facilities.

"I believe that [heavy dependence on gas] is a path that's pretty dangerous for America...," warned Sen. Pete Domenici (R-NM) during an Senate oversight hearing into U.S. gas demand and supply on Thursday.

"I think.....some other sources of energy for electricity have to enter into this mix or we will find ourselves at some point with the demand being so high for natural gas that it, too, will reach a very high market value, and then we'll be wondering why we weren't more concerned," he told his colleagues on the Senate Energy and Natural Resources Committee.

"I think one of the most interesting questions before our country is what is going to happen now in the next 20 years with reference to electricity because as of now the only power plants we are adding to our national grid come from natural gas.....There's no nuclear power, and there's no other alternative. And coal is even no long being used for new power plants. To the natural gas enthusiast, that sounds great." But to Domenici, following a single-fuel path is risky.

William Martin, chairman of the Washington Policy and Analysis Group, echoed this sentiment. He believes there's just "too much good news for natural gas" now. Although he acknowledged that natural gas is going to be the fuel of choice for the "next many, many decades," Martin believes there's a need to "balance" out the fuel sources for electricity.

The Energy Information Administration (EIA) estimates that about 780 new generation plants (average size of 300 MWs) will be built over the next 20 years, of which 92% will be fueled by natural gas, said EIA Administrator Jay Hakes. He noted that "pure restructuring" of the electricity industry has motivated companies to lean towards gas-fired generation facilities, which he said have lower capital and operating costs.

However, Hakes said the EIA sees coal becoming more competitive with natural gas as a generation source in the out years --- around 2020. "We believe that the coal industry will continue to be able to reduce the costs of coal whereas this heavy demand for gas is going to force exploration into more difficult areas, so the price differential between coal and gas will be wider than it is today," he told the Senate panel. Gas still will have an edge then, Hakes said, but coal will be more competitive.

Susan Parker

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