If current bullish projections for adding another 6 Tcf of gasdemand nationally over the next 10 years is going to become areality, the pace of merchant power plant development will have toaccelerate and the gas business will have to catch up with it,according to a Duke Energy executive speaking at GasMart/Power 2000yesterday in Denver. Brad Porlier, vice president for businessdevelopment at Duke Energy North America, said he’s unsure that thecurrent gas industry can meet the challenge, assuming merchantdevelopment can overcome a growing list of hurdles from siting topolitical issues.

“It is important to get ‘down in the weeds’ at the project levelto understand where a given merchant plant development is at anypoint in time,” said Porlier. “Land is getting increasinglydifficult to find for plant development. I think we too oftencircle the crossings where major electricity transmission lines andmajor gas transmission pipelines meet. That’s not the end of thestory. It is only the beginning.” Among the increasingly complexsiting/permitting issues affecting both gas and electricityinfrastructure additions are growing shortages of private land,water and the political will to support such development,particularly in the West and near load centers.

“We have to challenge zoning, challenge special use permits andchallenge people who will not vote for power plants or pipelines,”Porlier said. “State legislatures are increasingly getting more andmore active in the siting process. It is a highly charged politicalprocess now. Their constituents are saying they want something tosay about this [new energy infrastructure].

Gas demand is projected to increase by 5 Tcf/year and 210,000 MWof new power plants are expected to be added to the grid. “About60% of the projected new plants are combined-cycle plants, where wehave an opportunity to make margin over a good portion of the year.And about 40% of the gas demand will come from combustionturbines,” Porlier said. “So all of the merchant power plants aregoing to want big time gas supplies at the same time. We all knowwhat this means in terms of increased opportunities….. This kindof gas demand is going to have major implications for all of us —from the wellhead, to processing, to the pipelines, marketers andpower providers.”

Where is all the new gas going to come from? There will be someself-correction to both the discrepancy between power supplies andnew plants proposed as well as between projected gas demands andprojected future supplies, Porlier said.

“Press releases are not the same as actual plants being built,”Porlier said, referring to the continuing stream of new merchantpower plant proposals, each of which can cost up to $20 millionjust to get to the permitting stage. “Many of the present projectsproposed will not be successful.

“We sort of take it for granted that there is enough fuel thatwill be available, on time, in the right places to allow theseprojects to be built. We’re not so sure, and people here will havea lot to do about it.”

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