Legislation placing some type of restrictions on greenhouse gas emissions (GHG) will inevitably become U.S. law, and natural gas is likely to be the bridge — possibly a very long bridge — to the coming carbon-constrained economy, according a panel of industry experts.

“Regulation has already happened overseas, and it’s likely to happen here. It’s not all gloom and doom. There are opportunities that exist in advance of legislation…but one thing that’s for sure is that we will see some sort of regulation in the U.S. It’s already on the table,” said Graeme Martin of Coral Energy (soon to be renamed Shell Energy North America (see related story).

Speaking last Tuesday at the LDC Forum Mid-Continent in suburban Chicago, Martin said companies operating in the United States should look to regulations already in place around the world and plan how they will operate when — not if — similar legislation is passed here.

“The regulatory and legislative landscape is evolving,” said Tony Straquadine, regulatory and government affairs manager for Alliance Pipeline. Natural gas is the most immediately available and affordable fuel to answer the growing call for cleaner energy, and “will remain the bridge fuel in a carbon-constrained economy,” he said.

Some panel members said natural gas will in fact be “a very long bridge” and said they continue to advise buying gas long. Gas price volatility will continue until the technology required for other “clean” fuels is put in place.

While several states already have or are considering their own GHG regulations, federal legislation is still pending. The United States did not participate in the Kyoto Protocol, but Canada and other countries which did have already put a variety of forms of carbon-reduction regulations in place. The European Union has adopted a trading scheme that allows companies to buy and sell carbon credits while limiting overall emissions levels. In the United States the spotty state-by-state passage of GHG regulations has created an equally spotty carbon credit market. Until federal legislation is passed, the United States will see only a patchwork carbon credit market, Martin said.

“You could find yourself in this nightmare situation where there are 50 different markets and none of them are linked. We hope that’s not the situation.”

According to Straquadine, there is no immediate threat of national GHG legislation in the United States but he said passage could come with the changing of the guard at the White House.

“It’s unlikely that under today’s administration we are likely to see legislation affecting regulation of greenhouse gas. However, depending on what happens in 2009, all bets will be off.” A Democratic president and Democratic Congress would likely have the will and the muscle to enact emissions regulations.

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