US industry groups deny power generation relies too much on natural gas

By the OGJ Online Staff

WASHINGTON, DC, Nov. 15, 2001 – Three key natural gas associations Thursday refuted claims that the US is becoming too dependent on natural gas to generate electricity.

The presidents of the Natural Gas Supply Association, the Interstate Natural Gas Association of America, and the American Gas Association – representing gas producers, interstate pipelines, and utilities, respectively – sent the letter to Sen. Jim Jeffords (I-Vt.), chairman of the Committee on Environment and Public Works.

The committee has been reviewing the environmental impacts of electricity generation.

The gas groups, responding to a letter labor leaders wrote Jeffords Oct. 24, said, “We challenge the notion, implied in the letter, that the US power generation industry is becoming too dependent on natural gas. This statement is disingenuous, given the nation’s dependence on coal – not natural gas – to generate 51% of its electricity.

“And that reliance is even greater in certain regions of the country, such as the Midwest, where coal-fired generation is 75% of total generation (some states depend on coal for as much as 99% of total generation). Natural gas-fired generation, on the other hand, accounts for only 15% of the market nationwide.

“We agree with the labor leaders that fuel diversity is an important public policy goal. It is true that natural gas is the fuel source of new generation units, but even after all these natural gas units are built, coal will still dominate the electric generation market. In other words, in moving to natural gas the market is recognizing the superior environmental performance of natural gas.

“Furthermore, less than 10% of all new natural gas-fired plants will operate as baseload facilities. And many of these new baseload plants are replacing older, inefficient natural gas-fired plants, not replacing coal.”

The association presidents also challenged a claim that the natural gas delivery system cannot meet anticipated demand increases.

“Quite the opposite. While it is true that significant natural gas pipeline and distribution expansions are needed in order to keep up with anticipated demand, those expansions are currently taking place at an unprecedented level.

“The natural gas pipeline industry expects to spend $4.5 billion per year between now and 2015, just on new pipeline expansions. We can, and are, meeting the challenge. The current delivery system is more than adequate to meet demand, and we will take the steps necessary to continue that level of performance.”

They said the nation will have enough gas to meet future demand, citing a National Petroleum Council Study that said the Lower 48 gas resource base is 1,466 tcf.

“At current consumption levels, this is enough natural gas to last us 77 years. Similar conclusions were reached by the Gas Technology Institute and Energy Information Administration. In addition, Canada has substantial reserves and provides the US with over 15% of our natural gas.”

The letter was sent by NGSA Pres. R. Skip Horvath, INGAA Pres. Jerald Halvorsen, and AGA Pres. Dave Parker.

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