Natural gas to build up its lobbying

As a US climate change bill draws nearer (well, maybe), a few more voices are piping up that natural gas should be the easiest, quickest way to reduce the country’s greenhouse gas emissions without touching too many sensitive issues of rising electricity bills, fossil fuel jobs, and the American way of life.

Prolific blogger and former Democrat official Joe Romm, as we’ve noted before, is a big booster for a rapid conversion to natural gas, saying it’s a ‘game changer‘ and would make it cheap and easy to reach the targets set by Waxman-Markey.

Earlier this week Robert F. Kennedy Jnr in the FT’s comment page argued that a straightforward legislative change could dramatically increase the use of natural gas for electricity. There is actually more natural gas capacity than coal powered capacity, he wrote, but many utilities are required to dispatch coal-generated power in preference to gas.

For that reason, high-efficiency gas plants are in operation only 36 per cent of the time. By changing the dispatch rule nationally to require that whenever coal and gas plants are competing head-to-head, gas generation must be utilised first, we could quickly reduce coal generation and achieve massive emissions reductions.

In an instant, this simple change could eliminate three-quarters of America’s coal-burning generators and save a fortune in energy costs. Around 920 US coal plants – 78 per cent of the total – are small (generating less than half a gigawatt), antiquated and horrendously inefficient. Their average age is 45 years, with many over 75. They tend to be located amidst dense populations and in poor neighbourhoods to lethal effect.

But where is the natural gas industry itself in all of this? Sure, T. Boone Pickens has natural gas-powered cars as a key part of his Pickens Plan, but industry lobbying is only a tenth of that spent by the coal lobby, according to E&E news.  Compare this to the ‘clean coal’ campaigns so prevalent that they have provoked a backlash campaign complete with a Coen Brothers-directed advertisement. In comparison, natural gas has been underselling its green credentials for years.

That could be about to change: the Waxman-Markey bill is still before the Senate and Houston Chronicle’s news blog quotes a University of Houston professor saying he expects natural gas lobbying will increase soon. He also thought the nuclear lobby was likely to become more prevalent, although they have already had some success.

The gas industry has at least one good argument on their side: gas is historically very cheap compared to oil at the moment – so cheap, in fact, that the role of the UNG ETF has been eyed as a possible case. Cuts in production are beginning to firm up prices, according to a Platts report, as oversupply has fallen to 1.2bcf/d from 4.2bcf/d in the first quarter, but this may not be enough to stave off storage build later in the year.

Related links:

Oil/gas ratio likely to stay high (FT Alphaville, 24/06/09)
The pitfalls of natural gas as the default climate change (FT Energy Source, 18/06/09)

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