Time Is Right For A Gas Revolution

By Robert Carpenter, Editor | January 2012, Vol. 67 No. 1

The enemy of my enemy is my friend. Those words have been used in books and movies to dramatic effect. But in the world of energy, they take on a similar – though substantially less violent – meaning.

Often, we in the underground infrastructure market are at odds with the Environmental Protection Agency for what are deemed onerous and unnecessary regulations and oversight. Sometimes, particular for many of the major energy companies operating power plants, the use of coal is viewed in-step with natural gas as a necessary and economical packaging of fuel sources for power generation. But modern market dynamics combined with the fact that the coal industry is still a horrible polluter – even in 2012 – deem such viewpoint indefensible.

Today, natural gas is cheap and plentiful – so much so that we have ample domestic supplies for somewhere between and 100 and 200 years at a minimum. Building out a new gas infrastructure piping market continues to keep this market healthy for the foreseeable future.

However, coal has dominated power generation for decades, flaunting environmental rules and continuing to spew deadly toxins into the air. As long as coal was a cheap source, it has been virtually impossible to unseat the coal lobby from controlling power generation. While the gas industry remained largely quiet on the subject, many continued to lump all petrochemical sources as one market, one industry. That perspective is even more erroneous today than ever. Coal is not only the enemy of our lungs, but the enemy of the gas industry as well.

Recently, the coal industry has been in a desperate fight of survival. They’ve defied the odds – and the EPA – for decades. But on Dec. 21, the EPA let the other foot drop on the U.S. coal-generation power plants, announcing another round of regulations that will force them to upgrade or retire many plants that have been out of air quality compliance since 1990. About 40 percent of the 1,400 coal-fired units nationwide still lack modern pollution controls.

Coal lobbyists, in a predictable, apocalyptic diatribe, claim consumers will be forced to pay for a 19 percent rise in electricity prices. But the EPA models tell a different story, claiming the new standards will result in relatively small changes in the average retail price of electricity (approximately 3 percent).