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Natural Gas Shut Out of Debate: COAL INDUSTRY IS BELIEVED TO HAVE GOTTEN A BIGGER SHARE OF BENEFITS IN EARLIER LEGISLATION
Thursday, October 29, 2009 4:07 AM


(Source: The Daily Oklahoman)trackingBy Chris Casteel, The Oklahoman, Oklahoma City

Oct. 29--WASHINGTON -- Despite being abundant and relatively clean, natural gas has been mostly ignored in legislation to reduce greenhouse gas emissions, energy company executives told a Senate committee Wednesday.

Lamar McKay, chairman and president of BP America, said coal has been "insulated" from strong mandates to reduce carbon emissions, even though it's far dirtier than natural gas. McKay said natural gas "is not being let on the field" to compete.

Jack Fusco, chief executive officer of Calpine Corp., the nation's largest independent power producer, said the climate change bills being considered by the House and Senate have no real incentives for more natural gas usage. Dirtier sources of electricity generation get such broad benefits, he said, that any implicit benefits for natural gas will be "blunted."

The comments came at a meeting of the Senate Energy and Natural Resources Committee about how natural gas can help reduce carbon emissions. The committee met at the same the Environment and Public Works Committee was holding a hearing on climate change legislation.

Since the House passed its global warming bill last summer, there has been a common sentiment that the natural gas industry -- despite having a fuel that is about 50 percent cleaner in electricity generation -- got out-maneuvered and out-lobbied by the coal industry. The Senate bill is still a work in progress, and natural gas may still get some incentives.

Natural gas boosters, whose ranks have grown on Capitol Hill with the discoveries of huge shale deposits in different regions, have been pushing for expanded use of natural gas in all sectors, including transportation. Energy investor T. Boone Pickens, who is holding a town hall meeting today in Stillwater, has been in Washington numerous times to promote natural gas as a way to wean the country off foreign oil.

But old concerns still exist, including the volatility in prices for the fuel.

Edward Stones, director of energy risk for the Dow Chemical Co., told the committee that price spikes for natural gas have wreaked havoc with the nation's manufacturing sector, and that he didn't see the need to "dash to gas."

"I think it's too early to declare natural gas a silver bullet or a bridge-fuel solution," he said.

In the past, when the government created incentives to use natural gas, he said, it also blocked access to drilling for it on some public lands, creating price spikes when demand out-stripped supply. Though the natural gas industry now argues that the nation holds a 100-year supply of natural gas resources, Stones predicted price spikes would continue and lead to more manufacturing jobs shipped overseas.

The hearing drew an unusual number of senators, many of them praising the potential of natural gas.

Sen. Jeff Sessions, an Alabama Republican, quoted Pickens in calling for more vehicles running on natural gas.

Richard Newell, administrator of the Energy Information Administration, said natural gas was likely most viable for fleets and commercial vehicles because of the scarcity of fueling stations.

David Wilks, an executive with Xcel Energy, said Congress should offer incentives to replace aging coal plants with natural gas plants.

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Copyright (c) 2009, The Oklahoman, Oklahoma City

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