Electric Plants Shift from Coal to Natural Gas
For decades, electric power plants’ air pollution has been a main concern for environmentalists. However, a transformation is under way as more and more electrical plants are being fueled by natural gas, which has proven to be far cleaner than coal.
Optimistics of this new trend hope the domestic energy source will create new jobs as well as provide cleaner skies and fresher air.
Over the last decade, electricity generated by gas-fired plants has risen more than 50 percent. According to the U.S. Energy Information Agency, gas plants generated about 600 billion kilowatt hours of electricity in 2000 and 981 billion kilowatt hours in 2010.
To the delight of environmentalists, during this time, electricity generated by coal-fired plants declined. Coal generation declined from 1,966 billion kilowatt hours to 1,850 billion kilowatt hours, while hydroelectric and nuclear generation stayed about the same. Between 2009 and 2010, overall natural gas power generation rose approximately 7 percent.
Jay Apt, a technology professor at Carnegie Mellon, stated most people he knew in the electrical power industry were building natural gas plants due to the “low prices over the last few years and relatively low cost of building such plants, compared with coal fired or nuclear.” Although the trend has grown in popularity, Apt believes the trend could potentially stall due to the basic economic principles of supply and demand. “If too many plants embrace cheap gas, it won’t stay cheap. The surest route to $6 or $8 gas is for everybody to plan on $4 gas, and if prices do rise, coal will again be the most cost-effective fuel.”
Hopefuls of the natural gas trend anticipate its profitability. There has been a large growth in supply of natural gas thanks to the Marcellus Shale drilling project. Gas deposits that could not previously be extracted in an economic manner are now being tapped using new technologies, including hydraulic fracturing.
Although some companies are choosing to make the switch to natural gas-fired plants, others are choosing alternate approaches such as investing in pollution control equipment while keeping coal-fired plants open and compliant with clean air laws.
Those using the alternate approaches don’t feel as though the natural-gas trend will last long and believe history might repeat itself. From the late 1990s to 2004, some companies believed they would become extremely prosperous from the combination of cheap fuel and plants that were highly efficient yet relatively inexpensive to build. However, the cost of natural-gas spiked and numerous plants became idle.
Most companies are not going to start tearing down their coal plants to replace with natural gas as it’s just as likely for natural gas prices to rise again.
Only time will tell if natural gas operations prove to be a success.