Thursday, March 25, 2010

Natural gas escalates its war with coal

In the latest example of the growing feud between coal and natural-gas interests, the chief executive of oil giant BP said Wednesday that coal jobs weren't worth sacrificing the U.S.'s "clean energy" future. Tony Hayward told an audience at the Peterson Institute for International Economics in Washington that the nation's attempts to save coal jobs have come at the expense of clean-fuel industries and there is no reason to keep building coal-fired power plants in the U.S., Mike Soroghan of Environment and Energy Daily reports.

"Hayward's comments reflect an increasingly bitter political rift between two of the largest elements of the country's energy industry -- coal and natural gas," Soroghan writes. Gas-industry executives were angered by extra protections afforded coal in the House climate bill passed last fall, and say if lawmakers want to cut carbon emissions, they should look more to gas, which emits about half as much carbon as coal when burned. Proponents view gas as, at worst, a bridge fuel to a low-carbon future, or, at best, "a permanent fixture of a diverse approach to lowering emissions," Soroghan writes.

"Mr. Hayward is obviously unaware that coal is America's most abundant energy resource," Carol Raulston of the National Mining Association told Soroghan. "I'm consistently surprised that one of the world's wealthiest companies would suggest Americans should forgo good jobs and affordable electricity from coal so that oil and gas can increase their market share." (Read more, subscription required)

Hayward's frustration is illustrated by a new report released Wednesday from the international energy consultantcy Brattle Group, projecting that despite vast gas reserves recently made available through new drilling techniques, gas demand will decrease in the coming years thanks to incentives for renewable energy and free emission allocations for coal in climate legislation.The report concludes "The [climate] bills won't push prices of carbon dioxide emissions up enough for natural gas to displace coal at power plants in the first decade of the program," Katherine Ling of E&E reports, adding "incentives and mandates will spur more renewable energy." (Read more, subscription required)

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