A boom in natural-gas drilling is raising the prospect that utilities will start burning more gas and less coal, especially if Congress passes a bill to curb greenhouse gases, The Wall Street Journal reports. (Journal chart: Weekly change in prices since Dec. 31, 2006)"Power companies are beginning to ratchet back investments in coal-generated plants to take advantage of low gas prices and hedge against costly climate-change legislation," Rebecca Smith and Ben Casselman report."Natural-gas plants can be built more quickly and inexpensively than coal plants, and they release about half as much carbon dioxide as coal to produce similar amounts of electricity. That could be a big advantage if Congress passes a climate-change bill."
The Energy Information Administration forecasts that utilities will use 2.3 percent less coal this year than last year, and coal production is expected to drop 5 to 10 percent. "There basically is no spot market for coal right now," Jim Thompson, managing editor of the Knoxville-based Coal and Energy Price Report, told the Journal. "Coal companies are living off their utility contracts," which are long-term, not part of the spot market. (Read more)
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