Average consumer natural gas pricing, 2006-2009.
It's easy to get the mistaken impression that "Big Coal" is losing strength mainly from the well placed blows of climate activists, or by it's own dunder-headed moves- lame ads, forged advocacy letters, and fly ash floods come to mind - leading to the cancellation of new coal-fired generation capacity. These factors, however, are mere nuisances, compared to the heavy artillery that has been hitting utilities and mining companies: falling natural gas prices, which just hit a 7-year low, and the possibility of serious mercury control regs are serious hits. The US natural gas industry, it turns out, is manning the big guns, aiming to take advantage of the lowered price to turn the USA away from it's heavy reliance on coal.T. Boone PIckens is probably loving this.
The Economic Times, in it's story titled Natural gas prices plummet to a seven-year low summarizes the trend:
HOUSTON: Natural gas prices plunged on Thursday to levels last reached in 2002 after an Energy Department report showed that the amount of gas inIn Washington DC, natural gas industry could become a coincidental ally of climate activists, helping to further subdue the power of Big Coal. According to the Times:
storage had hit a record high for this time of year.
The sharp price decline of natural gas, to below $3 per thousand cubic feet from a peak of over $13 last summer, has been caused by a drop in demand from factories and homes because of the recession, coupled with a big expansion of domestic production over the last few years.
Gas executives saw a silver lining, arguing that the low prices will help them make a case in the Senate when it takes up energy and climate change legislation later this year. The gas companies want federal incentives to sway utilities to switch to gas from coal, and they want more government entities and businesses to convert their bus and truck fleets to compressed natural gas from diesel.Yeah I know: natural gas is still a fossil fuel; and we need to live in a perfect world. Get over it - this is how policy making works in the real world, with disappointing trade-offs and surprising allies.
The House version of the legislation, passed in June, disappointed industry leaders who contend that coal interests got a better deal than they did even though gas is a cleaner fuel.
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