Is Natural Gas the Answer for Electric Utilities?
Electric utilities have turned to natural gas for electricity generation because of its low prices and because of onerous regulations affecting coal plants from the Environmental Protection Agency (EPA). Natural gas emits about half the carbon dioxide emissions that coal emits and is dispatchable, which means it can be turned on and off by an electric grid systems operator and thus can be used to back-up renewable technologies such as wind and solar when the wind is not blowing and the sun is not shining. Its dependability as a generating technology, its low fuel cost, and its lower emission rate make natural gas an important generating source for electric utilities. So much, in fact, that in April 2015, natural gas surpassed coal in electricity output, generating 31 percent of the nation’s electricity to 30 percent for coal.(i] Coal, in the recent past, had been generating 50 percent of the nation’s electricity.
However, one needs to question whether natural gas is the answer for replacing coal in the generation sector. Natural gas has numerous uses—for heating and cooking in the residential and commercial sectors, as a fuel in manufacturing processes in the industrial sector, as feedstock for chemical and agricultural uses and as a generating technology in the electric sector. Because of its numerous uses, it has often needed to be rationed or prioritized with the residential sector generally receiving priority. For example, in the Northeast during the polar vortex, pipeline capacity was so constrained that the cost of generating electricity from natural gas rose to astronomical proportions. Where dual-fired capacity was available, such as in New York, oil was found to be cheaper than gas and was used instead. But, coal and nuclear units were used heavily to get the Northeast through the cold spell. Since then, coal and nuclear units have been retired due to pressing environmental regulations