Natural Gas Now Viewed as Safer Bet
The serious problems at the nuclear power plant in Japan have raised new doubts about the safety of nuclear energy. New exploration has yet to resume in the Gulf of Mexico after last year’s blowout of a BP oil well. And coal plants have been under a shadow because of their contribution to global warming.
Meanwhile, natural gas has overcome two of its biggest hurdles — volatile prices and questionable supplies. In large part because of new discoveries in the United States and abroad that have significantly increased known reserves, natural gas prices have been relatively low in the last two years.
It is far too early to say for sure whether the calamitous events in Japan may roll back the global nuclear revival and lead to a surge in natural gas demand.
Still, with the global demand for energy expected to grow by double digits in coming decades, analysts are anticipating a new boom in gas consumption. Given the growing concerns about nuclear power and the constraints on carbon emissions, one bank, Société Générale, called natural gas the fuel of “no choice.”
“At the end of the day, when you look at the risk-reward equation, natural gas comes out as a winner,” said Lawrence J. Goldstein, an economist at the Energy Policy Research Foundation. “It’s a technical knockout.”
Utilities are also reconsidering natural gas as a potential source of stable power, a function historically filled by coal and nuclear energy. Utility chiefs have been wary of price fluctuations of natural gas, particularly in the last two decades.
But that may be about to change, according to John Rowe, chairman of Exelon, the biggest nuclear utility in the United States. He argued that building a nuclear power plant would be prohibitively expensive, while new rules limiting carbon emissions by the Environmental Protection Agency would require costly investments to scrub emissions from coal-powered plants. This means that utilities will increasingly switch to natural gas.
“Natural gas is queen,” Mr. Rowe told a panel at the American Enterprise Institute in Washington this month.
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