Archive for January 17th, 2012

Electric plants shift from coal to natural gas

Posted on: January 17th, 2012 by shannon No Comments

PITTSBURGH — The huge, belching smokestacks of electric power plants have long symbolized air pollution woes. But a shift is under way: More and more electric plants around the nation are being fueled by natural gas, which is far cleaner than coal, the traditional fuel.

The most optimistic projections describe an abundant domestic energy source that will create enormous numbers of jobs and lead to cleaner skies.

Nationwide, the electricity generated by gas-fired plants has risen by more than 50 percent over the last decade, while coal-fired generation has declined slightly. The gas plants generated about 600 billion kilowatt hours of electricity in 2000 and 981 billion hours in 2010, according to the U.S. Energy Information Agency.
During the same period coal generation declined from 1,966 billion hours to 1,850 billion hours, while hydroelectric and nuclear generation stayed about the same. The figures include electricity use by consumers and industry.

Nationwide, EIA said natural gas use for power generation rose 7 percent between 2009 and 2010. That’s about 515 billion cubic feet. The biggest jumps were in the Southeast, with use rising 24 percent in North Carolina, 18 percent in Virginia and 15 percent in South Carolina.

“Most of the people I know in the electric power industry are building natural gas” plants, said Jay Apt, a professor of technology at Carnegie Mellon University in Pittsburgh. That’s because of low prices over the last few years and the relatively low cost of building such plants, compared with coal-fired or nuclear.

But Apt cautions that the trend could stall because the basics of supply and demand mean that if too many plants embrace cheap gas, it won’t stay cheap.

“The surest route to $6 or $8 gas is for everybody to plan on $4 gas,” Apt said, and if prices do rise, coal will again be the most cost-effective fuel. Natural gas is priced per million BTU.
Apt noted that there was a “huge building boom” in natural gas plants from the late 1990s to 2004, because utilities thought they would get rich from the combination of cheap fuel and plants that were highly efficient and relatively cheap to build. There were predictions that prices would stay low over the long term, too.

But natural gas prices spiked, and the new gas-fired plants around the nation stayed idle much of the time. That trend was also driven by another irony: The gas-fired plants are easier to start and stop compared with coal or nuclear, so many utilities used them just for peak electric demand periods.

Still, history may not repeat itself because of the huge surge in supply from Marcellus Shale gas drilling. Vast gas deposits that previously couldn’t be extracted economically are now being tapped using new technologies. Instead of drilling straight down, companies can drill horizontally and follow seams of gas for a mile or more deep underground. Then the drillers use hydraulic fracturing, or “fracking,” to free the gas from the relatively dense shale rock.

That’s led to environmental concerns from some residents, scientists and regulators who feel there are too many unknowns in the process, along with an undisputed boom in production that’s brought great wealth to some landowners, and a surge of jobs.

Some companies clearly believe the switch to natural gas plants makes long-term sense.

Sunbury Generation LP in central Pennsylvania plans to close five of its six coal-fired generators and replace them with two natural gas-fired turbines by 2015, the Daily Item reported last month.

But some companies are deciding not to switch fuels.

The owners of the Homer City Generating Station in western Pennsylvania, the state’s second-largest coal plant, plan to add $700 million in pollution control equipment to keep the 40-year-old plant running and in compliance with clean air laws.

Natural gas-fired power plants are “orders of magnitude cleaner” than coal plants, said Jan Jarrett, president of the PennFuture environmental group.

Jarrett said PennFuture wants coal-fired units retired and replaced by gas-fired, at least for the short term.

“There’s no way that we can scale up wind and solar to meet the demands over the near future,” she said. “Gas itself is a much cleaner burning fuel that can help clean up our air.”

But Apt sees a slow, moderate shift.

“My sense is you’ll get small changes here,” he said, since the current low natural gas prices are attracting market demand from around the world.

There are already federal permits for 3 trillion cubic feet per year of natural gas exports, Apt said.

“Will we export that bounty, and if we do, will that drive up U.S. prices,” he said. Natural gas sells for about $8 in Europe and $14 in Japan, but less than $4 here.

“They’re not going to tear down the coal plants, because they’ve seen this movie before,” Apt said of electric companies. “They will mothball those plants and start up the coal plants again” if natural gas prices rise.

 

By KEVIN BEGOS – Associated Press