Natural gas: 'natural' transition from dirty to clean energy?

Natgas a vital bridge for energy needs: gas group
Reuters 18 Jan 08;

NEW YORK (Reuters) - Natural gas remains the United States' only viable fuel source to help bridge a 15-year gap for the nation to transition from dirty fossil fuels to cleaner alternatives, an industry trade group said.

According to American Gas Association chairman David McClanahan, natural gas, with its "small carbon footprint" will be the key fuel until new nuclear power, renewables and liquefied natural gas can also meet America's growing energy needs.

"We need a bridge until clean coal and nuclear are available, which could be a 10 to 15 year period. Natural gas is ready to play a key role to the challenges that our nation faces not only in 2008 but in 2028," McClanahan said speaking to the New York Society of Security Analysts in New York on Thursday.

McClanahan said new nuclear plants would have no effect on supply until the end of the next decade or later, as the industry faces growing opposition from environmentalists and lengthy construction times.

In addition, he said with wind and solar energy not always available at times of peak demand, there are limits to how much renewables can add to the solution.

LNG will play a factor, McClanahan said, but stiff competition from other parts of the world, particularly Asia, will likely keep costs relatively high.

The AGA is focused on getting their message out that natural gas is abundant and less expensive and can help offset climate concerns, one of the biggest challenges facing the energy industry.

"We are in the midst of a seismic shift in the way carbon issues are dealt with in this country. It's a complicated issue and the solutions are elusive, but we can't wait for the perfect solution to present itself," he added.

But in order to meet those needs, McClanahan said offshore areas must be opened up for drilling as soon as possible and not after a supply crunch starts to affect prices.

"Supply is the number one issue. There are domestic places that are not being drilled offshore. Section 181 (in the Gulf of Mexico) was opened last year, but there are expectations that there is a lot of gas on the East Coast and West Coast," he said.

McClanahan said there are fears about not having those supplies until a "crisis" resulting in a big spike starts to hit consumers, some of whom are already showing signs of an economic pinch.

THE MODERATING FACTOR

McClanahan, also the president and chief executive officer of Houston-based CenterPoint Energy, said the company was starting to see some early indications of an economic slowdown in some of its Midwest market areas.

CenterPoint serves gas and power customers in Minnesota, Mississippi, Oklahoma, Arkansas, Louisiana and Texas.

"People have to have energy to heat or cool their homes, but we are seeing signs that people are starting to feel the pinch of a housing slowdown."

McClanahan said his company came out of last winter with its highest amount of delinquent accounts.

"We saw people having to make decisions about what bills to pay. It seems like they were putting aside their energy bill on the 'I'll pay it next month' pile," McClanahan said.

"We worked with those customers, but we were kind of shocked coming out of last winter. It's an indication that high energy prices and high prices at the pump are affecting people's bottom lines," he added.

McClanahan said high volatility and high prices remain big concerns for the gas industry, but the moderating factor is more supply. "Our message is we've got plenty of gas. We've just got to go and get it," McClanahan said.

(Reporting by Eileen Moustakis and Michael Erman; Editing by Marguerita Choy)

Gushing British gas to be harnessed for clean power
Reuters 18 Jan 08;

LONDON (Reuters) - Britain could soon harness the flow of high pressure gas from fields into the national pipeline network to generate carbon-free electricity, after the government confirmed its support for the clean energy on Friday.

The geopressure technology's main backer in Britain, 2oc, is working with network operator National Grid to generate up to a gigawatt of power in this way by 2010, equivalent to the output of a large nuclear power station.

The method, which uses the surge of gas into the network to drive turbines and make electricity, had been facing possible exclusion as part of an overhaul of Britain's Renewables Obligation (RO) scheme to support clean energy.

But the government said on Friday the technology would continue to get support as it tries to boost Britain's tiny renewable energy sector to meet tough European Union targets.

"Geopressure has the potential to be a low-carbon energy source which will help the UK in meeting its ambitious targets to cut carbon emissions," energy minister Malcolm Wicks said in a statement.

"It is an efficient additional use of the gas we will continue to need as part of our energy mix."

Gas flows from subsea fields into the network at such high pressure that pressure reduction stations have to be scattered across the country before it can safely enter British homes.

Geopressure being included in the RO, which helps emerging clean energy technologies to compete with established but dirtier fossil fuel power plants, was welcomed by company chairman Lord Oxburgh.

"The government has helped us to show world leadership in the fight against climate change. We are already talking to a number of partners in the UK and globally who are as keen as we are to exploit this clean, renewable energy," he said.

(Reporting by Daniel Fineren, editing by Anthony Barker)