Gas-fired power needed to fuel economic engine

Just as the political climate has made it nearly impossible to construct new refineries in the United States, it is becoming increas-ingly difficult to build power plants to fuel our economy. Many well-meaning people who oppose CO2 emissions appear to offer no choice but to return to the horse-and-buggy days when the public burned whale oil for light and cooked on wood-burning stoves.

This return to the past could never work, of course. Nowadays, the Sierra Club would lobby against the harvesting of timber, Greenpeace ships would attempt to prevent the slaughter of whales, and PETA (People for the Ethical Treatment of Animals) would oppose the use of horses for transportation. In short, we’re stuck between the proverbial rock and a hard place.

Wood Mackenzie’s Ed Kelly recently attempted to address this conundrum during a presentation at Gardere Wynne Sewell’s “Energy of Energy” event in Houston. Kelly noted that 15 of 17 regions of the US will require additional power generation capac-ity between 2007 and 2013 just to maintain power system reliability, while opposition to new construction is growing in power and influence.

Although opponents argue for more renewable generation, Kelly points out that renewable generation cannot be built to the scale required, in the time required, and is itself subject to varying degrees of opposition – for example, Sen. Edward Kennedy’s opposition to a “wind farm” off the coast of Martha’s Vineyard in Massachusetts.

Hydrocarbons continue to be the lifeblood of our economy – now and in the foreseeable future. Without an adequate supply of fuel, the scenario for continued prosperity and devel-opment looks bleak.

Coal has long had a central role as a fuel for electricity generation in America. Today, 52% of our power still comes from coal-fired plants. Natural gas and nuclear are the next largest fuel sources with each produc-ing about 19% of our electricity.

Natural gas, while not renewable, may offer the best hope for future power generation because it is relatively clean burning. Coal, on the other hand, is responsible for 82% of the CO2 output within the power sector.

If opposition to coal-fired power generation continues, the US will have little choice but to turn to natural gas. No nuclear plants have been built in the US in decades due in part to the issue of what to do with spent fuel – an issue that has yet to be resolved.

Considering the alternatives, gas-fired power generation will likely increase in market share in the years to come. Kelly believes it is probable that greater supplies of LNG will be needed to meet market demand, making the US the highest cost mar-ket in the world for natural gas.

CORRECTION: The July Edi-tor’s Comment mentioned several firms that have been merged into Weatherford International in the past 20 years. One of these was Bakke Oil Tools, which we inad-vertently listed as Baker Oil Tools. We regret the error.