As environmental concerns drive power companies away from using coal, natural gas has emerged as the nation’s No. 1 power source. Plentiful and relatively inexpensive as a result of the nation’s fracking boom, it has been portrayed as a bridge to an era in which alternative energy would take primacy.
But technology and economics have carved a different, shorter pathway that has bypassed the broad need for some fossil-fuel plants. And that has put proponents of natural gas on the defensive.
Some utility companies have scrapped plans for new natural-gas plants in favor of wind and solar sources that have become cheaper and easier to install. Existing gas plants are being shut because their economics are no longer attractive. And regulators are increasingly challenging the plans of companies determined to move forward with new natural-gas plants.
“It’s a very different world that we’re arriving at very quickly,” said Robert McCullough, an energy consultant in Portland, Oregon. “That wind farm can literally be put on a train and brought online within a year. It is moving so fast that even critics of the old path like myself have been taken by surprise.”
The shifting dynamics are being seen in the Western states in particular – driven not only by economics, but by regulation and climate as well.
The Arizona Corporation Commission, which regulates the state’s investor-owned utilities, recently refused to endorse plans by three power companies that included more natural-gas facilities. Commissioners directed them to make greater use of energy storage and plants that produce zero emissions.
Nationwide, utility executives, power producers and federal regulators have also argued that a healthy power grid requires consistent power, even when the sun doesn’t shine or the wind ceases to blow. The more solar and wind power that is added to the electric grid, they say, the greater the need for reliable backup sources like natural gas.
“Gas has got to be part of that equation,” Robert F. Powelson, a commissioner on the Federal Energy Regulatory Commission, recently told an energy conference. “The gas system has gotten extremely reliable.”
Natural gas isn’t likely to be unseated as the country’s primary source of electricity generation anytime soon. In fact, utility companies plan to add more natural-gas plants than any other source, including all alternative energy sources, like solar, wind and hydropower, combined.
But the calculus is rapidly shifting as the prices of wind and solar power continue to fall. According to the Department of Energy, power generated by natural gas declined 7.7 percent in 2017.
At the same time, state legislatures and regulators are increasingly demanding that utilities rethink how they manage their systems to reduce carbon emissions.
Some power producers have bristled at the mandates, even scaling back their operations in certain markets because, they said, it became too difficult to compete without losing money.
