Natural gas industry finds Clean Power Plan beneficial

The vast majority of natural gas industry participants who took part in a major survey think the Environmental Protection Agency (EPA) Clean Power Plan will help the gas business.

That’s one of the findings from the 2015 “Strategic Directions: U.S. Natural Gas Industry” report from Black & Veatch.

The report finds U.S. natural gas industry leaders are optimistic about the sector even as global forces reshape commodity pricing forecasts. The 2015 report looked at factors such as the ongoing supply boom, tempered demand growth and the impacts of a drastic drop in the price of oil on the industry’s ability to plan for the future.

Rising demand from the power sector and liquefied natural gas (LNG) exports continue to be viewed as areas of growth, Black & Veatch reported.

Report data shows that the final version of the EPA Clean Power Plan (CPP) fostered concern within the industry due to a focus on renewable energy and limits on carbon dioxide (CO2).

Reduction of CO2 emissions from new and existing power plants in the United States rank first and second among issues believed to have an overall positive impact on the industry. This is tied to the likelihood of new gas power replacing higher emission coal plants.

Black & Veatch reported that 85% expect the power sector to see material increases in gas consumption and nearly 75% view new CO2 regulations as being positive for the natural gas industry.

The survey found that regulatory uncertainty was the top concern (82%) in the medium term for pipelines.

This year’s survey was conducted from July 23 through Aug. 19. The online questionnaire was completed by 404 participants who, through a series of screening questions, identified themselves as natural gas utility/service providers or natural gas industry providers.

“The overall results of the survey have a precision of +/-4.8 percent at the 95 percent confidence level,” according to Black & Veatch.

“Over the past year, falling commodity prices have changed the natural gas landscape even as demand forecasts remained positive,” said John Chevrette, president of Black & Veatch’s management consulting business. “Across the value chain this creates opportunities to develop strategies for sustainability and to boost growth in the low price environment.”

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.