Gas producers and utilities have all but abandoned R&D and marketing. Is it too late to reverse the death spiral, or can the industry learn from other check-off marketing successes?
DOE's Curtis Champions Natural Gas R&D
Charles B. Curtis, deputy secretary of the U.S. Department of Energy, spoke on the world energy balance and its impact on U.S. markets at the American Gas Association (A.G.A.) Natural Gas Roundtable on April 2 in Washington, DC. Curtis pointed out the security implications of the latest Energy Information Administration (EIA) forecast that global demand for oil might reach an additional 20 million barrels a day by 2010, and that the Persian Gulf would likely supply 75 percent of that demand. In anticipation, Curtis urged, the United States must diversify its oil and natural gas supplies and expand research and development (R&D).
Currently, however, R&D in the United States is threatened by competitive pressures, and Curtis believes that situation could have serious implications for the gas industry. EIA sees growth for natural gas in all sectors of U.S. markets, especially electric generation. But that growth is tied to what happens with electric restructuring.
Curtis cited a speech given by Federal Energy Regulatory Commissioner Donald F. Santa, Jr. on
February 22 at the 16th Annual Natural Gas Conference in Washington, DC. Santa had noted that while use of natural gas to fire electric plants had increased, gas-fired generation still represented a small portion of total electric generation. To meet the Clean Air Act Phase 1 sulfur-dioxide requirements, most utilities have merely switched to low-sulfur coal or installed scrubbers to meet environmental specifications. Santa said no one can be sure how gas as the new generation fuel choice will "be affected by the vagaries of restructuring."
Curtis agreed, and added that coal will win as the fuel choice except where gas transportation costs are low. The solution requires finding ways to lower the price of gas, which Curtis linked to government and private sector R&D. Curtis said he was pleased that A.G.A. would be seeking more end-use technology funding in the 1997 U.S. budget, and added that the Gas Research Institute (GRI) needed more funds. Curtis warned that if the natural gas industry appears unwilling to fund R&D, Congress is unlikely to believe that taxpayers should pay for it.
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