Author Archives: Kristin Schrader Marcell

Kristin Schrader Marcell Senate Energy Bill: Love It or Hate It?

Recently Dave Parker participated in the National Journal’s Energy and Environment Experts blog to respond to their question, “Senate Energy Bill: Love It or Hate It?” Please take a moment to read his response posted below and visit the National Journal Energy Experts blog to view the comments from others in this respected group.

The American Gas Association (AGA) is pleased that the Senate Energy and Natural Resources Committee recently approved legislation to support the development of U.S. natural gas resources along the Outer Continental Shelf, which will benefit consumers, the economy and the environment. Specifically, the committee approved an amendment offered by Senator Byron Dorgan (D-ND) that will provide significant new access in the Eastern Gulf of Mexico by opening this area beyond 45 miles of the Florida coast for oil and natural gas development.

The Dorgan amendment also included the “Destin Dome” natural gas discovery, which lies approximately 25 miles south of Pensacola and is expected to produce anywhere from 110 to 165 billion cubic feet of gas every year for the next 20 years. Access to the Eastern Gulf of Mexico, which is known to have vast resources of natural gas that are close to existing pipelines and other vital infrastructure, will not only help supply more domestic natural gas to consumers but will also ultimately help make America more energy secure.

AGA was also encouraged that the Senate Energy and Natural Resources Committee legislation included biogas as a qualified renewable for the Renewable Electricity Standard (RES).  Biogas can be sustainably produced as a product of our waste-producing (landfills, agricultural processes and animal farms) lifestyle.  This efficient process also captures methane that otherwise would have entered into the atmosphere.

And while not included in the Senate Energy Committee’s recent energy legislation, AGA will continue to educate policymakers about a recently released National Academies’ (NAS) report to Congress, which found that the Department of Energy should consider changing its measurement of appliance energy efficiency to one based on the full-fuel cycle. This measurement takes into account the amount of energy produced and lost from the point of production to the final point of use. This more accurate measurement would provide consumers with more complete information on energy use and environmental impacts.  For example, 70 percent of the total amount of fuels used in producing, generating and transmitting electricity is lost by the time that electricity reaches a customer. By contrast, producing and delivering natural gas directly loses only about 10 percent of its usable energy.

The NAS study also supports the “carbon footprint labeling” provisions championed by AGA that were recently included in the Waxman-Markey climate change legislation.  These provisions would expand the existing Federal Trade Commission EnergyGuide labeling program for appliances to include carbon footprint information.

AGA looks forward to working with Congress as it considers energy and climate change legislation that strives to improve our environment and energy security, while also encouraging the increased use of clean, abundant, domestic natural gas. As the cleanest fossil fuel, emitting only one carbon atom when burned, natural gas can play a major part in reducing carbon emissions.

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Kristin Schrader Marcell Is Nuclear the Green Solution?

nationaljournalblog2 Is Nuclear the Green Solution? Recently Dave Parker participated in the National Journal’s Energy and Environment Experts blog to respond to their question, “Is Nuclear the Green Solution?” Please take a moment to read his response posted below and visit the National Journal Energy Experts blog to view the comments from others in this respected group.

We believe nuclear power is one part of the solution to climate change, given that it emits no greenhouse gases.   In addition, our industry supports increasing nuclear power’s ability to generate electricity because of the current trend in which more and more natural gas is being used for that purpose. Because it is the cleanest burning fossil fuel, more and more electricity generators are turning to natural gas as a way to comply with increasingly stringent environmental standards.  Unfortunately, as demand for natural gas in this market increases, so does its price, which makes it more expensive for the residential and commercial customers that natural gas utilities primarily serve.   That is why our industry supports the availability of a variety of supply sources for electricity generation, including more nuclear power.

In addition, when natural gas going into electricity generation drives up its price in the residential and commercial market, that can actually have a negative effect on our national environmental goals because as the price of natural gas increases, residential and commercial customers might choose other, less expensive, but less efficient and dirtier fuel sources.   The best use of natural gas, both from an efficiency and environmental standpoint, is its direct use in homes and businesses.   To the extent that more nuclear power frees up natural gas to be used directly in America’s homes and businesses, that is a good thing.

Yes, building nuclear power plants can be an expensive investment, in great part because of the extensive regulatory hurdles put in their path, and because, for the most part, the general public is not well informed about the benefits, including the clear environmental benefits, of nuclear power.  We believe the federal government should promote nuclear power, both through loan guarantees and through a public education outreach effort that explains the rewards of nuclear power as well as the risks.

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Kristin Schrader Marcell Will low natural gas prices lead to natural-gas fired plants

Yesterday the Wall Street Journal ran a story about how new supplies of natural gas, combined with reduced demand for electricity, have decreased natural gas prices to less than $4 per million British thermal units, which some say could prompt power companies to invest billions of dollars in natural-gas fired plants.

Specifically in the article “Lower Natural-Gas Price Leaves Coal Out in Cold,” Rebecca Smith and Ben Casselman reported that coal now accounts for about half of the nation’s electricity, compared with about 21 percent from natural gas. However, they stated that “natural-gas plants can be built more quickly and inexpensively than coal plants, and they release about half as much carbon dioxide as coal to produce similar amounts of electricity. That could be a big advantage if Congress passes a climate-change bill that would cap such carbon emissions.”

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Natural-gas plants can be built more quickly and inexpensively than coal plants, and they release about half as much carbon dioxide as coal to produce similar amounts of electricity.

Additionally, new natural-gas discoveries in Texas, Louisiana, Pennsylvania and elsewhere, have created a large natural gas supply abundance that has changed the view of U.S. gas supplies and fuel outlooks for the near future. In fact, according to a research report released June 1, 2009 by Merrill Lynch & Co, ‘in parts of the U.S. where there are daily electricity auctions, gas generators are chipping away at coal market share with lower prices. Coal-to-gas switching has created incremental gas demand of three billion cubic feet a day, and ‘further switching potential is still large, in our view.’”

This article is very timely since the American Gas Association and the Potential Gas Committee are hosting a press conference this Thursday, June 18, 2009 at 10:00am in Washington, DC to announce the unprecedented abundance of U.S. natural gas supply, as well as future consumer impacts. With climate change and energy proposals being considered on Capitol Hill this summer, we think that that these new natural gas discoveries are changing the national debate on energy and future domestic energy supplies. After reading this article, what do you think?

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Kristin Schrader Marcell Energy Efficiency Programs

Recently, the American Gas Association released a report that shows that an increasing number of states are implementing regulations that allow local natural gas utilities to set in place energy efficiency programs that help customers reduce their energy bills.

Specifically, the May 2009 issue of the Natural Gas Rate Round-Up reported that 19 states have regulations that permit the recovery of revenues and margins lost due to utility-sponsored energy efficiency programs. In addition, 11 states as well as Canada have approved financial incentives for utilities that invest in energy efficiency.

These measures are important because they align utility incentives with helping customers reduce their energy usage.  As a result, where utilities are able to recover energy efficiency program costs and lost revenues, and earn a profit on energy efficiency services, they become stronger partners with customers in achieving conservation.

Effective regulatory approaches, such as decoupling and other innovative rate designs, are a true win for both customers and utilities.  Customers save money by using energy more efficiently, and utility companies can promote efficiency and conservation measures without placing themselves in financial jeopardy.

In fact, the report says that by the end of 2007, utility companies in states with energy efficiency or demand management programs achieved a savings of 9 percent of total natural gas usage per residential participant—a direct consumer cost savings.

After seeing these benefits and the opportunities for efficiency and conservation, would you support this type of energy efficiency program in your state?

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