Billings Gazette
EPA’s impending regs may decrease coal market

Monday, October 11, 2010

CASPER — Natural gas is poised to grab a portion of the electric utility market that for decades has been dominated by Wyoming coal.

Driving this shift is the U.S. Environmental Protection Agency’s actions to further restrict a number of industrial air pollutants, and a legal mandate to phase in rules curbing greenhouse gas emissions, which begin in January.

Advanced directional drilling and the ability to shatter deep rock formations to unlock shale gas have boosted domestic gas reserves by more than 35 percent in recent years, according to industry estimates. Hundreds of rigs are drilling in shale gas plays such as the Marcellus in Pennsylvania and New York, the Haynesville in Louisiana and the Barnett in Texas.

Industry analysts say it’s reasonable to expect a significant resurgence of natural gas production in Wyoming and throughout the Rockies.

“The costs of those (production) activities are economic, at some prices. If gas stayed at $2 (per thousand cubic feet), probably not. But it’s likely it will be in the $3 to $5 range,” said Porter Bennett, president and CEO of Bentek Energy, which specializes in energy market analysis.

According to the Energy Information Administration, the Rocky Mountain region can expect an 8 percent increase in natural gas production from tight sand formations by 2035.

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