Major challenges loom for natural gas industry, study says
The 1994 edition of Natural Gas Trends, the annual joint study by Cambridge Energy Research Associates and Arthur Anderson Co., says that new oil-to-gas competition, price risks and the prospect of unbundling for local distribution companies loom as major challenges for the natural gas industry. With a tighter supply-demand balance in the past two years compounded by the fall in oil prices, gas is in head-to-head competition with oil for marginal markets, the report states. And with higher gas prices in 1993, industrial demand growth slowed while utility demand for gas fell. Some of this was related to fuel switching, particularly in the electric utility sector. Total electric power demand for gas has risen slightly due to the growth in industrial power generation, but there has yet to be a pronounced surge in gas use during the 1990s - a decade in which many had expected gas to make major inroads into the electric power sector, the report states. And while utilities still have plans to add between 40,000 and 45,000 megawatts of gas-fired generating capacity, gas actually has lost ground in the utility market to coal and nuclear power: In 1993, electricity output from coal and nuclear rose, while gas-fired generation fell to an estimated 250 billion kilowatt-hours - the lowest level since 1986, when gas generated 246 billion kwh.
- OSTI ID:
- 7089286
- Journal Information:
- Energy Daily; (United States), Vol. 22:18; ISSN 0364-5274
- Country of Publication:
- United States
- Language:
- English
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