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US gas sector fights White House coal claims

23 Jun 2017 18:08 (+01:00 GMT)
US gas sector fights White House coal claims

Washington, 23 June (Argus) — The natural gas industry is working to counter claims from officials in President Donald Trump's administration who say preserving coal-fired power plants is needed to preserve the reliability of the electric grid.

US Environmental Protection Agency (EPA) administrator Scott Pruitt has repeatedly touted the virtues of using coal to generate electricity, while raising concerns about the grid's growing reliance on natural gas. US energy secretary Rick Perry has ordered a study — set for release in two weeks — that will review if power markets are adequately valuing on-site fuel such as coal.

But industry group the American Petroleum Institute (API) is pushing back against claims that natural gas poses a threat to electric grid reliability. Yesterday it published a study, prepared by the consulting group Brattle, that argues natural gas is particularly valuable to the grid in ways that coal, nuclear, hydropower and renewables are not.

"Natural gas can offer all of the attributes that coal has, and then some," API chief economist Erica Bowman said.

API's argument is that natural gas, just like coal and nuclear, can generate massive amounts of electricity and provide stability to the grid. But gas has an additional benefit, the trade group says, of being able to quickly ramp up and down to match variable output from renewables. Coal and nuclear plants are usually unable to significantly change their output throughout the day.

"There has been a focus on fuel diversity," Bowman said. "We really wanted to demonstrate it is not fuel diversity, it is attribute diversity."

Coal industry group the National Mining Association said the study did not look at other benefits of fuel diversity, such as protecting against price volatility of a single fuel source and emergency readiness when fuel supplies are short. Even without these considerations, "we note how well coal stacked up against the other energy sources," the trade group said.

The forthcoming US Energy Department grid study is drawing intensive scrutiny ahead of its release. Environmentalists suspect the administration's focus on grid reliability might be used as a pretext for pursuing policies that help coal, which is struggling to compete against lower-cost natural gas and renewables. Trump promised to help coal on the campaign trail.