Utility chiefs worry U.S. rush to natural gas will crowd out other fuels

Published Jul 18, 2012 at 10:00 am (Updated Jul 18, 2012)

The United States is at risk of relying too much on natural gas as transportation, manufacturing and electric-power industries vie for the cheap fuel, top executives of three power utilities tell Bloomberg. While greater use of gas instead of coal for generation cuts air pollution and carbon-dioxide emissions linked to climate change, the executives say the nation needs a diverse fuel mix to hedge against cost increases in any one source. "Having one focus is never good, just like a portfolio having one stock," says Michael Yackira, chief executive officer of Las Vegas-based NV Energy Inc. Energy companies are developing vast reserves of natural gas by hydraulic fracturing underground to push gas out of shale rock. The process, also called fracking, has sent gas prices down about 38% over the past year, benefiting industries that use the fuel in production, such as chemical manufacturers. The three executives with whom Bloomberg recently sat down disagree on whether the United States should encourage production of alternative sources of electricity by taxing carbon emissions or by offering tax credits for wind and solar developers, for example. Natural gas is the "killer app" because it's the cheapest way to produce power, says Lewis Hay, executive chairman of Juno Beach, Florida-based NextEra Energy Inc.—the nation's largest producer of wind and solar energy. Thomas Fanning, CEO of Atlanta-based Southern Co., says taxing carbon emissions is a "terrible idea" because it would raise energy costs on low-income consumers. Check out the full story here.