NPRA ’10: Future US natgas threatened by climate, water regs

28 March 2010 18:25  [Source: ICIS news]

Natural gas supplySAN ANTONIO, Texas (ICIS news)--US regulations favouring natural gas as a fuel could limit supplies of the key chemical feedstock, despite the potential of the nation’s shale-gas reserves, an official with a trade group said on Sunday.

“We don’t need a spike in natural gas,” said Jim Cooper, vice president, petrochemicals, for the National Petrochemical & Refiners Association (NPRA). He was speaking on the sidelines of his group’s International Petrochemical Conference (IPC).

The US petrochemicals industry and downstream chemical manufacturers are heavily dependent on natural gas as a feedstock and a power fuel.

In 2009, low-cost natural gas gave US chemicals an advantage over foreign production. However, federal greenhouse-gas and climate-change regulations could discourage coal-burning power plants, making natural gas the fuel of choice among new plants. “That’s the thing about government policy,” Cooper said. “It inadvertently picks winners and losers.”

Even if the federal government fails to adopt any climate-change legislation, individual states could pass their own laws, favouring gas-burning power plants, Cooper said.

Increases in natural-gas demand could be met by the nation’s shale-gas reserves – which many have regarded as an industry game-changer.

However, regulations could also threaten the development of those reserves, Cooper said.

Already, US regulators plan to begin a two-year study of hydraulic fracturing to determine if that crucial natural-gas drilling technique threatens water quality and public health.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

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By: Al Greenwood
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