Natural gas power plants produced 42 percent of the electricity contained on the state’s power grid in 2009.
With natural gas prices low, some are doubting whether the share of wind power and other renewable energy sources will grow in Texas and nationally.
A recent study by the Massachusetts Institute of Technology on the future of natural gas found that 80 years’ worth of global natural gas consumption could be developed profitably with a gas price of $4 per 1,000 cubic feet or below.
Plans for nuclear plants and wind farms were made under the assumption that gas prices would average $7 to $9. At that level, electricity prices would be high enough to make wind and nuclear power look affordable. Now many of these projects suddenly look too expensive.
However, the biggest reason for a slowdown in development locally has been the lack of transmission lines needed to transport power from wind turbines to the state’s major urban centers, said Greg Wortham, executive director of the Texas Wind Energy Clearinghouse and also mayor of Sweetwater.
Construction has now begun on a large-scale transmission lines project.
“Wind projects are going to be under construction again,” said Wortham, adding that 2009 was a record year for wind installations nationally.
In the power grid that covers much of the state, wind power made up 6 percent of the total power available in 2009, behind coal (37 percent) and nuclear power plants (14 percent).
This year, the amount of wind turbines installed, as measured by their power generating capacity, has grown at a much slower rate, according to the American Wind Energy Association.
In the second quarter of 2010, only 700 megawatts were installed, a 71 percent decrease from the same time period in 2009, according to the association. Antonio Mexia, chief executive of the Portuguese utility EDP, the third-largest wind power producer in the world and owner of Houston-based Horizon Wind Energy, said in a recent interview that the company plans to reduce wind investments by 75 percent in the United States between this year and next. He predicted that wind turbine installations could fall by as much as half in 2011.
The U.S. uses natural gas to produce 21 percent of its electricity. Coal is the dominant fuel, accounting for 48 percent of the electricity mix. Coal power, struggling under tighter environmental regulations, now is under even more pressure. Natural gas emits fewer dangerous chemicals and about half as much carbon dioxide as coal.
Tenaska has announced plans to build a coal-fired power plant near Sweetwater, but the company touts technology it says will capture between 85 percent and 90 percent of carbon dioxide emissions. The company’s plans call for the gas to be piped to the Permian Basin for use in oil recovery efforts.
In Texas, Russel E. Smith is executive director of the Texas Renewable Energy Industries Association.
“I think you will see more natural gas, simply because it is cheap,” Smith said.
Starting in about 2006, after decades of work, natural gas drillers perfected methods first tried in 1981 that now allow them to cheaply drill down and then horizontally into gas trapped in formations of shale never before thought accessible.
To release the trapped gas, drillers inject a slurry of water, sand and hazardous chemicals deep into the ground to break up rock and create small escape channels, a process known as hydraulic fracturing, or “flacking.”
There is a fear that fluids or wastewater from flacking could contaminate drinking water supplies. Congress has asked the Environmental Protection Agency to study the issue.
Smith noted, however, that he expects to see growth in renewable energy sources as the state’s population grows.
Apart from natural gas prices, he said several factors affect the development of wind, solar and geothermal energy projects.
“Everybody has seen something of a slowdown just by nature of the economy,” Smith said.
The buzz at a conference on solar power is that Texas could see an increase in solar power installations, he said.
“There’s a lot of companies looking and a lot of companies interested,” Smith said.
Karr Ingham, an Amarillo-based economist, said “my suspicion” is that natural gas prices will rise “as the economy improves.”
The biggest uses for natural gas are for power plants and industry, with home use accounting for only about 10 percent of total usage, Ingham said.
Natural gas, which had traded at about $2 per 1,000 cubic feet in the 1990s, hit nearly $15 in 2005.
“It’s a little hard to know exactly how this is gong to play out in the future,” Ingham said, with producers having the ability to increase supply and “bring natural gas to the surface for a long, long time to come.”
This article contains material from The Associated Press.
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