A bright future for gas is good news for state
OUR VIEWS Economy, budget would benefit
The Oklahoman Editorial The Oklahoman Comments 37
Published: December 20, 2009

CALL it a case of strange shale-bed fellows:

The Sierra Club is allied with Oklahoma Gas and Electric Co. (as is the AARP) to battle a disastrous pollution mitigation plan instigated by another environmental group. The winner in this fight could be Oklahoma’s natural gas industry.

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Meantime, ExxonMobil is putting a tiger in the tank of that industry with the planned purchase of one of the country’s biggest gas producers. This development and others led The Wall Street Journal to ask in a headline, "Has Natural Gas’s Moment Come?”

The folks at NE 23 and Lincoln can only hope so. Nearby, at the headquarters of the state Department of Environmental Quality, a hearing was held Wednesday to discuss the dilemma public utilities face following an increasing assault on coal-powered electrical generation plants.

We could say the "moment” for natural gas came a long time ago in Oklahoma. It’s been one of the cylinders in the economic engine for years, but gas producers have long said the fuel has so much more potential. And there’s apparently so much more of it than most people thought.

The Journal notes that nearly 4,000 miles of gas pipelines were added in 2008, the most in more than 10 years. Also, new discoveries of natural gas in shale formations have driven up reserves by nearly 60 percent in the past four years. Finally, ExxonMobil’s purchase of XTO Energy Inc. signals that the industry is pumping up confidence in gas as the fuel of tomorrow — for heating homes, making power and running cars and trucks.

OG&E and its ratepayers are caught in a squeeze between the desire to keep electricity relatively cheap and the demand that power generation must be cleaner even if it means it will cost much more. An environmental group’s litigation has led to the potential for what would be the largest rate increase in OG&E history. That would happen if the utility is forced to spend more than $1 billion on scrubbers for its coal plants, which account for most of the power OG&E makes.

An alternative is to begin switching more generating capacity to plants fueled by natural gas — which is why the Sierra Club is aligning with OG&E on this one. Regardless of how this plays out, gas has a brighter future. That’s good news for the Oklahoma economy. And, if the price is right, it’s great news for state revenues.

Gas-producing states stand to benefit from increased demand and increased diversity in what drives that demand, including fuel for automobiles.

We’re still not sure what’s driving AARP’s current support for OG&E; it usually opposes everything utilities do, presumably including their logo designs.

An environmental group’s litigation has led to the potential for what would be the largest rate increase in OG&E history.



Buck