Thursday, December 25, 2008

Climate Change Legislation Will Help Natural Gas & Nuclear

Natural gas produces about half as much carbon dioxide as coal when burned. This gives it a major advantage if and when a price is put on carbon dioxide. Nobody knows how much it will cost to reduce carbon dioxide because you cannot put a piece of equipment on a power plant to 'scrub' it out. The current 'political' fix is to sequestor it in underground locations. The Center is promoting converting CO2 into diesel via the Fischer-Tropsch method. Regardless, you can get a fifty percent cut in such emissions just by switching fuels.

This could present a big problem for coal companies and coal jobs. Of course, nuclear produces no CO2 at all and would capture the full benefit of higher electricity prices due to a price on carbon dioxide (reduction). Of course, just a year ago, natural gas futures were projected to rise to $12 per million BTUs (British Thermal Units) compared to a forecast price of $5.50 for 2009. Natural gas averaged about $9 per million BTUs in 2008.

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