February 8, 2008
Roadblocks to building new coal and nuclear plants in the United States have some industry observers expecting a natural gas boom that could contribute to higher energy prices in Ontario over the coming decade.
Dozens of proposals for new coal and nuclear plants from U.S. utilities have been shelved or cancelled because of rocketing construction costs, financing risk, regulatory uncertainty and community resistance.
The attraction to gas is that plants are much easier to build. …
However, a "profound impact on price" would likely be an issue.
Norm Rubin, an analyst with Energy Probe, said such a trend would affect Ontario businesses and consumers, who rely on natural gas for heating and will grow more dependent on it for electricity as the province moves to phase out all coal-fired plants by 2014.
"Increased demand for natural gas will not only drive up the price, but it will drive us more toward liquefied natural gas," said Rubin, adding that increased reliance on so-called LNG means relying on imports coming in by ship – and, as with oil, being left more vulnerable to the volatility of global trading markets.
Rubin said energy is required to liquefy the natural gas and some of the fuel – what he calls "fugitive methane emissions" – is lost during transportation, bringing it closer to coal in terms of greenhouse gas emissions. … Amir Shalaby, vice-president of system planning at the Ontario Power Authority, said Ontario, compared to many U.S. states, will be somewhat sheltered by price increases because of its diverse energy mix. He added that new natural gas plants will also be used sparingly.
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