Cheap Natural Gas Prices: Prelude to Energy Unreliability and Price Volatility

Contact: Spencer Fane Britt & Browne LLP (Missouri, USA - TAGLaw)

Cheap gas prices driven by a boom in new shale gas development, coupled with more stringent emissions controls for coal fired plants, are causing a shift from coal to natural gas as the primary source of electric power in the United States. In the short term, most welcome this shift because natural gas produces significantly fewer greenhouse gas (“GHG”) emissions. But it appears increasingly certain that in the long run, this shift will result in decreased energy grid reliability and significantly higher electricity costs due to natural gas price volatility.