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Natural Gas: The Economics of Power Generation

By Greg Russell

According to a recent article in the WSJ, power company executives are reluctant to fully embrace natural gas as an energy resource over concerns of price volatility:  "Utility company executives and regulators are wary of fully embracing natural gas, mindful that they have been burned by wild swings in the price of the fuel in the not-too-distant past. Power companies had to push through unpopular electricity price increases as gas costs nearly tripled between 2002 and 2008, jumping to $9.15 a million British Thermal Units from $3.68. *** Since that 2008 peak, gas costs paid by utilities have plunged, falling 31% in 2012 to $2.77 a million BTUs from $4.02 in 2011, according to the EIA."

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Tags: Energy

Helping clients with their energy and environmental needs

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