Environmental regulation: Is the natural gas industry next?

August 19, 2014

As this blog has mentioned previously, the Obama Administration has been active in using its regulatory power under the Clean Air Act to place limits on the amount of carbon dioxide emissions that coal plants are allowed to emit.

Most recently, the Administration has ordered the U.S. Environmental Protection Agency (EPA) to write regulations establishing state-based cap-and-trade programs that will reportedly reduce coal-fired emissions by as much as 20 percent.

While environmentalists have cheered the news, the coal industry has responded negatively, claiming that these regulations will raise electricity prices. Others in the energy industry have reacted more cautiously. As reported by The Hill, natural gas industry insiders are already considering a scenario in which the EPA turns its sights to them.

Though new coal regulations will likely help the natural gas industry in the near term, many producers believe it is only a matter of time before the EPA regulates natural gas plants in a similar fashion. Even though natural gas emits less carbon dioxide than coal, current trends suggest that it will soon be the top power source in the U.S.

"There's a delicate dance going on," Randy Albert, former executive for Consol Energy Inc.'s natural gas branch, told the news source. "At some point they're going to turn their crosshairs on the natural gas industry."

Frank Macchiarola, a representative from the group America's Natural Gas Alliance, added that the natural gas industry has long been heavily regulated and is wary of any further restrictions. Future regulations may have a significant impact on the business. Environmental consultants are a significant defense against changes in legislation.