POWER Magazine Quotes Davis, Kapinos, Procaccini on Prospects for Natural Gas
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For its article “The Natural Gas Flame Continues to Burn Bright,” POWER Magazine quoted Akin Gump energy partners Steve Davis, Matt Kapinos and Gabe Procaccini on the natural gas sector.
The article discusses natural gas’ popularity in power generation in the U.S., even as the rise of renewable power sources and questions about the natural gas supply in the wake of Texas’ 2021 storms put its future in question.
Procaccini said that the future for gas-fired power generation is “incredibly bright, notwithstanding the decarbonization megatrend.” He noted that natural gas is abundant and inexpensive in the U.S., clean, and, he stressed, a flexible source of power, adding, “These attributes have fostered greater adoption of gas-fired power generation facilities by many states and independent system operators, and that trend is not expected to decrease anytime soon among this group.”
He said that the gas industry could end up being helped by the move toward decarbonization, noting, “In fact, as gas becomes even cleaner through carbon capture and storage, and other emerging technologies, pairing gas with voluntary carbon credits and the greater production of biogas, to name a few factors, demand for gas-fired power generation is expected to grow in these markets and additional gas-fired plants are expected to be built well into the next decade.”
Kapinos said that advanced technology will make gas-fired plants more attractive to build, although the movement against fossil fuels in some parts of the U.S. could create “strong headwinds” against building new plants irrespective of cost and grid efficiency. That said, he noted, the U.S. Energy Information Administration “predicts that 60% of all MW added between now and 2050 will be in the form of new natural gas generation. This goes to the reality of the situation: a robust mix of renewable generation requires a reliable mix of baseload and on-demand generation to support it. With the retirements of coal plants and the lack of enthusiasm for new nuclear generation, gas-fired generation has to play a role.”
Davis noted that the Biden-Harris administration will likely support strongly moves away from reliance on gas-fired power generation, although he added that it is too early to tell whether that support would be matched by regulatory support and mandates on the state level. He said, “Nonetheless, many of the largest oil and gas companies, as well as the largest car manufacturers, appear to be voting strongly with their capital dollars that the trends toward renewables and electrification are here to stay and even accelerating. It may be more regionally focused, with states with significant oil and gas-related facilities delaying mandates for a significant period of time. Still, the mid-February Texas weather events and their fallout are too early, and perhaps too potentially many and material, to predict.”