Regulations Reduce Energy Diversity
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Stephen Hayward at AEI points to an Energy Information Agency report showing electricity production shifting from coal to natural gas. Increased domestic natural gas development is one reason for the shift, but EPA’s Utility MACT, Cross-State Air Pollution Rule, and proposed greenhouse gas standard play significant roles and will continue to tip the scales away from coal.
The increased reliance on natural gas has created some reliability concerns. Late last year, a North American Reliability Corporation (NERC), report stated, “[I]ncreased dependence on natural gas for generating capacity can amplify the bulk power system’s exposure to interruptions in natural gas fuel supply and delivery.” This issue is important enough that the Federal Energy Regulatory Commission (FERC) announced it would hold a series of regional meetings to discuss coordination between natural gas and electricity industries.
These concerns are manageable, but it’s a reminder of the important of energy diversity. It’s that whole “Putting all your eggs in one basket” cliché. To effectively plan, businesses need the certainty that a variety of energy sources provides. Regulations that block coal, natural gas, nuclear, or alternatives from competing reduce energy diversity and security.