Bureau of Economic Geology

The future of natural gas use in power generation is uncertain

January 13, 2017 9:00 AM
Gürcan Gülen

Gürcan Gülen, Ph.D., 
Research Scientist/Senior Energy Economist
Center for Energy Economics

Shale gas producers have been “too successful,” supplying too much gas before demand could catch up.  Power generation offers the largest potential for creating new demand for gas as it has done in recent years. Yet, there are large uncertainties. The new administration will not pursue federal environmental regulations such as the Clean Power Plan, which may delay the retirement of many coal plants. States are passing new laws and regulations to save coal and nuclear plants at risk of early retirement.  Many states are strengthening their renewables targets, which is helped by the declining cost of these technologies. Electricity markets and utilities are adjusting to an environment of low prices with increasing deployment of new technologies not only on the supply side but also on the demand side (e.g., rooftop solar, demand response, storage). Our modeling of some of these uncertainties suggest a wide range of gas burn in 2030 (~6 tcf). The talk will focus on power sector trends that create large uncertainties for gas burn.

About the Author:
Gürcan Gülen is an energy economist with 20+ years of global experience across oil, gas, and electric power value chains. He has been with the Bureau’s Center for Energy Economics since 2005. He has been involved in Bureau’s shale resource assessment research, and has been leading the electric power sector research at CEE.