GAO: Economic Implications of Switching from Coal to Nat. Gas at Power Plants

Elevated concentrations of greenhouse gases–carbon dioxide, methane, nitrous oxide, and several synthetic chemicals–in the atmosphere resulting from the combustion of fossil fuels and other sources have the potential to cause significant changes in the earth’s climate. These potential impacts include shifts in sea level and weather patterns and could pose threats to coastal and other infrastructure. Concerns about the potential impacts of climate change have led the Congress to consider legislation that would place binding, nationwide limits on greenhouse gas emissions, and the House of Representatives’ leadership has initiated efforts to decrease emissions attributable to its operations. Nearly all of the greenhouse gas emissions from House operations consist of carbon dioxide and are associated with electricity purchased from utilities and the combustion of fossil fuels …

… With regard to the ability of U.S. coal-burning, electricity-generating units to switch to natural gas, according to available data and key stakeholders, the ability of these units to switch is limited by high natural gas prices, supply constraints, and existing infrastructure. In addition, increasing the nation’s use of natural gas for electricity generation could result in adverse economic consequences. Fuel switching to natural gas also poses challenges related to existing infrastructure, including limited pipeline and storage capacity and technical and regulatory barriers to the conversion of existing coal plants. Large-scale fuel switching would require substantial investments in pipeline and storage capacity and new terminals to process imported natural gas–all of which would require regulatory approval. Because of these technical and other issues, large-scale shifting demand for electricity production from coal to natural gas would increase electricity prices, residential and commercial heating costs, and fuel costs for certain industries that consume large quantities of natural gas, including chemical and fertilizer manufacturers. Because of these and other concerns, key stakeholders said that switching coal plants to natural gas has occurred infrequently in the past and is not likely to occur in the future.

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