Gas lobbies for attention as Perry aims to aid coal

Bloomberg

As Energy Secretary Rick Perry considers whether the US should do more keep coal and nuclear power plants online, natural gas producers are trying to ensure they aren’t left in the dark.
Lobbyists for the natural gas industry are telling the administration their fuel is just as reliable as coal or nuclear, and that gas-fueled plants have the added advantage of being able to ramp up quickly to respond to price spikes or a drop in wind speeds. The lobbying push illustrates how fulfilling President Donald Trump’s pledge to save coal has downsides for other fossil fuel interests, including those closely allied with the president.
“We’re not taking shots at coal and nuclear,” but it’s important to “tell the whole story,” said Marty Durbin, executive vice president and chief strategy officer at the American Petroleum Institute. “We want to make sure if they go down this road, they understand” that reliability is about more than the fuel itself, he said.
API, which absorbed America’s Natural Gas Alliance in 2015, released a study last month describing an array of natural gas attributes that make for a more reliable grid — including fleets that are both flexible and stable. The advocacy by API, which represents companies such as Exxon Mobil Corp., tracks similar arguments about the grid by wind, solar and battery companies.
Proponents of natural gas, which topped coal to be the primary source for electricity generation in 2016, are trying to fend off any decisions by the Energy Department to push for changes to the structure of power markets and give advantages to coal or nuclear producers. That prospect is real: FirstEnergy Corp. wants to see what moves Perry would make before a possible sale of its coal plants in competitive markets.
Coal is more reliable because that fuel sits in piles at the plants whereas natural gas must be delivered by pipelines to the facilities, coal producers say. That makes coal plants less vulnerable to disruption than those burning natural gas, its advocates argue.
Perry’s Energy Department is set to release this month its assessment of the grid — a study designed to examine whether policies favoring wind and solar energy are accelerating the retirement of coal and nuclear plants viewed as providing steady, reliable “baseload” power. Perry’s initial memo for the study referenced natural gas as supplying “affordable baseload power” as well. That suggested the focus would be on how to counter the surge in renewable wind and solar power, which benefit from federal tax breaks.
Since then the coal industry began highlighting that fuel’s perceived benefits over gas. “Coal is more resilient than natural gas,” said Paul Bailey, the president of the American Coalition for Clean Coal Electricity, which represents coal-mining companies, utilities and railways. “We think coal-fired power plants are necessary to have a
resilient electricity grid.”
Competition from cheap gas is only set to grow. The American Gas Association, which represents gas distributors, is set to release a report Wednesday showing that technically recoverable natural gas resources in the US have grown to the highest level in 52 years of assessing them, said Jake Rubin, an AGA spokesman. More supply generally leads to cheaper gas.
A draft version of the study prepared by career staff at the Energy Department suggests they are taking a broad view. “Fuel diversity does not in itself assure or improve grid reliability, and having fuel on site does not assure better grid
resilience,” the draft report says.