By Sarah Olson
For WisBusiness.com
Cheap natural gas is changing the energy market in Wisconsin and across the country.
At a forum yesterday organized by UW-Madison’s Nelson Institute for Environmental Studies, the state’s Public Service Commission chair said natural gas use is on the rise in Wisconsin.
PSC Chair Phil Montgomery said historically Wisconsin has had more capacity for natural gas than has been used because of the price. “Now that the price is coming down, we are using more of the capacity,” Montgomery said. “Cheap natural gas will primarily replace coal and nuclear in the near-term.”
Montgomery was joined by Frank Greb, president of the Energy Center of Wisconsin, and Greg Nemet, assistant professor of public affairs and environmental studies at UW-Madison, to discuss the economic consequences of inexpensive natural gas.
The forum was part of a series about Wisconsin’s connection to fracking, a drilling process that creates fractures underground to help release petroleum or natural gas. Wisconsin is becoming a top provider of frac sand, which is used in the process. Watch the previous forums.
Greb said that although evidence suggests the price of natural gas is decreasing because of increased supply, predictions tend to be inaccurate because the price of natural gas is volatile.
“We don’t want to put all our eggs in one basket,” said Greb, emphasizing the uncertainty in the development of natural gas.
Greb suggested that increased use of natural gas as an alternative to nuclear power may have negative consequences.
“To the extent that natural gas displaces coal, there will in fact be significantly less carbon dioxide emissions. Having said that, if natural gas displaces nuclear power, nuclear power doesn’t produce any carbon dioxide emissions” said Greb.
Nemet said that cheap natural gas has short-term advantages, but poses a substantial risk to the climate in the long term.
Nemet noted that although the rate of carbon dioxide emissions have not increased significantly since their peak in 2005, the rate of emissions is not declining, but is in a state of “stable production.”
According to Nemet, natural gas is not going to be the solution, but it can serve as a bridge by giving the industry time to develop alternative sources of energy such as nuclear and renewables. “It can serve as a bridge to a low-carbon future.” Nemet said.
Although natural gas is becoming increasingly available in Wisconsin, Montgomery said the state will face challenges such as pipeline capacity, opposition to fracking, and price volatility.
“The new world of natural gas will require adaptation.” Montgomery said.
Montgomery said the Public Service Commission is very open with its approach to energy development. Starting next year, open meetings will be held in which speakers and the general public will be invited to share their perspectives on energy issues.
