As Use of Natural Gas Rises, Houston Could Gain

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As coal starts losing its seat as the U.S.’s biggest source of electric energy to natural gas, companies in Houston are looking to gain.

The usage of natural gas at American power plants started to exceed the use of coal for the first time in 2016. Its share of the domestic electric market has grown, says the Energy Department, from 20 percent ten years ago to 34 percent this year. In the meantime, coal’s share has fallen from 49 percent in 2006 to 24 percent this year.

On a global scale, coal is still king in the area of electricity generation. But BP’s Statistical Review, which focuses on energy supply and demand across the globe, says coal is gradually starting to slip. Coal’s share of the global power market fell under 30 percent in 2015, the lowest in ten years. BP reports that during that same time, gas’s share rose from 23 to 24 percent.

Trends like these could offer a real improvement to both Houston and the state of Texas, the hub of the “shale revolution.” It flipped the balance of power with coal and opened huge, new reserves of natural gas.

Analyst at investment research firm Morningstar out of Chicago, Mark Hanson, said several natural gas projects have been suggested over the past several years that could further increase markets for Texas natural gas. Among these projects are pipelines leading to Mexico, export terminals that transfer liquefied natural gas to Asian and European countries, and $100 billion worth of new plants that line the Gulf Coast. “There’s plenty of new demand sources for natural gas production that can absorb the upticks,” Hanson said.

Article written by HEI contributor Briana Steptoe.

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