Friday, October 07, 2005

Rising Natural Gas Prices Forsage Expensive Winter

Today's Washington Post is taking a closer look today at an issue we're very familiar with: The rising cost of natural gas and its effect on the American economy:

U.S. consumers could face bills averaging 48 percent higher this season than last year, according to predictions by the economic research firm Global Insight Inc. The escalating costs could cause Americans to cut back on dinners out, trips to the mall and spending, crimping U.S. economic growth. Businesses, squeezed by high energy costs, could limit expansion plans. The high prices also are pumping up inflation.

Manufacturers that use huge amounts of natural gas are scouring the world for cheaper prices and considering moving operations to ease their costs. A renewed exodus -- many companies have already shifted overseas -- could further knock back growth in the United States and boost unemployment.

Andrew N. Liveris, chief executive of Dow Chemical Co., told a hearing yesterday before the Senate Energy and Natural Resources Committee that the country is in a "natural gas crisis." The Midland, Mich., company, which uses large amounts of the fuel to produce chemicals, must consider locating new plants in other parts of the world, such as China and the Middle East, because of U.S. energy costs, he said.

"How can I recommend investing here?" Liveris said.
Patrice Hill also covers the issue in today's Washington Times. None of this is exactly news, as Pat Cleary over at the NAM Blog sent out the warning about a month ago.

So how does nuclear energy fit into the equation? Well, by displacing natural gas-fired electrical generating capacity, that's how. And there's an historical precendent for it, as nuclear energy was substituted for much of America's oil-fired electrical generating capacity back in the 1970s.

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1 comment:

Stewart Peterson said...

>>So how does nuclear energy fit into the equation? Well, by displacing natural gas-fired electrical generating capacity, that's how. And there's an historical precendent for it, as nuclear energy was substituted for much of America's oil-fired electrical generating capacity back in the 1970s.

Wrong, wrong, wrong.
We have to go after coal capacity. Using nuclear to prop up the current fad leaves the half-built nuclear plants being converted to coal when the fad passes. The same happens for using it for new expansion--as soon as expansion slows or stops you've got a $15 billion bill and nowhere to sell the electricity.