US natural gas use to rise under next president

NEW YORK, Oct 29 - With both U.S. presidential candidates calling for a reduction in greenhouse gas emissions, the country's consumption of natural gas should rise under the next administration no matter who wins the White House.

Natural gas for electricity generation and industry will be key to the energy plans of either Republican John McCain or Democrat Barack Obama, said experts, who consider natural gas a bridge between oil and future renewable energy sources under development.

"John McCain and Barack Obama are both advocates of climate legislation and as such either explicitly or implicitly they would have to be in favor of increased natural gas usage," said Bill Cooper, executive director at the Center for Liquefied Natural Gas in Washington D.C.

"Even strong advocates of advancing renewable usage realize that natural gas is going to be a bridge fuel to accomplishing that end," he added.

Natural gas, as the cleanest of the fossil fuels, is considered the preferred middle ground between the dirtier burning oil and coal and greener renewables.

U.S. natural gas reserve estimates for 2006 were around 211 trillion cubic feet. But this could double in the coming years with the introduction of newly developed shale plays.

Senators John McCain and Barack Obama both have committed to greenhouse gas reductions -- Obama by 80 percent of 1990 levels by 2050 and McCain by 60 percent.

Natural gas now accounts for around 20 percent of the energy used in the United States, the world's top consumer, with coal just under 50 percent.

"The bulk of new growth will be met by gas, there's no question of that," said Paul Flemming, director at Energy Security Analysis Inc in Massachusetts, adding that the alternative of burning coal for power generation is looking increasingly unattractive and unpopular for politicians .

"One thing for sure is that it's been harder and harder to get coal plants off the ground. The progress of new coal plant development is not exciting," Flemming said.

Moreover, clean coal development -- advocated by both candidates -- is not expected soon as the vast expense needed to introduce new technologies has delayed development.

Some in the industry see some differences in the candidates' attitudes toward natural gas.

"Any introduction of greenhouse gas legislation is going to create demand for natural gas because there are very limited ways to meet the targets," said Dean Girdis, president of Downeast LNG.

"In that respect maybe Obama is better for gas because he is going to have more stringent adherence to climate control mechanisms because of the desire to meet support to slow down coal power production," he added.

Still, some analysts said the oil and gas industry is more comfortable with McCain's policies of increased drilling.

While McCain has voiced his support for renewables, he also has insisted that offshore drilling must expand -- fast.

Obama initially opposed lifting the congressional moratorium on drilling off the coasts, but he now says he would support limited expanded offshore drilling as part of broader legislation to solve the U.S. energy crisis.

"I think there is a big difference between the two candidates. The difference centers upon not so much their climate change strategy but in the role gas is going to play between here and there," said Porter Bennett, chief executive of Bentek Energy in Colorado.

He said McCain would be more likely to maintain a favorable climate for drilling and exploration, for instance by strongly opposing windfall profits taxes on energy companies.

"We have more gas than we know what to do with and that's happened because the prices have been allowing for investment, but also because of nearly a trillion dollars of producers' investment in exploration and development of resources in the U.S. in the last four years. Obama really doesn't care about that progress."