In the News...

Gas Bill May be Used as Model

Monday, April 5 2010

The Durango Herald
By: Joe Hanel
April 4th, 2010

DENVER - The natural gas industry won its first significant victory last week in its drive to offer its product as a cleaner alternative to coal.

Now, the industry and its new allies in the environmental movement hope to export the idea around the country.

Two local lawmakers carried House Bill 1365, which passed the Legislature on Thursday.

The bill is unlikely to help clean up Southwest Colorado's air in the short term because it focuses on coal power plants in Denver and Boulder. And because pipelines in the Four Corners do not connect directly with Denver, sponsors said the bill might not provide an immediate boost to the region's gas industry.

But backers hope it is the first step in a march away from old coal power plants.

Rep. Ellen Roberts, R-Durango, and Sen. Bruce Whitehead, D-Hesperus, sponsored the bill and helped hold together a coalition of former enemies: environmentalists, natural-gas producers and a major utility company.

“What Colorado's been able to do in a bipartisan way with an incredibly powerful coalition has proven to be a model that's ready for export," said Pam Kiely of Environment Colorado. “If you can do it in Colorado, there's a really good chance you can make it happen in the rest of the country."

Kiely called it one of the most important environmental bills “in many, many, many years." For the gas industry, it was the best bill in a decade, said Tisha Conoly Shuler, head of the Colorado Oil and Gas Association.

Less than a year ago, COGA was at war with environmentalists and Gov. Bill Ritter, who pushed through tough new rules on gas production.

But last July, when gas producers gathered for the annual COGA conference, several of them argued for a change in strategy. The U.S. House of Representatives had just passed a climate-change bill that ignored natural gas and went easy on coal power.

Conference founder Fred Julander argued that it was time to start working with government to expand the market for natural gas by using it to replace coal-powered electricity.

Julander was happy about the passage of HB 1365 and wants to expand the idea.

“I think there's national attention here because, obviously, people are concerned about air issues, economic issues and environmental issues. And this takes on all three of those in a hopeful note," Julander said.

Not everyone is ready to embrace natural gas.

Megan Graham, executive director of the Durango-based San Juan Citizens Alliance, thinks the benefits of burning gas in power plants could be offset by extra drilling.

“When you look at the life-cycle impacts of producing natural gas, it's not clear yet that it's a net gain," Graham said.

Roberts, the bill's sponsor, said the year-old environmental rules for the gas industry “laid the groundwork for natural gas to be safely increased throughout this state."

The coal industry, too, is ready to take on natural gas on a national scale.

“We're going to continue to make sure coal remains a big part of Colorado's energy future," said Lisa Camooso Miller, spokeswoman for the American Coalition for Clean Coal Electricity.

Miller said natural gas remains three times as expensive for power plants as coal - an assertion that gas supporters say is wrong once the costs of building an expensive coal-fired plant are taken into account.

Colorado's bill attracted national attention from both natural gas and coal lobbying groups, despite the fact that the bill probably will touch only two power plants.

The coal industry feels threatened that Colorado's bill might be the start of a larger transition, Roberts said.

Julander hopes Colorado politicians will help his industry make the case to President Barack Obama that natural gas can help clean up the air, relative to coal.

He might get his chance soon. The U.S. Senate could take up a major energy bill this month. Details, for the moment, still are being kept secret by the authors.

The motivation for Colorado's energy bill came from several looming regulations from the Environmental Protection Agency.

The Denver area soon will be out of compliance with the EPA's new ozone standards. Although one ozone monitor in the Four Corners exceeded the standard, state reports show the region probably will not be out of compliance with EPA rules.

But ozone isn't the only pollution problem. The EPA plans to adopt increasingly strict standards the next six years for sulfur and nitrogen oxides, mercury, particulates and ash.

Although backers of HB 1365 tried to avoid any mention of climate change, many members of Congress want to regulate carbon dioxide because of its role as a greenhouse gas.

Xcel Energy, which serves Denver and Boulder, decided it was easier to switch some of its plants to natural gas than to design fixes for each new regulation.

Whitehead thinks Southwest Colorado's air quality would improve if New Mexico coal-power plants went offline and were replaced with natural gas.

Colorado's HB 1365 will prove to be a model for states like New Mexico, he said.

“If it's successful in Colorado, I'm sure a lot of other states in the United States could look at it," Whitehead said.

For some, the importance of the issue goes beyond the hazy air in the Four Corners.

Former U.S. Sen. Tim Wirth, a Colorado Democrat, now runs the United Nations Foundation. He visited the COGA conference in 2009 and chided the executives in the audience.

“The time has come for the natural-gas industry to get organized, take the gloves off and get thoroughly engaged in helping our country advance rapidly toward a low-carbon economy. You will help yourselves, leave a legacy for your grandchildren and play a major role in saving the world," Wirth said.