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Natural gas incentives up against coal

A natural gas-powered electricity-generating plant in Middletown, Conn.

TEXT OF STORY

Steve Chiotakis: President Obama addresses the nation's top CEOs at a business roundtable meeting scheduled later today. He's expected to roll out a proposal to incentivize coal-burning power plants to switch to natural gas. From Washington, Marketplace's John Dimsdale reports.


John Dimsdale: Natural gas burns much more cleanly than coal, and new technologies have uncovered domestic reserves of gas. Prices have been coming down.

Steve Nadel at the American Council for an Energy Efficient Economy says gas-fired utility plants are becoming more attractive.

Steve Nadel: From an efficiency point of view, the gas would be better. But we do have lots of coal and there's a lot of political implications about where the gas comes from. So it gets pretty complicated.

Coal is still cheaper than gas, and coal means lots of jobs for economically-depressed parts of the country, like Appalachia.

Energy analyst Bob Lee with Charles River Associates says rightly or wrongly, the president's picking a winner and a loser.

Bob Lee: If the economics were such that gas was superior, the government wouldn't have to step in in that case. So the fact that the government has to step in and try to push producers toward gas and away from coal means there is an economic cost to be paid somewhere.

Big oil companies would be among the winners. They've invested a lot in the future of domestic natural gas.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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