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Natural gas provides no regrets for America

BY JIM ROTH Published: August 8, 2012

We can sustain the benefits of low natural gas prices into the next decade by allowing utilities to enter into long-term natural gas fuel supply contracts, as is common today with coal-fired power and power purchase agreements for renewables. The agreements can be equipped with logical protection provisions, such as associated hedging agreements, to share some of the risk of any future price changes. As the report notes, Oklahoma is leading the way.

Oklahoma lawmakers and regulators recently authorized longer-term agreements for buying natural gas. The Oklahoma Corporation Commission updated its rules, thereby allowing the best option to win the day. I commend the commission for its foresighted action.

As the report summarizes, the U.S. electric power industry has a historic opportunity to deliver cleaner and cheaper gas-fired generated power to America for decades. The opportunity won't be realized unless more lawmakers and regulators follow Oklahoma's lead to put into place the framework to support the wider use of longer-term gas supply contracts. Now is the time.

Roth, an attorney in Oklahoma City, is a former member of the Oklahoma Corporation Commission. He is an ACSF consultant.