Plentiful natural gas supply good news for La. users

• By CHAD CALDER
• Advocate business writer
• Published: Oct 3, 2008 - Page: 1D - UPDATED: 12:05 a.m.

• Print
• Email
• Save
• Twitter
• Social Media

• Del.icio.us
• Digg
• Facebook
• Reddit
• 

News that this winter won’t bring a natural gas shortage and price spike is music to the ears of Public Service Commission Secretary Lawrence St. Blanc.

“That’s exactly what we’re seeing, surprisingly,” he said Thursday afternoon. “This is good news for us.”

The PSC regulates Baton Rouge’s electricity providers, Entergy Corp. and Demco.

Entergy relies on natural gas for almost two-thirds of its power generation. It also provides natural gas for home heating and other residential uses.

With hurricanes Gustav and Ike wreaking havoc on the state’s energy infrastructure, it’s not unreasonable to have thought this winter could be an expensive one for homeowners.

“Having two storms we were prepared for the worst,” St. Blance said.

Demco, the other power provider in the Baton Rouge area, uses mostly coal-fired power because of the long-term contracts it was able to secure.

Utilities aren’t the only ones glad to hear there shouldn’t be much of a pinch.

LSU economist Loren Scott said it’s good news for the chemical industry, “the most prodigious users of natural gas in the state.”

Pointing out chemical plants use natural gas as both a fuel and raw material, “they outstrip commercial and residential users by several factors.”

Simply put, an expensive winter for gas would make the products the chemical industry produces more expensive. And prices have been eating into the profitability of Louisiana plants since the beginning of the decade, forcing many — particularly in the ammonia sector — to idle.

Scott said that unlike oil, the price of which is the same all over the world, natural gas has a different price everywhere, which has put Louisiana plants at a competitive disadvantage compared to places around the world.

And because they are owned by multinational corporations with plants around the world, sooner or later, companies could decide it just doesn’t make sense any more to make products here, he said.