(WSJ 4/11/2012) -Electricity Rates Slide and Coal Feels the Heat as Natural-Gas Prices Plunge. Plummeting natural-gas prices are pushing U.S. industries into virgin terrain, even beginning to dislodge cheap Western coal from its once-untouchable perch as the nation's favorite fuel for power production. On Tuesday, natural-gas futures settled at $2.03 per million British thermal units—just a hint above $2, the lowest price since January 2002.
By RUSSELL GOLD, REBECCA SMITH and DANIEL GILBERT
http://online.wsj.com/article/SB10001424052702303815404577335973150280672.html?mod=ITP_pageone_1
The shock wave for industry could intensify this summer because the U.S. is running out of room to store the glut of natural gas, which could drive gas prices down to sustained lows not seen in decades.....
Some experts say electric utilities' growing appetite for inexpensive gas will prevent storage from filling up.
"The power market will save the day," predicted Rusty Braziel, an industry consultant with RBN Energy and a former Texaco marketing executive in the mid-1990s, when gas prices last fell below $1.50 per million British thermal units.
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Fuel switching is sending shudders through the coal industry because the power industry consumes more than 90% of all domestic coal.
Eastern markets felt the effects of lower gas prices first, because eastern utilities mostly burn Appalachian coal, which is more costly, per ton, than coal from Wyoming's giant Powder River Basin, source of about half the nation's coal.
But now, "the coal that was least likely to be displaced is being displaced," said Anthony Yuen, energy analyst for Citigroup Global Markets Inc. He thinks the trend will pick up if prices continue to fall.
