Houston (Platts)--15Feb2008

The chairman of the US Federal Energy Regulatory Commission said Friday
he believes the US will, once again, turn to natural gas to fuel new
generation over the next decade.

A "dash to gas" in the 1990s came at a time of low gas prices, said
Joseph Kelliher, but a new dash "will take place with high gas prices."

Speaking in Houston at Cambridge Energy Research Associates' CERAWeek
meeting in Houston, Kelliher said the use of natural gas is "the only option"
and allowed that the US will rely "more than we probably should" on natural
gas over the next 10 years.

While the role of coal "is significant going forward," Kelliher
maintained that "there is a question about coal" that has led to the
cancellation of 54% of new coal-fired projects proposed since 2000.

Current uncertainty about coal and climate change policy "may continue
because the US presidential election does not appear to be a referendum on
climate change," he said, at least "not yet."

The electric industry is seeing a "resurgence in nuclear energy,"
Kelliher said, but that option will not be available within the next decade.
He said FERC and the industry also recognize limitations with wind energy.

Commenting on "siren songs" urging FERC to abandon support of competitive
wholesale power markets and re-regulate the industry, Kelliher said that "US
policy supporting competition will not change" and calls for re-regulation
"are really just calls for lower fuel prices, and that is not something
re-regulation can bring about very readily," he said.

--Jeffrey Ryser, jeffrey_ryser@platts.com