In the report, APPA says that a switch from coal to gas would require a $348 billion investment in pipeline capacity, and a $12.5 billion investment in storage capacity, to 1.4 Tcf.

"Operational considerations, such as the requirement to nominate natural gas in advance of its use, curtailments that must occur should supply or pipeline capacity run short, or unforeseen events such as hurricanes, which could increase natural gas prices or restrict supply, are further obstacles to fuel switching," APPA said in a statement accompanying the report.

The report, "Implications of Greater Reliance on Natural Gas for Electricity Generation," examines natural gas demand, supply, transmission and storage infrastructure and other factors utilities will have to consider if there is a large shift from coal to natural gas. Such a shift is possible if Congress or the Environmental Protection Agency create new rules to limit carbon emissions.

"There is a significant body of regulation underway and the potential for new regulation or legislation that will impact coal plants in particular," APPA President and CEO Mark Crisson said in a statement. "This study raises questions and concerns about the significant hurdles utilities would face converting from coal to natural gas in the face of these regulations."

Other studies focused on supply, Crisson said, adding that the study "strongly suggests that policymakers will need to take a fresh look at the regulations and incentives to make sure the problems identified in this study are addressed going forward."

The study assumes the expansion of natural gas production from shale-based supply, which raises environmental concerns because of the hydraulic fracturing, or fracking, process used to recover this resource.

APPA said that the East Coast and Central Plains states have significantly more storage and capacity problems than other areas. The cost to build new gas-fired units to replace coal units would be in the $330 billion range, not including outstanding debt incurred in building the current coal fleet, according to APPA.

If all existing coal plants were to switch to natural gas, demand would jump 50%, from 23 Tcf to 36 Tcf/year. The costs of gas supplies will continue to rise, particularly if EPA rules affect fracking.

--Jason Fordney, jason_fordney@platts.com