Martin Rosenberg | Sep 24, 2010

Natural gas continues to loom large over America's energy sector, with abundant supplies affecting every aspect of the industry. Natural gas-fired generation will represent 82 percent of generation capacity additions in the power sector in 2013, the government has just reported. To better understand the factors shaping the gas industry, EnergyBiz Insider recently interviewed Aubrey McClendon, chief executive of Chesapeake Energy, the second-largerst producer of natural gas and most active driller in the United States, according to its website.

EnergyBiz: Is natural gas a bridge fuel to get us to future energy sources that emit less carbon?
McClendon: I would object to the characterization of natural gas as a bridge fuel. We've been using it in this country since 1850. It's been a very important part of our energy future, and it will be for at least the next hundred years, so it way more than a bridge fuel. It's a foundation fuel. 
EnergyBiz: Your view of global warming?
McClendon: I don't really think the science is probably settled, but I don't think it matters. It's not something that we ought to take a risk with. We know CO2 concentrations are increasing, and we know there are ways to prevent that and so we ought to.  Ancillary benefits would be that fewer other pollutants such as mercury would get into the system through burning coal.
EnergyBiz: Natural gas has half the CO2 emissions of coal, so it will get us down the road until we can rely more on nuclear and renewables.
McClendon: My view is half is a pretty substantial reduction, and of course natural gas is cheaper than oil and we've been competitive with coal on price the past few years, and that's without pricing all of coal's social costs. The world is not going to go to zero carbon emissions, so a roll back by 50 percent would be substantial. The nuclear game is going to be a hard one to play.  They're pretty expensive and take 10 years to build. Any nuclear building over the next 20 or 30 years is probably just going to replace what we have that is depreciating away every year. Renewables are probably never going to be more than 15 percent of the grid. So you're either going to have to clean up coal or you're going to have to burn more gas, and right now the technology for cleaning up coal looks like an insurmountable technological and economic challenge. Gas is ready to pick up more load right now.
EnergyBiz: Natural gas provides about 20 percent of our generation. Do you see that growing?
McClendon: Over time it could double. The gas is there. We consume about 60 billion cubic feet of gas per day in the United States and about one-third of that goes to meet power needs. Coal produces 50 percent of our power and to imagine that natural gas replaces all of coal is probably unrealistic in the near term.  However, we should take a look at the coal plants that are the dirtiest 25 to 35 percent - the plants that are 30, 40, 50 years old and should be taken down. There's more gas-fired power generation capability in this country than there is coal-fired capability, but  coal plants run about 80 percent of the time while gas plants only run about 25 percent of the time. You do not have to spend a lot of money retrofitting coal plants. You just need to turn the dirty coal plants off and turn on your clean natural gas plants for longer periods of time.
EnergyBiz: Are you hiring?
McClendon: You bet. In the last year our net growth was about 700 employees. Our average compensation is around $100,000 a year. These are some of the very best jobs America has to offer.

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