Energy market analytics company BENTEK Energy said that the Environmental Protection Agency's Cross-State Air Pollution Rule would likely benefit the natural gas industry at the expense of the coal industry.
The EPA's new rule aims to cut sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions by 73 and 54 percent from 2005 levels by 2015, respectively, reports The Hill. The rule affects more than two dozen states in the eastern part of the U.S.
According to Cormark Securities, BENTEK said that the rule, which will take effect in 2012, will force the power industry to shut down or modify about 23 percent of existing coal-burning facilities in the affected areas.
This transition will cause demand in the natural gas industry to increase by 7.0 billion cubic feet per day by 2014, BENTEK determined. Correspondingly, demand for coal would drop by 15 percent over the same time frame.
The analytics firm said that it was unsure of whether the natural gas industry's infrastructure, such as pipelines and transmission stations, would be able to handle the increased workload, leading BENTEK to speculate that the implementation of the rule will be delayed.