Weak US gas prices have been hampering the oil industry for several years now, dragging down upstream profits and even prompting ugly asset write-downs (EE? Aug.7' 13). But even though prices continue to languish around $3.50 per million Btu, the outlook is much brighter today than two years ago. For that, the industry has an unlikely source to thank: the Obama administration. Team Obama has proved to be an ardent supporter of gas despite its "anti-Big Oil" image — a contradiction the White House has carefully managed to satisfy its environmentalist base. President Obama's latest "War on Coal," for instance, is an undeniable boon to the gas industry — a massive demand driver that could pull the commodity out of the doldrums for good. Obama's proposed regulations for new power plants, unveiled Sep. 20, are designed to curtail greenhouse gas emissions and fight climate change. They would force a new coal-fired plant to meet a limit of 1,100 pounds of carbon dioxide emissions per megawatt hour, effectively forcing it to capture and store at least 40% of its CO2 emissions. This would make building a new coal plant uneconomic unless it masters carbon, capture and storage (CCS). Experts put the capital cost of installing CCS on a typical new coal plant at $1 billion or more, leading some to say the regulation is a death sentence for new coal plants.
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