Is the U.S. Too Dependent on Natural Gas for Electricity?

As natural gas prices rise, concerns about electricity price spikes surface.

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A worker steps through a maze of hoses at a remote fracking site run by Halliburton for natural-gas producer Williams in Rulison, Colo. in 2009.

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But even the worst-case scenario projections only put natural gas prices at $5 or $6 per million BTU. While that's substantially higher than the prices seen in recent years, most experts don't think that will derail the expansion of natural gas. On the contrary, with coal and nuclear capacity declining, more natural gas assets are expected to come online in the U.S. as utilities continue to switch over from nuclear and coal.

The shift towards natural gas has, however, exposed some deficiencies in the nation's electricity infrastructure. Just last week, the House Committee on Energy and Commerce held a hearing to address supply and transmission issues highlighted in an ongoing study by the Federal Energy Regulatory Commission.

"Coordination of the natural gas and electric industries is among the most pressing energy issues we face as a nation," Philip Moeller, a commissioner at FERC, said in prepared testimony to the House committee. "I have been concerned for several years about our increased reliance on natural gas to produce electricity. I do not contend that this is a bad trend, but rather one that must be managed deftly to protect citizens so as to avoid supply disruptions and to maintain the reliability of the nation's production and supply of natural gas and especially electricity."

Moeller alluded to a slew of service disruptions that have occurred, one as recently in as 2011, when a cold snap resulted in supply issues cutting off power and natural gas to millions of people in Texas and New Mexico.

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FERC plans to hold a series of conferences to bring industry leaders together to improve communication and identify ways to improve the relationship between the electric utility and natural gas industries, "key issues" to worth through in coming years, Patrylak says.

"Natural gas assets are going to expand and the existing infrastructure needs to be looked at differently in order to make sure we have reliable electric grids, good supply and good pipelines to feed that coming demand," Patrylak says.

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