Floridians owe the juice that runs their lights, air conditioning and iPods to an increasingly dominant fuel: natural gas. More than 40 percent of Florida's electricity comes from gas-fired power plants, more than double the national average of 20 percent. By 2017, the state plans to add 12,000 megawatts of new natural gas power plants — that's seven times the output of TECO's Big Bend plant. That means natural gas will provide 55 percent of the state's electricity within a decade.
Just a few years ago, state regulators questioned Florida's increasing reliance on natural gas. Hurricanes could disrupt supply and raise prices, leaving the state vulnerable to shortfalls and exorbitant prices. "I think Katrina has shown us our vulnerabilities," one expert argued.
Any lessons learned from past storms have been forgotten in a few quiet hurricane seasons. Clean-air rules caused a shift toward natural gas and away from coal and oil. Climate worries have further tipped the scales.
"From an environmental standpoint, it is a cleaner burning fuel," said Sarah Rogers, president and chief executive of the Florida Reliability Coordinating Council. "From a reliability standpoint, we would like to see a more balanced portfolio of fuels used to generate electricity. It's like a stock portfolio … You want to spread your risk."
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Three years ago, "fuel diversity" was the buzzword in Florida's electric industry. It's been drowned out by the clamor to cut emissions that cause smog and acid rain, and reduce the carbon dioxide emissions believed to cause global warming.
Gov. Charlie Crist accelerated the shift to gas when he declared his opposition to new coal plants. Plans for at least three coal plants were canceled last year.
Eliminating coal narrowed the options. Nuclear plants have price tags of $17-billion, out of reach for small utilities. The utilities able to make that investment, like Florida Power & Light and Progress Energy, are a decade from producing electricity from new nuclear. Renewable energy sources such as wind and solar can't fill the void as quickly and cheaply as natural gas.
"You're in a situation where you see growing demand," said Robert Ineson, a natural gas expert at Cambridge Energy Research Associates. "If you think about how long it takes to build things, your other choices just are not as good, particularly if coal-fired generation is off the table."
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Florida is vulnerable to disruption in two ways: if supply is shut down in the Gulf of Mexico, or if a pipeline fails.
"There is a vulnerability," Ineson said. "The U.S. gets just over 10 percent of its production from the Gulf of Mexico. If a hurricane comes in and takes that offline, it's going to be painful across the board."
The good news is that new gas production is shifting onshore. Recent high prices for natural gas have helped make shale drilling financially palatable and sparked a gas rush. In the first week of August, there were more than 1,500 rigs drilling for gas in the United States, according to Baker Hughes, a leading oil and gas services company based in Houston. That's a 65 percent increase in five years.
Pipeline competition is also increasing. For 40 years, Florida only had one way to bring gas into the state: the Florida Gas Transmission Pipeline, which stretches from Texas to the tip of Florida.
In 2002, Gulfstream Natural Gas completed a competing pipeline that stretches from Mobile Bay in Alabama to Port Manatee on Tampa Bay. The company is on the verge of completing a spur to Progress Energy's Bartow power plant.
While there are no definite plans at the moment, Al Taylor, vice president of operations at Gulfstream, said the industry views Florida as a growth market. Expanding the pipeline system and some in-state storage is probably in the state's future.
Asjylyn Loder can be reached at email@example.com or (813) 225-3117.