Darren Kugler
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Darren Kugler in Commodities,

EPA ruling may be a ‘big plus’ for natural gas

The U.S. Supreme Court ruling against the Environmental Protection Agency’s regulations on power-plant emissions is a “big plus” for natural gas, an analyst said Monday.

The Supreme Court ruled that the EPA needs to consider costs when regulating pollution caused by power plants, which include coal-fired plants. The court ruling keeps the EPA from imposing new regulations to reduce the amount of mercury and other air toxins.

“The ruling also will be a negative for solar and wind which may be a positive for natural gas .... Those proposed solar and wind facilities may now be natural gas,” said Richard Gechter, Jr., principal and president of Richard W. Gechter Natural Gas Consulting.

Prices for natural-gas futures climbed Monday, with the August contractNGQ15, -1.41% up 3.5 cents, or 1.3%, to settle at $2.805 per million British thermal units

“Some utilities are still going ahead with their alternative-energy plans,” Gechter said The original EPA rules aimed at reducing pollution were “mandatory” and now power plants “have some flexibility,” he said.

Gechter notes that “natural-gas plants can be brought online in 30 minutes — rain or sun.”

“I do not expect the utilities to completely exit these [wind and solar] projects, but they will not be a priority,” he added, also noting the higher costs of those alternative-energy sources compared with coal or natural gas.

The Supreme Court ruling also provided a boost to coal stocks Monday, including Peabody Energy BTU, -12.75% Arch Coal ACI, -19.05% and Alpha Natural Resources ANR, -13.50% which moved higher in Monday trade after the ruling.