Black Hills Corp: Big Move In Natural Gas Not Expected Anytime Soon

Black Hills Corp BKH CEO David Emery was on CNBC Wednesday to share his outlook on natural gas prices and to discuss whether coal-fired power generation is over. Here is what he had to say.

Price Movement Unexpected In Near-Term

"I certainly hope we don’t stay in the under-$3 range (for natural gas) for too long," Emery began. "I would expect that things will gradually start to firm up. The one thing I don’t think we have seen all the impact of yet is the additional generation required to meet EPA regulations and other things as we retire coal plants. That’s going to put a little pressure on. I don’t expect big move in prices, however."

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With Population Increase, Price Jump Could Emerge

On whether there will be a significant move up in natural gas prices as demand for power continues to rise along with the rise in the population, Emery said, "It makes sense that there would be. I mean, the majority of generation that’s going to be built today that’s base-load is almost all going to be fired by natural gas, unless a technology comes along that’s significantly cheaper."

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Coal Is Not Over

Emery was asked if the days of coal-fired power generation are over. He replied, "I don’t think it’s over. I think, if you look at the economics of the coal-fired generation, it’s too economic to go by the wayside.

"Eventually, I think, technologies will be developed, especially if gas prices increase significantly and we put all our eggs in that one basket. I think coal will continue to follow along. Certainly, you are not going to see any new coal plants built in the foreseeable future, at least not with where the regulation is today," Emery concluded.