November 3, 2005

Wind power seen reducing need for US natgas

NEW YORK (Reuters) - Growth in U.S. wind power could reduce
the amount of natural gas used to produce electricity by up to
5 percent at the end of the year, which could provide some
relief to consumers from near record prices for the fossil
fuel, an industry group said.

The Washington, D.C. based-American Wind Energy Association
said about 2,500 megawatts (MW) of new wind power capacity will
be installed this year, bringing total U.S. wind capacity to
more than 9,200 MW.

The cumulative total is enough power to supply 2.4 million
average U.S. homes, AWEA said.

When additional wind power capacity comes on line it
generally replaces the highest priced fuel, natural gas, rather
than other sources of power like coal, oil and nuclear, said
AWEA spokeswoman Christine Real de Azua.

U.S. natural gas supplies are above normal for this time of
year. But futures prices are about double last year's and above
$11 per mmBtu as nearly half of the Gulf of Mexico's output of
the fuel remains down after hurricanes this summer.

The gas industry has no complaints about the growth in wind
power, especially amid near-record prices.

"We welcome it in order to meet our nation's growing demand
for energy," said Daphne Magnuson, a spokeswoman for the
American Gas Association.

Regional grid operator ISO New England Inc., which is
heavily dependent on natural gas for fuel, warned of possible
fuel shortages for the region's power plants this winter due to
the suppressed production from the Gulf of Mexico.

Texas, Oklahoma, and New York are the three states leading
instillation of wind power in 2005.

AWEA's director Randall Swisher said the industry is
hopeful to maintain record growth rates, particularly after
Congress extending the wind energy production tax credit
through December 31, 2007.

By then U.S. wind power capacity should grow 52 percent to
14,000 MW, according to AWEA.

About a quarter of U.S. natural gas is used for producing,
power, with the majority going to industry and heating homes.

AWEA said U.S. wind power produced in 2005 will reduce
emissions of greenhouse gas carbon dioxide by about 7 billion
pounds or the equivalent to keeping nearly 500,000 sports
utility vehicles off the road.