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Cheaper Natural Gas A Challenge For Wind Backers

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(credit: CBS)

(credit: CBS)

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OTTAWA, Minn. (AP) — Natural gas production is ramping up around the U.S., and that could take some of the wind out of Minnesota’s young wind industry.

Some power companies in the state are looking into natural gas as a more economical way to produce electricity than wind, Minnesota Public Radio reports.

Minnesota is the fourth-largest wind energy producer in the U.S., and the price of wind power is decreasing. Betsy Engelking, of Twin Cities-based Xcel Energy, says that may reflect the industry’s attempt to compete with natural gas.

Following decades of decline, recent years have seen a boost in nationwide demand for natural gas. It’s now at its lowest price in nine years, which makes it more attractive to consumers. It’s used in electricity generation, heating and cooking.

The appetite to extract more natural gas can be seen near the town of Ottawa, in southern Minnesota, where a big hole in the ground shows the progress of mining silica sand. The sand eventually will be used to get natural gas through an operation called hydraulic fracturing, or “fracking,” a big reason the U.S. natural gas production has risen sharply.

Unimin Corp., the company that mines the silica here, is planning to expand production to meet demand.

Floyd Robb, the owner of a power company in North Dakota, says he’s building a natural gas plant in South Dakota. The company made the decision before natural gas prices fell, but if prices remain low, it could mean more plants.

Coal still is the cheapest source of electricity, although natural gas recently came close. Tax and government incentives keep wind energy competitive, which is just slightly more expensive than the other options.

Wind still has its disadvantages, Robb said. While natural gas can produce electricity all the time, wind turbines are dependent on the weather.

Environmentalists condemn fracking, saying it contaminates drinking water. The process involves a large amount of water and potentially-toxic chemicals. The EPA has taken on an in-depth investigation into the issue, and will release its findings in about a year.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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