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Nick Akins, AEP chief executive, weighs in on EPA regulations, the rush to natural gas and fuel diversity in the energy industry.
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Temperature is helping to drive natural gas prices to six week high after bottoming out at at three month low earlier this month.
It is these wild price swings that have utility CEOs worried though include -- next guest nick yeah it's.
The CEO of American Electric Power.
Thanks so much for joining us and you know you've been quoted in a lot of articles recently talking about how.
This rush into natural gas make sure -- little bit nervous.
Is this one of the reasons tell me about that.
While -- -- is one of the reasons -- and a great day -- to be with you this afternoon.
Is clearly an issue where we're running into the -- here or natural gas prices are coming out.
And it shows the volatility of natural gas and the deliver ability associated with -- infrastructure so that's why -- balanced portfolio that includes all resources.
Is absolutely needed it has been officially customers.
Now I mean you have a dog in this fight of course you are huge power generator -- transmitter but 66%.
Of the electricity that you generator that you provide comes from coal see you have a big investment -- coal and coal mines.
Is that one of the reasons -- -- an advocate for diversity between natural gas and -- and other source says.
No I think it's it's more of a risk balancing the needs to occur because clearly we have more volatility with natural gas.
His prices go up and as evidence in 2012.
We saw natural gas and during the first three quarters go up about 40%.
On our system alone and when you look at what's happened with the natural gas prices in the later part of the year Cole has re enter the picture so it's good to be.
In that area where you have that balance -- go back and forth and reduce the process ultimately to -- as a result of their fuel costs.
You know -- followed this industry for a long time -- we have -- really wild fluctuations had been remembered -- natural gas was up around fifteen dollars a unit but a lot of people say that does seem like there is a new -- in natural gas because of the change -- technology.
That because of the fracking revolution.
That we really have uncovered an incredible supply -- natural gas and there's been a structural change in the price for the long term you don't buy that.
Now off I think there has been a structural change in the had been issue -- gas is clearly been a positive.
For our customers the question is is too much of a good thing.
Can help me hurt you because if it if it actually eliminates everything else in the portfolio.
And something happens -- natural gas continues to increase with LNG exports or whatever.
Then you're gonna what happens situation where your toll depend on natural gas in you run into those same situations we ran into.
During the mid 2000 so so clearly it's an issue where we need to keep that balance and maintain.
And speaking of the bouncing -- -- -- just looking at a chart that shows over the past ten years Howard used in usage has -- we used to get 50% of our energy.
From called now that's down at 37% natural gas was 18%.
Now it's all the way up to 30%.
Do you worry that the EPA is unleashing a war on -- right now and and what makes you feel that way.
I think it is troubling that -- That the EPA needs to really take a look at what it's doing relative to the energy mix in this country.
So particularly we're gonna have retirements of older coal -- argue this occurring in 20152016.
Time frame.
And we need to make sure that happens stabilize the system so we fully understand the implications.
Particularly if there's greenhouse gas issues with the existing.
Generation that could have a very dramatic impact on the resource mix of this country so we really need to be.
Thinking this process out make sure that the technology matches.
The implementation.
Of these kinds of activities.
-- interesting opinion an inside having your only this six CEO of BP and its hundred year history and -- you've worked at the company for thirty years.
So you certainly know of what you speak nick -- -- thank you so much for joining us today.
Thank you listen.
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