Prices at the pump have gotten a lot of attention lately, but it's time to focus on another gas price crunch. The price of natural gas has more than doubled in the last four years. This presents a prime opportunity to make widespread use of a long-overlooked technology: producing gas from coal. The U.S. is the Saudi Arabia of coal: While we have only 3% of the world's natural gas reserves, we have a quarter of the world's coal. In the late 1980s, however, investments in coal fell as cheaper and cleaner gas plant technology came on line; over the last ten years power companies have invested $100 billion in natural-gas-powered plants but very little in coal-powered ones. The expectation was that gas would remain inexpensive and U.S. and Canadian supplies would meet demand. But today gas that was supposed to cost $2.50 per million Btu costs $5 or more. Higher prices have caused chemical and fertilizer companies to cut back production and lay off workers. And home-heating costs will rise this winter.
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