Higher natural gas prices, largely resulting from lower inventories, could displace 1-2 Bcf/day of power burn demand as generators switch back to coal from gas because of improving fuel economics, an S&P Global Platts analyst said at an the annual Benposium conference Monday in Houston. Gas-to-coal fuel switching will occur in the Midwest and Southeast, but not in the East, where near-term gas prices will remain low because of oversupply, said George McGuirk, a Denver-based analyst. “It’s safe to assume about 1 Bcf/d of gas demand could switch back to coal,” McGuirk said. “Henry Hub and Chicago city-gates should hit $3/MMBtu by the end of year. Dominion South should not hit $3[/MMBtu] until 2018 so we could see switching there going forward.” The news should be welcome for a coal industry that has seen 41 GW of coal retirements over the last five years, largely because of environmental regulations. […]