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Senate Subcommittee Chairman Says Stand-Alone Gas Bill Still Being Considered

Sen. Lamar Alexander (R-TN), chairman of the Senate Energy and Natural Resources Subcommittee, last Wednesday said a stand-alone natural gas measure aimed at bolstering supply and roping in prices is still a possibility in the new Congress.

Speaking to the Natural Gas Roundtable in Washington, DC, Alexander said he may introduce gas-specific legislation but only if he and Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, "agree that that is a better way to proceed" than addressing natural gas issues in a comprehensive energy bill.

"It's still possible that I might introduce a separate [gas] bill. Others might as well. But if I feel like we're more likely to get a good result on natural gas [by] making it part of the whole energy bill, then that's the way we'll do it," he told reporters following his speech.

"I care about the price of natural gas because it's hurting Tennessee." He noted that the high gas prices have affected Eastman Chemical, a major employer in the state, driven up fertilizer prices for Tennessee's agricultural community and taken a toll on manufacturers. "It's a jobs issue for me."

Alexander said he and Domenici will determine what approach to take with natural gas within the "next couple of months." The committee currently is in the process of drafting an energy bill now and hopes to have a bill ready in about 60 days. At this stage, "we don't know yet" if the Senate will stick with a comprehensive energy bill approach, he noted.

"In a way, it's a good thing, I suppose, that the energy bill didn't pass last year...because what we may be able to come up with this year should be better. There's a larger sense of urgency. There is more bipartisan cooperation" at least at the committee level, he noted.

Alexander said Senate Majority Leader Bill Frist (R-TN) and Domenici will decide the strategy with respect to the Arctic National Wildlife Refuge (ANWR). He conceded that an energy bill that opens part of ANWR to oil and gas drilling will be difficult to pass in the Senate. "None of us wants ANWR...to torpedo the energy bill."

On the House side last week, Majority Leader Tom DeLay (R-TX) signaled that ANWR will be part of the House's energy bill. He noted that he supported the efforts of Rep. Richard Pombo (R-CA), chairman of the House Resources Committee, to have ANWR in the final bill that reaches the House floor. "Opening up ANWR for exploration...enjoys bipartisan support in the House."

The Senate energy panel hasn't decided yet if it will address the issue of who has jurisdiction over the siting of liquefied natural gas (LNG) terminals in an energy bill, according to Alexander. "We're trying to understand what would be best to do. There is already in a way concurrent jurisdiction because states are able to effectively veto a new LNG terminal by not granting a clean air permit or clean water permit," he said.

"My hope would be...that FERC might be able to lead a process that would locate terminals in places where people either wanted them or didn't object to them," he noted.

At a Senate Energy Committee hearing last Tuesday on LNG, Domenici expressed support for a strong federal role balanced by state input in siting import terminals for liquefied natural gas (LNG) in the wake of an industry report that warned that gas prices could double to $13.76/MMBtu by 2020 if policy makers do not quickly take steps to increase and diversify supply.

"I am deeply concerned by these warnings" in the American Gas Foundation (AGF) report that was released Monday, he said during a hearing that examined the issues underlying the dispute between FERC and California regulators over who has authority over the siting of a proposed LNG facility in the Port of Long Beach, CA.

"I do not want to wait until this economy is in a recession driven by high energy prices before we act. The federal government must take the lead in educating the public on the facts of LNG..., in educating special interest groups who complain about any new energy production..., [and] in crafting a procedure for siting LNG ports that appropriately balances state and local input with national interests," Domenici noted.

"We have some difficult choices ahead that require federal leadership. The Energy Information [Administration] tells us we must increase our importation of LNG nearly 30-fold by 2025 to meet domestic demand. The American Gas Foundation...warned that natural gas prices could double in the next 15 years if we don't increase domestic production, build LNG ports and diversify our sources of electricity."

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