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Gas Producers 'Definitely Engaged' in Senate Climate Change Talks

The natural gas industry may have been absent from the negotiating table when the House drafted its landmark climate change legislation, but it and its supporters are expected to be front and center when the Senate takes up a companion bill this fall, Washington, DC, sources say.

"We were late to the table" on the House climate change bill, but "we are very definitely engaged in the Senate" bill, said Rod Lowman, president of America's Natural Gas Alliance (ANGA), which was formed in March as the House released the first draft of its climate change measure. ANGA represents 28 independent producers -- including Chesapeake Energy, Devon Energy, Anadarko Petroleum and EnCana Corp. -- which account for more than 40% of domestic natural gas production.

"They [natural gas interests] did not have any champions" during the House climate change talks, said Josh Dorner, a spokesman for the Sierra Club. But "several people are expected to speak for their interests, including both Colorado senators [Mark Udall and Michael Bennet]," during the Senate debate, he said.

The emergence of ANGA is seen as a "significant development" that will cause gas producers to be more engaged in the Senate climate change debate. ANGA officials currently "are meeting with a whole lot of senators," Lowman said, but he declined to identify them. He noted that the group is targeting one third of the Senate, including members of the jurisdictional Senate Energy and Natural Resources Committee and the Senate Environment and Public Works Committee, as well as swing senators on the climate change issue. "We're getting a good reception where we go."

ANGA is said to have deep pockets, $50 million or more, but the funds will not be spent solely on lobbying, according to Lowman. "I think if they spend that kind of money they sure will" make Congress sit up and take notice, a gas industry source said.

Lowman cited several concerns with the House bill, which was passed in June (see NGI, June 29). "There was no recognition whatsoever of the benefits of natural gas to the climate change debate," he said. It further failed to tackle the issue of idled gas-fueled generation capacity. He estimated that only 25% of the existing gas-fired generation capacity is being used. Lowman said he "absolutely" supports the use of natural gas as a transportation fuel, but he doesn't believe the climate change bill is the right legislative vehicle for it.

Gas producer interests have not been adequately represented by the existing producer groups in Washington, industry observers claim. The American Petroleum Institute and the Independent Petroleum Association of America have been "very much conflicted by [their] representation on the oil side." And the Natural Gas Supply Association "has evolved into a marketers group," the industry source noted.

"I don't think that's the case...But I think it could have been more aggressive," said a spokeswoman in defense of her group's representation of gas producers' interests during the House climate change talks. "Coal did a much better job of representing [their interests] and we got edged out. I think things are shaping up differently in the Senate."

ANGA was established "because of the perception that there was a lack of focus on natural gas issues by producer organizations," the gas industry source said. Natural gas has been viewed as the "stepchild" to oil. Another Washington source pointed out that the major integrated companies make more money on sales of crude, resid, heating oil and gasoline, and have never particularly welcomed competition from natural gas. That possibly explains why they never have supported natural gas-powered vehicles. The new organization is being led by companies with production weighted toward natural gas.

Speaking to the Colorado Oil and Gas Association in July, former Colorado Sen. Tim Wirth said "every industry was deeply engaged [in the House negotiations] -- except one. Yours. The natural gas industry -- the industry with the most to gain and the most to offer -- was largely not at the bargaining table."

He noted that "the time has come for the natural gas industry to get organized, take the gloves off and get thoroughly engaged in helping our country advance rapidly toward a low-carbon economy" in the years ahead. "No doubt the House legislation was a missed opportunity, but as one of the committee members told me, while the hour is late, this can be recouped in the Senate," he said.

"A cadre of Senate champions must be recruited to carry the banner for cleaner fuels and this domestic industry -- not just traditional supporters but additional states with new discoveries of unconventional gas have significant interests that must be heard," Wirth advised. In the coming years a new line-up could develop around legislation in Washington, as formerly staunch consumer states such as New York and Pennsylvania become producer states on the strength of shale gas development.

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