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CEOs Gather to Promote Natural Gas, Blast Waxman-Markey

The heads of six natural gas exploration and production companies, all members of America's Natural Gas Alliance (ANGA), gathered Thursday to discuss efforts to "increase appreciation" of North American natural gas and educate legislators and the public on the role of natural gas. They also voiced their opposition to the Waxman-Markey climate bill approved by the House earlier this year.

Speaking at a well attended press reception at the Willard Hotel in Washington, DC, were Devon Energy Corp. CEO and ANGA chairman Larry Nichols, Anadarko Petroleum Corp. CEO Jim Hackett, El Paso Exploration and Production Co. President Brent Smolik, Newfield Exploration Co. Chairman David Trice, Linn Energy CEO Mike Linn and Range Resources Corp. CEO John Pinkerton.

They have been working together "to help define the new politics of natural gas," said ANGA President Rod Lowman.

"If you look at the 32 states from which natural gas is produced -- you've got those 32 governors, you've got 64 U.S. Senators, over 350 members of Congress -- we're about educating them to understand the potential of natural gas for this nation and, importantly, for their states," Lowman said. ANGA, which was formed earlier this year, now has more than two dozen members, including Chesapeake Energy Corp., Williams and XTO Energy Inc. (see NGI, March 2).

The group had only harsh words for the Waxman-Markey bill, which Nichols said would deliver "a huge cost" without any real impact on carbon.

"The main detriment of Waxman-Markey is that it's really a huge tax bill," Nichols said. "It's a huge tax bill that masquerades as a climate bill, but it's mainly a tax bill. I think the Senate recognizes that and its going to take a different approach."

The Waxman-Markey bill (HR 2454) cleared the House by a slim margin late in June (see NGI, June 29a) and still awaits Senate action. The prospects for the Senate passing comprehensive climate change legislation this year appeared to dim last week after Senate Majority Leader Harry Reid (D-NV) and other Democrats suggested that some of the work before Congress may be put on hold until 2010 (see related story).

Hackett said ANGA members are disappointed in the Waxman-Markey climate bill because "it keeps the status quo in place and I don't think it serves the purpose it was intended to." A lot of "horse trading" occurred to get the legislation through the House, and part of that horse trading was to effectively eliminate carbon parity for fuels. "What we want to have -- if we're going to have climate legislation -- we very much want it to be based on parity with regard to carbon emissions."

In talks with legislators, ANGA has met with "several senators" who "suggest that they will actually carry the ball" for natural gas, offering to help keep the playing field level in future legislation, Hackett said. "We continue to try to figure out the best way for this to occur in terms of putting natural gas into the energy picture...we think that anything that deals with making the environment cleaner and increasing domestic security ought to include natural gas."

"One of the things that ANGA is trying to do is make certain that the policy makers understand that we do have an abundance of natural gas and as we look forward natural gas needs to be a foundation of energy policy and climate change policy," Trice said. "If our policy makers accept that, we'll increase the demand for natural gas because of all the benefits it provides to the U.S...natural gas should be the winner if we have solid, sound policy at the national level."

ANGA is pushing House and Senate legislation known as the New Alternative to Give Americans Solutions Act of 2009, or the Nat Gas Act (HB 1835, S 1408) (see NGI, Sept. 7; Aug. 31). The legislation would modify tax incentives to encourage the purchase of natural gas vehicles and construction of refueling infrastructure, encourage federal agencies to use alternative-fueled vehicles and provide grants to light and heavy-duty engine manufacturers for research and development of better natural gas engines.

At the same time, ANGA opposes federal regulation of hydraulic fracturing (hydrofracing), which involves the injection of fluids into wells at extremely high pressures to crack underground formations and stimulate the flow of oil and gas. More than 90% of oil and gas wells in the United States are estimated to employ hydrofracing.

"It's a question of where it should be regulated, not should it be regulated," Trice said. "It is already regulated by each state, and each state passes regulations that fit the situation in those states...we just think it's better done on the state level." The Environmental Protection Agency (EPA) does not have the personnel to enforce a federal regulation, Trice said.

In June Senate and House Democrats introduced bills to repeal an exemption in the Safe Drinking Water Act for hydrofracing. The bills also would require oil and natural gas producers to disclose to the EPA the chemicals they use in their hydrofracing processes, although not the proprietary formulas unless there is a medical emergency (see NGI, June 15). The House in late June voted out a spending bill that calls on the EPA to study the risks of hydrofracing to the nation's drinking water (see NGI, June 29b).

"We think that some of the proposals in Congress to do something about federalizing hydraulic fracturing are ill informed and emotional," Hackett said.

A poll funded by ANGA found that more than 75% of the American public expects natural gas to play a significant role for the country in the next five to 10 years. Natural gas outscored wind, solar, hydropower, nuclear, coal, biofuels and both domestic and imported oil, ANGA said. Results of the poll indicate that consumers have a favorable view of natural gas -- about the same as solar, hydro, wind and domestic oil, and better than ethanol, biofuels, nuclear, coal and imported oil.

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