A House subcommittee has scheduled a hearing for Wednesday to examine escalating natural gas prices and a tight supply situation in the wake of Hurricane Katrina slamming into the energy-rich Gulf Coast two weeks ago.
The hearing, to be conducted by the House Committee on Government Reform's Subcommittee on Energy and Resources, will take a broad look at the impact of Katrina on natural gas prices and supply, the national economy and consumers, and the effect of regulatory policies on domestic production, according to the subcommittee, which is chaired by Rep. Darrell E. Issa (R-CA).
The hearing comes less than a week after the Energy Information Administration (EIA) projected that residential household expenditures for natural gas this winter will climb 46% to about $16.23/Mcf from $11.13/Mcf last winter. Expenditure increases are expected to be extremely high in some areas, such as the central portion of the U.S. (Ohio, Indiana, Illinois, Michigan and Wisconsin), which are likely to see spikes of 71% over last winter.
"Natural gas prices have been at record highs because of an ongoing tight supply and demand situation in the U.S. and Hurricane Katrina greatly exacerbated the situation. Natural gas prices rose 14% more than the price for crude oil in the immediate wake of Katrina," the subcommittee said.
As for the supply situation, the Minerals Management Service (MMS) on Monday reported that natural gas shut-in gas volumes in the Gulf of Mexico totaled 3.78 Bcf/d, or 37.84% of normal daily output. That was down about 5 Bcf/d from the peak. The cumulative shut-in gas production since Aug. 26 has been 91.81 Bcf, equivalent to about 2.52% of the annual production of 3.65 Tcf in the Gulf.
Testifying at the House subcommittee hearing will be Rebecca Watson, assistant secretary for the Department of Interior's Land and Minerals Management; EIA Administrator Guy Caruso; Michael Zenker, senior director of North American Natural Gas at Cambridge Energy Research Associates; Logan Magruder, president of the Independent Petroleum Association of Mountain States; and Tyson Slocum; research director for the energy program at Public Citizen.
The hearing will be at 2 p.m. Wednesday in the Rayburn House Office Building.
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