NGC Warns Clinton, Congress of Sharply Higher Gas Prices
The Natural Gas Council on Friday warned the Clinton
Administration and Congress of abnormally high natural gas prices
this winter and requested additional funding for the Low-Income
Home Energy Assistance Program (LIHEAP) for low-income households.
The Council, which is a group of senior executives representing
all sectors of the gas industry, also urged the president to
convene a special meeting between the administration, the council
and Canada's National Energy Board to "discuss issues affecting
natural gas in the near term and actions both industry and
governments can take to ensure adequate supplies are delivered to
"The United States currently imports 14% of our natural gas from
Canada, and the National Petroleum Council estimates that we will
increase our imports from Canada by 33% in the next 10 years," the
council noted. "But concerns are being expressed in the U.S. media
about the available supply for this winter's heating season, and
although we are confident that enough natural gas exists to serve
the market, an open dialogue between governments and industry could
help our understanding of the supply situation, in addition to
helping shape future agreements to further improve our working
In letters to both House Appropriations Chairman C.W. Bill Young
(R-FL) and Senate Appropriations Chairman Ted Stevens (R-AK), the
council explained that the price of natural gas in the spot and
futures markets has reached record levels because of strong demand
due to the robust economy and the drilling decline of the past two
years during a period of sharply lower prices.
"The good news is that producers are already vigorously
competing with each other to increase gas supplies..... However,
due to the continued high demand for natural gas and the historic
time lag between increased drilling activity and a price response,
consumers may pay significantly more for each unit of natural gas
this winter than they did last winter."
The Council urged the lawmakers to order the early release of
emergency LIHEAP funds. "Just as electricity bills are hitting
Californians hard this summer, consumers in the Northeast and
Midwest regions may face high heating bills this winter," the
council told the president. "In addition, we are concerned that the
Administration's request for FY2001 ($1.1 billion, with $300
million available for emergency release) may not be adequate.....
Current LIHEAP funding can serve only 12% to 15% of eligible
households and these recipients could need up to 35% more
assistance this winter."
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