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Energy Efficiency, Producer Tax Credits Key to Low Gas Bills

Energy Efficiency, Producer Tax Credits Key to Low Gas Bills

Congress already has two measures pending that would help to moderate the effects of the high natural gas bills expected this winter for consumers - the Clinton administration's package of energy efficiency measures and short-term tax incentives for producers, Energy Secretary Bill Richardson said last week.

Before adjourning this week, "I think those would be two important, immediate steps" that Capitol Hill legislators could take to help to mitigate natural gas prices this winter, Richardson told NGI following a luncheon at the National Press Club last Wednesday.

He believes another key to reining in prices for gas and other energy sources this winter will be increasing supplies of crude oil. "Our hope is that with more crude oil on the market, both heating oil, natural gas and gasoline prices will moderate," he told a crowd of energy executives and officials.

Toward this aim, the Department of Energy (DOE) last week awarded contracts for the transfer of 30 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) to 11 Northeast heating oil suppliers. With this move, the federal government is hoping to avert a heating oil supply shortage in the Northeast this winter. The contracts require the suppliers to return to the SPR 31.5 million barrels of crude oil next year.

President Clinton's proposed tax credits would offer incentives for natural gas and oil producers to drill "mainly on the American mainland," rather than on the Arctic Natural Wildlife Refuge (ANWR) in Alaska, which Clinton and Democratic presidential candidate Al Gore oppose.

Richardson made clear that ANWR, which he described as a "very fragile ecosystem," would continue to be off-limits to domestic producers under a Democratic presidency. "It is our view that there are other parts in the Lower 48.....that can accomplish the same goal" as drilling in the Alaskan arctic, he said.

"I think the big [fundamental] difference" between the energy policies of Gore and Republican presidential nominee George W. Bush is the opening of ANWR to gas and oil production, Richardson noted. In last week's televised debate, Bush said he supported drilling in part of ANWR, noting that he would rather get energy supplies from the U.S. than hostile Middle East countries.

Under Clinton's term, "natural gas production has increased both [in the] deep-sea and domestically," Richardson noted. But "we've got a [pipeline] capacity problem with getting that natural gas to markets." He urged Congress to pass technology initiatives that would clear the way for "more rapid" development of needed pipeline facilities.

Susan Parker

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