On behalf of the Natural Gas Supply Association, Conoco GeneralManager Mike Johnson is scheduled today to recommend that thegovernment maintain a hands-off approach to the natural gas marketdespite concerns about a potential crisis from Senate Energy andNatural Resources Committee Chairman Frank Murkowski, Sen. CharlesE. Schumer (D-NY) and other lawmakers. Several congressmen andsenators have voiced concern recently about high prices, low storagelevels and rising demand (see Daily GPI, July 11).

In testimony to be made today to the Senate Energy and NaturalResources Committee, Johnson urged lawmakers not to overreact tothe current high-price situation. He reminded them that prices havedeclined in real terms since natural gas was deregulated at thewellhead in 1985. “While we must communicate expectationsaccurately to American families and businesses to help them plantheir own energy use, it is important not to overreact — as theUnited States did, for instance, during the Carter era — withunwise national policies that result in restricted supplies andunnecessarily volatile prices.”

Congress “must be careful not to inject artificial market pricesinto this highly competitive working market,” he said. “There willbe enough natural gas to fuel the winter market and to fuel manymarkets in the future, but we must allow the market to play itselfout.

“If there is action to be taken, I encourage Congress to supportproducers in gaining access to now restricted government lands.There is no question that the U.S. has vast natural gas resourcesand that our producers have the technical and financial ability, aswell as the goal, to bring these resources to market. Thatinformation does not, however, answer the question: Will producersbe able to bring these resources to market?”

Producers are working hard to bring more gas to the market, hesaid, noting drilling rates are double what they were last year. ButAmerica’s best gas resources — “the resources we can produce mostcost-effectively — lie under onshore and offshore federal lands. Ourindustry can produce this natural gas in ways that are environmentallysensitive, and we are committed to that goal. Advances in ourindustry have reduced the impact of gas production on the environment,and dozens of environmentally sensitive technologies are beingemployed daily by the industry.” For a full copy of Johnson’stestimony, see NGSA’s web site at www.ngsa.org.

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