Federal Reserve Chairman Alan Greenspan may need a refresher course on natural gas supply issues because he's been way off the mark in recent public speeches, including one last week to the National Petrochemical and Refiners Association's International Petrochemical Conference, the American Public Gas Association (APGA) said on Tuesday.
In a letter to Greenspan, Bert Kalisch, CEO of APGA, which represents 600 municipal and publicly owned gas distribution systems, said he strongly disagrees with the Federal Reserve chairman's assertion that the U.S. is running out of natural gas because efforts to find gas are "coming up dry." Greenspan has said frequently that the U.S. needs to focus more on bringing in liquefied natural gas (LNG) from overseas.
"In the Lower 48 states alone there is approximately 213 Tcf of natural gas under federal lands or waters where moratoria or regulation make exploration virtually impossible," Kalisch said. "That represents a 10-year supply at the current demand rate. Given the advances in drilling technology, APGA firmly believes that we can increase access and supplies in an environmentally safe and sound manner. It is a self-defeating argument to say that we must make an 'either-or' choice between drilling and environmental protection."
He said that unless policymakers in Washington do something to bring gas back to "an affordable level," high prices will "wreak havoc in the economy."
Kalisch lauded Greenspan's efforts to draw public attention to the impact high energy prices have had on businesses, consumers and the economy. However, one "obvious step" that would help bring gas prices back down has not been taken, and that is increasing access to domestic gas supplies onshore and offshore, he said.
However, APGA is resigned to the fact that even if the drilling moratoria are lifted eventually, domestic gas supply will decline and new energy sources will have to replace it. Kalisch pointed to the need for research into methane hydrate, a frozen crystalline combination of natural gas and water. Huge amounts of it have been found deep beneath the oceans and polar permafrost.
"With over 200,000 Tcf of natural gas in the form of hydrates off the coast of the United States, this energy resource alone could serve as the last bridge between fossil fuels and renewables," Kalisch said. "But to achieve this reality in our lifetime, it will take the political leadership and national commitment last seen in the 1940s for the Manhattan Project and the early 1960s when President Kennedy pledged to send a man to the moon and return him safely by the end of the decade."
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