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54% of Industrials Surveyed Say Their Demand Will Fall This Winter

While 42% of industrial natural gas customers in a recent survey said their demand would not change this winter compared to last, the majority or 54% said their gas use would decrease between 5% and 40% this winter. One steelmaker said his demand would increase by 5%.

The results came in a random survey in October of 31 large and diverse manufacturing companies by the Industrial Energy Consumers of America (IECA). Paul N. Cicio, executive director of IECA, told a congressional committee last Monday government is at fault for skyrocketing natural gas prices which are driving manufacturers to cut back.

It is an "access" issue, Cicio said. Government has failed to allow access for drilling for natural gas on government lands and in areas of the Outer Continental Shelf (OCS) such as the resource-rich Lease 181 area in the Gulf of Mexico. Part of it is simply that government lacks the manpower to process drilling permits. Cicio recommended Congress increase funding for the Bureau of Land Management and the Forest Service by $10 million each to hire and train personnel to process drilling applications.

Industrials are on the losing end of the natural gas supply chain. Cicio also recommended government encourage power generators to use other fuels besides natural gas. He also suggested federal officials could work with state governments to "dispatch natural gas fired power generation only as needed and on an economic and efficiency basis."

In IECA's latest survey 22.6% said their demand would decrease by 5%; 16.1% expect demand decreases of 10%; and 6.5% said their demand would decrease by 15%. Of the remaining companies 3.2% each said their demand would decrease by 20%, 25% and 40%.

The profile of the manufacturing sectors and the number of participating companies are as follows: chemical/plastics (11); glass (3); steel (6); paper (5); fertilizer (1); brick (1); food processing (3); cement (1). Cicio said results were scattered and no one industry segment could be identified as suffering the most demand destruction.

Cicio testifed before the Senate Appropriations Subcommittee on Interior and Related Agencies Monday.

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