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Report Backs Increased R&D to Develop Nonconventional Gas Sources

The Consumer Energy Council of America (CECA) last Wednesday said it supports increased research and development of technologies and approaches to develop nonconventional sources of natural gas, including methane hydrates, ultra-deepwater development, deep gas formations, coalbed methane, shale gas and syngas from coal or biomass. The group also became the first consumer organization to advocate the expansion of nuclear power.

Along with making recommendations related to natural gas, CECA also used the report to recommend the development and commercialization of advanced clean coal technologies for power generation. And nuclear energy should play a prominent role in the nation's fuels portfolio to provide consumers with baseload sources of energy that don't emit greenhouse gases or other criteria pollutants.

CECA also recommended that innovative, cost effective incentives be provided for the deployment of renewable technologies so that these technologies become more competitive in the near term, and it supported greater use of energy efficiency measures.

CECA, in a new report, encouraged the "expeditious implementation" of requirements regarding these fuels and potential fuels included in the Energy Policy Act of 2005 (EPAct 2005).

"Funding for methane hydrates should focus on determining whether the economic and environmentally responsible development of such resources can play a major role in fulfilling the nation's energy needs over the next 20 years," the report said.

The report noted that the U.S. Geological Survey has estimated the in-place methane hydrate resource within the U.S. at approximately 200,000 Tcf. "Developing this resource in an environmentally sound manner requires a significant investment in data gathering, drilling and production techniques, and an assessment of the impact of hydrate development on the environment," the report said.

CECA also recommended that:

The report, "Fueling the Future: Better Ways to Use America's Fuel Option", is the result of the CECA Fuels and Technologies Forum, a blue-ribbon panel of energy experts. The forum was chaired by former U.S. Sen. J. Bennett Johnston. The report focuses on what policies are needed today to ensure the best mix of fuels to meet the nation's social, environmental and economic needs 20 years from now.

CECA notes that the forum was unique in developing a set of national consumer priorities as the prism through which its analysis was conducted and the recommendations were developed. Those priorities include environmental protection, affordable and predictable energy services, sustainable economic development, reliable and high-quality energy services, public safety and system security.

"The nation is facing serious ramifications of rapid escalation of natural gas prices coupled with domestic supply shortages and international competition for global supply," the report said. "Options for filling the gap include such nonconventional sources as LNG, assuming safety, siting and other concerns can be addressed, as well as coalbed methane, tight sands, deep gas, and the more environmentally sensitive areas in the Rocky Mountain region, all of which present risks to development."

The development of domestic resources, including gas from Alaska, needs to be considered, CECA noted. "Proven reserves of natural gas from the Alaska fields are estimated at 35 Tcf. However, moving that gas to the regions of the country that need it requires a substantial infrastructure investment, which has yet to be forthcoming."

Beyond Alaska, the U.S. "needs to invest in technologies to develop more difficult resources such as those found in deeper levels or in hydrate form," CECA noted.

To address these issues, Congress indicated its interest in the development of the Alaska natural gas pipeline through provisions in EPAct 2005. The law also calls for the establishment of a new ultra-deep and nonconventional gas program.

The report noted that in addition to increasing the nation's domestic natural gas resource, "there is serious consideration of the need for greater imports of liquefied natural gas to help meet future U.S. natural gas demand."

In order to ensure that the projected increased reliance on imports meets the national consumer priorities articulated by the CECA forum, "issues regarding safety of LNG facilities, dependence on foreign supply sources, security concerns, balance of payment issues, and siting and cost considerations must be resolved. In addition, the LNG infrastructure will need to be improved and assurances must be made that the use of LNG is compatible with the existing natural gas infrastructure."

"We believe that a major LNG effort must continue to be made by this country and building all of the infrastructure, not only import terminals, but the pipelines to provide for the LNG as well," Johnston said at a press conference held in Washington, DC.

"We need more gas," said Robert Hanfling, president of KFx Inc., at the press briefing. "LNG should be sited by federal and state authorities in good locations. They shouldn't be all clustered. They shouldn't be too close to populated centers, but they should be close to the markets. The report supports that."

KFx offers combined energy, environmental and economic solutions to coal-fired power generating facilities and industrial coal users in the U.S. and internationally.

Hanfling also noted that the report "supports a wide range of unconventional gases to be looked at and to be developed. There's nothing that's been taken off of the table." Hanfling served as one of the co-chairs of the CECA forum's working groups.

Hurricane activity in 2005 has demonstrated the vulnerability of having a large concentration of U.S. energy infrastructure in the Gulf of Mexico," with long pipeliens to market areas. Based on these supply/demand factors, "there is a need to design a national natural gas policy which will alleviate physical and cost pressures on the existing pipeline system to the benefit of consumers."

For more information about CECA, go to: http://www.cecarf.org/.

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