The National Association of Regulatory Utility Commissioners (NARUC) plans to undertake a study next year of the social and economic costs of maintaining restrictions on access to onshore and offshore federal lands for oil and natural gas development.

Work on the study is expected to begin in early 2008, with completion anticipated by mid-year, said Jenny Fordham, director of energy markets for the Natural Gas Supply Association (NGSA), which has contributed $5,000 to fund the study. NARUC has provided $50,000 for the study. Other industry groups are expected to contribute as well, she noted.

"This study will connect the dots on what the moratoria is costing consumers," Fordham said. The study is the result of a resolution passed by NARUC at its summer meeting in July.

"In an assessment four years ago commissioned by the Department of Energy, as noted in the resolution, the National Petroleum Council estimated direct costs to be about $300 billion over 20 years, which did not take into account the indirect social costs to the economy and low-income families, not to mention the states themselves via the potential loss of additional royalty revenues," wrote NGSA President R. Skip Horvath in a letter last Monday to NARUC President James Kerr of the North Carolina Public Utilities Commission.

"With no subsequent action by Congress during the interim, leaving as much as 200 Tcf of U.S. natural gas either off limits or highly restricted, all of these costs...are now undoubtedly even higher," Horvath said.

"The NARUC study will undoubtedly help policymakers and consumers better understand the link between the continuing federal moratoria on access to new domestic natural gas resources and restrictions on the nation's economic growth, air quality enhancements and even our energy security...we are hopeful the study will pave the way for the tough legislative decisions required to truly meet our country's energy and environmental goals."

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