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Industrial, Consumer, Gas Industry Groups Urge Congress to Lift Drilling Moratoria

One thing is clear from Katrina's devastation of the energy industry: the nation's energy infrastructure is too concentrated in one small geographic region and consumers are paying dearly for it, more than 100 businesses, industrial companies, and gas industry representatives told Congress Thursday in a letter.

"Steps must be taken now to expand and diversify our sources and supplies of energy," the coalition, which includes the American Gas Association, the American Chemistry Council, the Industrial Energy Consumers of America and numerous individual companies and other groups, told House Speaker Rep. Dennis Hastert and other members of Congress. They cited a 400% increase in natural gas prices over the last four years, "which is far higher than crude oil or gasoline, and the situation continues to worsen."

They said Congress should remove the offshore drilling moratoria, starting first with restrictions offshore Florida in the eastern Gulf of Mexico. "According to the Minerals Management Service, we have an estimated 406 Tcf of natural gas in our offshore areas that federal policies keep off limits to production that could supplement existing supply...

"The highest priority should be placed on Lease 181 in the Gulf of Mexico. Lease 181 has an abundant supply of energy resources with access to existing pipeline infrastructure that will speed delivery of natural gas to the market. This is our nearest term supply addition and among other things could save manufacturing facilities from shutting down, while saving good jobs that would otherwise be lost."

The coalition noted that the existing moratoria was put in place 24 years ago when there was an abundant energy supply, "an entirely different scenario than exists today." The companies also noted that technology has advanced over the last 24 years to provide much greater environmental protection and exploration and production efficiencies. "Today we can find and produce sources of energy in an environmentally responsible manner," they said.

The coalition also claims there is public support in coastal states to open up areas off their shores to oil and gas drilling. They cited a June poll that indicated that only 9% of the population in coastal states would not support production at any distance offshore.

"While high gasoline prices hurt consumers by increasing the cost of transportation and reducing disposable income, high natural gas prices have a much larger and lasting impact because they not only increase the cost of heating and cooling, but also affect the competitiveness of industry and the retention of good jobs...

"Congress has an opportunity to reduce the nation's vulnerability to sudden energy shocks by expanding our sources and supplies of energy -- especially in our coastal waters," the coalition said.

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