Noting that the United States cannot conserve its way out of the perilous natural gas supply situation, a major gas distribution group has called on the Interior Department’s Minerals Management Service (MMS) to open up many of the off-limit areas in the federal Outer Continental Shelf (OCS) to production in its upcoming five-year (2007-2012) leasing plan for energy development in the offshore.

“We ask that the [MMS] include areas currently under administrative withdrawal or leasing moratoria in the new five-year plan, so that the areas will have been analyzed if circumstances change between 2007 and 2012,” David N. Parker, president of the American Gas Association (AGA), said in an Oct. 6 letter to the Interior agency.

The group “strongly recommend[s]” that the Atlantic and the Aleutian Basin of Alaska planning areas be included in the five-year leasing plan, as well as the full area of the eastern Gulf of Mexico not under moratoria, known as the “original 181 area.” It also urged the MMS to continue the annual offering of all acreage in the Central and Western Gulf of Mexico.

Moreover, the Interior agency should consider the use of natural gas-preference leases “in order to make the new five-year plan as flexible as possible,” the AGA said.

“Residential consumers have already reduced their gas consumption by 20% over the past two decades. Yet overall demand for natural gas is rising due to population increases and regulatory pressure to use clean natural gas for electric power production. Conservation alone is not the answer. Instead, we must also increase supplies of natural gas to meet rising demand,” Parker wrote.

Natural gas prices, which closed Monday just under $13/Mcf for November delivery, have risen more than 400% over the past five years, he said. “It is critical that the federal government expand the offshore areas available for natural gas production.”

Public health and welfare are at stake, according to AGA. “Many poor families have to make hard choices between being warm and being fed. This tough fact often seems forgotten in the debate over drilling on the Outer Continental Shelf,” Parker said.

“From a broader public welfare perspective, if the current supply-demand imbalance and the resulting price volatility are allowed to continue, it could cause natural gas customers to switch to other less efficient, less secure and less environmentally friendly fuel sources.”

The MMS put out a request in late August for AGA and other industry participants to submit comments to aid in the development of its 2007-2012 leasing plan for energy activity on the OCS. The deadline for comments is Tuesday (Oct. 11). The upcoming OCS leasing program will be the seventh program prepared since Congress passed the Outer Continental Shelf Lands Act in 1978. The current program runs through June 30, 2007.

MMS has indicated that it will issue a draft proposed leasing program in the winter of this year, a proposed leasing program and draft environmental impact statement (EIS) in the summer of 2006, and a final leasing program and final EIS in the winter of 2006. Following a 60-day waiting period, the agency said it expects to approve the five-year leasing plan in the spring of 2007.

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