The East and West Coasts may not see any relief from escalating natural gas prices in the years ahead if they are successful in their efforts to block the construction of new liquefied natural gas (LNG) terminals in their areas, warned Sen. Pete Domenici (R-NM) Tuesday.

“Gulf states like Louisiana, Texas and Mississippi may welcome LNG facilities…But then we have to ship it to the states that use the most natural gas — the same East and West Coasts that refuse to import it. The high cost of transporting LNG across country [won’t] do much to relieve natural gas prices,” he said in a speech to the National Association of Manufacturers in Washington, DC. “Right now, it looks like local opposition on both coasts may keep us from building [the] LNG import facilities” that will be needed.

“[Gas] supplies are tight and prices have been climbing steadily since June 2000. Today, natural gas is almost prohibitively expensive,” Domenici told manufacturing executives, who have been hard hit by high gas prices. Futures gas prices for the June contract closed at $6.455/Mcf Wednesday.

“For the last 20 years, natural gas was the energy of choice for new power plants,” but now utilities “are switching from natural gas to coal,” which has driven up the price of coal by more than 30% over the last year.

Like others on Capitol Hill, Domenici said he was concerned about the sharp jump in crude oil prices past $40 per barrel, but he noted he was against opening the Strategic Petroleum Reserve (SPR) to provide temporary relief to the market.

“Frankly, I think that’s the worst idea I’ve heard all year. Why would we risk a valuable national security asset for a penny’s saving on the price of gasoline?” he asked.

While the energy bill is “still struggling” in the Senate — which he blames mostly on Democrats — Domenici said he remains optimistic that Congress will pass energy legislation this year. “The very problems I have identified are combining to create a perfect storm for passage of an energy bill,” said the chairman of the Senate Energy and Natural Resources Committee.

“Natural gas prices are so high they are driving tens of thousands of manufacturing jobs overseas. Rising gasoline price have peeled $31 billion from our economy this past year. Meanwhile, rising crude oil prices caused the stock market to fall this week.”

With the Domenici-sponsored energy bill, “We will produce more, conserve more and diversify our national energy supply…We will build a pipeline that brings the largest, untapped supply of natural gas in this country down from Alaska to stabilize natural gas prices,” and “we will do more to produce our own oil in the Gulf of Mexico and from inland wells,” he said.

“The energy bill isn’t perfect. But it’s the first big step in solving our energy problems.”

Domenici has characteristically been upbeat about the prospects for an energy bill this year, but other lawmakers question whether House and Senate leaders will be able to reconcile the procedural and substantive differences in the two houses’ energy measures.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.