Capping off a day-long emergency conference on Thursday called to address a potential crisis in the natural gas markets, Energy Secretary Spencer Abraham told reporters he planned to move quickly on submitting recommendations to President Bush that would soften the impact of a gas supply shortage this summer or next winter.

Abraham did not divulge what the recommendations would be, but he said he believed it was “pretty significant” that both the supply sector and the long-time advocates of energy efficiency measures came together on this issue, agreeing that, at least as a short-term option, more efficient use of gas would ease the pain of a supply crunch. This will be “definitely incorporated in our thinking,” he said.

More than 200 North American energy executives and major gas consumers converged on Washington, DC, to join Bush administration officials, congressional lawmakers and regulators at the emergency summit, which was organized by the National Petroleum Council (NPC). Their objective was to propose short-term solutions to avert a gas market crisis.

Major industry leaders called for policymakers, from President Bush down to city mayors, to launch energy awareness programs to inform the public of the gas supply shortfall and the resulting high prices, and to publicly ask consumers to initiate conservation, energy efficiency and others steps to reduce their consumption of natural gas and electricity. Given that power generators are major gas users, a Calpine Energy official called for the White House to use its “bully pulpit” to require more efficient gas-fired generation plants to be run in place of the older, natural gas-guzzling facilities.

This crisis was caused by governmental policies that promote the large-scale consumption of gas, while denying producers access to new supplies, said William Stavropoulos, president and CEO of Dow Chemical Co. He challenged the federal government to “step up” and fix the “root cause” of the current gas supply shortfall, which he said has made U.S. gas prices the highest in the world.

Stavropoulos projected that gas consumers will pay $70 billion more for gas this year than they did in 2002. Millions of jobs in the chemical and fertilizer industries, as well as other businesses, are at risk. “I’m not being hyper about this.” He urged Bush to launch a campaign to urge consumers to lower their energy consumption by 5%.

But short-term, stop-gap measures won’t be enough, he believes. In the end, “We’re going to have to put more natural gas on the table,” Stavropoulos said, adding that the 20-year-old moratoria on drilling in federal offshore areas must be replaced with a comprehensive strategy for growing gas supply in an environmentally responsible way. The nation must find a “positive way” to close the gas supply and demand gas.

Policymakers must “get on the same page” with respect to the environment and land-use policies, agreed Michigan regulator David Svanda.

In the meantime, Diemer True of True Companies Inc., an independent producer in Wyoming, said it was important that the Department of Energy (DOE) create public awareness programs about energy. The East doesn’t appreciate the problems that producers struggle with in the West, and the general public doesn’t fully understand the energy industry, he noted, adding the industry’s approval rating is only 36% and it is more distrusted than probably any other industry.

There must be “education, education, education at every opportunity,” said Svanda.

Until now, “It has been very, very easy for our government…to please environmental groups” and assure the nation that it will have plenty of gas supplies, said Devon Energy Chairman Larry Nichols. “Those days are over.” The nation is not running out of gas; it’s just “running out of places where we’re allowed to drill” for natural gas, he noted.

The United States is the only country in the world that bans drilling for prospective supplies, Nichols said. Producers aren’t to blame for the current fix the gas market is in. “Anybody who’s a natural gas producer is selling every molecule of [gas]” that they have, he told the NPC conference.

Producers in the Powder River Basin in the Rocky Mountain region could make supplies available quickly if only governmental permitting delays were resolved, Nichols noted. “We can drill those wells in three to four days.” All producers need are decisions by the federal government that aren’t “swayed by emotion.”

“I think the word is out that we have a natural gas problem,” said Mark Hopkins, vice president of Alliance to Save Energy. He also recommended that the president initiate a national campaign to cut energy consumption. Large industrials, which have been hit hard by high gas prices, insist they have taken all the conservation and energy efficiency measures they can. But “our experience of going into plants proves this wrong,” Hopkins said, adding that his group often finds room for 10% more savings in gas demand. Moreover, the federal government, a major gas consumer, needs to get serious about reducing energy waste at its own facilities.

Hopkins’ group advocates energy efficiency over conservation. He explained the difference. Merely turning off your lights when you leave a room is conservation. But installing a motion detector that automatically shuts off lights when you leave a room is energy efficiency, he said.

Until all aspects of a long-term comprehensive energy plan are in place and Congress passes a comprehensive energy bill, “we will continue to experience periodic price spikes and market dislocation of the sort we may see this winter,” Secretary Abraham admitted, adding the focus in the meantime should be on short-term solutions. That’s “why we are getting an early start to address” the gas supply shortfall, he said.

©Copyright 2003 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.