NGI The Weekly Gas Market Report
Congress already has two measures pending that would help tomoderate the effects of the high natural gas bills expected thiswinter for consumers – the Clinton administration’s package ofenergy efficiency measures and short-term tax incentives forproducers, Energy Secretary Bill Richardson said last week.
Before adjourning this week, “I think those would be twoimportant, immediate steps” that Capitol Hill legislators couldtake to help to mitigate natural gas prices this winter, Richardsontold NGI following a luncheon at the National Press Club lastWednesday.
He believes another key to reining in prices for gas and otherenergy sources this winter will be increasing supplies of crudeoil. “Our hope is that with more crude oil on the market, bothheating oil, natural gas and gasoline prices will moderate,” hetold a crowd of energy executives and officials.
Toward this aim, the Department of Energy (DOE) last weekawarded contracts for the transfer of 30 million barrels of crudeoil from the Strategic Petroleum Reserve (SPR) to 11 Northeastheating oil suppliers. With this move, the federal government ishoping to avert a heating oil supply shortage in the Northeast thiswinter. The contracts require the suppliers to return to the SPR31.5 million barrels of crude oil next year.
President Clinton’s proposed tax credits would offer incentivesfor natural gas and oil producers to drill “mainly on the Americanmainland,” rather than on the Arctic Natural Wildlife Refuge (ANWR)in Alaska, which Clinton and Democratic presidential candidate AlGore oppose.
Richardson made clear that ANWR, which he described as a “veryfragile ecosystem,” would continue to be off-limits to domesticproducers under a Democratic presidency. “It is our view that thereare other parts in the Lower 48…..that can accomplish the samegoal” as drilling in the Alaskan arctic, he said.
“I think the big [fundamental] difference” between the energypolicies of Gore and Republican presidential nominee George W. Bushis the opening of ANWR to gas and oil production, Richardson noted.In last week’s televised debate, Bush said he supported drilling inpart of ANWR, noting that he would rather get energy supplies fromthe U.S. than hostile Middle East countries.
Under Clinton’s term, “natural gas production has increased both[in the] deep-sea and domestically,” Richardson noted. But “we’vegot a [pipeline] capacity problem with getting that natural gas tomarkets.” He urged Congress to pass technology initiatives thatwould clear the way for “more rapid” development of needed pipelinefacilities.
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