The American Public Gas Association, American Gas Association, American Farm Bureau Federation, Industrial Energy Consumers of America and numerous other organizations sent a letter Wednesday to the Senate Energy and Natural Resources Committee urging it to move quickly on comprehensive energy legislation that includes provisions that would open up more domestic areas to natural gas drilling.

“The nation needs a major commitment to produce oil and natural gas from domestic sources, energy conservation and efficiency, greater fuel diversity and improved infrastructure,” the associations said. “While all of these are essential to a well-balanced policy, we write you today to urge special attention to increasing the domestic natural gas supply.”

Citing federal government data showing U.S. gas production down 4.9% from 2001 to 2004 and Canadian imports falling, they told the committee that natural gas prices are 300% higher than they were in 1998 and gas supply “remains tenuous.”

“The gravity of the supply challenge means we must increase access to natural gas both on and offshore. We are a country blessed with ample natural resources, yet significant amounts of natural gas remain off-limits.”

On May 17, the committee is expected to take up comprehensive energy legislation, including language that would give states the option of opening their offshore areas to oil and gas leasing. The current legislative moratorium on leasing offshore California, the East Coast and the west coast of Florida in the Gulf of Mexico, has been in place since 1982 and is reviewed annually.

More than 100 House lawmakers recently called on the House Appropriations Committee to keep intact the long-standing prohibition against oil and natural gas exploration and production in much of the federal Outer Continental Shelf (see Daily GPI, May 4).

The letter from the associations said the United States currently has the most restrictive offshore policies in the world. ” An April 19, 2005 report to the Senate Energy and Natural Resources Committee said, ‘Approximately 85% of the Lower 48 state offshore acreage has been placed under congressional and executive moratoria.’ Given these vast areas placed off limits, it is a reasonable expectation that there are areas where moratoria could be safely removed,” the associations said.

“Natural gas in moratoria areas belongs to every American and it is far better to produce domestic natural gas than it is to increase dependency on foreign sources.”

They said liquefied natural gas (LNG) is needed as additional supply source, but “LNG alone will not solve our nation’s energy crisis. Without increased supplies of natural gas, our nation is limited in its ability to meet our many environmental challenges.”

The associations request that a process be developed to allow “appropriate areas currently under legislated and/or executive moratoria to be opened to natural gas exploration, development and production; and provide a share of resulting federal revenues (bonuses and royalties) derived from resulting leasing and production to states in proportion to the amount of energy-related activity off their respective coasts.”

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