A House of Representatives task force, set up on an emergency basis to explore possible actions to shore up failing supplies of natural gas, may consider elimination of the congressional moratoria on oil and gas drilling on the federal Outer Continental Shelf (OCS) as one of the possible remedies, a Capitol Hill spokeswoman said.

The congressional moratoria have been in place for about 20 years, and have barred producers from drilling in the gas-rich eastern Gulf of Mexico and off of the East and West coasts.

The task force, formed by the House Speaker J. Dennis Hastert (R-IL) last Thursday, will be off and running with an open-to-the-public meeting July 21. Task force Co-Chairman Billy Tauzin (R-LA) emphasized the urgency, criticizing Federal Reserve Chairman Alan Greenspan who “told us that nothing can be done in the short term to increase our natural gas supply” in the U.S.

“Nothing is not an acceptable answer. That is why the speaker has formed the task force…to determine if something can be done about this pending crisis before it occurs,” Tauzin said. Greenspan testified last month on the gas supply situation before the House Energy and Commerce Committee, which Tauzin chairs.

Meanwhile Greenspan, who has focused mostly on LNG as a solution to the nation’s tight gas supply, was not the only official to come under fire this week for inadequate answers.

Energy Secretary Spencer Abraham’s reliance solely on conservation and demand-side management to address the gas crisis reduces the supply situation to a “game of chance” and threatens the nation’s industrial base, the Industrial Energy Consumers of America (IECA) charged in a letter to the secretary Tuesday.

The industrials, which have been taking it on the chin in the current tight supply/high price period, so far are the main ones doing the conserving by switching fuels or shutting down plants because of high prices.

“In our view, it is not possible to conserve our way into lower natural gas costs, economic growth, and the preservation of manufacturing jobs! A demand-side management ‘only’ policy assures natural gas prices will remain high for a sustained period of time, resulting in continued dismemberment of our nation’s manufacturing base, loss of jobs and significant financial pain for all homeowners.” Abraham, who recently launched a public awareness campaign to educate businesses, homeowners and consumers on ways they can cut energy bills by practicing smart energy use (see Daily GPI, July 10), is planning a visit to an LNG plant on the Maryland shore on July 21 (see related story).

“Limiting actions to demand-side management is playing weather roulette, counting on a cool summer and a warm winter,” said Paul N. Cicio, executive director of IECA. “We believe the stakes are too high for this kind of game of chance, and it puts adequate supply for the winter heating season at risk.”

The industrials thanked the energy secretary for his leadership in initiating the Natural Gas Summit in June and the “Smart Energy Use” campaign, but said that was not enough. The industrials want to see some sharing of the pain. The letter strongly encouraged maximizing use of energy sources other than gas for power generation and avoiding the use of inefficient direct-fired gas power generation, as suggested in the group’s own “Recommended Emergency Actions for Federal and State Policy Makers.”

The House task force’s first meeting on Monday at 1:30 p.m. in the Rayburn House Office Building will give the panel’s 18 members a chance to make opening statements, and spell out their positions and ideas for addressing the concerns about gas supply and prices in the near term, as well as “lay the groundwork for bringing these hearings across the country” to gather ideas from energy producers and consumers, a Capitol Hill aide said.

The task force, which is composed mainly of members of the House Energy and Commerce Committee and House Resources Committee, has not decided how many hearings will be held, she said. She noted the task force members may do site visits to gas-intensive plants that have been severely affected by high gas prices.

Capitol Hill observers, noting the administration leaders’ careful skirting of some of the real issues necessary to deal with a potential gas shortfall, said that opening up the almost-sacrosanct moratoria to scrutiny is likely to trigger an impassioned debate, with coastal state representatives and environmentalists leaping to defend it. The fight that would develop as election year approaches could make the efforts to open the Arctic National Wildlife Refuge to energy exploration and production appear easy in comparison.

The special panel is expected to report back to the House speaker in late September. “No legislation is planned at this point” as a result of the task force’s efforts, the aide told NGI. “It’s just a fact-finding mission.”

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