Concluding that the existing natural gas supply chain is “near the breaking point” despite abundant resources in the United States, the House task force on natural gas in a report last Tuesday placed much of the blame for restricted supplies on the federal government for its conflicting policies that promote gas consumption yet deny producers access to gas-rich federal lands.

“Government red tape is causing a worsening natural gas shortage, even though there is no lack of natural gas in America. There is, however, a shortage of natural gas for sale on the energy market because governmental policies restrict access to the most promising areas with the greatest potential natural gas resources. There is also a shortage of common sense that is preventing us from developing rational government policies that will enable us to get access [to] our natural gas resources and deliver them to the American people and our economy,” said the House task force in its 12-page report.

In addition to the government, “radical environmentalists continue to bang the same old drum that we can’t produce energy and still protect our environment,” but the two are no longer “mutually exclusive,” according to the report. “New technologies allow us to produce energy smarter and more efficiently, and we already have laws on the books that include the most restrictive environmental protections of any nation on earth.”

The report “clearly spells out that the federal government has pushed and pulled our energy sector into a corner, and now we’re witnessing higher prices and lower inventories which punish American consumers, workers and our nation’s economy,” said House Speaker Dennis Hastert (R-IL), who set up the task force in July to respond to an emerging gas supply shortage.

The American Chemistry Council (ACC), whose chemical company members have been rocked by high gas prices, agreed with Hastert, calling the task force report “an indictment of government’s ‘business as usual’ attitudes” towards the widening supply-demand imbalance in gas.

“While we may not make every one of [the task force’s] recommendations law in the current energy bill being negotiated,” Hastert said he expected the task force’s co-chairmen, Reps. W.J. “Billy” Tauzin (R-LA) and Richard Pombo (R-CA), to continue “working together to find environmentally responsible ways to increase domestic supplies of natural gas and promote fuel diversity.”

Specifically, the members of the task force called for an inventory to be conducted of gas resources on federal lands, a federal office to be created to coordinate permitting and environmental reviews of gas projects, accelerated decisions on lease applications for gas production on federal lands, faster permitting of interstate gas pipelines, more timely decisions on permitting requests for production on federal lands, incentives for gas production from marginal wells, and royalty relief for production of deep and ultra-deep gas in the shallow waters of the Outer Continental Shelf (OCS).

A number of the proposed solutions already are included in the national energy bill being negotiated by a House-Senate conference committee. While the energy proposals are a “necessary first step” to providing an antidote to the gas supply squeeze, the ACC noted the task force report makes it clear that much more must be done.

“Aggressive measures are needed to curb demand growth via conservation and energy efficiency. But even more urgently, increasing supply, especially by opening off-limit areas of the Outer Continental Shelf and Rocky Mountains to environmentally responsible production is needed. This is not an either/or proposition. The nation needs to pursue both approaches at once,” the ACC said.

The House report estimated that more than 60% of the nation’s future gas reserves are beneath lands in the Intermountain West, Alaska and the offshore waters that “are controlled by the government.” But overlapping environmental regulations, land-use decisions, leasing/permitting constraints and offshore drilling moratoria “are making it increasingly difficult, if not impossible, to access these promising reserves.”

The task force “considered every suggestion received over the past two months for solving the natural gas supply/demand imbalance facing our nation,” the report said. “Unfortunately, given the political difficulties Congress faces on many fronts, very near-term solutions would require more political determination on the part of Congress than can be garnered.”

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.