Citing high natural gas prices and imports and declining domestic production, a group of industrials Monday urged the Department of the Interior (DOI) to include all the federal areas currently under moratoria in its development of a new five-year leasing program starting in 2007.

In a letter to the Interior secretary and various congressional energy leaders, the Industrial Energy Consumers of America (IECA) said the five-year natural gas crisis already has claimed 2.5 million manufacturing jobs. During that time period consumers have paid nearly $200 billion more for natural gas than they paid in the previous five years. Natural gas prices now “are 344% of 1998 levels and the highest in the world; U.S. production declined by 4.9% and Canadian imports declined 23% from 2001 to 2004,” the group said.

The DOI is soon expected to issue a proposed new leasing plan and request comments. The plan would run from 2007, when the current plan expires, until 2012. Currently moratoria prohibit exploration and production activities off both the U.S. East and West Coasts and in the eastern Gulf of Mexico (anywhere near Florida).

Calling for “rational development” of resources, IECA suggested that DOI “pursue an education program that shows offshore drilling can be done in a very environmentally safe way with today’s technologies. The public needs confidence you will continue to regulate and inspect for compliance.”

The fact that last year’s Hurricane Ivan, one of the most powerful storms to hit the Gulf of Mexico, did not cause any environmental damage from wrecked oil and gas operations offers a good example of safe and clean operation of E&P activities, the group said. “Other nations such as the UK, Australia and Norway continue to increase their offshore leasing programs, yet we keep significant offshore areas under moratoria and, as a result, U.S. competitiveness is diminished.”

Had it not been for demand destruction, a cool summer and a mild winter, prices over the last year could have been even higher, and there could even have been rationing, the industrials advised.

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