Rep. Tony Hall (D-OH) has introduced legislation to create anatural gas reserve to help stabilize the market during times oflow supply and high prices. The proposed reserve would be modeledafter the Strategic Petroleum Reserve (SPR) and the Northeast HomeHeating Oil reserve, the latter of which allows heating oilsupplies to be drawn down during times of tight supply.
“He is going to push it [the bill]. It’s a solution that makessense” in light of the high gas prices that customers have seen sofar this winter, said a press aide. A gas reserve would be “part ofthe long-term solution” because the federal government could buygas when it’s “cheap and plentiful, and make it available duringtimes of shortage,” Hall said in the Congressional Record.
His legislation, the Natural Gas Reserve Act of 2001 (H.R. 245),would give the Energy Secretary the authority to determine whethera gas shortage exists and a drawdown should occur.
The secretary would be authorized to sell crude oil from the SPRto cover the administrative and acquisition costs of the newreserve. In addition, the secretary would determine the size andlocation of the gas reserve, according to Hall’s bill.
Hall believes now is the time to establish a reserve for naturalgas, given that the Energy Information Administration (EIA)projects that by next month gas storage in the nation will be 40%below the five-year average.
The legislation, which is co-sponsored by Reps. Frank Mascara(D-PA) and Bernard Sanders (I-VT), “is an insurance policy forAmerican consumers because it will provide relief during [a]national shortage,” he said.
The Senate is eying similar relief as well. Last week, it calledfor the National Academy of Sciences to conduct a study of therun-up in gas prices and impoverished supply situation this winter,and offer potential solutions – specifically, directing it toreview the feasibility of a gas reserve. This was included in anamendment to the pipeline-safety bill that the Senate passed lastThursday.
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