Rocky Mountain natural gas producers are not being hampered by inadequate pipeline capacity, the head of the Independent Petroleum Association of Mountain States (IPAMS) told a joint House-Senate panel Thursday.

“Currently the Rockies is not curtailed by pipeline [takeaway] capacity,” said Logan Magruder, president of IPAMS and vice president of Berry Petroleum, during a hearing of the Joint Economic Committee into the run-up in natural gas prices and tight supply.

He noted the Rocky Mountains has 4.6 Bcf/d of takeaway capacity now, and that it’s scheduled to increase to 6.5 Bcf/d within the next two years.

“The thing that’s hindering our ability to get more natural gas into the pipeline system and into the market is the regulatory constraint right now,” namely the long lag time for the Bureau of Land Management (BLM) to process and issue a lease after a lease sale, Magruder said.

Under current law, the BLM is required to process and issue leases within 60 days of a lease sale, but it often takes the agency eight months or more to do this, he told House and Senate lawmakers.

“Legal challenges are another factor limiting oil and natural gas development on public lands. At every stage of development, government agencies are challenged by groups seeking to stop natural gas exploration and production.”

Magruder said the Rockies has about 26% of the total known gas resources in the United States. That translates into approximately 338 Tcf of the nation’s known resources of 1,300 Tcf, he noted.

Despite the bureaucratic hold-ups, a lot of energy companies are migrating to the Rockies, according to Magruder. “We’re poised and ready to act.” He said he anticipates a “tremendous output” of natural gas from the Rockies over the next five years.

Both Committee Chairman Robert Bennett (R-UT) and Sen. Jeff Bingaman (D-NM) expressed concern about the processing/leasing delays at BLM. But it was unlikely that the situation would be remedied during this Congress, which was expected to adjourn over the weekend and return for a lame-duck session in mid-November.

Bennett further conceded that Congress was to blame, if only in part, for the current tight natural gas supply and demand. Congress contributed to the situation by “passing laws that stimulated natural gas demand without fully thinking through their long run consequences and dealing with them when they were more manageable.”

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