With 1,000 Louisiana chemical plant jobs lost in 2003 alone, Louisiana Gov. Kathleen Blanco on Monday called on the nation’s governors to press the federal government to form a “coordinated response” to historically high natural gas prices. At the same, top energy lawmakers engaged in a war of words in a Capitol Hill newspaper over the fate of the stalled Senate energy bill.

After the winter meetings of the National Governors Association, Blanco described the growing threat of high gas prices because of relatively flat gas production in recent years. She said the situation poses a threat to the economic health of Louisiana and the nation as a whole.

“Louisiana is by no means alone in its struggle,” said Blanco. “The entire American economy is growing more dependent on natural gas each year. Natural gas is now the fuel of choice to power factories, heat homes and businesses and generate electricity. Demand is on a steep growth curve and supply is not keeping up.

“We need a federal strategy to help ensure U.S. businesses and consumers can look forward to competitively priced natural gas,” she added.

Trends and price forecasts point to U.S. companies losing more chemical and other manufacturing jobs to overseas sites and foreign competitors, she said, underscoring the need for manufacturers in all states to join with local officials, consumer groups, elderly and fixed-income groups, labor, conservationists, farmers, small businesses and property managers to make sure their voices are heard in Congressional deliberations on energy policy, including a scheduled March 4 hearing on nuclear power by the Senate Energy and Natural Resources Committee.

Sen. Pete Domenici (R-NM), chairman Senate Energy and Natural Resources Committee, last week said his “leaner” version of the comprehensive energy bill will “stabilize the skyrocketing natural gas prices that have driven thousands of American jobs overseas. Besides creating new jobs, we will help staunch the hemorrhage of the jobs we have now to foreign countries,” he said in an op-ed piece written in Roll Call.

To appease critics, Domenici slashed the cost of the $31 billion bill to about $13-$14 billion by stripping out some of the tax incentives, delaying the effective dates for certain incentives, and cutting out the MTBE safe-harbor provision.

Domenici said the downsized energy bill still will create more than 800,000 new jobs and “does more to revitalize rural America than any legislation passed by Congress in the past 30 years — at less than half the cost of the old energy bill.” Half of the expected new jobs will be involved with construction of the Alaska gas pipeline, which some believe could enter service in about a decade.

“We are experiencing the early warning signs of that natural [gas] crisis like the breeze that announces a hurricane,” said Domenici. “Did you know that natural gas prices were 60% higher this winter than last winter? In some parts of the country, it cost consumers $300 and $400 a month to heat and light their homes this winter. If Congress does nothing, wait and see what it will cost to heat and light a home with natural gas in five years.”

In addition to promoting construction of the Alaska pipeline, which will deliver gas to the Lower 48 states, the bill also will focus more dollars on clean coal research so that more coal can be used instead of natural gas in the future for power generation and other needs.

“The looming gas crisis has prompted the federal government to redo its 25-year energy forecast, sharply increasing its prediction of coal consumption in anticipation of tight natural gas supplies and ever-climbing prices. In the coming years, Americans may rely on coal more heavily than any time in the past 30 years,” he said. “Wind and solar energies can’t begin to meet that demand, though their use will expand exponentially with the tax credits in my new energy bill.

“Rising coal consumption makes our $2 billion investment in clean coal technology critically important to our environment and our children. The energy realities of the next 25 years means this energy bill is as much about blue skies and clear water as it is about new jobs and lower energy prices.”

The bill faces an uphill battle, however. Some experts believe that any energy bill that exits the Senate without the key provisions regarding MTBE ultimately will fail to win House Republican votes (see Daily GPI, Feb. 23).

In his own op-ed piece in Roll Call on Monday, Sen. Jeff Bingaman (D-NM) said it is hard to see how the bill “will move Congress closer to enacting energy legislation.” He noted the House Republican opposition to the removal of the MTBE provision. Despite Domenici’s cut’s, the bill also still apparently costs 50-75% more than the Bush administration says it will support.

“Passing such a bill could well set off a protracted finger-pointing match between the two Houses,” Bingaman said. “That would stymie forward progress on any of the provisions contained in S.2095, even the ones that have broad bipartisan support in both Houses.

“Just in the Senate, the process of passing an energy bill based on S.2095 might be lengthy and rancorous. Like the failed energy conference report that preceded it, S.2095 is the product of a closed process that excluded Democrats,” he noted, adding that the bill contains “a number of the conference report’s controversial provisions that were never debated in the Senate…

“In a year in which legislative time is going to be at a premium, S.2095 appears to be an inefficient starting point for actually getting something done. It might be more realistic to look to a smaller set of key, broadly supported energy provisions and to enact them, as opposed to taking up another bill that is actually longer than the conference report,” Bingaman said.

He also said that process of chipping off sections of the bill and moving them separately through the Senate already has started. The highway bill passed by the Senate, for example, contains two sections of the energy bill conference report that deal with energy efficiency measures.

“We need an energy bill,” President Bush said Monday in remarks to the National Governors Association. “We’ll try to get one out of the Congress here.”

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