Rep. Richard Pombo (R-CA), co-chair of the emergency task force on natural gas issues with Rep. Billy Tauzin (R-LA), has asked the Government Accounting Office to conduct an inventory and report on all administration appeals and judicial litigation that are delaying critical energy exploration and production projects in the United States.
“This data will help Congress assess the economic impact of these suits, both on the energy market and on the consumer, as we continue to examine the road blocks in getting energy supplies to market in America,” Pombo said in a press conference following an open-to-the-public meeting on Monday. The task force was formed by House Speaker J. Dennis Hastert (R-IL) earlier this month.
Despite the so called natural gas “emergency,” Federal Reserve Board Chairman Alan Greenspan recently indicated that not much could be done in the short-term to alleviate the supply crunch and high gas prices.
“I hope he’s not right,” said Tauzin, but he could be. “We don’t know. We can’t promise that he’s wrong.” Tauzin said the task force is not out to determine energy policy or to dictate solutions. It will describe the current natural gas market situation and recommend options to the House speaker, who will then make recommendations to Congress and the president. In the end, there could be legislation or something could be incorporated in the energy bill.
Among the possibilities is the idea of John E. Peterson (D-PA) that Congress should look at prioritizing gas supplies, especially gas used in power generation. “This needs to be put on the table,” said Peterson, regarding possibly limiting gas supplies to certain customers. About 24% of gas supplies currently are being used for electric generation, he said, indicating that he was not comfortable with the wide open door for gas being consumed within the power industry. “I think we need to be prioritizing.”
However, Tauzin said the task force was not going to consider any heavy-handed intervention into the energy market. “This task force has more work than you ever asked for,” he said.
Tauzin noted he was “not overly optimistic” about whether or not the task force will be able to come up with short-term solutions. Greenspan and the others may be right, Tauzin said, but the task force ” should try to prove them wrong.”
Time is short. “We have two months… I caution all members…that we are already running out of time,” said Tauzin. He asked the staffs of the House Energy and Commerce Committee and the House Resources Committee, whose members make up the task force, to have the first half of a report submitted to the House speaker by the end of August. The first half of the report must spell out the “state of things as they are” in the gas industry: the physical description of the supply situation; the problem spots in the gas market; where important fundamental events are taking place in the market; and a description of the natural gas policy that has shaped the market.
Tauzin wants the members of the task force to fully understand all the choices for short term market assistance, which will make up the second half of the report. He said he wants the members to begin scheduling meetings around the country. Field hearings will be scheduled by Reps. Joe Barton (R-TX) and Barbara Cubin (R-WY). Oklahoma City is a potential location for at least one field hearing.
Pombo said he thought lifting the drilling moratoria was more a long term issue. But Tauzin said that was an area “where we can contribute to the debate.”
Little was made of the much ballyhooed solution of promoting imported liquefied natural gas (LNG). LNG apparently is viewed as more of a long-term solution. Tauzin did point out that there are no LNG facilities on the West Coast, but Pombo noted that at least five potential terminals have been proposed.
Other items likely to be discussed include increasing drilling access to public lands, approving new FERC commissioners and speeding up permitting for drilling.
“I don’t know yet where this task force will lead us,” said Tauzin. “It’s not that we as a country are out of gas, there’s an abundance of supplies, but there’s a government lock-down on places to drill,” he added.
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