The Natural Gas Council on Friday warned the ClintonAdministration and Congress of abnormally high natural gas pricesthis winter and requested additional funding for the Low-IncomeHome Energy Assistance Program (LIHEAP) for low-income households.
The Council, which is a group of senior executives representingall sectors of the gas industry, including the Natural Gas SupplyAssociation (NGSA), the Interstate Natural Gas Association ofAmerica (INGAA), the Independent Petroleum Association of America(IPAA), the American Gas Association (AGA) and the AmericanPetroleum Institute (API), also urged the president to convene aspecial meeting between the administration, the council andCanada’s National Energy Board to “discuss issues affecting naturalgas in the near term, and actions both industry and governments cantake to ensure adequate supplies are delivered to markets.”
“The United States currently imports 14% of our natural gas fromCanada, and the National Petroleum Council estimates that we willincrease our imports from Canada by 33% in the next 10 years,” thecouncil noted. “But concerns are being expressed in the U.S. mediaabout the available supply for this winter’s heating season, andalthough we are confident that enough natural gas exists to servethe market, an open dialogue between governments and industry couldhelp our understanding of the supply situation, in addition tohelping shape future agreements to further improve our workingrelationships.”
In letters to both House Appropriations Chairman C.W. Bill Young(R-FL) and Senate Appropriations Chairman Ted Stevens (R-AK), thecouncil explained that the price of natural gas in the spot andfutures markets has reached record levels because of strong demanddue to the robust economy and the drilling decline of the past twoyears during a period of sharply lower prices.
“The good news is that producers are already vigorouslycompeting with each other to increase gas supplies. As a result,the drilling situation has reversed itself and rig counts are nowwell above the levels of the same period last year. However, due tothe continued high demand for natural gas and the historic time lagbetween increased drilling activity and a price response, consumersmay pay significantly more for each unit of natural gas this winterthan they did last winter.”
The Council urged the lawmakers to order the early release ofemergency LIHEAP funds. “Just as electricity bills are hittingCalifornians hard this summer, consumers in the Northeast andMidwest regions may face high heating bills this winter,” thecouncil told the president. “In addition, we are concerned that theAdministration’s request for FY2001 ($1.1 billion, with $300million available for emergency release) may not be adequate.Although some portion of the $600 million in additional emergencyfunds provided by the FY 2000 supplemental appropriation may alsobe available for this winter, current LIHEAP funding can serve only12% to 15% of eligible households and these recipients could needup to 35% more assistance this winter just to provide the samelevel of benefit as last winter. We urge you to increase the amountby at least $300 million in additional funding for regular LIHEAPappropriations for FY2001.”
The letters were signed by NGSA President Skip Horvath, AGAPresident David Parker, INGAA President Jerry Halvorsen, IPAAPresident Barry Russell and API President Red Cavaney.
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