It’s no secret natural gas prices flew through the roof a few years ago and still remain well above the historical ceiling, but few would believe that over the last 41 months gas consumers (residential, commercial and industrial) have paid $111 billion more than they had the previous 41 months.

In a report sent to Congress and the Bush administration last week, the Industrial Energy Consumers of America (IECA) highlights those cost increases and maintains that they could have been prevented had Congress opened the door to drilling in areas currently off limits.

“Every penny of the $111 billion could have been prevented and was totally unnecessary,” said Paul Cicio, executive director for the IECA, a non-profit association that represents 23 major industrial companies, including Dow Chemical, Tyson Foods, Owens Corning, Bayer Corp., and the American Forests and Paper Association among others.

“The U.S. is blessed with enormous natural gas reserves, yet we do not lift drilling moratoriums,” said Cicio.

The IECA report shows that the price of gas increased 83% during what it calls the “41-month natural gas crisis,” which started in June 2000. Crude oil increased only 46% during the same time period, which included the period of high oil prices caused by the war in Iraq.

“The natural gas crisis has had a staggering direct and indirect impact on all consumers, the U.S. economy and especially manufacturing,” said Cicio. “The $111 billion is just the tip of the iceberg and it cost the economy a lot of jobs that may never return.”

According to the report, the increased price of natural gas has cost industrial consumers $57 billion, residential consumers $33 billion and commercial consumers $21 billion over the period of the 41 months.

“We think the Energy Policy Act of 2003 is a good start but will not resolve the natural gas crisis,” said Cicio. “Unfortunately, there is no end in sight to these high and sustained natural gas prices that are the highest in the world.”

Cicio said the main reason the Energy Bill does very little for gas consumers is its silence on lifting drilling moratoria (see https://energy.senate.gov/legislation/energybill2003/energybill2003.cfm).

“Look at the significant increase in the rig count that we’ve had,” he said in an interview with NGI. “In the first half of the year, gas production may have increased only 2% and current forecasts by independent organizations that have polled the top 25 gas producers are expecting a decrease in the second half.

One of the things that they point to is that producers just don’t have places to drill where there are significant reserves. They are punching a lot of holes in the ground and getting small amounts. They need to find large pockets, and we need to open up more areas to find those large reservoirs of gas instead of these little tiny ones.”

The National Petroleum Council estimates that drilling moratoria areas in the United States hold 80 Tcf of technically recoverable gas resources — 21 Tcf off the Pacific Coast, 33 Tcf off of the East Coast, and 25 Tcf off the Florida shoreline. However, the NPC said in its last report in September that only “limited data have been acquired in these areas due to the moratoria,” so the resource potential could be considerably larger.

The complete report from IECA can be found at www.ieca-us.org.

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