Abandoned by members of Congress, who left a lot of low-income energy users out in the cold as they headed for their own home holiday fires, natural gas end users are turning to federal agencies to stem the tide of high prices.
South Carolina officials are calling for an investigation of prices by the Federal Energy Regulatory Commission and the Commodity Futures Trading Commission (CFTC), and Wisconsin consumer representatives are asking the Federal Trade Commission (FTC) to block the merger of ConocoPhillips and Burlington, noting that “drilling on Wall Street” does nothing to increase supply.
“There is no assertion by natural gas marketers – nor is the [Office of Regulatory Staff] aware of any prevailing empirical data that suggests the nation is in short supply of natural gas,” according to a news release by the South Carolina agency. Duke Scott, executive director of the agency, said letters had been sent to the FERC and the CFTC asking for an investigation as to why natural gas prices are so high when there appears — despite the hurricanes — to be plenty of supply.
According to the U.S. Energy Information Administration, the supply of natural gas in storage is slightly above the five-year average, Scott pointed out, adding that suppliers have not called for curtailments. The South Carolina agency, which represents the state administration on consumer matters, also asked the state’s congressional delegation to call for an investigation into whether wholesalers are manipulating the market.
Scott said the agency had never asked for an investigation before, but was doing so now.
And from the coldest part of the nation comes a plea for the FTC to block the merger of ConocoPhillips and Burlington, with the claim it would concentrate control of supplies and send prices even higher.
Rod Nilsestuen, Secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP), said the acquisition would make ConocoPhillips-Burlington the world’s second largest natural gas producer. “With even less competition, the ability to control prices by controlling supply becomes increasingly dangerous to the citizens of Wisconsin and the nation.”
Nilsestuen said that at a hearing held earlier this month by DATCP, Thomas Mathiasmeier, a ConocoPhillips executive, testified that, “we have to invest in increasing supply.”
“But it looks like ConocoPhillips is doing their drilling on Wall Street, spending $35.6 billion to purchase an already existing company does nothing to increase the supply of natural gas. This business choice only hurts consumers who will continue to pay extremely high prices because oil companies are consolidating their control over supply,” Nilsestuen said.
Meanwhile, as one of its last acts before heading home of the holidays, the Congress voted against action to open certain resource-rich portions of Alaska to drilling and cut out extra funding for low-income energy assistance, leaving the funding total at less than last year, despite the higher prices.
“The Senate failed to provide any solutions for energy consumers this winter. They stripped out measures to help the needy pay their energy bills and they stripped out measures to increase domestic supplies of energy. This is tragic,” said AGA President David N. Parker (see Daily GPI, Dec. 23).
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