Coalition of Consumers Urges Senate Not to Legislate Natural Gas Demand in Energy/Climate Bill

/PRNewswire/ -- A coalition of major manufacturers, agricultural organizations and other industrial energy consumers today cautioned the Senate to avoid legislating new natural gas demand in any energy or climate change bill, saying such an approach would be "misguided" given existing strong demand growth and looming regulatory and political uncertainty surrounding access to major supply sources.

In a letter to Senate Majority Leader Harry Reid, 67 industrial and agriculture energy consumers -- representing farm and food concerns and makers of chemicals, fertilizer, glass, paper and steel -- expressed concern about artificially creating power and transportation sector demand for natural gas through legislative incentives. Doing so, they said, would cause the type of fuel switching that has ripple effects through the economy.

Paul Cicio, president of the Industrial Energy Consumers of America (IECA), said legislating new demand would prompt increased price volatility and higher prices. Higher natural gas prices also mean higher electricity costs.

"The impact will be felt by all consumers, not just industrial users," Cicio said. "Farmers will pay more for fertilizer, natural gas to dry their crops and electricity to run their irrigation systems; homeowners will pay more to heat and cool their homes; and manufacturers would be confronted with greater competitiveness challenges which threaten jobs at home."

The coalition said gas demand has been steadily rising in the past decade without the incentives being contemplated in the Senate and in the absence of carbon caps, which will increasingly shift more power generators from coal to natural gas. The power sector's natural gas demand has grown by nearly 30% since 2001.

"The economic recovery and our energy security will be better served if U.S. energy policy ensures American manufacturing can continue to compete globally and keep its jobs here," said Peter Molinaro, Dow Chemical's vice president of federal and state government affairs. "Our economy needs a diverse base of price-sensitive natural gas consumers -- and a diverse energy supply -- in order to reduce price volatility in all energy sectors."

The letter urges the Senate to allow the market to set supply and demand for natural gas instead of picking 'winners' and 'losers' through legislation.

The coalition acknowledged there is great hope that the large shale gas reserves will materialize as recoverable supplies. "However, history has shown that unforeseen circumstances, including the potential for both federal and state regulations to be placed on shale drilling, can either slow its production, increase its costs or otherwise dramatically alter these types of future projections."

The industrial and agriculture consumers called for a coherent energy policy that balances gas demand with the economy's need for affordable supplies.

Signatories to the letter include: American Forest &Paper Association, Dow Chemical Company, Kimberly-Clark Corporation, Land O' Lakes, Steel Manufacturers Association and The Fertilizer Institute.

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NGO Says Natural Gas Provides New Option for Immediate U.S. Carbon Cuts

/PRNewswire/ -- The American Clean Skies Foundation (ACSF), together with the UN Foundation and the Worldwatch Institute, today hosted a major side event in Copenhagen focusing on the ways natural gas -- and, in particular, the discovery of vast reserves of unconventional, or shale gas -- can accelerate the transition to a global low-carbon economy. Natural gas can generate electricity with 50-70 percent less CO(2) than coal per BTU. As is the case in the U.S., many other countries have also recently discovered very large new unconventional reserves of natural gas, primarily in deeply buried shale rock formations.

At the side event, ACSF released a comprehensive new working paper entitled "North America's New Natural Gas Resources and their Potential Impact on Energy and Climate Security." The paper shows why natural gas offers an immediate opportunity for climate action and describes the necessary U.S. legislative policies for pursuing this option. It is authored jointly by ACSF's CEO, Gregory C. Staple, a respected climate policy expert, and Dr. Joel L. Swerdlow, author of the noted National Geographic Society Book titled Nature's Medicine. Copies can be obtained from the Foundation at http://www.cleanskies.org/new-energy/. Event details can be found at www.cleanskies.org/pdf/acsf-agenda-121209.pdf

The Chairman and CEO of Chesapeake Energy Corp., Aubrey K. McClendon, who also serves as Chairman of ACSF, and Mr. Staple offered the following statements:

"We are in the midst of a natural gas renaissance in the United States -- a renaissance that gives the U.S. an unprecedented means to demonstrate global economic and environmental leadership because gas is a much lower carbon fuel than coal or oil. The U.S. boom in shale gas production also provides a historic opportunity to unite the business and environmental communities, since it may create hundreds of thousands of new jobs while producing large environmental benefits.

There is no longer any debate about natural gas supply in America: we have an abundance of natural gas. Big shale plays have become a key part of America's effort to gain a much greater degree of energy security, and we hope that in the next decade shale gas will also help Europe and Asia do likewise. What we need now is the political will to make sure that natural gas-based fuel switching is a leading part of our country's CO(2) reduction strategy. The more successful we are at producing shale gas in North America, the more likely it is that the U.S. and the world will have a new roadmap for energy and climate security."

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Outdated Regulations Slow Oil, Gas Drilling In Tennessee

(BUSINESS WIRE)--High crude oil and natural gas prices, new drilling technology and the state's Chattanooga Shale could combine to turn Tennessee into a significant oil and gas producing state, if enforcement of outdated regulations doesn't slow or even stop oil and gas exploration, said one industry official.

"We are currently producing crude oil and natural gas in 11 Tennessee counties, and there is potential for oil and gas producing from more than half of the state's counties," explained Scott Gilbert, President, Tennessee Oil & Gas Association (TOGA).

"Horizontal drilling in the Chattanooga Shale is a major factor in the growth of oil and gas development through a good portion of the state," said Scott. "And high crude oil and natural gas prices is another contributing factor.

"This could all come to a halt unless we can convince the state's Oil & Gas Board to make the kind of changes needed in the state's oil and gas regulations to stimulate oil and gas development rather than hold it back," he added.

Scott noted that many of the oil and gas regulations were written 30 or more years ago, when oil was less than $10 a barrel and natural gas was just flared into the atmosphere. Today oil prices are nearly $100 and natural gas is selling for $8 or more an mcf.

"Thirty years ago, if a well didn't flow oil when it was drilled in, it was considered a dry hole. Fifty years ago, all too often dry holes were not plugged and were just open. Thus, the regulation that require either producing or plugging all wells.

"With today's technology, we can turn many old wells that appear to be dry into a substantial oil or gas producer. But if the state forces old wells to be plugged, they can seldom, if ever be reopened," Gilbert noted.

"In addition, it often takes months or even years to drill enough gas wells to justify a pipeline. If we are forced, by the Water Pollution Control Division, to plug a well within six months, there would be very few wells drilled for gas, and certainly no wildcat wells where the operator may have to wait for many years for a pipeline," he added.

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