Republican News

WASHINGTON, D.C.– The Energy Department’s Energy Information Administration now predicts that consumers will pay at least 50 percent more for natural gas this winter, compared to last year. “We must address the long-term problems at the root of the crisis,” Chairman Frank H. Murkowski said at a hearing today. “We are drawing down gas reserves faster than we are replacing them with new discoveries,” said Murkowski, “And production from new wells drilled in the Gulf of Mexico declines by nearly 50 percent after the first year.” That accelerated depletion leads to higher prices and lower production. The hearing in the Senate Energy and Natural Resources Committee took place exactly one year from the date of the report of the National Petroleum Council’s report on natural gas demand. That report pointed to increased demand for natural gas–projecting 30-35 trillion cubic feet demand by 2020, and it highlighted the critical need for investment in infrastructure to deliver natural gas to market. Today natural gas demand is at 22 trillion cubic feet. Natural gas spot prices are at nearly four times higher than they were last year; now $10 per thousand cubic feet–last year $2.16. “As these price increases hit the consumer hard, there is evidence to suggest that the demand for natural gas in the future has been grossly underestimated,” concluded the Chairman. Natural gas is a vital part of our national energy mix with 56 million American homes using it for heat. Natural gas provides 15 percent of the nation’s electric power and nearly one-quarter of our total energy supply. Because of its clean-burning characteristics, it is easier to achieve permits from the Environmental Protection Agency for natural gas powered plants, consequently 95 percent of new power plants will use natural gas. “There are steps we can take in the short-run to help low-income families and the elderly pay their bills this winter–such as expanding funding for the Low Income Home Energy Assistance Program–LIHEAP,” the Chairman explained. But he listed a number of long-term actions to improve the problem: Expand access to natural gas on federal lands; expedite permitting of pipelines while maintaining safety standards; and develop the Alaskan Gas Pipeline Project. “We have 35 trillion cubic feet of proven natural gas reserves and the potential for more discoveries in Alaska.” Chairman Murkowski stressed the need to work in the new Congress toward a balanced energy strategy. He said we could face similar supply crunches for crude oil, gasoline and electricity. “We clearly need to develop a comprehensive and balanced national energy strategy for the next decade. One that takes advantage of all our energy sources; one that takes economic and environmental factors into account at the same time; and one that provides a cleaner, more secure energy future.” ####