Engineering News

Americas Chemical Makers Call for National Initiative
to Curb Natural Gas Consumption

Friday September 16, 12:47 pm ET

Plan Aims to Help Americans Avoid Sharply Higher Natural Gas Bills, Product Prices

ARLINGTON, Va., Sept. 16 /PRNewswire/ -- U.S. Secretary of Energy Samuel Bodman noted this week that there is "great concern about natural gas" production, including possible shortages this winter, as a result of Hurricane Katrina's damage to the natural gas supply system. Senator Pete Domenici warned of "real hardships" this winter for low-income families. Natural gas production in the affected Gulf Coast region remains 34 percent shut down, and pipelines and processing facilities could take months to repair. Last week, the U.S. Energy Information Administration estimated that natural gas prices could increase as much as 71 percent this winter in some parts of the country.

The American Chemistry Council issued the following statement:

"It's becoming clearer and clearer that unless decisive actions are taken this fall to curb natural gas demand and increase supplies, Americans could be in for a difficult winter. The potential for shortages and even higher prices is great, affecting Americans directly in the form of higher home heating costs and indirectly as they pay more for the many consumer goods produced using natural gas. Congress and the Administration should act now to prevent a supply shock this winter.

"Even before Hurricane Katrina hit, natural gas prices were at record highs, caused by a variety of factors from rising consumption to geographic supply concentration to federal restrictions on exploration put in place years ago, when natural gas prices were the lowest in the world. Hurricane Katrina exacerbated these problems; it now appears that due to damage, more than five percent of U.S. natural gas production will remain off the market through the winter heating season. As part of the hurricane recovery process, we are looking to Congress and the Administration to lead a national effort to curb natural gas consumption, free up new supplies and invest in new energy sources.

"Elements of a natural gas legislative initiative could include: * Emergency Aid: Rush amphibious resources (Navy, Coast Guard, Corps of Engineers) to damaged natural gas processing plants on the Louisiana coast. Damaged processing plants are an enormous bottleneck in the system. * Curb natural gas consumption before the winter heating season: Fund the $90 million public awareness campaign authorized in the Energy Policy Act of 2005 (EPA05); Accelerate and expand energy efficiency incentives for homeowners. Provide additional funding for the U.S. Department of Energy's efficient appliances program and for the Energy Star program. * Remove barriers to natural gas supplies: Lift restrictions to energy development on shore and on the Outer Continental Shelf. * Invest in new forms of energy: Expand investment tax credits for gasification technology. * Dispatch the most efficiently produced electricity: Give co-generators and combined cycle generators priority access to the power grid. * Suspend -- on a temporary basis -- Acid Rain and NOx SIP Call programs to allow electricity generation using coal or other non-gas/oil capacity to the maximum extent possible. The suspension might cause individual companies to exceed their annual or seasonal emission allocation/budget, and they need federal assurance that this would be acceptable before they would make the fuel switch.

"Unlike the oil market, there is only a small international market that can be tapped to increase the supply of natural gas, and there is no natural gas equivalent to the Strategic Petroleum Reserve. These factors make it all the more important that Congress and the Administration provide leadership in the form of a new natural gas initiative.

"Chemical makers use natural gas to heat and power facilities and as a raw material that goes into thousands of products that consumers use every day. Such products include medicines, medical equipment, auto parts, computer and telephone equipment, packaging, antifreeze, health and personal care products and many others. Other industries that use large amounts of natural gas include steel, aluminum, cement, defense, pharmaceuticals and agriculture."

The American Chemistry Council (ACC) represents the leading companies engaged in the business of chemistry. ACC members apply the science of chemistry to make innovative products and services that make people's lives better, healthier and safer. ACC is committed to improved environmental, health and safety performance through Responsible Care, common sense advocacy designed to address major public policy issues, and health and environmental research and product testing. The business of chemistry is a $516 billion enterprise and a key element of the nation's economy. It is one of the nation's largest exporters, accounting for ten cents out of every dollar in U.S. exports. Chemistry companies invest more in research and development than any other business sector. Safety and security have always been primary concerns of ACC members, and they have intensified their efforts, working closely with government agencies to improve security and to defend against any threat to the nation's critical infrastructure.

Source: American Chemistry Council

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