CAES News
Natural gas shortage calls for action
As we all are painfully aware, our country is facing a significant crisis: the need to safely access our abundant domestic energy supply.
Both consumers and U.S. manufacturers feel the pinch on a daily basis. Increasing our nation's supply of natural gas could go a long way toward improving this situation. Just recently, the U.S. Department of Labor reported that higher energy costs resulted in the fastest gain in prices since January.
For years, the federal government has been promoting natural gas as a preferred energy source because it burned cleanly and supposedly was plentiful. Because of this, demand for natural gas grew significantly. Today the demand for this natural energy source is as strong as ever, but the federal government is restricting supply, thus causing a tripling of natural gas prices over the past six years.
The only immediate solution to the natural gas crisis is to increase our domestic supply, and the only way to do this is by opening new areas in the Gulf and elsewhere, such as the Outer Continental Shelf, for exploration. Until recently, Congress has refused to act; but the consequences of maintaining the status quo are too extreme for our lawmakers to ignore.
If we cannot produce enough natural gas on this side of the ocean to meet our needs, key U.S. industries that rely heavily on natural gas will fail or move offshore where natural gas is much cheaper.
Consider this. As a direct increase in the tripling of natural gas prices, the plastics sector lost more than 150,000 jobs and $14.6 billion in business to other countries from 2000 to 2002. The chemical sector lost nearly 90,000 jobs and $50 billion in business to overseas operations; and the forest and paper industry closed more than 200 mills and lost 146,000 jobs since the run-up in natural gas prices began in 2000. We cannot afford to lose more jobs or send more business overseas to countries that have lower fuel costs.
Decades of experience have proven that offshore energy exploration is safe, and advanced technologies make it even safer.
According to the U.S. Department of Energy during the Clinton Administration, advances in drilling and production technologies have meant that "operators are able to locate and produce more offshore resources, with less drilling, fewer dry holes, less waste, and minimal impact."
Of course, any increase in offshore drilling must be balanced with a sensitive approach to the environment, as has been the case with limited offshore drilling that already is in place. The U.S. Minerals Management Service reports that "recycling retired natural gas and oil structures (platforms) as artificial reefs has proven to be an effective tool for fishery management" with both the fishing industry and coastal communities benefiting from the fishery enhancement resulting from the retired platforms.
As a clean, efficient energy source, natural gas will play a significant role in the expanded use of the exciting alternative energy sources of the future -- including ethanol and hydrogen. These fuels rely on large amounts of natural gas. Natural gas, the cleanest burning fossil fuel, will be crucial in any shift toward these promising new energy sources. So for those pushing these alternatives, there is no escaping that we need to expand supply.
There are two bipartisan bills before Congress this year that will allow for increased natural gas exploration -- H.R. 4761 and S. 2253. As leaders of the newly formed Arizona Consumer Alliance for Energy Security, we urge Congress to support this legislation so we can take steps toward increasing our country's supply of natural gas and begin to reverse the spiraling cost of this important natural fuel source.
Steve Twist is vice president and general counsel for Services Group of America and chairman of the board of directors of the Arizona Chamber of Commerce and Industry. Reach him at steve_twist@sgagroup.com. Mark Dobbins is senior vice president of human resources and general affairs for SUMCO USA, and is chairman of the board of directors of the Arizona Association of Industries. Reach him at mark.dobbins@sumcousa.co. The Arizona Chamber and AAI launched the Arizona Consumer Alliance for Energy Security this week.