http://ogj.pennnet.com/articles/article_display.cfm?Section=ONART&C=GenIn&ARTICLE_ID=251721&p=7
Manufacturers group chief urges action on gas supply
*Nick Snow*
*Washington** Correspondent*
*WASHINGTON**, DC**, Mar. 31* -- Congress should move quickly to open what
amounts to a strategic reserve of natural gas off US coasts, National
Association of Manufacturers Pres. John Engler urged.
"When it comes to oil, you often hear talk about a Strategic Petroleum
Reserve," he told the Economic Club of Pittsburgh Mar. 29. "We also have
another reservethis one unplannedfor natural gas. It's called the Outer
Continental Shelf."
Action is necessary to reverse policies that have encouraged gas use,
restricted producer access to the gas resource, and consequently driven up
gas prices, the former Michigan governor said.
He cited PPG Industries to show how rising gas prices hurt businesses.
"Every time the price of natural gas increases by another dollar, it results
in an unbudgeted expense to the company of $70 million," he said.
He said US Steel Corp. Chief Executive John P. Surma Jr. has told him that
each additional dollar paid for gas costs the steel manufacturer $80
million. "For the steel industry as a whole, it's $300 million," Engler
said.
The chemical industry, he added, has lost 100,000 jobs and $50 billion in
business largely because of rising energy prices.
*Contradictory policies*
Policies favoring gas use have pushed up domestic demand and raised prices
to record levels, Engler noted. Other policies not only restrict access to
potential domestic supplies but also limit construction of LNG import
terminals.
US manufacturers thus pay several times what many of their international
competitors do for gas.
But while federally imposed moratoriums and withdrawals block expansion of
oil and gas activity on the OCS, Cuba is moving ahead to develop its
offshore resources, Engler said.
"When you hear objections from the environmental lobby about the risk of
exploring deep waters off the Florida coast, you should know that Cuba has
licensed foreign firms to develop gas resources in waters as close as 60
miles to the US shore. In years ahead, that Cuba-backed drilling could come
as close as 45 miles," he said. "To me, it makes no sense for Venezuelan or
Chinese firms to be partnering with their Cuban friends to drill 45 miles
off our coast while Florida's US senators want US companies to stay 260
miles off our shores."
Engler said NAM recently established a coalition, the Consumer Alliance for
Energy Security, with the American Chemistry Council, the American
Forestand Paper Association, and the Agriculture/Energy Alliance in an
effort to
influence the debate on OCS leasing.
He also called for leasing of the Arctic National Wildlife Refuge Coastal
Plain.
Engler said conservation, which leasing opponents promote as an alternative
to new supply and which manufacturers embrace, isn't enough. "You cannot
power a forge or heat a warehouse or fuel your trucks through conservation,"
he said. "The supply and demand equation requires supply."
*Contact Nick Snow at [EMAIL PROTECTED]
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