Industry officials hope that recommendations from an upcoming National Petroleum Council natural gas study will bolster their case that comprehensive energy legislation is needed.
"I think the reality that natural gas demand is getting bigger all the time is a fact that is starting to sink in," said ExxonMobil Corp. Chairman and CEO Lee Raymond in a brief interview with OGJ following an NPC progress report meeting May 16. Raymond is serving as NPC vice-chairman and Bobby S. Shackouls, chairman and CEO of Burlington Resources Inc., is the chairman. Both positions are 1-year terms.
A final study is due in September, but US Sec. of Energy Spencer Abraham has asked NPC to schedule a special June meeting to focus on what the Department of Energy anticipates to be "short-term challenges" in natural gas markets. NPC, an industry advisory committee to the secretary, is expected to hold the meeting, although no official announcement about time or location has been made yet.
In remarks delivered to NPC members earlier this month, Abraham noted that current natural gas stocks in underground storage are unusually low due to a combination of cold weather in the Northeast and Mid-Atlantic regions this past winter, and declines in both domestic production and net imports.
"If we are to reach the desired storage level of 3-3.5 tcf of natural gas by the end of October, we must inject much more into storage than the usual weekly average of 60 bcf," Abraham said.
Abraham said he is "looking forward" to the final report in September but said that in his view, "we cannot wait until the late fall to take action on the more immediate problems we face."
There are 250 people actively working on the study, which DOE formally requested in March 2002. The final NPC study will address many of the same issues Congress is now considering as part of an energy bill that may be finalized before fall. The House passed a bill in April; the Senate is due to resume debate soon, probably in early June. Congressional staff members predict it may be September before the two chambers work out differences between the two proposals.
Various NPC committees are examining resources for capital investment, the role of technology, access to the US resource base, new sources of supply from Alaska and Canada, LNG imports, and the long-term potential of unconventional resources such as methane gas hydrates.
And in a departure from earlier NPC studies, a communications committee has been formed that will work with various government agencies on coordinating the rollout of the study to the public. NPC members anticipate that will happen sometime in the fall.
NPC critics
Some NPC members met with Republican congressional leaders about the study shortly before Friday's council meeting. But the fact that Democrats were not invited to the briefings has led some environmental groups and public land advocates to be suspicious of what they see as an uncomfortably close relationship between DOE and report authors.
Environmentalists said they fear the NPC report will be a "propaganda tool" that will exaggerate problems producers face accessing the resource base. Some green groups are also worried that reserve numbers may be underreported to validate the White House's call for encouraging coal, nuclear fuels, and LNG imports.
But industry officials familiar with the NPC study discussions lambasted these critics, saying it was impossible to dismiss a study that has not even been drafted yet.
Further, some NPC members, speaking on condition of anonymity, defended their meetings on Capitol Hill, saying that as a federal advisory group to DOE, it is the responsibility of the council to brief members of Congress. They added that there is no denying that the natural gas market picture is already troublesome: increased depletion rates and less productive drilling have led to a projected 2% decrease in natural gas supply already this year, according to DOE statistics.
