API's Cavaney addresses US House on plight of US gas supplies

Aug. 4, 2003
In a letter presented July 24 to the US House of Representatives, American Petroleum Institute Pres. Red Cavaney addressed the plight of the supply of natural gas in the US in the coming years.

In a letter presented July 24 to the US House of Representatives, American Petroleum Institute Pres. Red Cavaney addressed the plight of the supply of natural gas in the US in the coming years. "In the years ahead," Cavaney wrote, "our industry plans to supplement US natural gas supplies by increasing imports of LNG and the construction of a pipeline to gain access to Alaskan and northern Canadian resources."

American Petroleum Institute Pres. Red Cavaney
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Cavaney noted that "unlike past summers when gasoline supply was in the news," this summer's media attention is focused mainly on the nation's natural gas supplies. "Fortunately, fair weather and tempered demand have helped rebuild natural gas storage levels, which were at historic lows just 3 months ago," he noted.

Cavaney called the challenge for supply to meet increasing US demand over the next few years "very real," adding that the challenge also is "shaped largely by external factors beyond industry's control." These factors included extreme weather, downtime at electrical power generation facilities, and transportation interruptions, which could all "result in very tight supplies of natural gas," he said.

"Ninety-nine percent of the natural gas our nation uses is produced in the United States (85%) and Canada (14%). Facilities and specialized tankers to handle increased LNG imports will be 3 or more years in the offing," Cavaney warned.

Government policy

Cavaney pointed out the discrepancy in US government policy regarding fulfilling the nation's natural gas supplies. "For several decades, government policy has encouraged the use of natural gas as an efficient and environmentally beneficial fuel. Conversely, government policies have also specifically discouraged the development of new supplies. To ensure a reliable flow of natural gas to consumers, our nation must change this quixotic approach and adopt an energy policy that is consistent in facilitating the production of new supplies, in improving the transportation infrastructure, and in encouraging increased energy efficiency and conservation through individual action," he said.

Industry is responding well to the demand challenge, Cavaney said, noting the substantial rise of production-related activity over the past year.

"Our cutting-edge technology allows us to produce natural gas more quickly than before. However, government limitations force us to operate in older fields, depleting them more quickly and drilling more wells simply to maintain current production levels. Despite our efforts, US natural gas production has not risen since 1994, while consumer demand has increased by 6%," he said.

Cavaney explained that since industry "cannot control supplies simply by turning on or off the natural gas faucet; the only way to deliver new domestic supply is for all of us to work cooperatively to make available some of the vast potential natural gas reserves on nonpark government lands." He added, "Given the years necessary to acquire needed leases and permits, which must be done before exploration and production can begin, policy changes are needed now so the supply-demand imbalance does not become more pressing in the future."

In the near term, Cavaney suggested, what can be done is for gas to be used as "wisely as possible."

Cavaney concluded, "Both greater energy conservation and access to natural gas reserves on nonpark government lands are needed to increase the availability of natural gas for US consumers."