Watching Government: AGA pushing for gas supply

Dec. 19, 2005
Natural gas utilities haven’t always agreed with producers on energy priorities.

Natural gas utilities haven’t always agreed with producers on energy priorities. That’s changed for the past couple of years as local distribution companies have made securing gas supplies a major priority.

The result has been music to gas producers’ ears as downstream companies have pressed for greater producer access to the Outer Continental Shelf and other US regions currently off-limits.

Their pressure through the American Gas Association has started to create political heat for leasing and drilling opponents. And it’s going to increase in 2006.

AGA’s main focus this year was passage of comprehensive federal energy legislation, according to its president, David M. Parker. He told reporters at the group’s yearend press luncheon that he was pleased, but not overwhelmed, with the final bill because it didn’t do much to increase supplies.

Then came the two major Gulf of Mexico hurricanes. “Between Katrina and Rita, we moved into a different energy world. The price issue has dominated our agenda ever since,” Parker said.

A fresh storm

AGA’s 2006 Chairman Stephen E. Ewing was more emphatic. In the 2005 hurricane season, the vice-chairman of DTE Energy Co. in Detroit said there were more than 26 named storms, with another on the way that will produce economic turbulence.

“We’re right in the eye of a hurricane. When people get bills based on higher gas prices this winter, it’s going to send shock waves through thousands of households,” he warned.

“Many which were comfortably middle class last heating season will need assistance, both from higher gas prices and, in our region, from job layoffs at General Motors, Delphi, Northwest Airlines, and other companies,” Ewing said.

He applauded the Federal Energy Regulatory Commission’s exercising jurisdiction over LNG terminal siting because it will encourage long-term contracts not only for LNG imports but also for natural gas by pipeline from Alaska.

Back to supplies

“The real place that government needs to be involved is access to supplies,” Ewing continued. That includes not only more of the OCS, but also oil from the Arctic National Wildlife Refuge and facilitating leasing and permitting in the Rocky Mountains, he said.

“Whether we get more access will depend on how cold this winter is,” said Parker. “If prices jump in February and March, that will be concurrent with Congress returning to work. Many members could feel pressure to address this, particularly from the more northern states because they face reelection in the fall.”

That could lead to stand-alone natural gas legislation, which AGA would support, he said.

Ewing hopes it will happen. “In my mind, we need to get serious as a country about natural gas supplies. There’s just no way around that,” he said.