Warning that US natural gas prices could further increase this winter, five senior executives with the Natural Gas Council urged President Clinton and the chairs of the US House of Representatives and Senate Appropriations Committee to increase funding for the Low Income Home Energy Assistance Program (LIHEAP). They also asked Clinton to consider releasing emergency funds earlier in the winter season for low-income households hit by large gas bills.
In separate but similar letters sent Friday to Clinton and House and Senate chairs C.W. Bill Young and Ted Stevens, the executives expressed concern that the administration's request for funding for LIHEAP may not be adequate for the upcoming winter. They urged Clinton, Young, and Stevens to approve at least $300 million in additional funding for regular LIHEAP appropriations for fiscal year 2001.
The administration�s request for LIHEAP funding for FY2001 is $1.1 billion, with $300 million available for emergency release.
"Although some portion of the $600 million in additional emergency funds provided by the FY 2000 supplemental appropriation may also be available this winter, current LIHEAP funding can serve only 12-15% of eligible households. These recipients could possibly need up to 35% more assistance this winter just to provide the same level of benefit as last winter," the executives said.
They include Skip Horvath, president of the Natural Gas Supply Association; David Parker, president and CEO of the American Gas Association; Jerry Halvorsen, president of Interstate Natural Gas; Barry Russell, president of the Independent Petroleum Association of America; and Red Cavaney, president and CEO of the American Petroleum Institute.
Funding levels for LIHEAP will be determined this fall through negotiations between Congress and the administration. "Higher prices are already a reality, and the states will need the assurance of higher LIHEAP funding in order to design the most effective outreach to consumers," said the executives.
Strong demand fueled by a robust economy and a temporary decline in drilling in 1998 and early 1999 due to very low wellhead prices resulted in significant increases in gas prices. US producers have stepped up their drilling activity and pushed rig counts well above the levels seen this time last year. But due to continued high demand for natural gas and the historic time lag between increased drilling activity and a price response, consumers may pay significantly more for each unit of natural gas this winter than they did last winter.
"Just as electricity bills are hitting Californians hard this summer, consumers in the Northeast and Midwest regions may face high heating bills this winter," the executives noted.
They also encouraged the administration to meet with the Natural Gas Council and the Canadian National Energy Board to discuss ways for industry and government to ensure that adequate supplies of gas are delivered to the US markets. The Natural Gas Council is confident that enough gas exists to serve those markets now. Meeting to discuss the issues affecting gas in the near term "could help our understanding of the supply situation, in addition to helping shape future agreements to further improve our working relationships," the executives said.
The US imports 14% of its natural gas from Canada. The National Petroleum Council estimates the US will increase its Canadian imports by 33% over the next decade.
