Suddenly, members of Congress are talking about natural gas. It was one thing when US Reps. Tim Murphy (R-Pa.) and Dan Boren (D-Okla.) formed a gas caucus on Oct. 1. It was another when Sens. Mary L. Landrieu (D-La.) and Saxby Chambliss (R-Ala.) formed one in the Senate on Oct. 23, 2 days after the House's caucus held its first hearing.
The reasons are obvious, leaders of each caucus said. "When we produce natural gas in America, we produce jobs in America," Landrieu maintained. "A reliable and affordable supply of US energy has profound impacts on every sector of our economy and is the backbone of the US employment base."
Chambliss added, "America has an abundant supply of clean natural gas and has the means to access these resources in an environmentally friendly way. Increasing domestic production is a critical component of a comprehensive energy policy that will reduce America's dependence on foreign sources for our energy needs."
At the House hearing, Murphy observed that new technologies have opened up unconventional gas fields in the Lower 48 in the last 3 years. "With the recent estimates of 1,836 tcf of technically recoverable gas reserves, there is enough domestic supply to power America for more than 100 years," he said.
'Success story'
"The decisions Congress makes in the near term will determine the stability of our domestic energy industry and the future of our nation," added Boren. "It is our job to help our colleagues in Congress understand the great success story there is to be had with natural gas."
But Bruce H. Vincent, president of Swift Energy Co. in Houston and vice-chairman of the Independent Petroleum Association of America, told the House caucus that independents who produce most of the nation's gas already face problems.
"The current drop in gas commodity prices has reduced drilling activity to half of last year's high levels. Credit market restrictions bringing less access to capital are also hampering development," he said.
'Important tool'
Vincent noted that bills in Congress to revise trading of commodities could create problems. "Much of this year's drilling activity is being done because of higher revenues resulting from hedges from earlier years when gas prices were higher," he explained. "The structure of new commodity legislation could inhibit or effectively preclude independents from using this important cash-management tool."
The Obama administration's plan to repeal policies such as intangible drilling and development-cost exemptions, which have been part of the federal tax code since its inception in 1913, and percentage depletion, which was added in 1926, could reduce drilling of new wells 25-40% and cut US production of oil 20% and gas 12%, Vincent added.
With active caucuses on both sides of the Capitol, gas should have plenty of advocates. The question now is whether they'll be able to reach enough other members to make a difference.
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