Peña asks NPC for gas, refined products studies

U.S. Energy Sec. Federico Peña has asked the National Petroleum Council, his oil industry advisory group, to prepare extensive studies on U.S. natural gas use and future demand for refined products and reformulated fuels.

Peña said, "Our nation is counting on the oil and gas industry to deliver more natural gas to businesses and consumers than ever before.

Natural gas study

"Electricity restructuring, global climate change, our aging inventory of power plants and other factors will make it essential that affordable supplies of gas be available and are delivered as demand rises."

He said the NPC study should cover projected growth in demand for gas, particularly in light of global climate change and electric utility restructuring; critical technologies and infrastructure investments needed to meet this growth in demand and prevent potential bottlenecks in the gas supply and delivery system; and the potential role of imports.

The study would update a report that NPC prepared in 1992, which Peña said the Energy Information Agency still uses when developing its energy forecasts.

Refined products studies

Peña said the refined products study is needed because "anticipated changes in alternate fuels policies are creating concerns among refiners."

He said the analysis should include "future fuel use and demand that will take into account these changing policies and the needs of consumers."

He said, "The 1993 NPC study, U.S. Petroleum Refining: Meeting Requirements for Cleaner Fuels and Refineries, was a major source of understanding and information about economic factors, such as refiner investment and cost of production and the implications of regulatory options."

Also, NPC is launching a previously requested study on the petroleum product supply system.

It will examine the factors that affect the ability of the system to respond to dynamic conditions such as world oil prices, futures markets, product demand, and inventory levels, given the "system supply limitations in the refining and distribution sectors."

The study will examine trends in product inventory levels and the role price volatility plays in the self-correcting process of the market place.

NPC said, "The study also will examine the usefulness of the minimum operating inventory concept and compare it to the minimum observed inventory markers that are currently used by the Energy Department."