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Natural Gas Customers Will Benefit From Congressional Energy Bill, Natural Gas Utility Group Says

Posted on: Wednesday, 27 July 2005, 18:00 CDT

WASHINGTON, July 27 /PRNewswire/ -- Natural gas customers -- who have felt the brunt of rising prices that have been caused by a tight balance between available supplies and growing demand -- should benefit from a major energy bill that is nearing a final vote in Congress, according to the American Gas Association (AGA), which has lobbied for such a bill on behalf of natural gas utilities for five years.

"Homeowners and businesses who rely on natural gas have been hammered by rising natural gas prices since 2000, and we are pleased that Congress has listened and responded to them by laying out a fresh blueprint for the supply, delivery and efficient use of natural gas and other forms of energy," said AGA President and CEO David Parker.

He said, "Due both to declining productivity of many older natural gas basins, and public policies that promote greater use of natural gas for its clean-air benefits while stifling production, it has been increasingly difficult for production companies to keep up with rising demand for natural gas. Customers have literally paid the price for this natural gas supply/demand squeeze, but we feel confident that the congressional energy bill will help them by boosting natural gas supplies, expanding pipelines to link more homes and businesses with natural gas supplies, promoting more efficient use of energy, and assisting low-income Americans who are hardest hit by rising energy prices."

Parker cautioned that natural gas customers should not expect immediate reductions in natural gas prices, saying, "If you design a new house today, it won't be built tomorrow. In the same vein, energy projects have long lead times before they yield results." Parker emphasized that AGA will continue to be an advocate on behalf of customers for natural gas production from as-yet untapped land and water areas.

Nearly all of the key provisions sought by AGA were included in the version of the Energy Policy Act of 2005 (H.R. 6). They include:

* SUPPLY: Help to reduce natural gas prices by increasing natural gas production in the United States through a streamlined permitting process and targeted royalty relief; increase imports of liquefied natural gas; and promote further research into methane hydrates, a massive potential source of natural gas that is not yet commercially viable. * INFRASTRUCTURE: Link more homes and businesses to increased natural gas supplies through expansion of local natural gas utility pipeline systems, by allowing utilities to depreciate the value of new distribution pipelines over 15 years instead of 20 years; and encourage construction of more underground natural gas storage facilities. * LOW-INCOME PROTECTION: Help more low-income families to pay rising energy costs by increasing from $2 billion to $5.1 billion the authorized annual spending limit for the Low-Income Home Energy Assistance Program. * EFFICIENCY: Encourage homes and businesses to use natural gas and other forms of energy more efficiently; promote innovative technologies, such as natural gas-fueled fuel cells; and study whether the goals of energy-efficiency standards are best served by measuring energy at the site of use (as is often the case now) or via the full fuel cycle, from production to end-use. * FUEL DIVERSITY: Promote a greater mix of fuels to generate electricity, including nuclear, wind and solar power and clean-coal technology.

Natural gas meets one-fourth of the United States' energy needs. Demand for this efficient fuel is expected to grow by 40 percent during the next 20 years. About two-thirds of this new natural gas consumption will be in gas- fired electric power generation plants, due to the cleanliness and efficiency of natural gas. Since Congress first began consideration of a national energy plan in 2001, the wholesale price of natural gas has risen 72 percent -- from $4 per thousand cubic feet in 2001 to around $7 today, according to the U.S. Energy Information Administration.

The American Gas Association represents 195 local energy utility companies that deliver natural gas to more than 56 million homes, businesses and industries throughout the United States.

American Gas Association

CONTACT: Peggy Laramie of the American Gas Association, +1-202-824-7204

Web site: http://www.aga.org/

Source: PRNewswire

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