U.S. Senate Committee on Environment & Public Works
U.S. Senate Committee on Environment & Public Works
Hearing Statements
Date:   03/24/2004
Statement of Senator Max Baucus
Environmental impacts of U.S. natural gas production.

Mr. Chairman, thank you for calling this hearing today. Natural gas is a critical resource, for electricity production, for agriculture and industry. High natural gas prices have a definite impact on the economy. At a time when we’re working hard to create jobs in this country and keep jobs in this country, rising natural gas prices are a cause for great concern if they threaten our ability to grow the economy.

Stable natural gas prices are particularly important to a vital sector of my state’s economy, and that’s agriculture. Producers in my state have struggled through more than 5 years of drought. Rising fertilizer prices, tied to the price of natural gas, have just made things worse. This is an issue I take very seriously.

We’re certainly not powerless against tight supplies of, and rising demand for, natural gas. Increased conservation and energy efficiency improvements are key. Also, we must expand our use of renewable and alternative sources of energy, and increase the efficiency and environmental performance of more traditional sources of energy like coal. Coal in particular is a plentiful, domestic source of energy that is only getting cleaner.

I worked hard during the debate on the energy bill to include incentives for increased residential and commercial energy efficiency, renewable and alternative energy, and clean coal technologies. All of these things will help us reduce our demand for natural gas. They shouldn’t be dismissed out of hand, because they will have a real impact on the price of natural gas. They will also make us more secure as a nation.

Of course, hand in hand with reducing demand is increasing supplies of natural gas, both domestic and imported, and improving the delivery of natural gas to businesses and consumers. Again, much of the work we did on the energy bill, particularly in the tax title, was aimed at increasing financial incentives for domestic gas production and improving the gas delivery system.

Mr. Chairman, there’s absolutely no reason why we can’t increase our domestic supplies of natural gas and protect the environment at the same time. Our domestic producers are doing a good job of finding new supplies and bringing them on-line. If there are inefficiencies in the process, we should certainly take a look at those to make sure we’re not wasting everyone’s time and the taxpayer’s money. But, most often, the process works fairly well, allowing gas development to move forward while protecting, for example, drinking water sources and key wildlife habitat. Or at least, that’s what it’s supposed to do.

We have to strike a balance. And there are some places, like Montana’s Rocky Mountain Front, that should not be developed, period. Drilling in the Front is certainly not the answer to high natural gas prices because there’s just not that much gas there to begin with.

I look forward to hearing from all the witnesses, and learning more about what we can do to address the very real problem of rising natural gas prices. Again, I thank the Chairman for calling this important hearing today.