Mr. Chairman, I want to express my appreciation to you for holding this hearing. As I think we are all aware, increasing amounts of natural gas are being used strictly by power plants for energy production. It is also heavily utilized for home heating throughout the country. Demand for natural gas has increased sharply, this has put quite a strain on natural gas supplies.
There are any number of reasons that natural gas demand has increased so dramatically. New guidelines were placed on power production facilities by amendments made to the Clean Air Act in 1990. This has resulted in the fact that virtually every power production facility built since passage of these amendments operates by burning natural gas for power production. This is one of the major contributors to the increase in demand for natural gas and consuming otherwise available gas supplies.
During the same time period, natural gas development levels have remained basically flat which has driven the wholesale cost of that commodity up. As a natural result of increased demand and a level supply, we are seeing some of the highest natural gas prices in recent memory. Endless lawsuits, onerous “red tape” and regulations have greatly hindered new development and have made it very difficult for private companies to develop resources on public land - where most supplies that have been currently documented are located.
These lawsuits and regulations have also made it very difficult to add transmission capabilities. There is a severe shortage of transmission throughout the country, but any attempts to site new pipelines are met with more resistance and additional lawsuits. The lack of transmission capability restricts the ability to move supplies even if they can be developed.
I find it very interesting that the same special interest groups that encourage gas fired generation of electricity, oppose granting leases and permits to enable facilities to bring more natural gas on-line. Those who mast strongly argue the need for gas fired generation are very often those that file the lawsuits that hold up new production and transmission. We simply can’t have it both ways.
The vast majority of gas supplies in the west lie under federal land. It is important that we make these supplies available for production. Government owned, public lands were always intended to be available for multiple uses. Certainly there are places where one couldn’t imagine production taking place. But land should not be arbitrarily made unavailable for development. These areas should be throughly assessed and, if they indeed qualify as areas in which development would severely impact the land, development can be restricted accordingly.
While increased development will mean more natural gas on the market, gas production requires skilled workers, so it will also mean more jobs are available. Developers also pay local and state taxes on the gas that they extract. This is very helpful to residents in rural areas that often have low tax bases.
We must have more production from domestic energy sources including oil, natural gas, clean coal, nuclear, and renewable resources. The future of our energy supply must be a diverse one, and natural gas clearly must be a part of that make-up.
For all of these reasons I am grateful that the Committee is holding this hearing and I look forward to the testimony that we will receive here today. Thank you, Mr. Chairman.