DEMOCRATS OPPOSE AMENDMENT TO ENSURE AN ADEQUATE SUPPLY OF NATURAL GAS
December 5, 2007
Posted by Matthew_Dempsey@epw.senate.gov (3:51pm ET)
During today's Environment and Public Works Committee business meeting, Senate Democrats defeated Senator Vitter’s amendment to the Lieberman-Warner bill that would would allow for the expansion of the U.S. energy supply and reduce U.S. dependence on foreign oil by permitting, under certain circumstances, the exploration for natural gas off the coast of certain states.
Vitter Amendment #1
Natural gas demand is outstripping supply, and the bill makes it worse. December 2007 natural gas futures price are already priced 23.75% above today’s level, and FERC is forecasting electricity prices to rise across the country from 19% to as high as 32% because of high natural gas prices. The adoption of carbon caps in the near-term will exacerbate this problem greatly by causing fuel shifting from coal—currently about half of US electric generating capacity—to natural gas resources.
Since the natural gas crisis started in late 2000, we have lost 18.5% of all manufacturing jobs or 3.2 million good paying jobs. High natural gas costs played a significant role in those job losses. Higher energy prices mean job losses will continue because natural gas prices are cheaper in other countries.
Consumers paid a staggering $75.7 billion more for natural gas and $65 billion more for electricity in 2006 than in 2000. Even though natural gas is used to produce only 20 percent of the electricity, it accounts for 55 percent of the industry’s entire fuel expense ($50 billion out of $91 billion) according to the Electric Power Research Institute.
We must increase domestic supply because even small increases or decreases can have an enormous impact on natural gas prices. For example, even though we lost only 5% of our natural gas production because of Hurricane Katrina, consumers paid $40.8 billion more in higher natural gas prices over the following five months.
Natural gas exploration is one solution to this problem. There is an abundant supply of deep-sea natural gas on the Outer Continental Shelf that can be retrieved in a safe and environmentally sound manner. Yet, 85% of these supplies are off-limits to exploration.
The OCS has enough natural gas to heat 100 million homes for 60 years, and enough oil to drive 85 million cars for 35 years. Natural gas exploration would provide greater access to this supply would help reverse the current imbalance in supply and demand of natural gas. U.S. energy policies promote the use of natural gas, driving up demand, yet they also restrict access to domestic supplies.
Decades of experience has proven that deep-sea natural gas exploration is safe, and the development of new technologies is making it even safer. Increasing our supply of natural gas from OCS resources can be accomplished with little risk to the environment.
Link to Vitter #1
How Committee Members Voted: (8-10-1, Amendment Defeated)Senate Majority Committee MembersSen. Barbara Boxer - NO
Senate Minority Committee Members