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New Legislation Urgently Needed to Increase Access to Supply

Congress Must Build on Modest MMS Proposal to Help Meet Growing U.S. Natural Gas Demand
Emerging Policies in Congress Are ‘Supersizing’ Demand for Domestic Natural Gas (ACC)

ARLINGTON, VA (April 30, 2007) – Section 18 of the Outer Continental Shelf Lands Act requires the Secretary of the Interior to prepare and maintain a schedule of proposed oil and gas lease sales determined to “best meet national energy needs for the five-year period following its approval or re-approval.” Today the U.S. Interior Department’s Minerals Management Service (MMS) announced its Outer Continental Shelf (OCS) leasing plan for 2007-2012.

American Chemistry Council (ACC) President & CEO Jack N. Gerard issued the following statement:
“The MMS plan announced today is a modest step toward expanding access to domestic energy supplies in the OCS. As Congress develops new policies that will ‘supersize’ natural gas demand in an already-constrained market, lawmakers should recognize the urgent need for legislation to bring new supply online. Members must build on the modest OCS leasing proposal put forward by MMS today and enact new legislation to help fill the growing supply-demand gap. The abundant natural gas in the OCS is critical to fulfill the needs of American consumers, sustain the nation’s manufacturing and agricultural economies and jobs, and enhance energy security.

“Rising domestic natural gas demand comes from a variety of sources. Electricity demand is forecast to rise sharply in the coming decades, requiring more natural gas-fired generation. Emerging policies in Congress to reduce greenhouse gas emissions and boost renewable fuels production will mean greatly expanded use of lower-carbon energy sources such as natural gas. And many of the materials needed to make wind and solar power, lighter weight vehicles, and energy efficient buildings and appliances come from an industry – the business of chemistry – that relies on affordable, accessible supplies of natural gas even as we significantly improve energy efficiency.

“American consumers have already paid the price for Congress’s conflicted approach to energy policy. They’ve found that legislating new demand while restricting access to new supply leads to high and volatile prices, ‘demand destruction’ in the manufacturing sector and stunning job losses.

Between 2000 and 2005 rising demand combined supplies made scarce by federal policies led to a $425 billion increase in America’s natural gas bill and contributed to the loss of more than three million manufacturing jobs. Meanwhile, farmers have incurred huge increases in costs to produce food and fiber for the nation. Consumers’ natural gas heating bills have more than doubled from an average $465 in the winter of 2001-2002 to $926 in 2005-2006.

“Congress must recognize the inherent conflict in their approach – putting forward proposals that legislate huge increases in demand for natural gas without developing legislation to increase access to supply. At a minimum, Congress should support MMS’s limited efforts to expand domestic natural gas supply and reject any proposal that would roll back existing supply policies. We believe Congress must go further, address the American public’s natural gas supply needs and develop supply policies equal to America’s energy demand growth.”

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