- The Washington Times - Tuesday, February 25, 2003

WASHINGTON, Feb. 25 (UPI) — It will be necessary for the United States to increase natural gas production in Alaska and in offshore areas of the Lower 48 states in the near future if the nation's growing demand for energy is to be met in the coming years, the chairman of the Senate Energy Committee solemnly warned Tuesday.

Senator Pete Domenici, R-N.M., opened a committee hearing on natural gas prices by repeating predictions that gas demand will double in the next 22 years, and it will be necessary to look for sources of new supplies.

"We can't meet that demand without new production on the Outer Continental Shelf or Alaska's North Slope," Domenici insisted. "The Lower 48 states — alone — can't supply this country with the gas it is going to need. If we decide not to increase production, we must accept our growing reliance on foreign natural gas as a fact of life."

Members of the committee and the representatives of the energy industry called to testify were of a like mind on the need to increase the production of natural gas as a means of meeting growing demand in the coming years.

With dead-of-winter gas prices rising to their highest level in two years, a new round of warnings has been heard from Houston to Capitol Hill about the need to open up more land and offshore areas for exploration and production

Natural gas makes up about a quarter of the nation's energy mix and is considered the environmentally preferred fuel for large power plants over fuel oil, coal and nuclear; in addition, large volumes of gas are consumed annually by the chemical industry.

But there was a consensus Tuesday that relying on gas fields currently in production to meet future demand won't work because those fields have matured and will eventually run out of gas.

To secure the nearly 35 trillion cubic feet per year that the nation will need 20 years from now, there is a general agreement among government and industry that more areas of currently protected lands and offshore areas on all three coasts will have to be opened up to production.

"We aren't running out of natural gas, and we're not running out of places to look for natural gas," testified Keith O. Rattie, president and chief executive officer of Questar Corp., a gas company that operates in the Rocky Mountains. "We have, as a matter of policy, chosen not to develop much of our potential natural gas resource."

Some areas that could hold gas reserves, however, are on federally protected lands and any plan to open them would likely face potentially vociferous opposition from environmentalists.

While the political aspects of such a debate did not find their way into Tuesday's testimony, the industry representatives were unanimous in their sentiment that decisions needed to be made soon so that the arduous process of obtaining financing and permits can begin as quickly as possible.

"Lead times are long in our business, and meeting demand years down the road requires that we begin work today," said Robert Best, president of Atmos Energy. "We must come full about, and we must do it in the very near future."


(Reported by Hil Anderson, UPI Chief Energy Correspondent)

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