- The Washington Times - Friday, May 26, 2006

Since Katrina hammered America’s offshore production of oil and natural gas last summer and throttled the refinement of oil products and the distribution of natural gas, soaring prices for oil, gasoline and natural gas have been accompanied by counter-productive legislative policy and an oversupply of rhetoric from Capitol Hill. In the midst of an energy crisis that is both supply- and demand-related, talk is cheap.

That is especially so when it focuses on scapegoating the very businesses that actually have the capability of raising the supply of energy resources for which demand is soaring. Demagoguing the profits of Big Oil does nothing to increase the supply of oil and gas. The next time a Washington politician of either party talks about “good jobs at good wages,” ask him about the future of the high-wage-paying, high-benefits-providing chemical industry, which relies upon natural gas as its major feedstock. As Business Week reported last May, there were “120 chemical plants being built around the world with price tags of $1 billion or more,” but only one was being built in the United States. China has 50.

The next time a Washington pol pats himself on the back for the 160 percent increase (since 1985) in the use of environmentally friendly natural gas to generate electricity, ask him how he voted in the House on Pennsylvania Republican Rep. John Peterson’s sensible idea to lift the 25-year-old congressionally imposed moratorium on drilling for natural gas along 85 percent of the Outer Continental Shelf (OCS).

While a warmer-than-normal winter helped American households partly dodge the heating-cost bullet, the average residential price for natural gas from November through February was still 125 percent higher than it was six years earlier. Earlier this month, the House irresponsibly reversed commendable action taken by the House Appropriations Committee, which, in a 37-25 vote that included support from eight Democrats, had earlier adopted Mr. Peterson’s amendment. When the bill reached the floor, Mr. Peterson emphasized that his relatively modest amendment “in no way affects the existing ban on the exploration for and production of offshore oil. Nor does it repeal the existing presidential moratorium already in place along much of the OCS.” Nevertheless, the Peterson amendment was a very important first step toward energy-supply sanity.

Regrettably, 59 Republicans joined 157 Democrats in supporting an amendment on the floor reversing Mr. Peterson’s amendment. The vote was 217-203. Mr. Peterson took some solace from the fact that the 203 representatives supporting his proposal were 46 more than supported an identical proposal a year ago. In the meantime, vast amounts of offshore U.S. natural gas remain untouchable.

Compared to U.S. proved natural-gas reserves of roughly 190 trillion cubic feet, the U.S. Minerals Management Service estimates that there are more than 400 trillion cubic feet of gas in undiscovered fields on the OCS. The 25-year-old congressional moratorium prohibits the vast majority of these potential OCS reserves from being developed, putting upward pressure on the price of natural gas.

According to the journal World Oil, Russia and the Mideast nations of Iran and Qatar account for 62 percent of the world’s proven natural gas reserves. If Americans like what the 11-member OPEC cartel has done for the price of gasoline, they will love what the potential natural gas cartel will do for the price to heat their ever-expansive homes. When it comes to heating costs, Congress will deserve to be the scapegoat.

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