Alexander Introduces Natural Gas Legislation

“Bold and Aggressive steps” to lower record high gas prices

Posted on April 6, 2005

WASHINGTON – With natural gas prices at “record levels and the highest of any industrialized country,” U.S. Sens. Lamar Alexander (R-Tenn.) and Tim Johnson (D-S.D.) today introduced legislation that takes “bold and aggressive steps” to lower the cost of natural gas. During a news conference on Capitol Hill, Alexander said, “high natural gas prices are threatening our jobs, our farms and hurting Americans who are trying to heat and cool their homes. Only an ambitious, comprehensive approach that both increases supply and controls demand can lower the price of natural gas and keep our growing economic recovery from becoming recent history. “This is not a question of tweaking our natural gas policy. It is time to aggressively revamp it. We need aggressive conservation, aggressive use of alternative fuels, aggressive research and development, aggressive production, and for the time being, aggressive imports of liquefied natural gas.” 1. Energy Efficiency and Conservation • Consumer Education - Creates an aggressive four-year national consumer education program on actionable measures to reduce the demand for energy. • Efficiency Standards - Sets higher appliance and equipment standards for natural gas efficiency. For example, a commercial air conditioner will cool the same while using less natural gas to do it. • Cogeneration - Creates tax incentives and regulatory relief to enable manufacturing facilities to more easily produce their own power and steam from a single source – which saves money and energy while also reducing pollutants. • Efficient Electricity Generation - Provides incentives for utilities to utilize their natural gas plants based on efficiency. • Oil Savings - Sets a bold target for demand reduction of 1.75 million barrels per day of gasoline by 2015. This is almost twice the amount of anticipated production from the Artic Wildlife National Refuge. 2. Alternative Fuels • National Coal Gasification Strategy - Supports the deployment of six coal gasification plants by 2013 in order to fully commercialize coal gasification. Similarly supports aggressive use of coal gasification for industrial applications. Provides streamlined permitting for coal gasification facilities. • Solar Power - Provides tax incentives for aggressive investment in solar power generation. 3. Research and Development • Hydrogen/Fuel Cell Initiative - Invests in research and development of technologies and infrastructure to use hydrogen for fuel cell vehicles. In the long-term, this will reduce our dependence on foreign oil. Senator Alexander introduced President Bush’s hydrogen initiative in the Senate in 2003. • Gas hydrates – Invests in gas methane hydrates research, which holds tremendous potential to provide abundant supplies of natural gas. Estimates indicate the U.S. resource base contains one-quarter of the world’s supply. • Other R&D programs – Invests in solar energy technologies, distributed generation, biofuels, and biomass. 4. Production • Off-Shore Production: Provides Department of Interior with the legal authority to issue “natural gas only” leases. Instructs Department of Interior to draw the state boundary, according to established international law, between Alabama and Florida regarding Lease 181 and lease portions which are not in Florida by December 31, 2007. Allows states to selectively waive the federal moratoria on off-shore production and collect significant revenues from such production. A conservation royalty would also be established. The conservation royalty would be shared equally by the Federal land and water conservation fund, state land and water conservation fund and wildlife grants. None of these payments would be subject to appropriations. 5. Importing Liquefied Natural Gas • LNG Terminal and Pipeline Siting: Streamlines the permitting of facilities for bringing liquefied natural gas (LNG) from overseas to the United States. Gives Federal Energy Regulatory Commission (FERC) exclusive authority for siting and regulating LNG terminals, while still preserving states’ authorities under the Coastal Zone Management Act and other acts. Requires that FERC grant or deny a terminal or pipeline application within one year. Clarifies the permitting process for pipelines and natural gas storage facilities. The bill raises revenues that are expected to provide $4 to $6 billion to pay for the initiatives outlined in the proposal. Alexander was joined for the announcement by James Ray, vice president and general manager of Eastman Chemical Company’s Texas Division; Robert Hardie, plant manager of DuPont’s New Johnsonville, Tennessee plant; and Henson Moore, president of the American Forest and Paper Association.