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How to Ensure Adequate Natural Gas Supplies in the Future
America's natural gas policy has encouraged the use of clean-burning natural gas, while discouraging the development of new supplies. The result is the current tight supply/ demand balance and the prospect of continual future tightening if action is not taken. Natural gas markets have distributed supplies efficiently, but prices have risen and markets have become more volatile due to the tight supply/demand balance. To ensure the long-term availability of adequate, affordable natural gas supplies, America must develop its abundant domestic supplies and diversify its supplies by tapping into global supplies through liquefied natural gas (LNG).
However, there is no "silver bullet" - no single policy to alleviate the tight supply/ demand balance. Rather, a balanced portfolio of policies is needed. Both comprehensive energy legislation and regulatory changes are needed. While conservation and efficiency can have important, near-term effects and must be pursued, the urgent need to develop future supplies must be addressed. For too long, the supply side of the equation has been ignored. Much of the domestic resource base has been placed "off limits" -- either directly through withdrawals and moratoria or indirectly through constraints on operations that delay development and/or make it uneconomic.
Implementation of the policy recommendations in the National Petroleum Council's (NPC) study, "Balancing Natural Gas Policy: Fueling the Demands of a Growing Economy" (2003) would expand access and help ensure future supplies of clean-burning natural gas. Key recommendations include:
- Increasing access to non-park, non-wilderness onshore areas and reducing permitting costs and delays. More than half the technically recoverable resources in the Rockies are either off limits or highly restricted - that is enough natural gas [about 125 trillion cubic feet (Tcf)] to heat the 60 million homes currently using natural gas for 30 years. And, the resources in the Arctic National Wildlife Refuge could provide the equivalent of current imports from Saudi Arabia for 20 years.
- Lifting constraints on key offshore areas with high-resource potential. Only 11% of the offshore submerged lands under US jurisdiction are available for leasing. Administrative moratoria preclude exploration and development in many OCS areas until 2012 - at least 79 Tcf is off limits off the East and West Coasts and in the Eastern Gulf of Mexico (and this estimate may be low as it is based on old and limited data).
- Developing infrastructure to deliver natural gas supplies to consumers. Large resources of Alaskan natural gas will be stranded until a pipeline can be built to move this gas to consumers in the lower 48 states. A simple and timely regulatory process is needed.
- Expanding access to world gas supplies. Expediting the approval process for expanding existing LNG terminals and constructing new facilities is essential.