Report Calls for Increased Use of Natural Gas

Source: NewsOk, Jay Marks  (3/23/11)

"Increased production has resulted in stable pricing."


A producer-consumer task force headed by SemGroup CEO Norm Szydlowski is calling for expanded use of natural gas because increased production has resulted in stable pricing.

"Fundamental changes that have taken shape in the domestic supply and demand balance for natural gas, including an unprecedented level of available storage and import capacity, should allow markets to function more efficiently and fluidly in the future," Szydlowski said.

The task force assembled by the Bipartisan Policy Center and American Clean Skies Foundation spent a year studying the historic causes of instability in the markets.

The group on Tuesday issued a 70-page report urging governments to "encourage the development of domestic natural gas resources, subject to appropriate environmental safeguards" because efficient use of natural gas can potentially reduce harmful emissions, enhance energy security and improve the prospects of energy-intensive manufacturers.

The 16-person group also urges producers and state regulators to consider using more long-term supply contracts.

"Rules that unnecessarily restrict the use of or raise the cost of long-term contract and hedging tools for managing supply risk should be avoided," according to the task force.

American Clean Skies Foundation CEO Gregory C. Staple, who was co-chairman of the task force, said he was surprised the diverse group—which included representatives of producers, consumer groups, regulators and environmental groups—was able to agree on its recommendations.

"This consensus suggests that, although we may have a stalemate on many other energy issues, there is at least one important area—natural gas—where progress is within reach," he said.

Ralph Cavanaugh, co-director of the Natural Resources Defense Council's energy program, said the group's report offers "practical regulatory and policy measures that can provide the necessary confidence to support new investment in efficient applications of natural gas.