Chemical Makers Seek Relief

A top chemical industry official urged Congress on Nov. 17 to lift the generation-old moratorium on natural gas production along the U.S.’s outer continental shelf, warning that the consequences of insufficient supplies will soon become “painfully clear” to all U.S. consumers.

If U.S. natural gas prices do not return to their historically affordable levels, American Chemistry Council President Jack N. Gerard told a panel of the House Resources Committee, the nation’s key manufacturing industries will accelerate the transfer of operations and jobs overseas, where the cost of energy is much cheaper.

“Paying the highest natural gas prices in the world puts America-based manufacturing at a severe competitive disadvantage, and this is a largely self-inflicted wound,” Gerard testified. “What I can’t predict is how Congress will respond to this crisis. There has never been a better or more critical time to pass natural gas supply legislation.”

The committee is considering legislation introduced on Nov. 15 by Rep. John E. Peterson (R-Pa.) that would immediately repeal all federal leasing restrictions and allow drilling for natural gas in coastal areas that are now off limits. States would receive 40% of the revenue from any new natural gas production off their coasts.

The bill goes beyond a measure dropped last week by Republican leaders from the House budget reconciliation bill that would have allowed states to opt out of the federal moratorium, which prohibits oil and gas production in 85% of domestic offshore areas.

U.S. natural gas prices have been steadily climbing over the past five years, but the increases have been felt more by energy-intensive manufacturers than by residential consumers. “If the general public realized that 1 million or more jobs are going to leave this country, they would vote to open up natural gas production,” Peterson remarked.