The mammoth energy bill that Congress hopes to finish up this fall is not likely to provide the kind of help on natural gas supplies that the plastics and chemical industries are looking for, at least during the next few years.
That was the consensus of several speakers at an Oct. 1 forum on natural gas, sponsored by the U.S. Chamber of Commerce.
Congressional leaders are debating provisions of the legislation behind closed doors, but several lawmakers and industry officials said it doesn't look like the legislation will contain provisions they want, such as allowing for more drilling in federal lands in the Rocky Mountains and offshore in the outer continental shelf.
Many environmental groups oppose more drilling and several speakers at the Washington forum said industry has not made its case to the public that more natural gas is needed.
A Sept. 25 report from the Bush administration predicted higher natural gas prices and more movement of the chemical industry offshore unless the government allows more production and moves quickly on permitting new liquid natural gas terminals.
A second report, from a panel of lawmakers appointed by House Speaker Dennis Hastert, R-Ill., said many of the changes needed to boost production won't happen until ``Americans become so angry'' over rising prices that they demand congressional action.
The Energy Department report, from the National Petroleum Council, said prices could rise as high as $7 per million Btu if the government fails to balance energy supplies and boost natural gas production.
Currently, prices are near $5 per million Btu. That's still well above the levels of the mid-to-late 1990s, before the current run-up in natural gas costs.
The second scenario said that if the government takes those steps, prices could drop to $3 per million Btu.
``At $3 we barely stay competitive,'' Kip Howlett, executive director of the Chlorine Chemistry Council, told the forum. ``At $7 we're gone.''
The NPC study said that if gas prices rise, price-sensitive industries like petrochemicals will begin to locate new production offshore. Ethylene plants, for example, reach their threshhold at about $5 per million Btu, the report said.
Rep. Richard Pombo, R-Calif., chairman of the House Committee on Resources and one of the authors of Hastert's report, said lawmakers were surprised to discover that there was very little they could do in the short term to boost supplies.
Greg Lebedev, president and chief executive officer of the American Chemistry Council in Arlington, Va., said government policies created the problem because Washington essentially has mandated more natural gas use for electricity because it's cleaner, but has blocked new production.
About 70 percent of the feedstocks for plastics made in North America come from natural gas.
``If we don't remove the `off-limits' signs on the gas fields in the outer continental shelf and the inner Rockies, we will be hanging `going-out-of-business' signs on manufacturing plants all over America,'' Lebedev said.