AGA commends Representative Reed for leading the House’s Marcellus Shale Coalition and continuing to help lead America toward a clean energy future.

“Mister Speaker, I rise today to bring attention to the plentiful natural gas reserves that we have in the United States.  Many of my colleagues may not be aware of two studies which recently highlighted the abundance of this clean-burning, domestic fuel source which holds so much promise.

The first study I’d like to draw attention to is the Energy Information Administration’s Energy Outlook 2011, which analyzes energy production, consumption, technology, and market supply and demand and the direction these trends may take in the future.

The Outlook anticipates strong growth in natural gas development and consumption because of development of shale gas resources.  It notes that growth in natural gas would not be possible but for the combination of horizontal drilling and hydraulic fracturing technologies which have made shale gas economical to produce.  It finds that hydraulic fracturing and horizontal drilling have led to an average annual growth rate of forty-eight percent during the time period from 2006-2010.

The second study I’d like mention is the Potential Gas Committee’s 2010 biennial report. This report highlights the potential supply of natural gas in the United States. To be specific, the report finds that the United States possesses an untapped natural gas resource potential of 1,898 trillion cubic feet. This is the highest resource evaluation in the Potential Gas Committee’s 46 year history.

My Congressional District in New York State overlays a formation known as the Marcellus Shale.  This shale play is one of the leading contributors to the rapid growth in estimates of recoverable natural gas in the United States.

By developing and utilizing these massive natural gas reserves, we can begin to reduce our dependence on foreign oil, and thus over time, reduce the cost of gasoline.  As we all know, American producers and consumers are paying a heavy price as he cost of gasoline continues to rise. Everything costs more to produce, more to transport, and more to purchase.

Reducing our dependence on foreign oil is both a national security issue and an economic issue.  I urge my colleagues to consider these reports and support policies that will lead to the development of these valuable resources.”

For so many reasons, Mr. Obama’s newfound focus on the benefits of clean, domestic natural gas is especially heartening.

Natural gas is the foundation fuel for our clean energy future and must be part of any energy policy produced by the 112th Congress.  And, with more than 100 years of supply readily available, and a safe and reliable delivery infrastructure already in place, we can put it to use right now to help us meet our energy challenges.  Natural gas is America’s natural fit.

The president’s commitment to the responsible development and use of domestic natural gas is also a step in the right direction.  The safe, transparent production of America’s vast natural gas resources, particularly shale gas, should be a top priority for the industry and we here at AGA are committed to working with all parties to ensure that happens.

Natural gas’ impact is also far-reaching, including support of many alternative and renewable energy options, from wind to solar.  Every day, 662,000 people work to explore for, produce, transport and distribute natural gas.  And as a whole, the natural gas industry employs nearly 3 million people in all 50 states.

New fuel economy and emissions standards will mean a larger role for clean, efficient natural gas vehicles (NGVs) in securing America’s clean energy future.  Tough new fuel standards will raise average fuel economy to 35.5 miles per gallon by 2016 and the administration’s national fuel economy and greenhouse gas emission standards for commercial trucks, vans and buses will help to cut oil use and further promote the increased deployment of NGVs.

The impact of efficient, abundant and domestic natural gas is wide-ranging and poised to move our energy economy forward to a cleaner, more sustainable future.

President Barack Obama appears to be taking a second look at how to pass comprehensive energy legislation that will improve energy efficiency, reduce consumer costs, reduce greenhouse gas emissions, increase America’s energy security and create American jobs. This is a tall order but an achievable one. The question is whether one of the surest ways to meet these goals — clean, American natural gas — will be a defining part of a sound energy policy going forward.

At a recent address to the U.S. Chamber of Commerce, the president pointed out that the government has a role to play in encouraging energy efficiency to help meet many of our most pressing challenges. And earlier this month during an address on energy at Pennsylvania State University, the president noted that buildings consume 40 percent of the energy we use and present a tremendous opportunity for large-scale energy savings.

“That may not sound too sexy,” Obama said at Penn State, but “making our buildings more energy efficient is one of the fastest, easiest and cheapest ways to save money, combat pollution and create jobs right here in the United States of America.”

The president is right. Efficiency gains haven’t earned a fraction of the media hoopla around energy stories such as the promise of electric cars or advances in renewable technologies such as wind and solar. But the even bigger untold story is that using environmentally friendly, domestically abundant natural gas directly in American homes and businesses is one of the most effective and cost-effective ways to achieve our goals of improving energy efficiency, while reducing consumers’ energy costs and enhancing job creation.

Look no further than the ever-expanding American home for a prime example of the potential efficiency gains from natural gas. The size of the average American home has increased by more than 50 percent since 1970, yet during that same time period, natural gas consumption has gone down by 40 percent per household because of more efficient appliances and tighter homes. If more homes and businesses switch to this clean energy source, it would result in millions of dollars in savings for consumers. It would also create additional jobs in an industry that already employs nearly 3 million American workers.

Beyond the reduced consumption, the energy that is created from the direct use of natural gas, which is by far our cleanest fossil fuel, produces fewer carbon emissions.
Perhaps most important, clean natural gas is an American source of energy — readily available now and for hundreds of years in the future. Almost 90 percent of the natural gas we use today is produced in the United States, and we possess at least a 100-year supply of natural gas resources.

If it were a larger part of our energy equation, we would not be as dependent on energy imports from foreign nations or as susceptible to international incidents and energy market fluctuations as we are now.

The uprising in Egypt, which briefly pushed oil prices past $100 per barrel, is just another example of actions beyond our shores that can result in millions of dollars in higher energy prices for American consumers.

We tend to focus on anticipated technology or latest innovation as the solution to our nation’s energy needs. Technology and innovation are critically important across the spectrum of energy industries, including natural gas, but as we work to meet our energy challenges, it’s time that we look beyond the “sexy” headlines and ensure that clean natural gas is a central part of any energy policy produced in the 112th Congress. For a clean, reliable and abundant source of American energy, natural gas is a natural fit.

Power companies are also utilizing more natural gas than normal to meet their electric demands. All of which can lead to the situation we are seeing now. When demand for natural gas exceeds the resources available in the pipe, key factors like pipeline pressure are affected and the results can be customers being shut down.

It’s important to note that this is a rare occurrence as the nation’s pipeline system is one of the most reliable in the world. But safety is the top priority, so customers must be shut down when this does occur – it’s a safety protocol.

Natural gas utilities are doing everything they can to get more natural gas into the lines and ensure that folks have the gas they need to stay safe and warm. Part of this process will require customers who have been shut off to be safely re-lit by their natural gas utility.

To that end, the natural gas utility will need to gain access to affected homes or buildings in order to re-light customers. Customers who are away from their home for an extended period, due to vacation or for other reasons, should contact their utility directly to see what arrangements can be made to restore service.

Safety is always the first priority, and the customers affected should follow the lead of their local natural gas company. In no instance, should anyone seek to re-light any natural gas appliances themselves.

The documentary Gasland, just nominated for an Academy Award, is perhaps one of the most prominent examples of fear outstripping facts.  Hydraulic fracturing, on which the movie focuses, is a time-tested drilling process that has been in use for more than 50 years in hundreds of thousands of wells.  Rather than objectively explore the subject, ‘Gasland’ ignores the reality of this technology and instead creates a distorted story designed to generate fear and distrust.

America’s Natural Gas Alliance, which represents many of the companies involved in domestic natural gas production, underscores just how riddled with inaccuracies Gasland is in this just-released video which sets the record straight.

Per the very definition of the documentary category from The Academy of Motion Picture Arts and Sciences, the emphasis of a documentary film must be ‘on fact and not fiction,’ and there is no doubt Gasland has missed the mark.

We hope that after learning the facts you agree.




First and foremost, though, kudos to the EPA for looking at upstream emissions for comparing natural gas to other options.  The problem, however, is that the actual data used is limited and may even inflate methane emissions by several orders of magnitude.

The EPA and everyone else in the industry has been using “emission factors” developed long ago to estimate how much methane leaks from production wells, pipeline valves and the like.  It’s common knowledge that these emission factors were based on very limited field testing performed nearly 20 years ago, and that they are seriously in need of updating and refinement.  The EPA even addresses this issue of outdated data in its November 2010 Technical Support document.  However, without any support to back up the claim, the EPA then claims that emissions today may be higher than they were 20 years ago.

Not only is such a statement wholly unsupported by any data, it’s actually in opposition to recent findings.  EPA’s Natural Gas STAR program managers, fully aware of the problem with outdated information, took steps about four years ago to launch a joint research project with energy industry trade groups to do new, more extensive field testing on modern natural gas systems to see what is really going on and to develop updated emission factors.

That work has already resulted in some new emission factors for natural gas distribution and transmission equipment, and other work is continuing this year and next.  The work so far shows that methane emissions are declining as natural gas systems become tighter as the result of new technology, equipment and procedures.

And let’s not forget that even using the old inflated emission factors, EPA estimates that natural gas is more efficient and lower emitting than other options.

Dave Parker, who is retiring as president and CEO of AGA, also provided a political update, highlighting both the opportunities and challenges of the 112^th Congress.

Somerhalder’s speech to the NYSSA officially kicks off his year as AGA chairman and gave the many analysts who cover the utility and natural gas space an opportunity to learn more about the state of the industry and his priorities for 2011.

Noting that the natural gas supply picture has never been brighter, he stated that, “currently, we have about 100 years of natural gas supply.”  Somerhalder also said that this bright picture is reflected in the stable affordable prices that natural gas customers currently are enjoying.

Somerhalder told an audience of more than 100 analysts and industry executives that natural gas utilities continue to be a solid investment opportunity.

“Natural gas utilities have a consistent long-term track record of creating shareholder value,” he said. “They focus on fundamentals; they have healthy balance sheets and positive earnings trends. And thanks to the abundant supply of natural gas, utilities are now focusing on growing demand.”

Somerhalder added that the recent two-year extension of the 15-percent dividend tax rates will make dividend-paying companies such as natural utilities an even more attractive investment.

“We are especially pleased with this victory, which AGA worked very hard to achieve,” he told the audience.

Somerhalder also focused on demand growth by pointing out that at a time when America’s domestic supply of natural gas is at an all time high, it is critical for our industry to explore new market opportunities based on the clear price and environmental and energy efficiency advantages of the direct use of natural gas.

Leading AGA’s legislative and regulatory priorities for 2011 is pipeline safety,AGA is working with the U.S. Department of Transportation (DOT) on reauthorization of an effective, flexible and cost-effective Pipeline Safety Act.  AGA is also working with DOT and state regulators on implementing a sound Distribution Integrity Management Program.

Touching on the transportation market, an especially attractive demand growth opportunity, he said that displacing oil with domestically abundant natural gas by expanding our use of natural gas vehicles can save money, reduce green house gas emissions and decrease our dependence on foreign oil.

“The bottom line is that America needs clean and abundant energy and natural gas utilities can meet that need. With all that natural gas has to offer, this is an exciting time for the industry and I am thrilled to capitalize on the many opportunities we have before us to provide safe, reliable and clean energy solutions to our customers.”

This landmark event brought together leaders from the top oil, gas, electricity, renewables and nuclear associations.  Discussions focused on the future of energy and the roles of conventional fossil fuels, nuclear power and, increasingly, renewable sources of energy.

Dave Parker, president and CEO of the American Gas Association, was part of a panel focused on natural gas, oil and nuclear.  He discussed a range of issues affecting the natural gas distribution system and and noted that safety is the entire industry’s number-one focus.

Parker highlighted the increasingly important role of shale gas in domestic supply.  As demand for natural gas increases, distribution companies will be playing a larger role in the transportation of natural gas.  Parker also touched on the often neglected fact that natural gas is the primary backup fuel for many renewable fuels sources like wind power.

Keynote speaker Tom Kuhn, president of the Edison Electric Institute (EEI), talked about how business efficiencies need to be part of the equation when looking at the future of a cleaner and more efficient energy system.  He noted that renewables will be a key part of the utility industry moving forward.

Innovations in efficiency, another key topic throughout the day, also play an emerging role in utilities.  Kuhn pointed out that 90 percent of EEI members in 43 states are active in smart grid development and technology.

President and CEO of the Electric Power Research Institute, Michael Howard, stated that innovation continues and is moving the energy industry forward.  He said that a major challenge is to provide reliable, affordable and sustainable electricity. Navigating competing constraints like electric vehicles, demand response and efficiency, renewable energy, energy storage, controls and cyber security is also a key issue.

Howard noted that other larger challenges facing the future of energy supply and demand include the search for near-zero emissions, integration of renewables, evolution of the “smarter” grid and innovations to the energy distribution system. These increased opportunities to use power more efficiently will affect everything from data centers to residential appliances.

American Petroleum Institute president and CEO, Jack Gerard, spoke about the importance of domestic oil and natural gas production. Access and business certainty were his key themes.

Donald Santa, president of the Interstate Natural Gas Association of America, pointed out that natural gas has moved beyond the “bridge fuel” moniker.  He stated that natural gas, as President Obama recently pointed out, is an issue on which American can come together and through which we can move toward a smart energy future.

The heads of the nuclear and solar associations also highlighted the importance of a diverse and multifaceted energy mix. Both groups indicated that they foresee a growing demand for their energy sources as both technology and consumer familiarity increase.

As Dave Parker said during the discussion, “we need all these energy sources as we move toward the future.”

Here’s a link to the article and the text from his letter appears below.

What if the near-term solution to reducing greenhouse gas emissions actually began with the increased use of fossil fuels?

This is a real possibility because the generation of electricity from natural gas results in much lower emissions of carbon dioxide than from coal or oil. And in recent years we’ve unlocked vast new supplies of natural gas. Leading industry experts now believe North America has more than 3,000 trillion cubic feet of proven natural gas reserves—enough to meet the current rate of consumption for more than 100 years.

These reserves can powerfully contribute to our domestic energy security while making a significant, near-term reduction in greenhouse gas emissions.

With cap and trade clearly off the table for now, lawmakers are considering new approaches to put America on a path to a cleaner energy future. One idea gaining momentum is Sen. Lindsey Graham’s (R., S.C.) proposal to require utilities to generate a targeted share of their electricity by renewables such as wind and solar power, nuclear energy and coal technologies that capture and sequester greenhouse gasses. Mr. Graham’s “Clean Energy Standard” is a good starting point for enacting a comprehensive energy policy next year, but it should be expanded to include the substitution of natural gas for coal.

There are already more than 300 natural gas-fired electricity plants in the U.S., but according to a Congressional Research Service Report (CRS) of January 2010, we are only making use of 40% of their overall capacity of 171,000 megawatts. By substituting this unused gas-fired capacity for an equivalent amount of coal-based generation the CRS report noted we could almost immediately reduce CO₂ emissions in the U.S. electricity sector by more than 10%, or more than 240 million tonnes.

Ultimately, we’ll have to retrofit conventional coal plants with new technology to capture and sequester carbon if we are to achieve more substantial reductions in global CO₂ emissions. But while we work to develop an economically viable carbon retrofit technology, gas-fired generation offers the country a cost-effective approach to begin reductions of emissions.

Mandating the use of renewables, on the other hand, is much less attractive: Despite their allure, they displace only a modest amount of CO₂ at a very high price. According to an analysis by Northbridge Group consultants, mandating that 20% of every utility’s generation portfolio come from renewables—a proposal that’s currently before the Senate—would cost $225 more per household each year than achieving the same CO₂ reduction by increasing the use of existing natural gas-powered generators.

A clean energy standard that includes natural gas focuses on what’s realistically available in the here-and-now. It provides real opportunities to reduce carbon emissions right away while buying us time to develop and hone other electricity-generating sources that don’t rely on fossil fuels. Most importantly, it would not require us to shut down the plants that rely on our most abundant fossil fuel, coal.

No one doubts that if we are to overcome the challenge of climate change, we will have to expand the use of renewable energy. But that doesn’t mean rejecting the most effective alternatives available today. Natural gas stands out among these alternatives.

Mr. Graham’s clean energy standard has given us a workable starting point. By expanding his proposal, Congress can take an important first step towards the long-term goal of a sustainable planet.

Mr. Leonard is chairman and CEO of Entergy Corp., which produces and distributes electric power.

In addition to the impact homegrown energy has on our national security, it plays a significant role in creating jobs and sustaining the U.S. economy. So, while the removal of the ban will not turn the tide overnight, it is a step in the right direction and we are pleased to see the administration lift the deep water drilling ban.

Natural gas can be found in abundance on American soil, with more than 100 years of supply at our fingertips. This clean, efficient, affordable fuel is available right now for home heating, cooking, water heating and power generation. AGA supports environmentally sound access to our country’s vast resources of natural gas, both onshore and offshore.

With the right policy decisions from our lawmakers, AGA’s 195 member utilities will continue to deliver natural gas safely and reliably to their 70 million U.S. natural gas customers for many years to come.