US NPRA warns Congress on natgas supply and pricing

25 February 2003 17:40  [Source: ICIS news]

WASHINGTON (CNI)--The National Petrochemical & Refiners Association (NPRA) warned Tuesday that this week's sharp boost in the cost of natural gas "threatens the competitiveness of the US petrochemical industry."

NPRA president Bob Slaughter told CNI today he will deliver that caution and other comments later today to the Senate Energy and Natural Resources Committee which will hear testimony today about natural gas supplies and pricing.

Slaughter said NPRA's comments to the committee will "remind Congress of the importance of the petrochemical industry to the US and the fact that natural gas and gas liquids are a primary feedstock for the petrochemical industry."

"The immediate concern is the sharp increase in natural gas prices threatens the competitiveness of the US petrochemical industry," Slaughter said in an interview.

Natural gas prices have ballooned in recent weeks, reaching a two-year high Monday with one-day price jumps not seen since late 2000. The hearing is expected to examine factors that influence gas supply and prices.

Slaughter said NPRA does not support price or allocation controls. Instead, it argues Congress should "take a look at policies that affect gas supply and demand, and make sure we’ll have enough supply to meet all of the demands for natural gas use, including petrochemicals."

"There has been a big movement over the last few years," Slaughter told CNI, "to require electricity generators to use natural gas, which is exactly the opposite direction we were headed in the 1970s."

"The push for more gas use" in power generation, he noted, "is generally driven by environmental policy, since gas is a clean fuel. But if you do that without looking at the available supply, you will put the petrochemical industry at a severe disadvantage."

Slaughter said Washington, DC-based NPRA will "remind and caution policymakers that there has to be a balance. A lot of the environmentally-oriented actions of the last few years that promoted natural gas were taken by the government, we think, without adequate attention to gas being a feedstock."

Among those scheduled to testify during today's Senate hearing are Robert Best, president and chief executive of Atmos Energy, a natural gas distributor in Dallas, Texas; Keith Rattie, president and chief executive of Questar Corporation, an energy company in Salt Lake City, Utah; and David Welch, president of BP Alaska-Canada Gas.

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