US House gets bill to increase stability in natgas trading

14 April 2005 17:20  [Source: ICIS news]

WASHINGTON (CNI)--A bi-partisan bill aimed at increasing transparency and stability in natural gas trading was introduced Thursday in the US House of Representatives, according to the two sponsors.

 

Representatives Sam Graves (Republican-Missouri) and John Barrow (Democrat-Georgia) said their bill is meant “to bring some stability, predictability and reliability to the natural gas market.”

 

Although Graves and Barrow say the bill is needed to aid US farmers hit hard by the rising costs of gas-based agrochemicals and energy, their bill also has support in the chemicals industry and won praise from Huntsman Companies president Peter Huntsman at the International Petrochemicals Conference (IPC) earlier this month.

 

Graves said in a statement: “Right now natural gas prices are less reliable than the weather. It is manufacturers, seniors and farmers who are being burned by artificially high natural gas prices.”

 

Said Barrow: “Congress needs to step up to the plate and take the lead in helping to get natural gas prices under control.”

 

Both cited the plight of farmers, with Graves noting that “As a result of recent increases in [natural gas] demand and price, many of the nation’s farmers have seen their fertiliser costs more than double.”

 

Barrow added: “Farmers all across my district are facing skyrocketing fertiliser prices. They’re not only struggling to feed the crops that feed our country, they’re fighting just to stay in business.”

 

Both also cited the plight of US senior citizens who, they said, “find themselves spending more and more of their limited income to heat their homes."

 

The congressmen noted that natgas heats about 55% of US homes, makes up as much as 90% of the production cost for nitrogen-based fertilisers and accounts for 37% of industrial energy consumption.

 

“The recently recovering manufacturing sector,” the said, “is being hampered by soaring natural gas prices.”

 

The Graves-Barrow bill, formally titled the “Commodities Exchange Improvements Act of 2005,” would make several changes in the operation and regulation of market exchanges and instruments to make the trading of natural gas contracts more transparent and subject to limitations on price fluctuations.

 

A spokesman for Graves said the bill likely will be referred to the House Agriculture Committee where both are members. That committee is to re-authorise the Commodities & Exchange Act this year.

 

A separate piece of legislation pending in the US Senate seeks to moderate US natgas costs by encouraging more exploration and development, advancing coal gasification and gas methane hydrates and accelerating the import of liquefied natural gas (LNG). That measure is sponsored by Senator Lamar Alexander (Republican-Tennessee). Other measures to eas the US natgas crisis are being considered within the pending national energy policy bill.

By: Joe Kamalick
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