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Consumer price tag for gas $111 billion Industry report pegs cost of natural gas higher prices since June 2000 at $111 billion over the late 1980s prices Larry Persily Petroleum News Juneau Correspondent
A report produced by an organization of natural gas industrial consumers pegs the cost of higher gas prices to U.S. users since June 2000 at $111 billion over the prices paid in the late 1980s. And it suggests the nation’s electrical power plants burn more coal to help relieve the demand on natural gas supplies, thereby lowering the cost of natural gas.
“The increased price of natural gas (since June 2000) has cost industrial consumers $57 billion, residential consumers $33 billion and commercial consumers $21 billion,” said the report issued Dec. 3 by the Industrial Energy Consumers of America.
The group, based in Washington, D.C., is composed of 23 members, including some of the largest natural gas consumers in the country such as Dow Chemical Co., BASF Corp. and Eastman Chemical Co.
The report compared the cost to consumers of natural gas for the 41 months between June 2000 and October 2003 vs. the cost from January 1997 through May 2000. It found that the average price per thousand cubic feet for the 41 months ending October 2003 was $4.34 vs. the average of $2.37 for the 41 months in 1997 through 2000.
“The U.S. natural gas crisis … has had a staggering direct and indirect impact on all consumers, the U.S. economy and especially on manufacturing,” said the report. Report recommends more drilling As at least a partial answer to the costly problem of high natural gas prices, the report recommended more drilling for new production. “The U.S. is blessed with enormous natural gas reserves yet we do not lift drilling moratoriums. … The blame for these high prices does not rest on the oil and gas companies, it rests mostly on federal and state policy makers.
“Congress and states must work together to break the impasse between the environment and the need to increase supplies of natural gas.”
In addition to recommending expanding drilling areas and increased production of natural gas, the report said the nation needs to increase its use of coal for base-load electrical generation. “Using natural gas to produce electric power increases the cost of natural gas and electricity for all consumers.
“Increasing use of coal for power generation solves this problem. Use of clean-coal technology allows use of coal in power generation in an environmentally acceptable manner,” the report said.
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