Secretary Norton Highlights Interior Initiatives to Address Natural Gas Crisis

Remarks Prepared for Delivery by the Honorable Gale Norton Secretary of the Interior Natural Gas Roundtable, July 22, 2003

(WASHINGTON) - Interior Secretary Gale Norton today highlighted Department of the Interior initiatives underway to tackle natural gas shortages which are causing higher prices for American families and touted exciting studies on methane hydrates which could help in the long-term need for expanded natural gas supplies.

Norton spoke with the Natural Gas Roundtable in Washington. The Roundtable is a leading forum which brings together leaders from industry and government to discuss cutting-edge energy policy issues.

"We face a crisis because, as a nation, we have seen a sea-change in the use of clean-burning natural gas. Approximately 56 million homes are heated with natural gas today. Because of it's air quality benefits, 90 percent of our new energy plants will be powered by natural gas," Norton said. "We need a reliable supply of natural gas to heat our homes, power our lives and keep our businesses operating in the black."

"Natural gas bills in Indianapolis will increase 38 percent next month, as projected by the local power company. Residential consumers in Central Ohio are paying nearly double the amount for gas that they were charged in June 2000. Farmers are paying higher prices for fertilizer. Other natural gas dependent industries are laying off workers. The poor and those living on fixed incomes are struggling to pay utility bills.

"Interior-managed lands and waters produce more than 30 percent of all domestic energy and 35 percent of all natural gas. At current consumption rates, the U.S. Geological Survey says there is a 50-year supply of technically recoverable undiscovered natural gas. More than half of this supply exists on lands and waters managed by the Interior Department.

"With the existence of these huge supplies, our challenge is to implement policies, with economic efficiency and with full environmental protection. We do exhaustive land-use planning that involves input from all stakeholders. When environmental conditions warrant protection, we recommend no development. We respect all moratoria on offshore oil drilling off our coasts.

"The Interior Department is implementing the President's National Energy Plan and Congressional directives.

"We are implementing our new 5-year offshore leasing program for 2002 to 2007. This is estimated to make enough natural gas available to heat and cool 56 million homes for a dozen years.

"To encourage exploration and development of technological frontiers, we are providing financial incentives. For example, starting in 2001, we offered royalty relief for the production of natural gas in formations more than three miles beneath the ocean's surface.

"At the beginning of the year, we completed the interagency study of oil and natural gas resources called for in the Energy Policy and Conservation Act.

"The five basins we studied in the West contain enough natural gas to provide energy for 56 million homes for nearly 30 years. The inventory looked at whether lands containing oil and gas are open or closed to leasing. It then examined the degree of constraint on development resulting from lease stipulations.

"We are working with Congress to pass energy legislation to codify many of these incentives and common sense administrative reforms - and to expedite construction of a pipeline to deliver Alaska natural gas to the lower 48 states. Interior geologists estimate that enough natural gas is available on Alaska's North Slope to power those same 56 million homes for more than 30 years.

"Also, there is a new source of energy, called methane hydrates, which may vastly expand our natural gas supplies. Methane hydrates are molecules of gas compressed and trapped in frozen water. It is estimated that the Nation's methane hydrates resources have 175 times the amount of the volume of undiscovered, technically recoverable natural gas.

"With methane hydrates, we could have hundreds of years of natural gas supply. According to the Department of Energy, if only one percent of the methane hydrate resources could be made technically and economically recoverable, the U.S. could more than double its gas resource base. It appears the ideal locations for gas hydrates are the oceans and certainly Alaska.

"Two years ago, I was told it would take decades to develop this natural gas potential. Some expect production could begin within a decade. Total federal investment in methane hydrates research has been roughly $15 million a year since 2001.

"All in all, we prefer the spirit of partnership over the power of pressure. Working together we can provide the natural gas America needs," Norton concluded.