Most Americans don’t
know it, but the price of natural gas has increased as much as 700% in the
last three years. That’s what happens in the marketplace when an essential
commodity becomes scarce. It’s not that there aren’t huge amounts of natural
gas. The problem is that access to it has been effectively blocked.
“We’re not running out of natural gas, and we’re not running out of places
to look for natural gas,” says Keith Rattie, president of Questar, an energy
developer. “However, we are running out of places we are allowed to look
Why do you think that is? Perhaps it is the same reason that the Clinton-Gore
administration put some of the richest supplies of high quality coal off
limits to development and fought access to the oil reserves in Alaska? In
the case of natural gas, the Bush administration’s Secretary of Energy, Spencer
Abraham, will tell you that environmental restrictions have put nearly half
of the huge natural gas reserves on federal lands off limits for use. When
the laws concerning federal lands were first written, they included the sale
of natural resources. It was understood they were integral to the economy.
But environmental laws forbid it. That’s why thousands of acres of our national
forests just burn to cinders every year.
Another invaluable instrument Greens use to deter access to natural gas is
the Endangered Species Act. It has been used in the past to decimate sectors
of the timber industry, mining, and ranching. On December 16, 2002, the Forest
Guardians, together with the Chihauhuan Desert Conservation Alliance and
the Texas Public Employees for Environmental Responsibility, delivered notice
to the US Fish and Wildlife Service that it intended to sue in order to protect
the “critical habitat” of the Aplomado Falcon. This bird’s habitat extends
from southern Arizona, throughout half of New Mexico, and into west and south
Texas. If successful—and these suits have been successful in the past—it
will shut down any drilling for natural gas and, of course, any other energy
source. For a single species of falcon! At a time when this nation needs
natural gas (and oil) now and will need more in the future!
So we have plenty of natural gas (as does Canada), but environmental laws
have so slowed new domestic and offshore drilling for it that there’s this
little problem. According to Andrew Weissman, chairman of the Energy Ventures
Group, there is “a staggering shortfall, with profound implications for energy
companies and for the health of the US economy.” This shortfall is going
to drive the price of natural gas through the roof. It may force industries
to shut down in order to insure homeowners and apartment dwellers do not
freeze in the event of a long, cold winter.
“Further, this growing imbalance between available supplies of natural gas
and expected demand is not likely to be short-lived. Instead, it reflects
the early stages of a long-term structural imbalance, in which supplies of
natural gas available to the US market are likely to consistently fall 10%
or more below the levels achieved during the 1990’s, at the same time that
the underlying rate of demand is likely to continue to increase every year.”
Supply and demand is the oldest rule of the marketplace, and energy experts
are telling us we are just a few months away from a full-fledged disaster.
Let’s have a big round of applause for all the environmentalists—Greens—who
have engineered this. As if the US wasn’t already broke, having spent its
way through a huge surplus, we now are staring at a major crisis involving
one of the most key elements of heating and energy for large sectors of the
As Anne Keller, a senior consultant with Jacobs Consultancy, Inc., recently
told other energy experts, “It seems that we are doomed to re-live the 1970’s.”
She recalled for them that, in the 1950’s, the US Supreme Court imposed federal
regulation over the price of natural gas sold into the interstate markets.
When oil prices spiked in the 1970’s, thanks to our dear friends, the Saudis,
the power industry began to switch heavily to “cheap” natural gas.
After the winter of 1977-78, an especially cold one that saw curtailments
of gas deliveries to schools and hospitals (but not inside states where gas
prices had been deregulated), a whole new bunch of regulations were implemented
to provide incentives to develop new gas as well as to restrict the use of
gas as a fuel in power generation, i.e., electricity. Ms. Keller notes that
the natural gas market did enjoy a kind of golden age with “fairly stable
prices at levels low enough to encourage industrial development, and provide
assurance that the (energy) industry could support another round of gas-fired
power plant development.”
It will probably take another crisis to get the government to facilitate
new natural gas development, the financing of new pipelines, and whatever
else it will take to heat grandma’s house. Right now, as this is being written,
stored natural gas supplies are at the lowest level since the federal government
started keeping records more than a quarter century ago. Meanwhile, the Energy
Information Administration is predicting that the demand for natural gas
will increase by 50% over the next twenty years, but that domestic production
will grow by only 14% unless restrictions on public lands are ended.
In an article by James M. Taylor for Environment & Climate News, my friend
Robert Bradley Jr., president of the Institute for Energy Research, Houston,
was quoted, noting that “The first point is that natural gas reserves in
both the US and Canada are at all-time highs. Mother Nature is not to blame
for high prices. Lagging infrastructure is at fault, from wellhead production
to pipeline capacity to move supply to markets.” You don’t build infrastructure
when you have to battle endless environmental regulations and laws suits
by environmental groups.
In plain words, this is a train wreck about to occur and a particularly bad
winter will only worsen its impact on the US economy. Without adequate energy
resources, this nation will be in big trouble and a natural gas crisis will
ripple through Wall Street and all other sectors of the economy.
While the Greens continue to tell you about how dangerous it is to breathe
the air and drink the water, and how many endangered critters there are,
your natural gas bill, if that’s what you use to heat your home or business,
is about to go through the ceiling into the stratosphere. You might want
to hug an environmentalist to keep warm.
Alan Caruba is the author of Warning Signs, published by Merril Press. His weekly commentaries are posted on the Internet site of The National Anxiety Center.