The Squeaky Wheel Gets The Grease

In America that means those with lobbyists in Washington, D.C. get the "grease" (investments). It seems that as much as things change, they stay much the same. Like it or not; new administration, or not. The following article from the "Wall Street Journal" describes efforts by gas producers to promote their product. It is a clean fuel, it is increasingly abundant, and the infrastructure, or ability to produce and distribute it already exists.

While we wait for "alternative" sources of energy to become reality, America and the world is going to need all the natural gas it can find and deliver.
Peter


FEBRUARY 25, 2009
Natural-Gas Producers Launch Lobbying Group
By BEN CASSELMAN
U.S. natural-gas companies, hurt by a combination of booming supplies and falling demand, are banding together to promote their product with lawmakers and the public.
Such industry heavyweights as Newfield Exploration Co., Devon Energy Corp. and Chesapeake Energy Corp. will announce Wednesday the formation of the American Natural Gas Alliance to push broadly for more use of gas in power generation, transportation and other fields. The group says its more than 20 members account for roughly 40% of all U.S. gas output.

Production has surged in the past year, as new technologies have unlocked vast quantities of gas trapped in tight rock known as shale. Newly discovered fields in Texas, Louisiana, Arkansas and elsewhere have flooded the market with new gas, helping fuel a collapse in natural-gas prices, which last week touched a six-year low. Prices have plummeted to just over $4 per million British thermal units from more than $13 per million BTUs in July.

New supplies aren't the only cause of the price drop -- weak industrial demand has also contributed. But producers and their investors are increasingly concerned that the market will remain oversupplied even when the economy recovers.

Leaders of the new group argue the boom in gas production presents an opportunity to rethink the nation's energy policy. They note that gas burns more cleanly than coal, is produced domestically and relies on existing technology and infrastructure. But policy makers have not embraced wide use of natural gas, in part because U.S. production was declining until the recent discoveries.

"In order to promote greater use of natural gas, you've got to convince people it's abundant," said Newfield Chairman and Chief Executive David Trice, who will serve as chairman of the new coalition.

Mr. Trice said he and other industry executives began talking last year about the need for a louder voice in Washington. In the past, gas producers spread their message to politicians and the public through groups such as the American Petroleum Institute and the Independent Petroleum Association of America. Most energy companies produce both oil and gas, and the interests of both fuels were considered to be similar.

In recent years, the two fuels have headed in opposite directions. U.S. oil production has continued to decline, and oil companies are concerned about finding new areas to drill, whereas gas producers are more worried about finding customers for their surging supplies.
"The natural-gas industry lacks a unified voice," energy analysts from Wachovia wrote in a recent report. The analysts noted that that the recently approved federal stimulus package included no significant support for the gas industry, and concluded that "the gas industry has utterly failed to address the demand side."

The new alliance is not the first effort to promote the wider use of natural gas. In 2007, Chesapeake Energy, the largest U.S. gas producer, helped create the American Clean Skies Foundation. The foundation has teamed up with the Sierra Club, among others, to promote gas as a cleaner alternative to coal. Mr. Trice said his group will not attack coal or other energy sources, and merely aims to promote gas.

The new group has hired trade-group veteran Rodney Lowman as its president. Mr. Lowman, 60 years old, previously ran the Abundant Forests Alliance, an advocacy group for the wood and paper-products industries, and the American Plastics Council.

Write to Ben Casselman at ben.casselman@wsj.com