Barton: Stymied Energy Projects Partly To Blame for Higher Fuel Costs

Barton: Stymied Energy Projects Partly To Blame for Higher Fuel Costs

WASHINGTON - U.S. Rep. Joe Barton, R-Texas, chairman of the House Energy and Commerce Committee, issued the following statement today as part of an Energy and Air Quality Subcommittee hearing entitled, "EIA's Report on Short-term Energy Outlook and Winter Fuels Outlook."

"I want to begin by thanking Guy Caruso, administrator of the Energy Information Administration, for testifying before the subcommittee today. He has been guiding and advising the Energy and Commerce Committee since his appointment in 2002 and we are always very appreciative and grateful for his analysis and views.

"I have reviewed portions of the EIA Outlook and I'm confident that you will be telling me that the winter fuel prices will be higher this year because of supply constraints two weeks ago. We approved the GAS Act to increase supply. Not one Democrat voted for it. Not one. That's a disappointment to me. The GAS Act aims to address concerns about high gasoline prices:

* By giving federal authority to investigate price gouging.

* By easing siting and permitting restrictions for the willing. If, and only if, a governor requests it or if the local redevelopment authority chooses through the BRAC process to site a refinery on a retired military base, the Department of Energy will coordinate the permitting process for a refinery.

* By reducing the number of "boutique fuels," making it easier to move gas around the country during supply shortfalls.

"In today's hearing we will begin looking at winter fuels like natural gas and home heating oil. It's expected that households that heat with those fuels are going to pay about $350 more this winter in fuel expenditures depending on the fuel source that they're using. That's a real price increase, approximately $100 a month. That's real money and it's going to hit real Americans. These price increases carry a message: We need less politics and we need more energy policy which results in more fuel.

"Today's and this winter's higher prices are driven by the need for supply. Do we really want to tell the American people that the way to solve the energy problem is to freeze to death by lowering your thermostat? It's with great concern that I review lists of energy projects - these are real projects, these aren't make-believe - they're real projects that have been delayed, killed or postponed in the very areas of the country where prices for winter fuels are expected to be the highest.

"In the West, 62 percent of all households rely on natural gas. California, the largest state by population in the union, is the second largest natural gas consuming state in the country. There are at least two LNG projects that would have brought significant LNG supply to California, but they've been delayed. One in Long Beach has been delayed by the California Public Utilities Commission. The other is Cabrillo Port, again, held up by the state of California regulatory hurdles.

"In the Northeast, where the winters are colder than they are in California, 51 percent of the households rely on natural gas. That's over half. Again, projects that would have provided more natural gas to heat Northeastern homes have been stopped cold. To name a few:

* The Islander East gas transmission pipeline project from Southern Connecticut across Long Island Sound to western Long Island and New York City. Initially, Connecticut denied the CZMA approval. After the project sponsors overcame that hurdle, Connecticut denied the project its Clean Water Act permit and the dispute was tediously dragged through state court.

* The Broadwater Energy offshore LNG terminal project, located nine miles north of Long Island, in New York State waters. Both New York and Connecticut congressional delegations have come out in opposition to this project. These projects don't help Texas. They don't help Oklahoma. They help New York, they help Connecticut, then help New England. And yet, their own areas are opposed to them.

* The Weaver's Cove LNG terminal project in Fall River, Mass. This project showcases the lengths opponents will go to stop a project. After FERC approved the application, the opponents slipped a provision in the highway bill (H.R. 3) to prevent the demolition of the Brightman Street Bridge in order to block LNG tankers from using the river to get to the project.

"Now, we know who's going to complain about natural gas prices this winter, and they should. I'm not saying we should support higher natural gas prices. The real conspirators seem to be the very people we're trying to help - the people of New England and places like Fall River, Mass. Fall River's mayor says this about the project to bring more fuel to the people of his town: "I will make it bleed with a thousand paper cuts until its investors lose interest and go away." Increasingly, the energy policy of some states and localities in the chilly Northeast seems to be, 'Let us freeze in the dark.'

"For the most part, Northeastern homes that don't use natural gas use home heating oil, instead. In the Northeast, 30 percent of households use heating oil as their primary heating fuel. However, 50 percent of the Northeast's distillate consumption, which is where home heating oil comes from, must be brought in from other areas of the country or overseas. When Northeast constituents raise concerns about the prices, and again, rightfully so, they will be forced to pay for home heating oil, the need for increased domestic refining capacity should be clear. And yet even as we face dramatic price increases at the beginning of what's likely to be a cold winter, no refinery seems likely to ever be built in the Northeast. Ever. Why is that?

"My congressional district in Texas will produce this year over a trillion cubic feet of natural gas. My district doesn't use a trillion cubic feet of natural gas. I have natural gas drilling rigs within 10 miles of my backyard. About a half dozen of them and I wish I had a dozen. My congressional district at one time was the eighth-largest oil-producing country in the world if it were a country instead of a congressional district. My district is going to do its part on the supply side. A lot of the natural gas and oil we still produce is going to go all over this great nation and it should. So it really upsets me when I look around this country and see these high prices and a clamor to do something about it, and we try to do something about it, the same people who we're trying to help say, 'No!'

"I look forward to your testimony, Mr. Caruso. I particularly look forward to hearing more from you on the increase in costs associated with the lack of infrastructure generally and if there are particular projects that, had they been implemented, could have stopped the distressing price hikes that EIA is projecting."

http://energycommerce.house.gov/108/News/10192005_1686.htm