Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - April 06, 2005)

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By Mr. ALEXANDER (for himself and Mr. JOHNSON):

S. 726. A bill to promote the conservation and production of natural gas; to the Committee on Energy and Natural Resources.

By Mr. ALEXANDER (for himself and Mr. JOHNSON):

S. 727. A bill to provide tax incentives to promote the conservation and production of natural gas; to the Committee on Finance.

Mr. ALEXANDER. Mr. President, today I am introducing the Natural Gas Price Reduction Act of 2005 and the ``Tax Provisions for Natural Gas Price Reduction Act of 2005.'' I send to the desk two pieces of legislation. One is the substantive provisions of the bill and one is the tax provisions of the bill.

Mr. President, I offer the legislation on behalf of myself and the Senator from South Dakota, Mr. JOHNSON, who is the lead Democratic sponsor on the legislation. I do so with appreciation to the chairman of our Energy and Natural Resources Committee, Chairman PETE DOMENICI, and the staff of that committee who have worked very closely with us on the development of this comprehensive piece of legislation, and with thanks to my own staff, Sharon Segner, who has worked on it for several months.

This is a piece of legislation to address aggressively and comprehensively the rising cost of natural gas in the United States. This is legislation for the blue-collar worker, for the American farmer, and for the American homeowner.

Natural gas prices in the United States are at record levels. We have gone from having the lowest natural gas prices in the industrial world to the highest. These high prices are threatening millions of our jobs. Our farmers are getting a 10-percent pay cut. Homeowners are having a hard time paying their heating and cooling bills because of our contradictory policies.

Our policies boil down to this: We are restricting the supply of natural gas, and we are encouraging the use of natural gas. You do not have to go very far in an economics class at the University of Oklahoma or the University of Tennessee to know that if you restrict supply and encourage demand, the inevitable result is higher prices. And higher prices is a very serious problem for U.S. workers, U.S. homeowners, and U.S. farmers.

Only an ambitious and comprehensive approach that both increases supply and controls demand can lower the price of natural gas and keep our economy growing. This is not a question of tweaking our natural gas policy. It is time, aggressively, to revamp it. We need aggressive conservation. We need aggressive use of alternative fuels. We need aggressive research and development. We need aggressive production. And, for the time being, we need aggressive importation of liquefied natural gas from other parts of the world.

Here on this chart is an idea of where we are today. This is the United States of America: $7 per unit for natural gas--the highest in the industrialized world. Until recently, we had the lowest natural gas prices in the world.

What that means is large parts of our industries--the chemical industry, for example--were built on the idea of $1.50 or $2 for natural gas, but today it is $7.

A million Americans work in those blue-collar manufacturing jobs in every State in our country. Now, if they are paying $7 here, and it is $5.55 in Canada and $5.15 in the United Kingdom and $2.65 in Turkey and $1.70 in the Ukraine, where do you suppose, though, a million blue-collar jobs are going to be 5 years from now, if we do not do something about the $7 price? They are not going to be in the United States. They are going to be moving out of the United States, to the United Kingdom, to Germany, to the Ukraine, to other parts of the world. And people are going to be writing their Congressmen and saying: Why didn't you do something?

So here is what we can do. By aggressive conservation, I mean setting stronger appliance and equipment standards for natural gas efficiency so that a commercial air conditioner will cool the same while using less natural gas doing it. Those standards have been generally agreed upon by environmental groups with the industry. If they were put in place, by a rough estimate, they might save the equivalent energy that could be produced by 30 or 35 powerplants.

By aggressive use of alternative fuels, I mean, for example, fully commercializing coal gasification. Coal gasification is taking this abundant supply of coal we have in the United States--we are the ``OPEC,'' the ``Saudi Arabia'' of coal; we have a 400- or 500-year supply--and finding a clean way to use it instead of importing oil from a part of the world where people are blowing each other up.

That means starting with support so we can have six coal gasification plants in this country by the year 2013. Coal gasification means, you burn the coal to create gas, and then you burn the gas to create power. If we can do that commercially, we will not only be passing a clean energy bill, we will be passing a clean air bill, because if you do that, you remove most of the mercury, most of the nitrogen, most of the sulfur. And by additional research, we may be able to find a way to recapture the carbon that is produced and put that in the ground and solve the carbon problems that a lot of people are talking about around the world.

In addition to helping ourselves, we would help ourselves by helping others. China and India and other parts of the world are building hundreds of coal plants. We would much rather them build a coal gasification plant, one that is clean and does not contribute to air pollution. Because if China and India and Brazil build dirty coal plants, that air blows around the world, and it blows into Tennessee and it blows into South Carolina. It blows into Oklahoma.

So aggressive alternative fuels is a part of a natural gas supply. Aggressive research and development includes investment and research in gas hydrates. Gas hydrates is gas that is in the ground. Methane hydrates hold tremendous potential to provide abundant supplies of natural gas. Hydrates are like ice solid structures, consisting of water and gases, mainly methane, compressed to greater than normal densities.

Coastal U.S. areas are rich in this resource. The United States is estimated to contain one-fourth of the world's supply. We need to find a way to use that gas so we do not have $7 per unit natural gas prices. That sends millions of jobs overseas. That cuts the income of farmers. And that raises home heating prices and cooling prices for residential Americans.

Aggressive production means, among other things, allowing States to selectively waive the Federal moratoria on offshore production of gas and collect significant revenues from such production. Let me give you an example. Within the last few weeks, the legislature of Virginia decided it might like to explore the idea of drilling for gas offshore. Now, why would Virginia want to do that? Because there is probably a lot of gas offshore. What would that mean for Virginia? Well, they could put a gas rig out in the ocean, beyond 20 miles, so nobody in Virginia or North Carolina could see it, run a pipeline underground to Virginia, and take their share of the revenues. And they can lower taxes in Virginia and put the rest of the money in a trust fund to build the best colleges and universities in America. That is what they could do in Virginia.

If Tennessee had a coastline, and I were Governor of Tennessee, that is what I would be asking the Congress to let me do.

I think as other Governors and other legislatures and other people look at Texas and Louisiana and Alabama and see what they are doing and decide that they can in an environmentally sensitive way exercise a State option to drill for gas in Federal waters so far out you can't see it, that they will find that a good option because it will help lower the price of gas. It can build up the schools and keep taxes down, and it can avoid other worse forms of energy.

For example, you would have to have 46 square miles of windmills, these things that are 100 yards tall, in order to equal one gas rig that you couldn't see out in the ocean. This is a State option. Aggressive importation of liquefied natural gas starts with giving the Federal Energy Regulatory Commission exclusive authority for siting and regulating what we call LNG terminals. This means importing liquefied natural gas from other parts of the world. There is a lot of it around the world. They freeze it and put it in tankers, and they bring it here and put it in our pipelines, and then we have it.

That seems like a pretty big waste of effort when we have plenty of natural gas here in the United States that we don't have access to. But if we want an adequate supply of natural gas, we are going to have to import some from around the world, and that means we are going to need terminals to which to bring it. Some of them may be offshore. They might be 10, 12, 14 miles offshore. Some of them, like the four we have today, may need to be onshore. There is no silver bullet. There is no single answer. That is why we need aggressive conservation. If, for example, the United States adopted the conservation attitudes towards natural gas that California did a few years ago, it might equal what 50 powerplants could produce in the United States. If that is so, we ought to do it today. That would begin to bring this $7 figure down.

Aggressive use of alternative fuels such as coal gasification. I also would say nuclear power is the most obvious alternative fuel to natural gas. If we had more nuclear power, we would use less natural gas. In our country today, what do you suppose we are using to create electricity when we need more electricity even though the cost of it is $7 a unit, the highest in the world? Natural gas, because natural gas plants can be built for a few hundred million dollars, and we have created an environment where we can't use nuclear.

We haven't built a new nuclear plant since the 1970s, even though we invented the technology, even though France has 80 percent of its power now produced by nuclear power, even though Japan builds a new nuclear plant every year or so. We invented it. Our Navy has operated nuclear reactors since the 1950s without ever having a single accident. It is a clean, obvious alternative to $7 natural gas, and we haven't built a plant since the 1970s. So we need to think seriously about aggressive conservation, aggressive use of alternative fuels, aggressive research and development for solar, for methane hydrates, aggressive production, and that includes giving States the option of deciding whether they would like to drill offshore and take some of the revenues and put some of the revenues into a conservation fund, and aggressive importation of liquefied natural gas from overseas at least for the time being.

In March of 2002, the Secretary of Energy requested that the National Petroleum Council undertake an extensive study on the natural gas crisis. That advisory council produced a study. It talked about the results I have described. Our Senate Energy Committee, under the chairman, Senator DOMENICI, has paid a lot of attention to that report. Senator DOMENICI hosted what we called a natural gas roundtable that was well attended by Senators and went on for 3 or 4 hours. There were more than 100 proposals presented.

I am chairman of the subcommittee of that full committee, and so my purpose today is to take many of the ideas that we heard that made the most sense, some of which people haven't been willing to advocate, and put them into the discussion. Again, because I do not want to be a Senator who 10 years from now somebody comes up to and says: How did you let farmers get a 20-percent pay cut because of $7, $8, $9 natural gas; how did you let millions of jobs in the chemical industry, the auto industry go overseas because of $7, $8, and $9 natural gas; how did you let prices of natural gas for home heating or cooling get so high that middle-income Americans can't even afford to heat their homes? I don't want to be that kind of Senator. So I am here today with a comprehensive proposal across the board even though some of the ideas will create that kind of controversy.

I have summarized in a few words the provisions of a 250-page piece of legislation.
We were ambushed in the United States on September 11, 2001. Even though you could argue that we might have known it was coming, terrorism wasn't new on September 11, 2001.

I remember being in a meeting with Prime Minister Rabin of Israel in 1994. At the end of a long day, I asked him: What is the greatest challenge threatening the world? And he said terrorism. That was many years before we were attacked. He was right. He was dead within a few months at the hands of terrorists within his own country. We didn't see the terrorism coming. We were ambushed, and we have paid a terrible price--in lives, in dollars. We have had to create whole new departments. We have had to interrupt the lives of thousand of national guardsmen and Army reservists and send them overseas, some to die and some to be wounded, because of terrorism. Maybe we couldn't have seen exactly that act coming, but we knew it was out there.

We are about to have another big surprise. That is to our standard of living. We are 5 to 6 percent of all the people in the world. Yet we produce a third of all the money in the world. We could wake up 10 years from now and that picture could be very changed. One way is if we lose our brainpower advantage. And we could lose it. Half of our new jobs have been created by science and technology since the end of World War II. And if we go through our budget balancing, deficit controlling exercise for the next 10 years and we don't double investments for the physical sciences and retake the lead in advanced computing, and if we don't see that we have plenty of graduate students in science and engineering, we are going to find most of the R&D will be done in other parts of the world. We are going to find most of the engineers who produce this brainpower that creates jobs in other parts of the world.

They are thinking in China, and they are thinking in India. There is no real good reason why the United States should make a third of all the money in the world every year with just 5 or 6 percent of the people, and we have so little. So they are keeping their bright people home. They are building up their universities. They are doing what we need to keep doing. That is one place we could get a big surprise.

But the other is in energy. We have taken energy for granted for a long time. I know I come from Tennessee. We have had the Tennessee Valley Authority. It has sat there since the 1930s, and it has produced reliable, low-cost electricity. Homes that have never been lit, barns that have never been lit, rural areas that have never been lit have enjoyed that. That is within my lifetime.

And then while I was Governor in the 1990s, I remember that one of the big attractions for Saturn and Nissan and the automobile industry coming into Tennessee was low-cost reliable power. But when I had a natural gas roundtable last fall in Tennessee, there was the president of Saturn, the president of Nissan, the head of the Tennessee Farm Bureau. There was the head of the University of Tennessee. They were all saying: We can't live in Tennessee on $7 natural gas. What do they do if they can't? It is very easy what they do. They don't have to have those jobs in Tennessee or South Carolina. They can move them to Germany, they can move them to Mexico, they can move them to Canada, and they are doing it every day.

And Tennessee Eastman in the upper part of east Tennessee, which we think is just like the great Smokey Mountains, has been there so long. There are 12,000 people there, real good incomes. What do they use to make chemicals there? They use natural gas.

How long are they going to be there? If we have $7 gas and they have $3 and $4 gas in other parts of the world, I am afraid they are not going to be there too long. And somebody is going to say to me: What did you do about it? At least my answer is I stood up on the floor of the Senate and said this is not the time to tweak our natural gas policy.

We do not need to sit around and wait for a big surprise on energy like we had a big surprise on September 11 on terrorism. We need an aggressive policy. We need a comprehensive policy. We need aggressive conservation. That is where we should start. We need aggressive alternative fuels. That means nuclear and that means coal gasification. We need aggressive research and development, whether it is hydrogen or whether it is solar, or whether it is methane gas hydrates. We need aggressive production. We have lots of gas in the United States. We should be using it if we have $7 gas.

For the time being, we need to create the terminals that will permit us to import enough liquefied natural gas to get that $7 price down to $6 or $5 or $4.

Mr. President, I thank Senator JOHNSON from South Dakota for joining me in this comprehensive aggressive approach. I thank Senator DOMENICI for taking the lead on an energy bill. I thank Senator BINGAMAN, who is the ranking Democrat on our committee, because I notice on our committee a greater sense of urgency, a greater sense of bipartisan cooperation on coming up with an energy bill this year. Our blue-collar workers, our farmers, our homeowners in Tennessee and across this country expect it from us.

Senator JOHNSON's and my contribution today is to introduce this comprehensive 250-page bill and to get on the table all the aggressive ideas we can think of that make sense about how to reduce the price of natural gas for workers, for farmers, and for homeowners. We hope it contributes to the discussion. We hope we find lots of these provisions in an ambitious energy bill.

I look forward to working with my colleagues, as I know Senator JOHNSON does, on a bipartisan basis to help lower the price of natural gas, keep our jobs, keep our homes cool and warm, and make it possible for farmers to make a living.

Natural gas prices are at record levels and the highest of any industrialized country. High natural gas prices are threatening our jobs, our farms, and hurting Americans who are trying to heat and cool their homes. Only an ambitious, comprehensive approach that both increases supply and controls demand can lower the price of natural gas and keep our growing economic recovery from becoming recent history.

This is not a question of tweaking our natural gas policy. It is time to aggressively revamp it. We need aggressive conservation, aggressive use of alternative fuels, aggressive research and development, aggressive production and for the time being, aggressive imports of liquefied natural gas.

Aggressive conservation, for example, means setting stronger appliance and equipment standards for natural gas efficiency so that a commercial air conditioner will cool the same while using less natural gas to do it.

Aggressive use of alternative fuels, for example, means fully commercializing coal gasification, starting with support for the deployment of six coal gasification plants by 2013. Coal gasification means that you burn coal to produce power but get the much lower pollution output of using natural gas.

Aggressive research and development includes investment in research of gas hydrates. Methane hydrates hold tremendous potential to provide abundant supplies of natural gas. Hydrates are ice-like solid structures consisting of water and gases, mainly methane, compressed to greater than normal densities. Coastal U.S. areas are rich in this resource. The U.S. is estimated to contain one-fourth of the world's supply.

Aggressive production means, among other changes, allowing states to selectively waive the federal moratoria on off-shore production and collect significant revenues from such production.

And aggressive importation of liquefied natural gas starts with giving the Federal Energy Regulatory Commission exclusive authority for siting and regulating LNG terminals, while still preserving states' authorities under the Coastal Zone Management Act and other acts.

In March 2002, Secretary of Energy Abraham requested that the National Petroleum Council undertake an extensive study on the natural gas crisis.

That council, a Federal advisory committee to the Secretary of Energy, produced in late 2003 one of the most extensive policy studies and recommendations on the natural gas crisis to date. Since that time, other prominent groups, such as the National Commission on Energy Policy, have also produced extensive studies on the natural gas crisis. In October 2004, I held a roundtable on the impact of soaring natural gas prices on Tennessee farmers and jobs. The Senate Energy Committee has held numerous hearings over the last 2 years and recently held an extensive natural gas
roundtable on the subject on January 24, 2005.

Over 100 proposals were submitted to the Senate Energy Committee on natural gas issues.

The conclusion of all of these forums has been clear.

High natural gas prices are threatening our country's economic competitiveness and costing us jobs. For example, high natural gas prices have been the equivalent of a 10 percent pay cut to American farmers.

The situation is urgent.

There are no silver bullets. We cannot conserve our way out of this problem, nor can we drill our way out of this problem. We will need to be aggressive on all fronts, in order to keep our industries competitive.

High natural gas costs are also tied to high oil prices. We need to address both natural gas and oil prices in order to lower natural gas costs.

Our country has contradictory policies on natural gas--on one hand, we encourage its use. On the other hand, we limit access to its supply. We need to amend our contradictory natural gas and environmental policies.

That's why I am introducing the ``Natural Gas Price Reduction Act.'' It is an aggressive, bold approach to tackle this issue. This 250-page legislation is an attempt to start a very difficult, but balanced, legislative discussion in the United States Senate on natural gas prices. I have taken the best ideas that I have heard in these roundtable discussions and from the various policy studies. I have met with hundreds of people in the past year discussing natural gas prices. This legislation is an attempt to be more aggressive on all areas impacting natural gas prices--energy efficiency and fuel diversity, natural gas supply, and improved infrastructure for importation of liquefied natural gas.

Half our Nation's increase in natural gas demand in the last decade has come from the power sector. So to conserve natural gas, one must not only reduce consumption of gas itself, but also of electricity. And, as I noted, since oil prices affect natural gas prices, conserving oil is also important. My bill addresses conservation in five ways.

The bill creates a 4-year national consumer education program on the urgent need for energy conservation. A statewide California effort to educate energy consumers resulted in savings of 10 percent at peak usage--the equivalent of five-and-a-half 1,000 Megawatt coal-powered power plants. My bill aims to take that effort to the entire nation.

The legislation sets higher appliance and equipment standards for natural gas efficiency. These standards have been negotiated between consumer and industry representatives and are codified in the bill. For example, the standards would require a new kitchen oven to produce the same heat while using less natural gas to do it. The American Council for an Energy-Efficient Economy estimates that these standards will reduce natural gas use by about 125 BCF in 2010 and 525 BCF in 2020. In addition these standards will reduce peak electric demand by about 33,500 MW in 2020, equivalent to 34 coal power plants of 1000 MW each, and will save consumers and businesses more than $60 billion.

The bill creates tax incentives and provides regulatory relief to enable manufacturing facilities to more easily produce their own power and steam from a single source--a process called cogeneration or CHP which saves money and energy while also reducing pollutants. A CHP system can produce the same electrical and thermal output at 75 percent fuel conversion efficiency as compared to 49 percent separate steam and power. This is a 50 percent gain in overall efficiency, resulting in a 35 percent fuel savings. Large industrial plants, such as International Paper, Alcoa and Eastman in my home State of Tennessee all use cogeneration in their manufacturing processes. More companies could do the same, and the bill particularly focuses on providing incentive for smaller cogeneration projects.

The Alexander bill provides incentive for public utilities to utilize their natural gas plants based on efficiency. The process of activating different power plants to meet demand during a given day is called ``dispatching.'' For example, on a hot summer day in Tennessee, the demand for electricity, for air conditioning, might be highest in the early afternoon, so then a power company would have to dispatch the most power plants to provide the energy. But during the cooler night, they might dispatch less plants since less power is needed. If power companies dispatched their most efficient plants first, this would save us a significant amount of natural gas. As you can see, the highest saving will be in the medium-term--2010-2015--but real savings continue for many years.

Our reliance on foreign oil is the silent elephant in the room when it comes to high natural gas prices. My legislation includes a provision that requires the President report to Congress annually on efforts to reduce U.S. dependence on imported petroleum 1.75 million barrels a day from projected 2013 levels, almost 10 percent. As I noted earlier, oil and gas are usually produced together; and, typically, there is a 6:1 ratio between natural gas and oil prices. Reducing dependence on foreign oil will help bring natural gas prices down.

Conservation of natural gas and related energy sources is critical to lowering prices and keeping our manufacturing and farming jobs here in the United States. But conservation alone is not enough. The second focus must be to develop alternative sources of energy. The ``Keep Manufacturing and Farming Jobs in the United States Act'' encourages the use of three alternative fuels:

The bill initiates a national coal gasification strategy. Eastman Chemical in Kingsport, TN, has been using coal gasification with a 95% availability factor for the past 20 years. Tampa Electric has successfully demonstrated large-scale coal gasification. It is time for this process to be more widely used. Coal gasification is a process whereby gas derived from burning coal is used as a source of energy or a raw material. When used in a power plant, coal gasification means that you burn coal but get the much lower pollution output of using natural gas. My legislation provides up to $2 billion in tax or other incentives to support the construction of six new coal gasification power plants. Similarly, the legislation provides up to $2 billion in assistance for industrial gasification projects. The bill also provides streamlined permitting for coal gasification facilities. Coal is an abundant resource in the United States; we should use it to produce clean energy and raw material for industrial applications.

Solar energy is another clean, alternative fuel source that could be developed further. Solar energy can be used directly for heating as well as to create electricity. To push an aggressive solar energy strategy, the Alexander legislation provides tax incentives for investment in solar power generation. Specifically, it provides businesses a tax credit for investing in geothermal or solar heating and/or power generation--10 percent heating, 25 percent for generating or displacing electricity.

My bill also contains language to invest in new technologies to use hydrogen to power fuel cell vehicles. The language in this bill mirrors language I offered in the last session of Congress on the Energy Bill that would have enacted President Bush's Hydrogenl/Fuel Cell Initiative. When I visited Japan last year, I visited a hydrogen fuel station--that looked much like a gas station--and saw fuel cell vehicles that range from small cars to SUVs. These cars not only allow us to use an alternative fuel source but are also great for the environment--their only byproduct is water vapor. The bill invests in research and development of technologies and infrastructure for 2 hydrogen and fuel cell vehicles.

Methane hydrates hold tremendous potential to provide abundant supplies of natural gas. Hydrates are ice-like solid structures consisting of water and gases--mainly methane--compressed to greater than normal densities. Coastal US areas are rich in this resource--the U.S. is estimated to contain one-fourth of the world's supply. My bill invests $200 million over the next 4 years in research for this promising new resource, a number consistent with recommendations from the National Commission on Energy Policy.

Conserving natural gas and using alternative fuels will take us a long way to reducing gas prices and keeping jobs here in the U.S., but we must also address the other side of the equation: supply. As Energy Committee members learned at our Natural Gas Roundtable, our current policy encourages consumption of natural gas while restricting the supply. We need to stop putting unnecessary restrictions on production and supply of natural gas, and my legislation does so by addressing production off-shore and in the Rocky Mountains as well as the importation of liquid natural gas from abroad.

We have plenty of natural gas here in the U.S., we just cannot get to it. There are large fields off the coasts, especially the Atlantic, and in the Rocky Mountains. There is no reason for natural gas prices here in the U.S. to be so high when we have so much available here--if only we would use it.

Today, there are two moratoria on our outer continental shelf, OCS--a congressional moratorium and a Presidential moratorium. The Atlantic Coast--40 miles off the coast is believed to be largely natural gas-prone. The Pacific Coast is believed--to be mainly oil-prone. The Gulf of Mexico is both. Today, when production is greater than 9 miles offshore, a State that has oil and gas production gets zero percent of the production revenues. This is radically different than onshore production; on Federal lands, States get 50 percent of the production revenues. Alaska gets 90 percent of the production revenues. In order to have a constructive dialogue on OCS production, the right framework needs to be established.

My legislation provides the Department of the Interior with the legal authority to issue natural gas only leases. Currently, Interior can only issue combination gas and oil leases. Since there is greater hesitation about the environmental impact of producing oil off-shore, issuing natural gas-only leases may alleviate some concerns.

It also instructs the Secretary of the Interior to draw the state boundary between Alabama and Florida regarding Lease 181--a disputed area off the coast of both states in the Gulf of Mexico in which Alabama may wish to permit production while Florida may not. The boundaries shall be drawn using established international law. Under my bill, portions of Lease 181, which are not in the state of Florida and greater than 30 miles off of the coast of Alabama, shall be leased by December 31, 2007. However, of those portions of Lease 181 that are in the State of Florida, the State of Florida may keep the moratoria. Leasing would not be allowed to interfere with U.S. military operations in the Gulf Coast.

Finally, under the bill, States will have the authority to request studies of natural gas resources off their coasts and be permitted to waive Federal moratoria on offshore production. The states shall not have the authority to lift the moratoria at National Marine Sanctuaries or National Wildlife Refuge Area. The State of Virginia recently engaged on this issue, and the state ought to have the ability to license off-shore production--especially if it is far enough off-shore that you cannot even see it from land. My bill also allows States to collect significant revenue from such production, and designates that a portion of revenues also go to a conservation royalty. The conservation royalty would be shared equally by the Federal land and water conservation fund, state land and water conservation fund and wildlife grants.

Importing liquefied natural gas--LNG--requires the infrastructure to receive it. LNG comes to the U.S. by ship, and terminals to receive these ships and unload LNG must be built and appropriate infrastructure developed to transport gas from those terminals to users across the country.

My bill streamlines the development of offshore liquefied natural gas terminals. The siting of LNG terminals has become a difficult issue since we all want cheaper natural gas, but no one seems to want an LNG terminal in ``their backyard.'' The Alexander legislation gives FERC clear authority for regulating liquid natural gas terminals, but, unlike a related House bill, still preserves States' authorities under the Coastal Zone Management Act and other acts. I hope this will provide some balance so that LNG terminals can be sited, but environmental concerns will play a significant role in choosing their sites. In an effort to speed the siting of pipelines that allow natural gas to reach all parts of the country, the bill also requires that FERC grant or deny a terminal or pipeline application within one year.

Our country is facing an energy crisis. We are consuming more and more electricity. Gasoline prices are poised to reach all time highs. The price of oil is up. And so, too, is the price of natural gas.

The bill I introduce today, the ``Natural Gas Price Reduction Act,'' addresses high natural gas prices. Natural gas is not just used for heating homes, a source of electricity, it is a raw material for industries, and it is an important component in fertilizers used by farmers. High natural gas prices have cost farmers a 10-percent pay cut and are shipping manufacturing and chemical jobs overseas. We can not afford to let this problem fester any longer.

Bold action is required, and that is what my legislation provides. This bill takes a comprehensive approach to addressing the problem by encouraging conservation, developing alternative fuel sources, and reducing roadblocks to the production and importation of natural gas. I urge my colleagues to support it.

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