Greenspan alarmed at gas crisis

Greenspan alarmed at gas crisis

By Joe Baker, Senior Editor

U.S. officials are belatedly becoming alarmed over critical levels of natural gas; there may not be enough to meet this summer’s demands.

Federal Reserve Chairman Alan Greenspan went before a congressional committee Tuesday to outline what this looming shortage means for the domestic economy.

Spencer Abraham, U.S. energy secretary, scheduled an emergency meeting of the National Petroleum Council this month. He is making an urgent appeal to the administration to deal with the problem.

Abraham said the U.S. had 696 billion cubic feet of gas in storage at the end of March, the smallest amount since 1976 when record-keeping began. By April 11 levels slipped to 623 billion cubic feet.

“Storage has increased since that time, but it is still only half the level of a year ago and 42 percent below the previous five-year average,” Abraham said.

Financial Times reported gas prices have risen as much as 700 percent in the past three years. That has prompted industries such as steel and petrochemicals, to urge the government to address what they call “the other energy crisis.” It is so named because it is less well known than the domestic oil shortage.

Greg Lebedev, president of the American Chemistry Council, which includes the largest users of natural gas, commented: “No company, no industry, no consumer can absorb a threefold increase in major raw material prices and continue to compete in the global marketplace.”

The crisis built after the federal government encouraged the use of natural gas but refused to open about 40 percent of potential gas reserves on federal lands.

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