Wall Street Journal, 2/24/09
Natural-Gas Producers Launch Lobbying Group
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.
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Producers and their investors are increasingly concerned that the market will remain oversupplied even when the economy recovers.
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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.
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“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.