Tuesday, December 12, 2006

Com. Kelly: U.S. Needs LNG

SNL Interactive:

One of the biggest challenges facing energy policymakers and natural gas industry officials in the northeastern United States is securing enough gas supply to meet growing demand from both [Local Distribution Companies] and the power generation sector, [Federal Energy Regulatory Commission] Commissioner Suedeen Kelly said Dec. 8 during a panel discussion in New York City sponsored by the Center for Liquefied Natural Gas.

"Even if we increased the pipeline capacity, we're really talking about the supply," she said. "It's also no secret that if last winter had been a cold winter, there's a very high likelihood that there would have to have been rationing of gas in the Northeast. It was a very precarious situation." The Northeast, along with the entire nation, faced an unstable gas supply picture heading into the winter of 2005-2006 due to significant production damage caused by Hurricanes Katrina and Rita.

Kelly said it is unclear whether the public in the Northeast "understands how tight the gas situation really is. In the winter of 2004, we came very, very close to having to ration gas. There was a situation where it was a question of whether the gas should go into the heating or the electricity."