The drumbeat of concerns regarding natural gas continued last week, with The National Petrochemical & Refiners Association warning a U.S. House of Representatives Subcommittee of a shortfall in supply meeting demand, and of contradictory public policy that is hurting efforts to balance the dueling dynamics. NPRA said there are many challenges for the nation, and lawmakers should look at policies that promote consumption, yet limit supply, as a way to remedy the growing deficit.

“NPRA believes that there is an urgent need to harmonize the nation’s energy and environmental policies, and that any national energy plan must include traditional supply and market-oriented policies for all fossil fuels, including natural gas,” said the association in written testimony for an oversight hearing on the domestic natural gas supply shortage filed with the House Subcommittee on Energy and Mineral Resources.

According to industry analysts, under current conditions it will take storage of 12.7 billion cubic feet per day for the remainder of the summer season to return to storage levels entering the previous winter of 2002-2003. Compared to the previous five-year average fill rate of 9.2 Bcf, the nation currently faces a 3.5 Bcf per day shortfall of natural gas as it enters the winter of 2003-2004.

NPRA said that the current natural gas shortfall is not a resource problem, but, lacking changes to current policies, it could become even more serious.

“NPRA believes the current policy of limiting natural gas supply while encouraging gas use because of its environmental benefits – mostly in the generation of electricity and as industrial plant fuel– has resulted in supply concerns and price volatility.”

In the short term, it may be hard to make significant changes on the supply-side of the equation. Efforts can be made, however, to help mitigate the demand side of the problem by encouraging conservation and energy efficiency.

“If natural gas supplies become extremely tight this summer or early fall, the federal and local government should consider allowing facilities to switch to other fuel alternatives in order to conserve natural gas supplies,” NPRA said.