U.S. natural gas costs are extremely high and uncompetitive on a global basis. The price of U.S. gas is the highest and most volatile in the industrial world, and remains three times what it was just a few years ago. This is not only troublesome for the growing number of homeowners that rely on gas, but undermines the global competitiveness of American industry. U.S. manufacturers, farmers and even the ethanol industry are all reliant on gas as a feedstock.
Government action is needed to close the supply-demand gap projected through 2025.
Government Policies Drive Demand While Limiting Supply
Dow maintains that the root cause of the U.S. natural gas crisis is the fundamental imbalance between government policies that promote the use of natural gas and drive up demand, and government policies that restrict access to the nation's natural gas supply. The clean burning properties and lower CO2 emissions per Btu of natural gas have made it the fuel of choice for new electric power generation. Meanwhile, domestic natural gas production is in decline, and promising new sources of supply are off limits by congressional and/or presidential moratoria.
Legislative Principles for a Sound Natural Gas Policy
Our nation needs a comprehensive and balanced energy policy, focused on three key elements:
- Aggressive energy efficiency and conservation;
- Greater fuel diversity, including practical renewables, advanced nuclear and clean coal technologies;
- Supply expansion — more environmentally sound onshore and offshore U.S. gas production, the Alaska Pipeline, and liquefied natural gas (LNG) infrastructure improvement, including more storage and transmission pipelines.
Legislative Principles for Sound Climate Change Policy
At Dow, we believe it is imperative that we take action now to reduce the impact of fossil fuels, and to help slow, stop, and reverse the growth of greenhouse gas emissions. To do this and foster technology solutions to combat climate change, Congress should:
- Enact cap-and-trade legislation. This market-based approach is the best way to put a price on carbon and ensure that emissions targets are met. We support a cap-and-trade system with short- and mid-term GHG reduction targets.
- Give credit for early action. Efforts to reduce energy use and greenhouse gas in advance of a formal climate policy should be recognized and rewarded.
- Allocate allowances fairly. Allocation of emissions allowances has the potential to decide winners and losers. Dow supports allocation based on early action and done so in a way that rewards companies for addressing energy efficiency through practices and products.
- Establish a national research program. Lawmakers should accelerate federal research, development and deployment of clean energy technologies and provide incentives for private RD&D. In addition, dedicate any revenue generated from the sale/auctioning of allowances to fund climate friendly projects.
- Ensure a global approach. U.S. policy must that create incentives and encourage actions by other countries, including large emitting economies in the developing world, to implement GHG emission reduction strategies, as ultimately the solution must be addressed globally.
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