STATEMENT FOR THE RECORD - MICHAEL C. BURGESS

ENERGY AND AIR QUALITY HEARING

NATURAL GAS AND HEATING OIL FOR AMERICAN HOMES

November 2, 2005

First, I want to thank Chairman Barton for convening this hearing today.

I think today's hearing will do a good job of breaking down the natural gas and home heating oil supply chains. We did something similar following Hurricane's Katrina and Rita to break down the supply chain for gasoline.

As we discussed during our hearing last week, the EIA expects home heating costs to almost double this year when compared to last year. The EIA Short-Term Energy Outlook predicts that consumers who heat their homes using primarily natural gas can expect to pay an additional $350 this winter and those who use heating oil can expect to pay an additional $378.

This Committee and this Congress have already taken some steps to help address our home heating needs in the future.

When President Bush signed the Energy Policy Act of 2005 into law, it included several important provisions intended to boost supply and hold down costs for consumers.

It incentivized domestic production of both ultra-deep gas wells in the Gulf of Mexico and on-shore marginal wells; streamlined permitting for natural gas projects on federal lands; and clarified the federal government’s role in siting LNG facilities to help reduce red-tape. The Energy Policy Act also provided loan guarantees for the construction of an Alaska Natural gas Pipeline.

When the House passed the GAS Act a few weeks ago, we sunset these provisions to spur companies to action. At least one company in my neck of the woods is listening -

Just last week, the Challenger Capital Group in Dallas announced that it will take the lead in arranging financing for the pipeline. The project is expected to cost between $13 billion and $20 billion when it's finished in 2012 and provide 4.5 Bcf per day.

I'd like to ask unanimous consent to insert an article by the Dallas Morning News on this subject into the record.

Hurricanes Katrina, Rita, and Wilma all have had an impact on the availability of supply this winter, but the underlying reason for the high prices is that in the U.S., demand far outstrips supply. We have restricted exploration off of over 2/3 of our coasts, placed thousands of acres of federal lands off-limits, and then prevented the siting of LNG projects and refineries in those areas that could most use them.

We are in this situation, Mr. Chairman, because some members of this panel have consistently opposed measures that would increase supply of both natural gas and oil.

I have a hard time understanding how these members can be opposed to policies that will bring relief to their constituents from high heating costs.

We've seen that in their single-synapse opposition limited exploration in ANWR and their consistent opposition to projects that would directly benefit their constituents.

Some examples include the Islander East gas transmission pipeline project from Southern Connecticut across Long Island Sound to western Long Island and New York City and the Weaver’s Cove LNG terminal project in Fall River, Mass.

I can assure you that none of my constituents would directly benefit from these projects. It is the constituents who are represented by those who have most staunchly opposed energy infrastructure development that would stand to gain the most.

We are lucky in North Texas to be geologically blessed with the Barnet Shale to provide us with natural gas. In 2004 the Barnett Shale produced over 370 Bcf and total reserves are estimated to be over 500 Trillion Cubic Feet.

We have all the natural gas that we need in Texas. In fact, we export it up to our friends in the Northeast. North Texas is clearly playing its role in providing the country with safe and secure domestic energy.

It is time for those who would stand in the way of increasing energy supply to realize that it is their obstructionist tactics that are causing the high heating costs that the EIA is predicting for this winter.

So in conclusion, Mr. Chairman, I thank the panelists for appearing before us today and look forward to learning more about the supply chain.