Report from the Public Issues Committee

Title: Report from the Public Issues Committee
Author: Larry Anna, Chairman, from Washington
Publication: The Outcrop, December 2004, p. 11

Yucca Mountain

The Yucca Mountain nuclear waste repository suffered a setback recently when a federal nuclear licensing panel ruled the DOE’s repository document database is incomplete. The Nuclear Regulatory Commission’s Atomic Safety and Licensing Board said that DOE failed to satisfy NRC regulations by not making publicly available substantial quantities of documentary material already in the Department’s possession. DOE and nuclear industry officials say they are confident the Department can complete its work on the additional materials in another month. But Nevada officials, whose challenge of the DOE document certification led to the ruling, are doubtful.

Methane Hydrates

Methane hydrates, a frozen mixture of methane and water, have gained notice as a possible energy source and a potential hazard. Federal efforts to lead and support research and development of methane hydrates resulted in the Methane Hydrate Research and Development Act of 2000. Under the Act, DOE is coordinating an effort explore possible solutions to methane hydrate hazards and determine their potential as an energy source. House Resources Committee Chairman Richard Pombo (R-CA) recently introduced H.R. 4515, which would provide energy companies with incentives to produce natural gas from methane hydrate resources in certain areas. The technology to exploit this resource has not been developed, although the bill provides incentive for companies that develop technologies and begin extraction before the year 2018.

Natural Gas Economics

Recently, the Senate Joint Economic Committee held a hearing on the long-term economics of natural gas. The Committee said that the rise in gas prices is due to an increasing dependence on gas-produced electricity and a decline in production from “mature” wells, as well as increased environmental restrictions. According to Dr. Yergin, Chairman of the Cambridge Energy Research Associates, “The higher and volatile gas prices are not a failure of markets. Rather, they are the result of a disappointing geological experience over the last several years, compounded by issues involving access to resources.” He attributes the spike in prices to a simple rise in demand without a concurrent rise in domestic production, resulting in an increased dependence on foreign LNG imports. Yergin urged the senators to move on legislation to increase drilling and domestic supply of gas. William Prindle, speaking for the American Council for an Energy-Efficient Economy (ACEEE), suggested that the long-term prospects for significant expansions in U.S. gas production are limited. He said, “U.S. natural gas dry production peaked in 1973, and in 2002 was 13% below that peak. Most low-cost fields have been drilled; recovery of additional gas from existing and new fields will come at a premium price. The average depletion rate for newly-opened natural gas fields in the continental U.S. is approaching 30%. This means that the gas industry must work harder each year just to offset depletion, let alone increase net production.”

Parts of this report were taken from AGI Government Affairs Research web site, http://www.agiweb.org/gap/issues/index.html.

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