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With Little Clout, Natural Gas Lobby Strikes Out

A drilling crew move a section of steel pipe at a natural gas well site near Bradford, Pennsylvania. (Getty Images)

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There is almost a century's worth of natural gas in shale rock formations all over the country, enough to make a significant change in the debate about America's energy future. But as Congress moves toward writing a new national energy policy, natural-gas lobbyists have been mostly missing in action.

"Natural gas is the cleanest of the fossil fuels," says Christopher Flavin, president of the Worldwatch Institute, a think tank that does environmental research. "I think nobody's ever argued that. The big thing, of course, that's changed is that shale gas has now opened up as this enormous resource."

Modern Shale Gas Development In The United States: A Primer by the U.S. Department of Energy (PDF)

The American Clean Skies Foundation is a nonprofit devoted to educating the public about natural gas and its relation to renewable energy and energy efficiency.

The Ground Water Protection Council monitors regulation of natural gas drilling and production in the U.S.

Worldwatch Institute, an independent research group based in Washington, D.C., conducts research about energy and climate change.

Natural gas emits half the carbon of coal. Flavin and some other top environmentalists want Congress to embrace natural gas as a transition fuel, to move the country away from coal and toward clean fuels that haven't yet come on the market.

A Changing Landscape?

"I'm actually hopeful that we will see a change in the whole landscape of the politics around natural gas as a result," Flavin says.

But the change hasn't come yet on Capitol Hill. When the House passed its climate-change bill in June, the big winner was coal. The measure — called Waxman-Markey for its two lead sponsors, Reps. Henry Waxman (D-CA) and Edward Markey (D-MA) — would give electric utilities longer deadlines to keep burning coal, and would commit millions of federal dollars to research new technologies that would reduce coal's carbon emissions.

Waxman-Markey had no such incentives for natural gas, and those in the industry are frustrated. That's because about a century's worth of natural gas is available in shale formations all over the country.

"I know I had many conversations with representatives, trying to tell the natural gas story," says Steven Malcolm, CEO of Williams Companies, a big independent producer of natural gas. "I don't know why we didn't fare better. I heard one representative say there wasn't a critical mass of natural gas represented."

Soon after Waxman-Markey passed, leaders of the natural gas industry met at an annual conference in Denver — where former Sen. Tim Wirth chewed them out.

Wirth used to represent Colorado and has long been an advocate of natural gas. Since 1998, he has been president of the United Nations Foundation, a nonprofit organization that works on climate change.

Wirth told the industry leaders that on Waxman-Markey, they blew it. "Every industry was deeply engaged, except one: Yours," he said. "The natural gas industry, the industry with the most to gain and the most to offer, was not at the bargaining table."

It's an especially harsh verdict because the Waxman-Markey bill was drafted only after high-profile negotiations with proponents of coal, nuclear, oil, wind, solar and other energy sources.

What Kept Natural Gas Out?

Three things kept natural gas away from that table.

First of all: politics. The industry likes Republicans and historically has funneled most of its campaign contributions to the GOP. But now, of course, it's the Democrats who control Congress.

The second problem: The natural gas industry has a lot of global-warming skeptics. Fred Julander, president of Julander Energy Co. in Denver, isn't one of them, but he understands their perspective.

"They want to be honest brokers," Julander says. "They don't want to take advantage of something they don't believe in, even if it improves their bottom line if it's based on a falsehood — which is, I mean, is in some ways commendable, but in some ways is short-sighted."

And the industry's third problem is size. It's made up mostly of medium to small companies that can't compete on Capitol Hill.

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Transcript

LINDA WERTHEIMER, host:

We have been talking this week about an energy source that's largely been overlooked. Supporters of natural gas think it could carry a lot more of America's energy load. Energy firms can now extract gas from underground rocks - that's the scientific reality. The political reality is something else. Proponents of natural gas had little influence over a climate change bill passed by the House.

STEVE INSKEEP, host:

NPR's Tom Gjelten and Peter Overby have been covering this story. And this morning Peter explains why the natural gas lobby lost out.

PETER OVERBY: Natural gas emits half the carbon of coal. So, some environmentalists say it would be faster and cheaper to switch from coal to gas as fast as we can and then go from gas to clean fuels as they come online.

Christopher Flavin is president of the Worldwatch Institute, a think-tank that does environmental research.

Mr. CHRISTOPHER FLAVIN (President, Worldwatch Institute): Natural gas is the cleanest of the fossil fuels - I think nobody's ever argued that. The big thing, of course, that's changed is that shale gas has now opened up as this enormous resource. And I'm actually hopeful that we will see a change in the whole landscape of the politics around natural gas as a result.

OVERBY: Maybe the change will come, but not yet, not on Capitol Hill. In the House climate change bill, passed in June, the big winner was coal. The bill's called Waxman-Markey, for sponsors Henry Waxman and Edward Markey. And Waxman-Markey would give coal's customers - electric utilities - more time and money to keep burning coal. Natural gas would get no such incentives.

Mr. STEVE MALCOLM (CEO, Williams Companies): I know I had many conversations with representatives, trying to tell the natural gas story.

OVERBY: Steve Malcolm is CEO of the Williams Companies, a big independent producer of natural gas.

Mr. MALCOLM: I don't know why we didn't fare better. I heard one representative say there wasn't a critical mass of natural gas represented.

OVERBY: Soon after Waxman-Markey passed, natural gas leaders held a conference in Denver, where former Senator Tim Wirth chewed them out. He's head of the United Nations Foundation, a nonprofit organization that works on climate change. Wirth said that on Waxman-Markey, the natural gas industry just blew it.

Mr. TIM WIRTH (Former Democratic Senator, Colorado): Every major industry was deeply engaged, except one - yours. The natural gas industry, the industry with the most to gain and the most to offer, was not at the bargaining table.

OVERBY: Three things kept natural gas away from that table. First of all, politics. The industry likes Republicans and generally gives them money. But of course it's the Democrats who run Congress. The second problem: the natural gas industry has lots of global warming skeptics.

Fred Julander, the head of Julander Energy in Colorado, isn't one of them, but he understands their perspective.

Mr. FRED JULANDER (Julander Energy): They want to be honest brokers. They don't want to take advantage of something they don't believe in, even if it improves their bottom line if it's based on a falsehood — which is, I mean, is in some ways commendable, but in some ways is short-sighted.

OVERBY: And the third problem: size. The industry is mostly medium to small companies - just too small to compete on Capitol Hill against the big coal and utility companies.

There are natural gas trade associations in D.C. - five of them - but they didn't have much effect on Waxman-Markey either. So as the bill took shape without them, some of the gas companies created yet another group. It's called America's Natural Gas Alliance. The CEO is a veteran Washington lobbyist, Rod Lowman.

Mr. ROD LOWMAN (CEO, America's Natural Gas Alliance): We will acknowledge that we missed the boat with Waxman-Markey. We were just formed in March of this year. A lot of the backroom work, the lobbying, the deals that are being cut, have been cut by that time.

OVERBY: The coal industry says natural gas's promises of abundant supplies and stable prices are unsustainable. Joe Lucas at the American Coalition for Clean Coal Electricity adds this little zinger…

Mr. JOE LUCAS (American Coalition for Clean Electricity): Natural gas is a great fuel - I've always said that. It's such a great fuel that it's almost a shame to use it to generate electricity in this country, 'cause we use natural gas for other things, unlike coal.

OVERBY: So, Steve, that jab tells you something about how the big coal industry used natural gas right now. And I'll give you one data point for comparison also: in the first half of 2009, the Natural Gas Alliance spent $310,000 on lobbying; and in the first half of 2009, the coal and utilities industries spent $78 million.

INSKEEP: Wow. NPR's Peter Overby is in our studios here along with NPR's Tom Gjelten. They've been reporting on natural gas this week together. And Peter, when you look at the numbers that you just gave, how can this industry hope to compete when money translates into influence in Washington?

OVERBY: Well, they're revving up more quickly than you might expect even. They just put out a study of the industry's impact on the economy and on jobs. And this is the first time anyone's looked at natural gas industry as an entity in that context. They're starting to run ads. But the fact is they're always going to be outspent. Natural gas is a small industry compared to the coal industry. Coal has a lot of allies and natural gas hasn't built those networks.

INSKEEP: And I also think about the electoral map. If you look at the map of the United States, there are key political states - West Virginia, Virginia, Pennsylvania, Kentucky - where coal is presumed to be very powerful. So Tom Gjelten, if natural gas doesn't have that kind of clout, is it going to get the kind of support that it needs to grow as an energy source?

TOM GJELTEN: Well, what we're talking about here, Steve, are basically government policies. What government policies do is they create incentives and disincentives to use something. In this case, if those incentives favor coal over natural gas, then obviously that's going to make a difference.

But really mainly at the margins, because in the end if natural gas is to expand and coal is to decline, it will be because of market forces. And natural gas is cheaper, and as Peter made clear, it's cleaner. So the forces over time - this is what natural gas advocates believe - will prevail.

INSKEEP: If there's demand, it will be used.

GJELTEN: Exactly.

OVERBY: But Steve, here's the other thing: When Congress comes it, it is retilting the playing field away from natural gas toward coal. Here's an example of that: You were talking about all the states that lawmakers who are backing coal interests. There's a coal caucus in Congress and, you know, it's well known, it's powerful, it's been there a long time. There is no natural gas caucus.

INSKEEP: Granting that a lot of this is about politics, let's talk about the facts. What are the downsides of natural gas, even if it is an American-produced fuel?

GJELTEN: Well, remember, Steve, from one our earlier pieces, to get gas out of shale rock you've got to fracture the rock. They do this by blasting water into it. The concern is that that might cause some contamination of drinking water supplies. There are chemicals that are used in that water.

Now, the natural gas people say that that can be dealt with by tight regulation, very close monitoring of the pipe itself and the disposal of the wastewater, but that is a concern.

INSKEEP: And once again, even though it's cleaner than oil, it is a fossil fuel.

GJELTEN: It does produce greenhouse gas emissions, you're right. However, it produces fewer, as Peter said. And the other point is that the renewable energy sources that don't produce greenhouse gases are still in the future. So what is needed, environmentalists say, is a transition fuel, and natural gas might be an ideal transition fuel as we move toward renewable energy sources.

INSKEEP: Tom, thanks very much.

GJELTEN: Thank you, Steve.

INSKEEP: NPR's Tom Gjelten. And Peter Overby - Peter, thanks to you.

OVERBY: Glad to be here.

INSKEEP: And you could find charts and maps on natural gas and join the discussion on this issue by commenting at NPR.org.

This is NPR News. Transcript provided by NPR, Copyright NPR.

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