Remember the Energy Crisis?
N E W Y O R K, Aug. 24 -- Remember the energy crisis?
In his first few months in office, President Bush seemed preoccupied with the supposed power shortage in the United States, using it as a rationale for a string of high-profile and controversial decisions.
Among the most prominent administration moves: the reversal of Bush's campaign pledge to regulate carbon dioxide emissions from power plants; rejection of the Kyoto treaty intended to combat global warming by reducing greenhouse gases; a proposal to drill in Alaska's Arctic National Wildlife Refuge; encouraging new nuclear power plants; and proposing to eliminate "overly burdensome" energy production and delivery regulations.
But three months after Bush and Vice President Dick Cheney released the administration's broad energy report in May and a couple weeks before Congress starts its new session, the energy supply situation in the United States has shifted. The country is further away from crisis territory — if it were ever there in the first place.
Natural Gas Prices Lower, Oil Remaining the Same
For instance, according to a report released by the Department of Energy earlier this month, U.S. natural gas prices figure to be 30 percent lower in the third quarter this year than in 2000 — and heating bills, starting in the fall, could be 40 percent lower.
"If these projections are correct, gas consumers can expect to see considerably smaller bills this winter," states the DOE's forecast. About 30 percent of the nation's electric power plants are fired by natural gas, meaning the reduced costs could be passed along to consumers.
"We'll almost surely enter the winter season with more gas in storage than we did last year," says Chris McGill, managing director of policy analysis for the American Gas Association (AGA), an industry group in Washington.
The outlook is less certain when it comes to the U.S. oil supply. First, the good news: OPEC's prices have been steady in recent months, averaging around $24 per barrel. Now the bad: On July 25, the Organization of the Petroleum Exporting Countries decided to cut production by a million barrels a day, starting Sept. 1. Additionally, domestic reserves have declined since July. Those factors could raise prices a little, although no one is expecting them to get much worse.
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