As the U.S. House of Representatives’ Subcommittee on Energy and Environment examines the carbon-emission allowance-allocation policies contained in the American Clean Energy and Security Act (ACES), I am pleased to offer the following thoughts of America’s Natural Gas Alliance (ANGA).

ANGA is a new organization representing 26 of the nation’s leading independent natural gas exploration and production companies. ANGA members are dedicated to increasing the appreciation of the environmental, economic and national security benefits of clean, abundant, dependable and efficient American natural gas.

ANGA believes any policy to reduce greenhouse-gas (GHG) emissions should provide incentives to reach the lowest, most cost-effective carbon emissions possible. GHG emissions resulting from the combustion of natural gas are the lowest of any fossil fuel. In fact, natural gas emits nearly 50% fewer emissions than coal. As such, policies that promote a reduction of GHG emissions should encourage, not inhibit, the production and use of natural gas.

Natural gas producers are concerned, however, that provisions of ACES, as approved by the committee, could discourage use of natural gas. Specifically, the allowance-allocation formula in the bill could eliminate the incentive to burn fuels with a lower carbon content for power generation.

The bill would initially distribute, for free, 50% of utility-sector allowances based on the utility’s historic average annual CO2 emissions from retail electricity sales. That provides a disincentive for utilities to purchase the electricity they sell from generators that use cleaner fuels, such as natural gas. Natural gas producers believe allowance allocations should, instead, reward utilities that acquire their power from fossil-fuel generators that have the lowest CO2 emissions per megawatt hour and are also the most efficient—that require the least amount of energy to produce electricity.

The allocation policy for allowances should complement the bill’s environmental goals, not cancel out the distinction between high- and low-carbon fossil fuels for generating electricity. Such an approach seems counterproductive.

Expanded use of natural gas is an important way to support GHG-emission reductions. According to the Energy Information Administration, if the U.S. increased use of its existing natural-gas-fired power plants from 26% to 50%, it would reduce America’s annual carbon emissions by 326 million tons. Moreover, utilizing North America’s abundant supply of natural gas—the U.S. holds more than a 100-year supply of natural gas—will help to create thousands of jobs and reduce our growing dependence on foreign oil.

As Congress continues to address our nation’s most challenging energy and environmental issues, consider the role that abundant, reliable, North American natural gas can play in securing a clean energy future.

--Rod Lowman

About the author: Rod Lowman is president of America’s Natural Gas Alliance, which consists of 26 U.S. natural gas producers, representing more than 40% of U.S. gas supply and producing more than 9 trillion cubic feet of gas per year. Lowman and ANGA can be reached at 204-944-1930 and at info@anga.us. Click for a PDF (angaletterjune809) of Lowman’s June 8 letter to U.S. Representatives Henry Waxman, chairman, Committee on Energy and Commerce; Joe Barton, ranking member, Committee on Energy and Commerce; Edward Markey, chairman, Subcommittee on Energy and Environment/Committee on Energy and Commerce; and Fred Upton, ranking member, Subcommittee on Energy and Environment/Committee on Energy and Commerce. More information on ANGA is at www.ANGA.us.