MICHELE NORRIS, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Michele Norris.
And it looks like this coming winter is going to be costly. Natural gas is selling at record-high prices, and that means high heating bills for many people. A number of drilling rigs along the Gulf Coast were shut down by hurricanes, so the price may climb higher as the temperature falls. Today, Energy Secretary Samuel Bodman offered some tips on how consumers can save money on their heating bills. NPR's Scott Horsley has the story.
SCOTT HORSLEY reporting:
Natural gas prices were climbing even before Hurricanes Katrina and Rita hit the Gulf of Mexico, where nearly 20 percent of the nation's gas is produced. Energy analyst Phil Flynn of Alaron Trading in Chicago says for years demand for the clean-burning fuel has been growing steadily, both for heat and electricity, but the supply of natural gas has been relatively flat.
Mr. PHIL FLYNN (Alaron Trading): This is a situation with natural gas that we've been warning about for some time. And the reason, of course, is our US policy has been to encourage the use of natural gas, but discourage the production thereof. It's been a perfect case of wanting your cake and eat it, too.
HORSLEY: Then came the hurricanes. More than a month after Katrina and more than a week after Rita, nearly 80 percent of natural gas drilling in the Gulf remains shut down. That's pushed prices on the futures market to all-time highs and prompted this warning today from Energy Secretary Samuel Bodman.
Secretary SAMUEL BODMAN (Energy Department): Because of the increasing demand for energy and the damage that has been inflicted on America's energy infrastructure, Americans can expect to see higher energy costs, higher costs to heat and power our homes, our schools as well as our places of business.
HORSLEY: More than half the homes in America are heated with natural gas, and those heating costs are estimated to be 47 percent higher this year than last, with some parts of the country seeing even bigger jumps. With that in mind, the Energy secretary kicked off a consumer education campaign today, along with the Alliance to Save Energy, a Washington non-profit that promotes energy efficiency. Alliance President Kateri Callahan recommends that people check their insulation, seal up air leaks and turn down the thermostat, especially when nobody's home.
Ms. KATERI CALLAHAN (President, Alliance to Save Energy): The best way to protect against the rising energy costs is by using energy-efficient technologies and what we like to call smart energy practices. Consumers may not be able to control energy prices, but they can take control of their own energy costs through smart energy use, and they can help to control their monthly bills.
HORSLEY: The call for energy savings is a departure for the Bush administration, which has been slow to adopt efficiency standards and generally dismissed conservation as little more than a personal virtue. Secretary Bodman stressed that the hurricanes have created an unusual situation. He took pains to distance the administration's approach from that of former President Jimmy Carter, who famously donned a cardigan for his own fireside conservation appeal during the late 1970s.
Secretary BODMAN: The situation that we are facing is a very different one than was faced in the past by President Carter's administration. The genesis of this has come about because of the significant damage that has been done to the infrastructure of this country in terms of his energy infrastructure.
HORSLEY: Over time, those Gulf drilling platforms will be repaired, but Alaron's Phil Flynn says eventually the US needs to expand its supply of natural gas, either on domestic land that's currently off limits to drilling or through greater imports of liquid natural gas.
Mr. FLYNN: Either we're going to have to allow a lot more drilling here in the US or, if we want to continue to use natural gas in this country, we have to find ways to import it. And if we don't, we're really putting ourself at a competitive disadvantage with the rest of the world. We really are.
HORSLEY: New import terminals for natural gas are on the drawing board, but they won't help with this winter's energy crunch. In the short run, natural gas consumers have little choice but to pay more and use less. Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.
