President's Budget Fuels Natural Gas Crisis

February 2, 2004

Media Contact(s):

Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

WASHINGTON, D.C. — The American Council for an Energy-Efficient Economy (ACEEE) today expressed deep disappointment in the U.S. Department of Energy's (DOE) funding cuts for energy efficiency. Core efficiency research and development funding, outside of grant programs, fell by $88 million, or 14% compared to the FY 2004 level.

"The DOE budget mocks a commitment to energy efficiency as the nation's only near-term response to the natural gas crisis," said ACEEE Policy Director Bill Prindle. "The Secretary made commitments last year to use energy efficiency as the first line of defense against high gas prices. But this budget is a retreat from that commitment."

ACEEE research has shown that small savings in natural gas consumption, using proven energy efficiency technologies and policies, can have a major softening effect on natural gas prices. The study, found at http://www.aceee.org/sector/national-policyefnatgas-study.htm, shows that over the next one to five years, a 2% savings in gas usage would cut wholesale prices by 20% and would return over $100 billion in savings to the economy.

Just last week, 11 CEOs of major manufacturing companies sent a letter to the President and Congressional leaders, calling for serious new energy efficiency efforts to address the unfolding natural gas crisis, which has destroyed thousands of American jobs and burdened the economic recovery with over $100 billion in added costs.

The manufacturers aren't the first to identify energy efficiency as a key to battling the upward spiral of natural gas prices. At the Natural Gas Summit held in June 2003, Secretary Abraham highlighted energy efficiency as a key to solving the natural gas crisis in the near-term. In September, the National Petroleum Council's landmark report on the future of natural gas in the United States also called for increased use of energy efficiency to keep natural gas prices manageable.

Although the energy bill now in Congress faces uncertain prospects, one of its major provisions would increase authorizations for energy efficiency by 50% over five years. The manufacturers agree with ACEEE that this bill will do little in the near-term to address the natural gas crisis. "Whether or not the bill passes, the DOE budget is the Administration's best available tool to use in responding to the natural gas crisis," added Prindle. "Congress needs to raise this request if we are going to find real solutions to the natural gas problem." (See ACEEE's assessment of energy legislation at http://aceee.org/energy/legsttus.htm).