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2004 Policy Positions
of the Southern Legislative Conference

3.  Policy Position on America’s Fundamental Energy Supply, Demand and Network Imbalances


BACKGROUND

America’s energy supply and demand curves are out of kilter, and our ability to provide energy where it is needed is becoming increasingly difficult while eroding jobs, raising prices and jeopardizing our security. 

The United States is the world’s largest producer, consumer and net importer of energy.  In 2003, the Energy Information Administration (EIA) reported that the United States used 1.1 billion tons of coal, 22 trillion cubic feet of natural gas, 3.9 billion kilowatt hours of electricity, and roughly 7 billion barrels of oil (or 20 million barrels a day).

The United States imported about 62 percent of its total gross oil used in 2003.  Oil demand is rising by 420,000 barrels a day, suggesting our national consumption will be up 2.1percent this year.  The number of operating refineries in the United States has been falling.  Rising consumer demand threatens to overwhelm America's collective refining capacity and, not surprisingly, gasoline prices are rising.  Although the United States has the world’s largest emergency (strategic) petroleum reserve, filled to 93 percent of its planned capacity, it can sustain the nation for roughly six months.  Natural gas wellhead prices are nearly 200 percent higher than in the 1990s, exceeding $6 per thousand cubic feet, prompting Federal Reserve Board Chairman Greenspan to caution that they threaten America’s economic recovery. 

Constricting supplies and ignoring demand - especially in a world destabilized by upheavals in the Middle East - will deliver predictable, inevitable and harsh economic effects for the South and the nation. 

RECOMMENDATION

The Southern Legislative Conference of The Council of State Governments urges the expeditious development of regulatory and fiscal policies that promote:

  • New technologies to efficiently acquire and deliver energy supplies to all users;
  • Greater conservation and efficiency for buildings and appliances;
  • Clean coal technologies and advanced recoveries of oil and gas;
  • Better energy networks (e.g., pipelines, terminals and ports);
  • Environmentally-sensitive access to additional domestic oil and gas reserves;
  • Renewables (e.g., solar, biomass, and wind energy) and promising new energy technologies (e.g., coal gasification);
  • Enhanced fuel flexibility capabilities (e.g., including new generation nuclear technology); and
  • Initiatives that respect and integrate the rigorous discipline of our market-based economy.

The Southern Legislative Conference of The Council of State Governments recommends that this policy position be forwarded to the president of the United States; leaders in the U. S. House of Representatives and U. S. Senate; members of the Southern congressional delegation; secretaries of the U. S. Departments of Energy and Interior; and Southern governors of the 16-member states of the Southern Legislative Conference.

 

 Adopted by the Southern Legislative Conference, August 18, 2004, Little Rock, Arkansas.

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