Lancaster Farming, Saturday, Oct 4, 1975
74
Regulations blamed for natural gas shortage
By Bill Brier
Director of
Energy Resources
National Council of
Fanner Cooperatives
This winter several areas
of the county will come face
to face with the reality that
we have a severe natural gas
shortage in this country.
The impact of this reality
will be particularly great in
the Mid-Antlantic States
from southern New York to
South Carolina, and in Ohio,
Kentucky and West Virginia.
Spot shortages are also
expected in Missouri, lowa
and California.
Some industries in the
affected states will probably
have to shut down produc
tion, and the unemployment
rolls will grow as a result.
And the sad point is, this
crisis could be reduced to a
great extent by changing
current government policies
regulating the natural gas
industry.
Much of the shortage
situation in natural gas can
be traced to a 1954 Supreme
Court decision which
essentially held that all
independent gas producers
Get more heat
for your money
with a new
Agway
oil burner
A run-down oil burner wastes fuel every
minute that it's operating. If your present
burner won't hold a tune or needs frequent
repair, you can probably save money by
investing now in a new Agway burner.
The model 40J will modernize your heating
system, conserve oil, and deliver solid,
dependable comfort all season long
The price is just $199.95 plus tax, and that
includes installation. Once your new Agway
burner is installed, you'll also benefit from
our money-saving service program.
You're already paying good money for heat
We think you ought to get all that you pay for.
Call Agway Petroleum
$199«
plus tax
for a model 40j
Were bringing down
the cost of winter.
AGWAY PETROLEUM CORP.
BOX 1197, DILLERVILLE ROAD. LANCASTER. PA
PHONE 397 4954
.GWAY PETROLEUM (agway)
What does all this mean for agriculture
would have their wellhead
prices regulated by the
Federal Power Commission
(FPC).
Since then, the FPC has
struggled to regulate some
3,700 gas producers.
Generally, this was done by
equating protection of the
public interest with low
natural gas prices for con
sumers.
The FPC currently holds
interstate market prices at
roughly 50 cents per 1000
cubic feet of gas, while non
regulated intrastate prices
are running two to four times
that amount. These prices
have provided interstate
producers with little in
centive for additional ex
ploration or development of
reserves.
Yet, in contrast to other
energy sources, the United
States is still reasonably self
sufficient in natural gas
supplies. The U.S.
Geological Survey has
forecasted that, a current
production rates, there are
at least 63 and possibly 100
years of natural gas supplies
yet to be discovered in this
country.
To unlock these un
discovered domestic
reserves will require a
monumental commitment
from the gas industry in
volving billions of dollars.
It will take an average of
22 trillion cubic feet of new
reserves annually Just to
maintain current production
levels. This amount was
reached only once - in 1956.
To achieve this result will
require a 250 percent in
crease over the discovery
rate between 1968 and 1972.
What does all this mean to
agriculture?
While natural gas as a
direct energy source is used
on a limited basis on farms
and ranches, it is a critical
source of LP gas and
anhydrous ammonia, the
primary source for nitrogen
fertilizer.
LP gas, primarily
propane, provides 15 percent
of all energy consumed on
farm. This includes such on
farm uses as family living
(primarily space heating
and food preparation),
irrigation, crop drying,
tobacco curing and space
heating for certain livestock
and poultry production
areas.
Of direct importance to
farmers is the fact that
natural gas shortages could
reduce propane production
by as much as 8 percent over
the next year.
In addition, the cabinet
level task force on fertilizer
has estimated that natural
gas curtailments could
reduce anhydrous ammonia
production by 680,000 tons.
Gas shortages could also
affect the pertochemical
industry, hurting supplies of
herbicides, pesticides and
plastic wrappings used in
food processing. Essential
food processing for which
there is no acceptable
substitute, such as milk
drying, could be limited.
Several bills pending
before Congress are
designed to help relieve
shorterm interstate shor
tages. One, S. 2330, would
permit interstate pipelines to
make emergency purchases
of natural gas at unregulated
prices from the intrastate
market where surpluses now
exist.
Other legislation would
allocate natural gas among
interstate pipelines to permit
COMMERCIAL and AGRICULTURAL BUILDINGS
WE OFFER COMPLETE ERECTION ON ANY SIZE OR STYLE BUILDING
For Further Information On Our
STEEL BUILDINGS And GRAIN STORAGE
....Feel Free To Mail Attached Coupon
Or Call Today! No Obligation.
SPECIAL TRADE-IN
9 N FORD
$775.00
a more equitable sharing of
the shortage.
However, it’s important to
remember that none of the
emergency legislation will
generate the production of
more gas. It will only
allocate existing gas. So, it’s
essential that long-term
legislation be developed to
encourage maximum ex
ploration and development
of domestic natural gas
supplies.
After considerable study,
PENN
MANOR
FUTURE FARMERS OF
AMERICA
Thank the following buyers for their support of the FFA Fat Hog
and Steer Sale at West Lampeter Fair
Randy Walker, Sanitary Disposal Service, Lancaster ; Wilmer Shertzer, R 2
Columbia; Welks Trucking, Rl, Strasburg; Frank DeFillippo, Norristown,
Pa.; C. L. King, R 3 Quarryville; Falk Bros. Meat Market, Lancaster, Pa.;
Kings IGA, Rt. 30 between Soudersburg and Paradise; Ed Minder, Nursery,
Lampeter: Louis Lyons and Son, Lancaster Stockyards: Glenn Fite,
Quarryville, Pa.; Raymond Lemon and Sons, Rl, Willow St., Friendly First of
Strasburg, Pa.
The Future Farmers Appreciate their support
(L to R) Ed Minder ; Representatives (2) of Friendly First, Strasburg;
Representative of Louis Lyons & Sons, Lane.; Howard Shaub, Auctioneer;
Randy Walker; C. L King.
VERNON E. MYER
STEEL BUILDINGS
AND GRAIN STORAGE
R. D. #4, LEBANON, PA.
PHONE (717)867-4139
the National Council of
Farmer Cooperatives
supports deregulation as the
best long-range solution to
the gas shortage problem.
We concur with a Federal
Power Commission
statement of February, 1975
which noted that,
“Deregulation of new
natural gas at the wellhead
is the single most effective
measure that can be taken
today to alleviate the
nation’s severe supply-
Mtoi£ Coupon Tcwby!
□ SEND STEEL BUILDINGS LITERATURE
[3 SEND GRAIN STORAGE LITERATURE
II NAME
j ADDRESS
| CITY.
1 TELEPHONE
demand imbalance.” The
FPC also stated that,
“Federal regulation has
played a major role in
inhibiting the ability of the
industry to locate, develop
and deliver needed gas
supplies.”
The NCFC believes that
past regulatory policies have
forced establishment of gas
rates at minimum cost
based levels. This isn’t
| Continued on Rate 79]
LAMPETER
STRfISBURG
STATE ZIP...