Natural Gas Potential: Approaches to a Balanced Solution to the Energy Crisis

Abstract

Someone recently hazarded the opinion that, if the energy spent talking about the energy crisis were added to our energy reserves, the crisis would be solved. And while we may sometimes be of a mind to agree with him we must recognize that there have been, as is usual in every controversial subject, two kinds of rehetoric expended on this subject. One is the rehetoric of the axe-grinders, men who, for one reason or another, have something to sell for immediate profit, whether it be a commodity or a fuel that they promote as the ultimate solution to the energy situation or a political viewpoint calculated to win them attention from the media and, ultimately, votes. The other is the rhetoric of men urging a reasoned, carefully balanced examination of all aspects of the situation, men whose primary concern is contributing to practical solutions of the very real energy problems that our nation faces. Let me present to you today first my credentials, then my observations on the situation in the modest hope that I may contribute some words to the side of the scale that represents balance and reason and moderation. I speak today for Southern California Gas Co., the nation's largest natural gas distribution utility, serving more than 3.2 million meters in a service area that directly encompasses most of the southern portion of the state of California and which, in portion of the state of California and which, in turn, supplies gas wholesale to the distribution utility serving San Diego County so that, in essence, we provide natural gas for almost all of the 13-county area that is commonly known as southern California. Southern California Gas Co. in each of the past several years has distributed just over 1 Tcf of gas, or about 5 percent of all the gas distributed each year in the U. S. The other company I represent today is Pacific Lighting Corp., the parent holding company of Southern California Gas Co. Pacific Lighting has, in recent years, diversified into other fields such as real estate and agriculture, but its primary area of activity continues to be the gas utility business and a growing number of utility-related subsidiaries in support of exploration and gas and to obtain gas supplies from many parts of the world that are accessible to our market area. With such a large stake in the natural gas industry, the Pacific Lighting companies are concerned about the energy situation in this country and, specifically, about the imbalance between supply and demand of natural gas. Our concern is not of recent origin. Since 1969, when our two present out-of-state suppliers, El Paso Natural Gas Co. and Transwestern Pipeline Paso Natural Gas Co. and Transwestern Pipeline Co., informed us we could expect no new additional increments of gas from their traditional source areas, we have been engaged in an international search for new sources of supply. We have been importers of natural gas since 1947, when we first turned to out-of-state sources to supplement California intrastate production. Largely as a result of our efforts in lining up new supplies during the past 2 1/2 decades, we now find ourselves slightly better off in terms of gas supply than are many areas of the nation. But let me stress that such a position is only relative. We are, in terms of time, only a very few years better off than our already hard-pressed fellow gas distributors in other parts of the country, and we now face developments that could erode that position to a considerable extent. Only last November, the FPC approved a plan for curtailment of supplies by El Paso Natural Gas Co. that has already, in the first 3 1/2 months of its operation, cost us more than 7.8 Bcf of gas from our regular contracted levels. This development, in the context of the nationwide supply-demand situation, clearly foretells a continuing pattern of erosion in our contracted levels of delivery from traditional sources. Obviously, we need to do something about this situation, and we are doing something about it. P. 21