WASHINGTON -- George Lawrence, president of the American Gas Association, said Tuesday that demand for natural gas is growing with the opening up of new industrial and electric generation markets.
Lawrence, in a yearend statement on the natural gas industry, credited the gains to the repeal by Congress of the Fuel Use Act early this year.
'This action eliminated the artificial statutory restraints on gas use in large industrial and power generation facilities, and thereby created a new opportunity for the industry to agressively seek new and expanded markets,' he said.
As a result of the repeal, he told reporters, gas demand 'is expected to rise by 15 percent to 20 percent by the year 2000.'
Lawrence said 1987 was 'a pretty good year' for natural gas, with consumption about 4 percent higher than in 1986. In 1988, he said, it is expected to rise another 6 percent.
One of the problems still facing the industry, he said, is that of 'take-or-pay' gas purchase contracts entered into with producers at a time when shortages were expected.
'The potential $7 billion take-or-pay claims in natural gas purchase contracts continues to hang over the indutry as the Federal Energy Regulatory Commission continues to struggle with this sizable problem,' Lawrence said.
In a recent filing with FERC, he said, the AGA urged the commission to use its authority under the Natural Gas Act to 'reform' take-or-pay provisions in purchases contracts.
But in response to questions, Lawrence said he 'would not rule out' the possibility that the AGA might appeal any FERC ruling on the issue to the courts.
In citing 'new market opportunities' for the industry, Lawrence said new areas in which natural gas may become more competitive with oil included motor fuel, air conditioning and heating.
'Both houses of Congress are considering legislation to promote the use of natural gas and other fuels as alternatives to gasoline,' he said, adding that it has advantages over gasoline in meeting Clean Air Act standards.
