CAEM Plans Natural Gas War Room Project

A Rapid-Response Public-Interest Organization That Will Protect the Progress Made on Competitive Gas Markets

Natural gas markets have had a tortured history of distortion. The restructuring of natural gas markets that began with Order 380/436 was much needed and phenomenally successful, especially when compared to the setbacks in replicating that success in electric markets. Prices were low for nearly 15 years but have recently surged. We have less supply and much more demand. More than 90 percent of new electric generation is gas fired.

High gas prices coupled with high reliance on gas by electric generators have created a sense of crisis. Projects that have been mothballed for decades are being trotted out: pipeline from Alaska and increased use of LNG and even synthetic fuels. Some ideas will be proposed that threaten to retard the hard-fought progress that has been made in gas markets over the last two decades.

There are five world views in light of the dramatic increase in demand for gas use in electric generation and the concomitant increase in gas prices:

  • Let markets work.
  • Gas prices are too high so let’s lower prices by fiat.
  • Gas prices and gas demand are too high so let’s bribe our way into more supply and less demand.
  • Demand is too high so let’s lower demand.
  • Electric has come to rely on natural gas and dysfunction in electric markets has implications for gas so let’s do something that prevents gas use in electric.

There is currently no broad-based group that develops public interest analysis to deal with these threats to natural gas markets.

CAEM proposes to develop a scoping analysis of the need for and structure of a rapid-response public-interest effort to thwart efforts that would impede the progress made on natural gas markets. CAEM will organize an advisory committee to assist it in funding and conducting this analysis. CAEM expects to complete this analysis within three months of obtaining a critical mass of funding.

The project prospectus describes the methodology of the study, the expected deliverable, the process for developing the deliverable, and the outreach methods to be used to disseminate the results.

There will be three levels of membership:

  • Public Interest Participants (as defined above): No fee.
  • Small Private Organizations (under $5 million in annual revenue): $2,000
  • Large Private Organizations (all others): $5,000

All contributions to CAEM are fully tax deductible.

Ken Malloy, CAEM's CEO, will be the senior executive in charge of this project. Gary Clouser, CAEM's Director of Education and Outreach, will be responsible for the day-to-day details of executing this project and for drafting the final report, based on the research, interviews, consensus building, and input from the advisory board of experts, consisting of public and private sector participants. The prospectus contains the qualifications of these individuals and more background on CAEM.

If you are interested in joining the Advisory Committee or would like more information, please contact Gary Clouser.