June 9, 2003, 1700 PDT (FTW) -- Financial Times reports US Natural Gas Supplies at Critical Lows. Greenspan to address economic threat posed by possible imminent shortages and brownouts.

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Alarm as US gas supplies hit low
By Sheila McNulty in Houston
Published: June 9 2003 5:00 | Last Updated: June 9 2003 5:00

Natural gas supplies in the US have reached critically low levels in recent months and may be inadequate to meet demand during a hot summer this year.

Spencer Abraham, the US energy secretary, has called an emergency meeting of the National Petroleum Council this month amid calls for the administration to deal urgently with the shortage.

Mr Abraham said the US had 696bn cu ft of gas in storage at the end of March, the lowest since 1976 when record-keeping began. By the week of April 11, levels had dropped to 623bn cu ft.

"Storage has increased since that time, but it is still only half the level of a year ago, and 42 per cent below the previous five-year average," Mr Abraham said.

Tomorrow Federal Reserve chairman Alan Greenspan is to testify before the House energy and commerce committee on threats to the economy from the shortage.

Prices are reported to have increased as much as 700 per cent over the past three years, provoking industries from steel to petrochemicals to call on the government to address what they call "the other energy crisis" because it is less well known than the domestic oil shortage.

"No company, no industry, no consumer can absorb a threefold increase in major raw material prices and continue to compete in the global marketplace," said Greg Lebedev, president of the American Chemistry Council, the largest industrial users of natural gas.

The problem arose after the US government encouraged natural gas as an environmentally friendly fuel but refused to open what Mr Abraham said were about 40 per cent of the potential gas resources on federal lands.

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