Gas Pain Relief Can Be Found Offshore.(ISSUES & INSIGHTS)(VIEWPOINT)

Byline: MARK J. PERRY

The public uproar over volatile natural-gas prices brings up a question that lies at the very heart of the matter: Why isn't the U.S. using more of its own enormous gas resources?

The Interior Department estimates that America's Outer Continental Shelf -- off the Atlantic and Pacific coasts, Alaska and the eastern Gulf of Mexico -- holds 420 trillion cubic feet of natural gas, three times the natural gas supplies of Canada and Mexico combined.

And it has vast quantities of oil -- an estimated 179 billion barrels. Yet nearly all of the OCS is off-limits to oil-and-gas exploration and production, and the growing national demand for natural gas has unfortunately not changed regulatory policy.

The price that Americans pay for this myopic neglect is painfully evident in the rise of gas prices from $3 per million BTUs five years ago to $14 today. U.S. gas prices are higher than those in any industrialized country, and this is harming our economy.

According to the Commerce Department, more than 2.8-million manufacturing jobs have been lost since gas prices began to rise in 2000. A third of the fertilizer industry has been shut down and chemical companies have closed over 100 U.S. facilities and may shutter more. Of the 120 chemical plants being built around the world for $1 billion or more, only one is in the U.S.

Natural gas is America's fuel of choice throughout the economy. Demand keeps growing, but domestic gas production in recent years has been flat. The many users of natural gas -- households, factories, office buildings and electric utilities -- are competing for the same limited supplies of gas, and this has pushed prices to record levels.