Discussion

MODERATOR: WHEN I WAS IN CONGRESS IN 1995, A bus pulled up to the Rayburn House Office Building fueled by clean natural gas. Our discussion quickly turned to the availability and affordability of natural gas. The country could even run bus fleets with it, we said. In the past year, however, natural gas prices have doubled, and they may do so again. How did we get where we are, and what went wrong?

BIE: Over the last couple of years, we have certainly seen our dependence on natural gas increase. We found ourselves with a demand increasing at least 2 percent per year, and we have recognized that the demand is going to continue to go up. But the supplies are not as adequate as people thought in the past. If we are going to continue to use natural gas the way we are using it, we're going to see that it's going to be harder to get, and we're going to have to drill deeper. It's going to be costlier to bring to the marketplace, and therein lies the significant problem.

That's why diversified portfolios are going to be critical, because natural gas prices are going to continue to remain high. I don't think there's really an end in sight for those prices.