Natural Gas Priorities & the Environment

As the national focus on climate change and greenhouse gas emissions intensifies, we must clearly communicate the positive role natural gas can play in addressing these issues.  As a clean and efficient energy resource, our product is uniquely positioned to offer both immediate and long-term solutions for our environment.

We have identified nine natural gas priorites that we feel are of strategic importance in the ongoing discussions around energy, the environment, natural gas customers and the companies that serve them.  Please join us in advocating for the creation of effective long-term energy and environmental policy solutions that will shape our collective future.

1 - Recognize the environmental benfits that natural gas provides and the role it should play in addressing our energy needs now and in the future.
"Natural gas is the cleanest of all fossil fuels, emitting 40% less carbon dioxide (CO2) than coal, 28% less CO2 than oil, and 14% less CO2 than propane.  Natural gas offers energy policymakers a clean choice for meeting our energy needs today while providing a bridge to our energy future."

2 - Encourage the adoption of utility rate structures and programs that promote energy efficiency and customer conservation.
"Traditional volumetric rate designs that place incentives on utilities to promote and market increased energy usage are no longer appropriate in an era of higher energy costs. Utilities and state regulatory commissions should adopt new rate structures and programs that encourage energy efficiency and customer conservation.  Piedmont's margin decoupling tariff in North Carolina is one example of the kind of innovative rate designs that are needed."

3 - Evaluate energy efficiency from start to finish.
"Evaluating energy efficiency only at the point of use ignores the energy that is lost in the process of producing and transporting that energy to the end user.  Energy decisions based upon such evaluations result in the inefficient use of our energy resources and actually increase greenhouse gas emissions.  Because natural gas retains 90% of its original energy value when it is received by a customer, it is one of our most efficient energy resources."

4 - Encourage the direct use of natural gas in homes and businesses in order to maximize total energy efficiency and reduce greenhouse gas emissions.
"In Piedmont's markets, natural gas used directly by consumers for their water heating and space heating needs results in 20% to 30% fewer greenhouse gas emissions than if those same needs were met using electricity.  Using natural gas to generate electricity, though cleaner than using coal, is an inefficient use of natural gas and results in greater greenhouse gas emissions. The best use of natural gas is its direct use."

5 - Encourage fuel diversity in the generation of electricity.
"The demand for natural gas to generate electricity has increased over 50% since 1997.  During that period of time, wholesale natural gas prices have tripled from $2.50 per MMBtu to $7.50 per MMBtu.  Electric utilities should diversify their electric generation portfolio with such alternatives as nuclear, clean coal technologies and renewable energy resources.  They should be incented to implement energy efficiency and demand side management programs that take into account total fuel cycle efficiencies (production through use) and the direct retail use of natural gas to reduce the need for new power generation facilities."

6 - Increase access to domestic natural gas supply areas in order to increase the supply of natural gas and help meet our nation's growing energy demand.
"With demand for natural gas expected to grow by 20% by 2030, we must access more of our nation's abundant domestic natural gas reserves on federal lands, including the Outer Continental Shelf (OCS), the Rockies and Alaska.  Doing so will ensure that natural gas remains competitively priced, that it will play a prominent role in helping our nation achieve its environmental goals, and that our energy security and independence will be enhanced."

7 - The impact of climate change regulations on market segments should be proportionate to their contribution to greenhouse gas emissions.
"Residential and commercial natural gas customers emit only 6% of total U.S. CO2 emissions.  The vast majority of CO2 emissions are from the power generation, industrial, transportation and agricultural sectors.  In fact, even though the number of residential natural gas users has increased by 70% since 1970 - from 40 million to 69 million customers - total natural gas consumption and CO2 emissions by such customers today are actually below 1970 levels.  These customers should not be penalized by harsh climate change regulations and higher energy costs when their usage has been declining and use of natural gas is better for the environment than electricity or other available energy alternatives."

8 - Increase funding for the Low Income Home Energy Assistance Program (LIHEAP).
"As the price of natural gas, and all energy, has risen, the impact on low-income households in terms of their monthly energy bill has been dramatic.  For a typical household that would qualify for LIHEAP assistance, the percentage spent on essential energy needs has risen to 15% of family income.  While authorized funding for LIHEAP is $5.1 billion, only $2.1 billion on average has been appropriated since 2005.  The result has been that only 15% of the thrity million low-income families that need financial assistance to heat and cool their homes receive any LIHEAP assistance."

9 - Extend or make permanent the lower 15% maximum tax rate on dividends.
"Dividends are taxed twice, once at the corporate level and then again at the individual taxpayer level.  The reduced tax rate on dividends of 15% was intended in part to address this double taxation.  If the current dividend tax rate of 15% expires in 2010 as currently scheduled, shareholders receiving dividend payments will likely be subject to higher tax rates, negatively impacting their investment returns.  Utility companies paying dividends will see an increase in the cost of captial making it more expensive to develop the energy infrastructure necessary to maintain service and meet demand growth.  Piedmont will continue to advocate for the permanent reduction in the dividend tax rate."