July 9, 2003

Dear Chairman Domenici and Ranking Member Bingaman:

We are writing to state our growing concern over the crisis caused by the inadequate supply of affordable natural gas for U.S.-based industry, following up on our letter dated March 3 (attached).

Natural gas is a great energy source for residential and industrial use due to its environmental characteristics. The U.S. has promoted conversion to natural gas on a broad scale to accomplish environmental goals and make industry more fuel-flexible. However, on balance, natural gas demand has been promoted with no offsetting incentive to promote supply or alternatives.

Domestic-source gas production has stagnated even as other available energy sources have been restricted or curtailed. It is time to reconsider this approach - or else continue losing high-paying U.S. jobs and investments in major industries that use natural gas as fuel and feedstock.

In the chlorine sector, over 50 percent of production costs are energy and over one-third of our derivatives rely on natural gas as a feedstock. For the first time, U.S. producers are no longer among the world's low-cost producers and some production capacity has already moved offshore.

ARCC joins in the call for federal action to address this crisis, beginning with an independent commission to recommend actions to protect America's economic security, to enhance our competitiveness, and to balance natural gas supply with demand. The commission should be bi-partisan and solicit the views of labor and management in the affected industries, and conduct its work in an open and timely fashion. The study should explore:

• Projected natural gas demand vs. supply from foreign and domestic sources
• Establishing an inventory of all domestic natural gas resources
• Impact of government policies that promote or restrict supply
• Alternatives to government policies that restrict supply
• Maintaining environmental progress in fuel use
• Promoting other energy sources, including coal, nuclear and hydrogen
• Conservation measures to increase supply

We are ready to support your efforts to ensure that American consumers, workers and industries will have access to affordable natural gas.

Sincerely,

John J. Barry Co-Chair, ARCC President Emeritus International Brotherhood of Electrical Workers		C.T. "Kip" Howlett, Jr. Co-Chair, ARCC Executive Director Chlorine Chemistry Council

CC: Members of the Energy and Natural Resources Committee