STATEMENT

Contact: Tracy Cullen
Tel: (202) 210-0467
Email: tcullen@socplas.org

SPI STATEMENT ON HOUSE RESOURCES COMMITTEE’S LANDMARK NATURAL GAS PROPOSAL

SPI, U.S. Plastics Industry Applaud Proposed Legislation, Critical to the Plastics Industry, That Would Lift Moratorium on Outer Continental Shelf Drilling

CHICAGO, IL (June 22 2006) - - On Wednesday, June 21, 2006 the Committee on Resources in the House of Representatives passed legislation to access natural gas resources in the Outer Continental Shelf (OCS). This legislation was overwhelmingly passed by the Committee in a bipartisan vote of 29-9. Titled the Deep Ocean Energy Resources (DOER) Act, the proposed bill is the combined result of approximately two dozen bills that address drilling for natural gas in the OCS. In particular, the DOER Act pulls together two different approaches on OCS drilling authored in separate bills sponsored by Representatives John E. Peterson (R-Pa.) and Neil Abercrombie (D-Hawaii) and Representatives Bobby Jindal (R-La.) and Charlie Melancon (D-La.). The legislation will be considered by the full House of Representatives sometime during the week of June 26.

William R. Carteaux, president of The Society of the Plastics Industry, Inc. (SPI), issued the following statement from Chicago, where approximately 65,000 plastics industry professionals have gathered for NPE 2006, SPI’s international plastics trade exposition.

“On behalf of the U.S. plastics industry and the 1,100 member companies of the Society of the Plastics Industry (SPI), I want to commend Chairman Pombo and the House Resources Committee for the critical measure they have taken to address America’s natural gas energy crisis. Because our industry uses natural gas as both an energy source and a feedstock, the crisis has had far reaching negative repercussions for our sector. I am hopeful that this bipartisan effort will create a more affordable and accessible supply of natural gas in order to relieve the economic pressures that skyrocketing natural gas prices have caused our industry over recent years.

“The DOER Act prohibits oil and gas leasing within 50 miles of the coastline. This will codify existing federal moratoria on oil and gas leasing in the OCS and will not expire but allows states to opt-out with the approval of the state legislature and the governor. With enactment of the DOER Act, states have one year to permit or deny natural gas leasing in an area between 50 and 100 miles off of the state’s coastlines. In the event that a state does not act then natural gas leasing can take place; oil leasing cannot take place.

“The DOER Act also permits states the power to extend the leasing restrictions in five year increments by votes of the legislature. The DOER Act also prohibits leasing within 25 miles of the coastlines of a neighboring state that does not support leasing. In terms of the economic benefits of the proposed bill, the DOER Act also enacts a revenue-sharing component between the federal government and the states, and creates new federal funds including the Federal Energy Natural Resources Enhancement Fund, the Federal Energy and Mineral Resources Professional Development Fund and the National Geo Fund. Revenues from these funds will support education, transportation, environmental and wildlife restoration as well as other activities.

“Recent statistics released by SPI show the price of natural gas has increased in price by 700 percent in seven years. Without an economically affordable supply of natural gas, SPI members will continue to find it more difficult to compete in the marketplace. Over the past five years, the U.S. plastics industry has lost more than 200,000 jobs, and countless small companies all over the United States have been driven out of business. A third of the job losses occurred in the last two years when natural gas prices started to spike and reach record highs. From 2002–2004 we’ve seen a 20 percent increase in the cost of materials for the industry which coincides with the spike in energy prices.

“SPI and the U.S. plastics industry strongly urges passage of the proposed bill by the full House and will be actively working with its sponsors to get this legislation passed next week.”

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Founded in 1937, The Society of the Plastics Industry, Inc., is the trade association representing one of the largest manufacturing industries in the United States. SPI's members represent the entire plastics industry supply chain, including processors, machinery and equipment manufacturers and raw materials suppliers. The U.S. plastics industry employs 1.3 million workers and provides nearly $345 billion in annual shipments.

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