Executive Report

Natural gas shortage: 1977 is just the beginning

BETTER OFF than most states, Illinois got through the January natural gas crisis without massive plant shutdowns or curtailments to high priority customers. Curtailment of gas supplies to the state's industries began in mid-January. Many industries using conversion burners switched voluntarily to other fuels. By early February curtailment was on a day-to-day basis fluctuating with temperatures.

In the Midwest, Illinois and Michigan were the best prepared for the winter fuel shortage. Illinois, which gets most of its natural gas from Kansas, Oklahoma, Louisiana and Texas, owes its comparative good fortune to heavy investment in underground storage capacity — the largest gas fields of any state — and a good reserve supply accumulated during the last two or three years. Conservation efforts by both industrial and residential consumers were successful but would continue for the rest of the winter. In addition, two synthetic natural gas plants in the Joliet area produce 10 per cent of the state's needs — though at three times the price of federally controlled pipeline gas.

The big question is the winter of 1978 — and the ones that follow. Even if comprehensive federal energy legislation deregulates the price of natural gas this spring, there will not be enough time or enough gas to replenish reserves by fall. Continued cold weather could worsen the situation by depleting the "cushion" needed for efficient operation of storage fields. The nation's natural gas production has declined steadily since 1973. Deregulation would provide an incentive to open new fields, but forecasts collected by the American Gas Association suggest that by 1985 production will still not have reached 1973 levels and that a decline will follow shortly thereafter.

Possible diversion of Illinois gas
The state could stand to lose some with the passage February 2 of the Emergency Natural Gas Act, which gives President Jimmy Carter power to order one interstate pipeline to share gas with another and allows pipelines to bid for emergency gas from producers at whatever price will get the gas. The emergency legislation, which will be in effect until August 1977, "could possibly take some of the low priority gas we have and distribute it to the other states," according to Bob Podlasek, Illinois Commerce Commission administrative assistant for energy. Contracts for gas deliveries made before the federal controls were lifted might be bypassed under the bill in order to divert supplies to the eastern states, leaving Illinois with more expensive gas. Utility companies and the Illinois Commerce Commission are willing to go along with President Carter's emergency measure but oppose long-term sharing of Illinois natural gas supplies with other states.

Relaxation of ban on high sulfur fuel
At Gov. James Thompson's request, the Pollution Control Board on February 3 relaxed the state's sulfur dioxide standards on grades 4, 5 and 6 residual fuel oil and allowed industries to turn off their after burners for a 30-day period ending March 7. The relaxation was limited to Cook, Lake, DuPage and Will Counties. The action was taken to prevent plant closings caused by an inability to get shipments of low sulfur oil up the frozen Mississippi and Illinois river systems. The emergency measure raises the allowable sulfur dioxide content from 0.8 pounds per million BTU's of heat produced to 2.5 lbs., still within acceptable limits. The colder weather favored a minimizing of pollution. The Environmental Protection Agency (EPA), which was monitoring the affected areas to determine the impact of relaxed standards, requested firms using the higher sulfur oil or not using after burners to notify the EPA's Division of Air Pollution in Springfield: phone — 217/782-7326. / M.S.K.

28 / March 1977 / Illinois Issues


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