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Last Updated: Friday, 27 June, 2003, 06:29 GMT 07:29 UK
US tackles gas crisis
Gas storage appliance
US gas prices are double that of last year
The Bush administration has held an emergency meeting to discuss how to control soaring natural gas prices and ensure stable supply during the winter.

The US energy department has warned that the average residential winter heating bill for a typical Midwest consumer could rise by as much as 19% this year.

Such enormous rises are likely to stem consumer spending and damage the chances of an economic rebound.

Gas stocks began the summer at the lowest level since the 1970s and wholesale gas prices have doubled since last year.

"We recognize the need to move quickly," said US Energy Secretary Spencer Abraham.

"We're just at the starting point of putting together a strategy, but it's not going to take a long time," he added.

Environmental worries

The crisis meeting brought together the Bush administration, the National Petroleum Council advisory group as well consumer and industry groups.

Natural gas is the US' primary generator of electricity, and artificially high natural gas prices triggered California's electricity crisis in 2001.

Some experts have suggested easing taxes on coal-fired power plants in order to reduce demand for natural gas.

But environmental groups are opposed to this, and are instead seeking to persuade consumers to cutback on their energy demand.

Chairman of the US Federal Reserve Alan Greenspan has previously warned of the damaging effect of high natural gas prices on the economy.

And an economist at the Dallas Federal Reserve recently warned that the rising prices could cut US economic growth by as much as 2.1%.


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