Washington, DC 20585

May 6, 1998

Mr. Joe B. Foster
Chair
National Petroleum Council
1625 K Street, N.W.
Washington, D.C. 20006

Dear Mr. Foster:

In 1992, the National Petroleum Council released a study entitled, "Potential of Natural Gas in the United States." That study was critical in identifying natural gas as an abundant domestic resource that can make a significantly larger contribution to both this Nation's energy supply and its environmental goals.

Since the release of the study, the Nation has experienced five years of sustained growth in the use of natural gas. In addition, the study did not anticipate at least two major forces that are beginning to take shape, which will profoundly affect energy choices in the future -- the restructuring of electricity markets and growing concerns about the potentially adverse consequences that using higher carbon- content fuels may have on global climate change and regional air quality. These issues offer opportunities and challenges for our Nation's natural gas supply and delivery system. For a secure energy future, Government and private sector decision makers need to be confident that industry has the capability to meet potentially significant increases in future natural gas demand.

Accordingly, I am requesting that the Council reassess its 1992 study taking into account the past five years' experience and evolving market conditions that will affect the potential for natural gas in the United States to 2020 and beyond. Of particular interest is the Council's advice on areas of Government policy and action that would enable natural gas to realize its potential contribution toward our shared economic, energy, and environmental goals.

Given the significance of this request, Deputy Secretary Elizabeth Moler will cochair the study committee. I offer my gratitude to the Council for its efforts since our meeting in December 1997, to assist the Department in defining a more concise study scope. The breadth of issues related to natural gas supply and demand is vast and I recognize that further refinements in scope may be necessary once the study is underway to address the most significant concerns about future natural gas availability.