Knoxville, Tennessee (Platts)--25Sep2009/535 pm EDT/2135 GMT

A bipartisan group of nine US senators from producing states wants the chairman of the Senate Environment and Public Works Committee to include several measures in energy and climate bills that would expand the production and use of natural gas.

"Our nation is in desperate need of a comprehensive energy policy, and natural gas can serve as a vital bridge fuel as we transition to the new energy economy," they told California Senator Barbara Boxer in a Wednesday letter.

Natural gas is abundant, is the cleanest of the fossil fuels and is becoming an important economic driver in regions in need of revitalization, the senators wrote. To expand gas demand, they urged incentives for increased use of gas for power generation and in heavy-duty and fleet vehicles.

They also suggested that gas emissions from pipelines and wells be subject to performance standards under Section 733 of The American Clean Energy and Security Act under the list of potential offsets, rather than subjecting such emissions to performance standards under Section 811.

"Additionally, given that rate case determinations for natural gas transportation systems can take several years, while the price of carbon allowances will likely fluctuate more frequently, we support accommodations for price-controlled entities to track their prices with allowances to ensure real-time consumer responses," the senators wrote.

The group also said gas-fired power plants should be eligible for the same carbon capture and sequestration research incentives offered to coal-fired plants under the act. They also suggested that the full fuel cycle carbon dioxide emissions of electricity supplied by utilities should be disclosed to consumers through bill inserts.

The senators also said they support preserving the industry's deductions for intangible drilling costs and the percentage-depletion credit, both of which are under fire as part of recent tax proposals. "Repealing these tax credits could have severe and unintended consequences on the small independent producers of natural gas," they said.

Likewise, they recommended that Congress order a study by the Environmental Protection Agency on the risks of hydraulic fracturing to drinking water supplies using best-available science and independent information sources before legislators consider any US regulation of fracking.

The letter was signed by Senators Michael Bennett, Democrat-Colorado; Lisa Murkowski, Republican-Alaska; Mark Udall, Democrat-Colorado; Arlen Specter, Democrat-Pennsylvania; Tom Udall, Democrat-New Mexico; Mary Landrieu, Democrat-Louisiana; David Vitter, Republican-Louisiana; Sam Brownback, Republican-Kansas; and Mark Begich, Democrat-Alaska.

--Stephanie Seay, stephanie_seay@platts.com