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Lawmakers mull relief for gas spike

ATLANTA - A substantial spike in natural gas prices this winter could prompt the General Assembly to take the state sales tax off of Georgians' gas bills, several lawmakers said Monday.

The temporary moratorium for the heating season would echo action the legislature took during a special session in September, when lawmakers removed the sales tax on motor fuels for nearly a month in response to price increases following Hurricane Katrina.

"There's a lot of talk by members ... to bring some relief, particularly if these prices triple,'' said House Speaker Pro Tempore Mark Burkhalter, R-Alpharetta, co-chairman of a legislative study committee looking for ways to dampen expected increases in natural gas bills this winter.

Industry analysts are predicting that Georgia businesses and homeowners will be hit with significantly higher home-heating bills in the next few months because of normal winter demand coupled with ongoing hurricane-related supply disruptions.

As of two weeks ago, natural gas production capacity in the Gulf of Mexico still was down by about 40 percent from the levels generated before hurricanes Katrina and Rita devastated the region in August and September.

Earlier this month, officials from Southern Natural Gas announced plans to temporarily boost the capacity of a pipeline that supplies liquefied natural gas shipped from the Caribbean to the company's terminal at Elba Island.

But both that project and the temporary lifting of the sales tax on natural gas offer only short-term solutions to rising prices.

On Monday, Rep. Harry Geisinger, R-Roswell, suggested that the General Assembly support opening up the Outer Continental Shelf off the Georgia coast to drilling for natural gas.

A federal moratorium on drilling off the east coast has been in effect since the 1980s.

But Geisinger, chairman of an advisory committee made up primarily of industry representatives, said an amendment to the energy bill passed by Congress last summer calling for offshore exploration for gas failed in the Senate by just one vote.

"We are a consumer state, not a producer state,'' he said. "This would make us a producing state and put us in a self-sufficient position.''

Geisinger said technology has improved in the last two decades to the point that drilling for natural gas is no longer a threat to the environment.

But Jill Johnson, environmental advocate for the Georgia Public Interest Research Group, said drilling remains "dirty business'' that could threaten the state's tourism industry and is a shortsighted approach to rising energy costs.

"We really need to break our dependence on oil and gas,'' she said. "The best solution is energy efficiency.''

Some members of the study committee also questioned the wisdom of lifting the sales tax on natural gas.

"I hesitate to make these short-term (tax) breaks that may be politically expedient but don't solve anything in the long term,'' said Sen. Steve Henson, D-Tucker, whose district includes portions of western Gwinnett County.

Henson also warned lawmakers not to move too quickly to reduce tax revenues when the state is grappling with cuts to education and rising Medicaid costs.

But Burkhalter said lifting the sales tax wouldn't affect Georgia's budget because it would occur only during a time when the state otherwise would be reaping a huge increase in collections because of higher gas prices.

"When fuel spikes ... it's like a windfall,'' he said. "We'd cut into that excess windfall.''