March 29, 2006 — Daniel DiMicco, President & CEO of Nucor Corp. took part in a unique alliance of chief executives representing U.S. industrial natural gas consumers and U.S. natural gas producers in calling on the United States Congress and Administration to take immediate action to help increase U.S. natural gas supply. Other participants in the alliance included Stephen R. Wilson, Chairman & CEO, CF Industries Holdings, Inc.; Laurence M. Downes, Chairman & CEO, New Jersey Resources; J. Larry Nichols, Chairman & CEO, Devon Energy; and James T. Hackett, Chairman, President & CEO, Anadarko Petroleum.

The group emphasized that although the United States has plentiful natural gas resources, Americans are being hurt by high natural gas prices. The group pointed out that increasing the supply of natural gas — particularly those resources that have been placed off-limit to producers — would reduce and stabilize prices for all consumers.

The business leaders outlined actions that would immediately address problems the North American natural gas industry faces. The alliance of consumers and producers underscores how consumers and energy producers, working together with lawmakers and regulatory agencies, can increase critical supplies of natural gas, lower prices for consumers, keep American jobs and businesses strong and protect America's economic security.

Specific solutions outlined by the alliance included:

• Reducing the permitting backlog and accelerating the applications processes for onshore federal non-park, non-wilderness lands.
• Opening up the remaining Sale 181 areas in the Eastern Gulf of Mexico; pushing to lift the exploration moratoria on the East Coast, West Coast and offshore Alaska; and working with the affected states to provide revenue benefits.

Natural gas currently supplies a quarter of America's energy's needs. It is a clean, efficient source of energy that is primarily ‘Made in America,’ with more than 80% of the natural gas used in the United States produced in the United States. In addition, it is developed and supplied in an environmentally responsible manner.

"There is no shortage of natural gas in this country. In fact, Minerals Management Service studies indicate there are 1,040 trillion cubic feet of gas waiting to be discovered, yet we can't get access to much of this resource because of various government restrictions," Anadarko's CEO Jim Hackett said. "It's economics 101 — tight supplies lead to higher prices for everyone — especially farmers, manufacturers and ultimately, individual households."

America's steel industry suffers from high natural gas prices, which make domestic manufacturers less competitive against imports. Nucor's recycling process consumes large amounts of electricity that is primarily generated by natural gas fired electricity plants. Higher prices drive electricity costs higher, resulting in higher production costs.

"Last year, there were times when Nucor was paying 3 to 5 times as much for natural gas as some of our foreign competition," Dan DiMicco of Nucor explained. "I don't expect our government to guarantee us low natural gas prices. I do expect that our federal government will not withhold access to the energy resources they control. That is what Congress is doing in the Outer Continental Shelf and on federal lands. Delays in regulatory permits are further limiting new production, which impacts how I run my company."

The challenges, however, are not limited to major manufacturing companies. Natural gas is a critical input for American farmers. It is the raw material used to make ammonia, the building block of all nitrogen fertilizers. Forty percent of U.S. crop production depends on using nitrogen fertilizers. And without nitrogen fertilizers, U.S. corn yields would drop an estimated 40%. Since 2000, the U.S. fertilizer industry has watched natural gas prices rise from $2.50 per million Btu to a high of $15 this past December.

"Without question, American farmers have felt the blow. Since 2002, the price of ammonia has more than doubled and recently has moved as high as $500 per ton. The continued loss of U.S. nitrogen fertilizer production due to high natural gas prices has forced farmers to rely to a great extent on imported fertilizers -- which are up 80 percent since 2002 -- in many cases coming from volatile regions of the globe," CF Industries' Steve Wilson explained. "Putting our food production at risk is not an acceptable option for the United States, a country that prides itself on being the breadbasket for the world."

New Jersey Resources distributes energy to retail customers in New Jersey, and provides energy services to customers from the Gulf Coast to Canada. Customers now pay substantially more to heat their homes and run their businesses due to the rising cost of natural gas. Reliance on natural gas for electricity generation has compounded the country's supply and demand dilemma. The result is higher and more volatile natural gas prices.

"As a Natural Gas Local Distribution Company, we are the face to the customer. We are the ones who get to deliver the bad news to customers about the impact of high prices," New Jersey Resources' CEO Larry Downes said. "I believe we are facing an energy crisis of epic proportions and in order to solve it, policy makers must take immediate action. What we need is a multi-faceted strategy that is focused on the environmentally sensitive development of our nation's reserve base, a strong emphasis on conservation and efficiency, and fuel diversity for future electric generation. Together, we need to encourage Congress to pass legislation to provide Americans with the relief they need."

Energy producers agree that increased natural gas supplies will help stabilize the market and lower prices for consumers. Devon Energy and Anadarko Petroleum are large independent exploration and production companies that find, produce and transport oil and natural gas. Both are among the largest domestic producers of natural gas in North America and among the most active drillers in the United States.

"Our natural gas supply problems are man-made by legislation and red tape," Larry Nichols, Devon Energy, explained. "We are joining together to call on Congress and the Administration to take immediate action to fix the problem. The solution is in their hands and within their reach."

By speaking out directly to the American public, the CEOs hope to communicate their agreement that the country needs a strong multi-faceted energy strategy. In addition, the coalition called on Congress to appropriate the funds needed to hire additional staff and make other changes to help Federal land management agencies approve and accelerate the processing of nearly 5,000 drilling permits that are currently stuck in the system.

"The U.S. postal service has more workers in big cities where there is more mail," Nichols added. "Our land management agencies deserve the same treatment. Imagine if a piece of mail sat for six months before being delivered."

According to the alliance, not only does the Government need to solve onshore permitting issues, but they also need to focus on offshore constraints where there is a tremendous opportunity to explore for new sources of energy. Ninety percent of America's Outer Continental Shelf is off-limits to further exploration. One specific region which was slated to be offered for lease and then withdrawn from access is the Lease Sale 181 region in the eastern Gulf of Mexico. Ultimately, a very small sliver of that area was offered for lease in 2001, and since then the industry has made 10 discoveries in those waters — all natural gas. As a result of these discoveries, about 1 billion cubic feet per day of new natural gas resources will be making its way to American consumers in 2007. When it comes online, this additional natural gas will represent an increase of approximately 2 percent of all U.S. supply.

"We applaud Senators Domenici and Bingaman for their efforts to open the remaining parts of Sale 181 and call on Congress to follow their lead," Hackett added. "Without a doubt, opening up 181 offers the best chance for significant new domestic natural gas production in the next five years. This would be a direct, positive action to increase supply and relieve high prices pressuring American consumers.

"But we can't stop there. We need access to explore off the West Coast, East Coast, the eastern half of the Gulf of Mexico and the coast of Alaska. Our industry has proven that development can take place with little or no environmental impact. Only by exploring these vast resources will we know their real potential to add to America's energy security."