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Washington, D.C. – U.S. Senator Mike Enzi, R-Wyo., said natural gas prices play an important role in the nation's economy and an emphasis should be placed on domestic development before resorting to increased dependence on foreign markets.

Enzi spoke today at a Senate Banking Committee hearing on "The Semi-Annual Monetary Policy Report to Congress," at which Federal Reserve Chairman Alan Greenspan testified. The purpose of the hearing was to hear from Greenspan about the state of the U.S. economy.

"If I had to pick the one single issue that has the greatest impact on the financial affairs of Wyoming, and the rest of our nation for that matter, I would have to choose the state of our nation's energy development," said Enzi, a member of the Banking Committee. "Before we start importing gas and increasing our dependence on foreign countries, we need to start maximizing our technological and regulatory efficiency so we can begin utilizing the abundance of energy in Wyoming and other domestic sources."

Enzi said Wyoming has an abundance of energy in the form of natural gas and especially coal, but it is stranded in the state and is not as accessible to other parts of the country as he would like. Enzi said limited pipeline and power line capacity and the threat of new regulations and bureaucratic limitations are having an effect on the rest of the economy.

Greenspan recently testified before the Senate Energy Committee and the House Financial Services Committee about how important finding new sources of natural gas would be to the U.S. economy and that only a major expansion of liquefied natural gas imports will ease volatility in U.S. natural gas markets.

Enzi also addressed factors affecting the role of small business in the economy including the relationship between small business and small community banks and the number of private companies that are growing large enough to enter the public sector.

"In addition to the importance of natural gas prices on our nation's economy, we also must ensure that we have a favorable business climate to encourage the creation and growth of our small businesses," said Enzi. "For many industries, small businesses represent more than 97 percent of the number of businesses in the industries and the vast majority of them are critically reliant upon access to credit from our financial institutions."

Enzi's statement is included below.

Opening Statement by Senator Michael B. Enzi
"The Semi-Annual Monetary Policy Report to Congress"
Senate Committee on Banking, Housing and Urban Development
July 16, 2003



The U.S. economy is still the greatest economy in the world. However, there are certain issues that we need to address to ensure that we retain that position. If I had to pick the one single issue that has the greatest impact on the financial affairs of Wyoming, and the rest of our nation for that matter, I would have choose the state of our nation's energy development. Every sector of our economy relies on some form of technology that in turn relies on electricity and/or fossil fuels to function. Our economy is literally driven, therefore, by our ability to develop and maintain a steady, constant energy supply.

Wyoming's role in this situation is much like the position held by the colonies during America's first years of European settlement. We provide the raw materials, or in other words the feedstock, that makes the rest of our nation's energy economy function. If my home county, Campbell County, Wyoming were its own country we would be the third largest coal producing nation in the world. One-third of our nation's coal is produced in this one county alone. We also produce more uranium annually than the rest of the nation combined and have the greatest potential for natural gas development in the entire continental United States. In short, we have what the rest of the nation needs to keep its technology fueled and running.

Unfortunately, however, most of that energy is now stranded in Wyoming and is inaccessible to the parts of the country that need it. Our natural gas development is being slowed down by the inability to get the gas out of the state. Our electricity runs into bottlenecks where the power lines outside the state don't have enough capacity to carry what we can generate and our coal is being hit with the threat of new regulations and bureaucratic limitations that could eventually slow down exploration and development. All of these limitations are having an effect on the rest of the economy.

I understand Chairman Greenspan has already visited the Hill on a number of occasions and has testified on this issue. I look forward to any additional insights he might offer on how we can bolster our economy by increasing energy stability, and I hope he could address what future role Wyoming can play in meeting our energy demands.

In addition to the importance of natural gas prices on our nation's economy, we also must ensure that we have a favorable business climate to encourage the creation and growth of our small businesses. For many industries, small businesses represent more than 97 percent of the number of businesses in the industries and the vast majority of them are critically reliant upon access to credit from our financial institutions.

Recently, the Office of Advocacy of the Small Business Administration released an independently conducted study that showed that small businesses are disproportionately affected by a tight federal monetary policy. Specifically, the study showed that the vital link between small businesses and small community banks can be worsened when community banks have difficulty adjusting to tighter monetary policies and to adverse banking developments and lending conditions. The study also found that community bank capital was capable of stimulating employment about three times compared to large bank capital. While the study cited the importance of SBA loan programs to stabilize lending to small business in tight monetary policy times, I believe that it is more important to keep in mind the effects on small business as the federal monetary policy is being developed.

Another critical issue for small businesses and our economy is the state of our initial public offering (IPO) market. Recently, news articles cited statistics that China has gained the crown for the IPO market and that Singapore has the fastest growing IPO market. In the first 6 months of this year, each of those countries had more IPO's than the US markets. Last year, Congress took great pains to pass the Sarbanes-Oxley Act to help restore investor confidence in our financial markets, however, it is clear that the IPO market has failed to materialize. I am very concerned that our overall business climate may not be sufficient to encourage the creation and growth of our small businesses.

In addition, recent news articles cite that many of our high technology jobs may be heading overseas. The combination of the loss of high technology jobs and of the rise in the overseas IPO markets, is troublesome at best. I would like to hear Chairman Greenspan's perspective on how we can remedy this situation.

Mr. Chairman, thank you again for holding this hearing. I look forward to hearing from Chairman Greenspan.