Environmental Report Predicts U.S. Energy Policy up until 2040

By: Julia Boccagno

Members of the U.S. Senate Committee on Energy and Natural Resources heard testimony from the administrator of the Energy Information Administration (EIA) Thursday. The document of discussion—the Annual Energy Outlook for 2015—predicts the factors expected to shape U.S. energy markets in both the short- and long-term.

“It is my understanding that this is a ‘projective’ document rather than a ‘predictive’ one,” Lisa Murkowski (R-Alaska), Chairman of the Energy and Natural Resources, said. “In other words, you are not telling us what will happen in the future. Instead, you are telling us what may happen in certain reference cases and under certain assumptions.”

As the United States’ primary source of information, the EIA disseminates independent and impartial energy information, despite its relationship with the Department of Energy. Ultimately, its objective is to educate government agencies, the public, academia and the private sector so that they can make collective sound policymaking decisions regarding the environment.

In the two-hour Congressional hearing, EIA Administrator Adam Sieminski discussed many topics, such as renewable energy sources and crude oil pricing. However, Chairman Murkowski and fellow members appeared particularly interested in the changing role of the U.S. According to the Annual Energy Outlook for 2015, the U.S. could export more energy than it imports by 2030, because of continued oil and natural gas production and slower growth in energy demand.

“I believe this is enormously good news for our nation,” Murkowski said. “The projected zeroing out of our net energy imports portends a future in which the United States is a net energy exporter. It doesn’t require much of an imagination to see how that may potentially enhance our geopolitical position around the world.”

Discussion about economic sanctions in Iran further explored the relationship between geopolitics and energy policy. On April 2, the five permanent members of the United Nations Security Council (the United States, China, Russia, France and the United Kingdom) plus Germany and Iran reached an agreement that could result in the removal of oil-related sanctions in the Middle East.

This policy didn’t go unchallenged, though. Senator Barrasso (R-Wyo.) called on the Hon. Sieminski to comment on how the lifting of economic sanctions could impact American workers in the oil and gas industry. According to a recent Wall Street Journal article, oil layoffs hit 100,000, and are still continuing.

Sieminski said, “Our rough assessment is that this could lower the price—everything else held constant—that much more oil on the market. If you just look at how the supply and demand chain curves have to cross at a price would lower the price anywhere between five to 15 dollars a barrel. That lower price implies lower drilling activity, which would then influence the numbers that you were citing. ”

Oil wasn’t the only fossil fuel in question during the hearing. According to Sieminski’s testimony, the average American household in 2015 can expect to save about 700 U.S. dollars because of declining natural gasoline prices.

“EIA expects U.S. regular gasoline retail prices, which averaged 3.36 U.S. dollars per gallon in 2014, to average 2.40 U.S. dollars per gallon in 2015 and 2.73 U.S. dollars in 2016.”

Besides natural gas, sources of renewable energy, such as wind and solar, are seeing a decline in prices, due to advancements in technology. Maria Cantwell (D-Wash.), ranking member of the Energy and Natural Resources Committee, says the U.S. needs to make energy efficiency a larger variable in the equation.

“Carbon pollution is still expected to increase even as we remain below the 2005 levels,” she said. “And this highlights the fact that we must take steps to bend the curve even further downward, given the tremendous costs to our climate and what is already imposing on business and communities in my state and around the country.”

Not all of the politicians agreed with Cantwell, particularly Senator Joe Manchin (R-W.Va.)

“As you know, I have a real problem with what’s going on, the demonizing of coal,” he said. “It seems by a whole group of people that don’t seem to understand the life that we all have is because of domestic energy we have right here in this country, and we’ve developed one of the greatest industrial mites, built the middle class, off of coal.”

Despite the evident points of contention, Chairman Murkowski maintained that the data collected by the EIA has the ability to seam together remnants of political division moving forward.

“This Committee is currently working on a bipartisan energy bill,” Murkowski said. “We will have both infrastructure and supply titles in that bill, along with titles on efficiency and accountability. So, it’s my hope that this morning in this hearing on the Annual Energy Outlook that we gain some numerical grounding to that effort and that the EIA will continue to be a resource for the Committee going forward.”

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