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Summary of Hearings on Energy3/26/13
Witnesses Committee Members On March 5, 2013, the House Committee on Natural Resources Subcommittee on Energy and Mineral Resources Oversight held a hearing to receive testimony assessing America’s offshore oil, gas, and wind energy resources. The hearing discussion focused primarily on the potential economic benefits of offshore energy development. Ranking Member Rush Holt (D-NJ) argued in his opening statement that “offshore wind…is the new frontier in energy production,” noting that the nation installed over 13,000 megawatts (MW) of wind capacity in 2012, “more than any other generating source, including natural gas.” He outlined improvements in oil and gas development including the 20 year high in domestic oil production and record levels of domestic gas production. He noted that the U.S. is projected to surpass Russia and Saudi Arabia in oil production in three to four years, 2012 oil import levels were the lowest in 20 years, and foreign oil dependence is down to 40 percent. He stated, “Even with geology dictating that the vast majority of shale oil development is happening on private lands, production on federal lands is also higher today than at the end of the previous administration” and 2012 saw more offshore oil produced than 2008. Holt expressed concern that the sequester and Congress’s inability to balance the budget could “threaten” these offshore energy resources by “hamper[ing] the [Department of the Interior’s] ability to issue permits, to plan new projects, to conduct environmental reviews, and to lease new federal lands.” Full Committee Chairman Doc Hasting also emphasized the booming production on state and private lands in his opening statement. He credited the “paralyzing web of bureaucratic red tape” for hindering development on federal lands as well as President Obama’s policies that “locked-up 85 percent of our offshore areas to new energy production.” Hastings cited a different report projecting that opening offshore areas to development would create 1.2 million jobs and increase GDP by $8 trillion. He noted that “energy production on federal lands is the second highest source of revenue to the Treasury, bringing in an estimated $16 billion in 2012” and questioned Obama’s policies in lieu of the sequestration, “budget crisis,” and debt. He stated, “If reducing the debt is a priority; if growing our economy is a priority; if creating new American jobs is a priority; and if lowering gasoline and energy prices is a priority -then we need to make increased American energy production a priority.” Cory Kief, director of business development at Crosby Tugs LLC, testified on “how important offshore drilling, exploration, and production are to [Crosby Tugs], and how it supports our operations.” He stated that his company focuses on “shallow water rigs” and “the more rigs that are working, the better it is for us and our industry.” Additionally, his company assists in building infrastructure, such as pipelines and platforms. He discussed the far economic reach of oil and gas production as his company relies on supplies from other industries around the country. Kief stated, “Our industry is ready to help make this country more energy independent. Exploration, development, and production of our own resources are essential to achieve that objective and are vital to our economy.” Executive Director of Greater Lafourche Port Commission Chett Chiasson discussed in his testimony “the importance of Port Fourchon to the offshore oil and gas industry; [its] contribution…to the national economy; and the importance of robust oil and gas lease sales in the Gulf of Mexico.” He noted that Port Fourchon serves as a transport point for 675 million barrels of domestic and imported crude oil and “plays a key roll (sic) in 18 percent of the nation’s oil supply.” He included a study in his testimony by Loren Scott, former Chair of the Louisiana State University Economics Department, which found “that more than $63 billion in total value of oil and gas are associated with Port Fourchon.” Chiasson emphasized that “industry needs to have confidence that the investments made in domestic offshore energy production will not be overly impeded by governmental regulations, and that our Nation’s domestic energy policy will continue to sustain investment of all energy types.” Matthew Cartwright (D-PA) asked the witnesses to describe the potential impact of the sequester on their respective industries. Kroll stated that sequestration would “slow things down and it’s unfortunately an already slow moving process.” Mitchell agreed and added that “the states working together with the federal government can help accelerate” the process. Turning to oil, Cartwright referenced “500 exploration plans and development documents that are anticipated for review this year” and asked, “How would those delays in oil and gas development due to this sequester, impact your industries?” Kief responded that delays in permitting would result in delays in drilling which would have a “negative impact” on Crosby Tugs and similar businesses. Chiasson stated it would have an impact, but he was “not sure” how much given the already slow 12 to 18 month permitting process. Holt focused his questioning on wind energy and asked for an outline of the current status and potential for wind. Mitchell responded that the wind industry is looking at machines that have evolved from producing 35 kilowatts of energy in 1991 to now planning for 6 MW machines. He anticipates that this will “drive down costs and make it more efficient to build” offshore wind farms. He noted that a wind farm with a capacity for 3000 MW would be the equivalent of removing the pollution generated by 1.5 million cars; it would also produce enough energy to power 1 million homes. Holt inquired about the permanent oil and gas tax subsidies and whether it was fair to have tax subsidies on renewables that must be renewed annually. Mitchell discussed the problem of the nation “picking winners and losers” in the renewables industry and the lack of a national energy policy. He advocated for taking a “long range view.” Opening statements, witness testimonies, and an archived webcast of the hearing can be found on the Committee’s web site. - KAC
Witnesses: Committee Members Present: On February 13, 2013, the House Committee on Science, Space, and Technology’s Subcommittee on Energy held a hearing to receive testimony assessing the current state of America’s energy technologies and policies and their potential impacts on energy markets. Adam Sieminski, an administrator for DOE’s Energy Information Administration (EIA), outlined in his testimony the recent energy production and consumption statistics issued in the Short Term Energy Outlook (STEO) and 2013 Annual Energy Outlook (AEO). The recent STEO is the “first to include the extension of the federal production tax credits for certain renewable energy sources.” The EIA expects an increase in domestic crude oil production of 1.4 million barrels per day by 2014. Over the next two years, they project a fall in crude oil prices and a rise in natural gas prices. An increase in natural gas prices will “contribute to a modest rise in coal-fired electricity generation.” Sieminski also stated that EIA expects electricity generation from renewable resources to grow; wind power generation is anticipated to increase by 16 percent in 2013 and 8 percent in 2014, and all solar power generation by 30 percent in both years. The 2013 AEO projects that natural gas will comprise 30 percent of U.S. energy generation in 2040 and will reach “other new markets, such as exports, as a fuel for heavy-duty freight transportation like trucking, and as a feedstock for producing diesel and other fuels.” In his testimony, Sieminski noted that the rate of “renewable fuel use [will grow] at a much faster rate than fossil fuel use,” increasing from “13 percent in 2011 to 16 percent in 2040.” The increase in renewables and efficiency will prompt a “shift away from the most carbon-intensive fuels,” leaving the “U.S. energy-related carbon dioxide (CO2) emissions…more than 5 percent below their 2005 level through 2040.” He added that, among other reasons, the increase in efficiency means that the projected increase in electricity usage is “less than one percent per year.” In his testimony, Robert McNally, president of the Rapidan Group, set out five observations and suggestions for dealing with energy markets, technologies, and policies. First, he stated that “ample” amounts of energy, particularly from fossil fuels, are necessary to “sustain our standard of living.” Fossil fuels are “far superior to other primary energy sources because they are dense, highly concentrated, abundant, and comparatively easy to transport and store,” according to McNally. Second, he issued a reminder that transforming existing energy systems takes time. Third, he urged policymakers to be cautious in making predictions and setting “unachievable targets.” Fourth, he noted that “we live in a global oil market, no matter how little we import” and that can have undesired consequences such as the “short-term crude and gasoline price volatility caused by a fundamentally tight and fearful global oil market.” Fifth, McNally stated that “not all surprises in the energy sector are unpleasant.” He pointed to the innovation in technology that “enables the energy industry to find and produce enormous reserves while protecting the environment and conserving natural resources.” Accessing methane hydrates, he advocated, could be a “plausible” innovation in the future. Lummis began the question and answer section asking Sieminski about EIA’s projections for exporting coal. Sieminski indicated that coal demands are “growing rapidly” in underdeveloped areas; however, since U.S. electricity will only grow by less than a percent, “our options are limited.” Domestic use of coal will increase slightly, Sieminski stated. He noted that not only does the opportunity to export coal exist, but the U.S. has already been exporting coal to Europe. He told Lummis that more information would be available with the publication of EIA’s International Energy Outlook this summer. Swalwell discussed President Obama’s challenge in the State of the Union address to cut in half U.S. energy consumption. Given that commercial buildings consume about 19 percent of all energy in the U.S., Swalwell inquired, “Is there an opportunity for us to have commercial buildings working better with public utilities to connect to the grid…[and to] install clean energy technology on these buildings to make them more energy efficient, reduce their consumption, and also create more made in America jobs?” Sieminski replied that there are “lots of opportunities in the business sector for improvements in energy efficiency,” and that EIA is implementing a survey of energy consumption in different types of buildings to identify such opportunities. Jacobson brought up the Better Buildings Initiative which brings together stakeholders to “overcome the barriers” to implementing efficiency increasing measures. She noted the high standards for building efficiency and the beneficial fact that “energy efficiency jobs can’t be outsourced.” Ralph Hall (R-TX) brought up the issue of EPA regulations and how such actions could affect energy production. Jacobson voiced support for the state-based regulation plan outlined by Governor John Hickenlooper (D-CO) at the Senate Committee on Energy and Natural Resources hearing on February 12, 2013. Hickenlooper stated that “states are the laboratories” indicating a hope that “federal regulations would be modeled after [those of] a group of states” rather than added on top of state regulations. Jacobson noted a need to be careful and ensure that correct data is utilized in regulations, but also pointed out the importance of generating public confidence in production safety. Marc Veasey (D-TX) inquired as to the practice of flaring and if there was “technology on the horizon to make it so that we don’t have to flare natural gas.” Sieminski pointed out that much of the flaring occurs in locations of new oil and gas developments that have yet to be connected to existing pipelines. He stated that it “takes time” for those areas to get connected. Additionally, he stated that there are companies considering using small natural gas liquefaction containers that allow for easier transport. In Alaska, much of the extracted gas gets reinjected, thereby reducing the need for flaring, Sieminski noted. Daniel Lipinski (D-IL) discussed issues of nuclear energy and EIA’s projections for the nuclear industry. Sieminski responded that the projected growth in nuclear stems from the construction of new plants and improvements in efficiency technology. Rohrabacher and Lummis expressed an interest in discussing additional “approaches to nuclear energy” including light water and small modular reactors. Randy Hultgren (R-IL) inquired as to what would be the best use for limited energy resources and funding. McNally replied that beneficial uses included research into improving batteries and extracting methane hydrates safely and efficiently. Opening statements, witness testimonies and an archived webcast of the hearing can be found on the Committee’s web site. - KAC
Witnesses: Committee Members Present: Chairman Ron Wyden (D-OR) began his opening statement declaring, “When it comes to natural gas, America is the land of opportunity.” He outlined some of the benefits of natural gas as giving the U.S. a “competitive advantage” in the energy market, initiating a “manufacturing renaissance,” and increasing national security. Natural gas is also 50 percent cleaner than other fossil fuels and contributed to the decrease in U.S. carbon dioxide emissions, noted Wyden. He stated that “production could soon outstrip American demand” raising issues of exporting liquid natural gas (LNG). He focused on the need to find a “sweet spot” that will “strike a balance between the environmental and economic” impacts. In her opening statement, Ranking Member Lisa Murkowski (R-AK) pointed to the economic improvements and job creation in states that host the natural gas industry. She noted the 44 percent increase in resource estimates associated with the “natural gas boom.” Advantages of the boom include “abundant clean energy,” “economic growth and security,” and fixing of the trade imbalance should the U.S. begin exporting LNG. She raised the issue of regulations, noting that geology differs from region to region and policymakers should rely first on state regulations. Rather than simply implementing blanket nationwide rules and standards, the government should “look at existing laws and determine where there are deficiencies” and address them. Governor John Hickenlooper (D-CO) opened his testimony discussing the “three interconnected issues facing our country right now”—economic recovery, national security, and climate change—and stating that the “crux of each of them is energy.” Natural gas offers the prospect of jobs, domestic industrial development and investment, less dependence on foreign oil, and lower emissions, Hickenlooper indicated. He stated that he believes the U.S. is “on the threshold of achieving energy independence,” but that the “future is more secure with energy that is sustainable and renewable” and the U.S. needs an “all of the above policy.” Between 2005 and 2012, U.S. importation of oil decreased from 60 to 41 percent. Hickenlooper focused primarily on how to best regulate natural gas extraction. He emphasized the need to “take full advantage of technology” while “ensuring that we have the strongest safeguards we could possibly have.” Colorado passed a law requiring disclosure of the contents of hydraulic fracturing fluids and is requiring green completions, “robust” groundwater monitoring, and assurance of well integrity. Additionally, universities are studying air quality around fracturing fields. He declared the state’s primary goal as ensuring “sufficient” and “balanced” public and industry involvement to create a level of transparency that provides the public with confidence that they are not “working against some unseen villain.” He hoped that Colorado’s state regulations could offer a national model. In his testimony, Andrew Liveris, chairman and chief executive officer of the Dow Chemical Company called natural gas “essential for American industry, and growth in shale gas production...a bright spot for the U.S. economy.” He discussed the manufacturing “renaissance” that has resulted substantially from the “reasonable and stable natural gas prices,” and will inspire new investments in U.S. based production facilities and create “approximately 5 million manufacturing jobs.” Liveris noted that manufacturers “conduct two-thirds of U.S. research and development.” Policies, he noted, greatly affect natural gas supply and demand, price, investments, and job creation; therefore, Liveris urged caution in developing policies encouraging using natural gas over other resources, exporting LNG, and enacting “unreasonable” regulations. Ross Eisenberg, vice president of Energy and Resources Policy for the National Association of Manufacturers (NAM) highlighted in his testimony the fact that manufacturers represent a third of U.S. energy consumption and stated, “Natural gas is a critical component of an “all-of-the-above” energy strategy that embraces all forms of domestic energy production.” A PricewaterhouseCoopers report that he cited indicated “full-scale and robust development of U.S. shale gas plays could result in 1 million new manufacturing jobs by 2025.” He added that the natural gas boom would draw companies to move production to the U.S. and positively impact manufacturers “across the supply chain.” Summarizing the NAM’s position, Eisenberg stated that “if the federal government takes an overly prescriptive or reactive approach to permitting, regulations, or exports, then our natural gas fueled manufacturing renaissance will be over quicker than it began.” He agreed with Hickenlooper that regulation should be state-based. President of the Natural Resources Defense Council Frances Beinecke stated in her testimony that “shale gas is changing our nation’s energy profile,” but pointed out that “natural gas, even if properly produced and consumed, is not a panacea for our energy challenges. It is still a fossil fuel, burned it produces fossil fuel pollution and contributes to climate change.” She called into question the current exemption of hydraulic fracturing from the Clean Water Act, Safe Drinking Water Act, Clean Air Act, and other regulatory laws. She emphasized a need for federal safeguards as opposed to a “patchwork” system of state regulations. Beinecke stated that there is “mounting” evidence of the damaging effects of fracturing and that “people want to know that their water is safe, that their air is clean, and that their lands and farms are protected...[and] their children are healthy.” She was in favor of a policy that would increase use of renewables and improve efficiency. In his testimony, Kenneth Medlock, senior director of the Center for Energy Studies at James A. Baker III Institute for Public Policy at Rice University, stated that the U.S. regulatory system has created “arguably the most efficient market in the world” as any consumer or producer can access it. The current regulatory system “encourages competition, entrepreneurship,” and is the reason behind the current “shale gale.” He argued “anything that stands to disrupt this very well functioning market…would be a detriment to this country and to the natural gas industry.” Medlock noted that the three countries most affected by the natural gas boom will be Russia, Iran, and Venezuela which raises significant geopolitical issues. Finally, he discussed how natural gas generated more power than coal in 2012, carbon dioxide emissions fell to the lowest levels since the 1990s, and the Environmental Defense Fund is examining methane leakage from the wellhead to end use. Jack Gerard, president and chief executive officer for the American Petroleum Institute stated in his testimony that the developments in natural gas are a “game changing opportunity” and have resulted in the “emergence [of the U.S.] as a superpower in global energy production.” He emphasized the role of oil and gas in creating American-based jobs given that “unconventional natural gas production supports 1.7 million [upstream segment] jobs.” Such jobs are expected to increase to 2.5 million by 2015, 3 million by 2020, and 3.5 million by 2035 with unconventional natural gas and oil generating over $2.5 trillion in tax revenues by 2035. He touched on geopolitical issues referring to LNG exports and the ability to “improve our trade deficit and spur major investment in infrastructure, which will strengthen our energy security.” Gerard also noted the reduction in U.S. carbon emissions to 1992 levels and credited this mainly to the growing use of natural gas. Much of the question and answer session was spent discussing the prospect of LNG exports. Liveris prominently emphasized the need to be “careful of unintended” consequences of exports and to approach the issue cautiously. One potential consequence he noted was the risk of “indexing the domestic gas price to the global oil price.” This could occur, he argued, because while the U.S. has a domestic gas price, the “world gas market doesn’t exist” and gas prices are set at the same level as oil prices. Medlock disagreed stating that gas prices were set at the level of oil because the gas market lacked liquidity which is “gained as the market matures” and is a process that shouldn’t be hindered. Wyden asked the witnesses for recommendations on finding the “sweet spot” in natural gas policymaking “where American can have it all: economic growth, lower emissions, cheaper power, and reduced trade deficit.” Hickenlooper cited the need for “appropriate regulations.” Liveris stated that the U.S. should continue to “follow current laws and regulations,” be cautious in moving forward to enact “responsible regulations” and ensure that supply and demand don’t become unbalanced. Eisenhower focused on the need to streamline and speed up permitting. Beineke replied that issues of public protection and increasing public confidence in gas extraction processes and safeguards are essential. Medlock indicated a need for transparency and stated that markets should be left free to respond naturally. Gerard seconded allowing the market to “sort out and adjust” for the natural gas boom and exports. Murkowski asked Hickenlooper if he thought the U.S. needed federal regulations on hydraulic fracturing on top of the Colorado state regulations, or if they would add an “unnecessary layer” of rules. Hickenlooper responded that “states are the laboratories” indicating a hope that “federal regulations would be modeled after [those of] a group of states” rather than added on top of state regulations. He referred to the state-based plan as a “template” allowing “different states to work together with the federal government…[to] cut the red tape and yet still maintain a very high and rigorous set of regulatory environments.” John Hoeven (R-ND) also inquired as to the “state’s first approach” asking about transparency, regional differences, and building consensus. Beinecke advocated that there be “federal minimal standards” but did not discount the prospect of regulations created by a state becoming the federal standard. She noted that there are regional differences in geology to take into account and stated that “most [federal] environmental laws recognize” differences from state to state. She emphasized the need to make people “confident that standards will protect them” and bring together all of the stakeholders to address concerns. Gerard stated that regulations at the federal level should not be rushed and regulation should start at the state level. Environmental questions focused on methane emissions and increasing renewable energy use and development. Mark Udall (D-CO) stated that committee’s primary goal should be to “protect the health and well being of citizens” and asked about fugitive methane emissions from natural gas extraction. Hickenlooper stated that the issue of methane emission is “crucial” as methane is “very harmful” and extensive loss will negate much of natural gas’s environmental benefits. The University of Colorado is studying air quality to obtain data on methane leakage. He noted that this methane is a product that companies can capture and sell. Beinecke indicated a need for measuring methane loss, monitoring air quality, and implementing technology to reduce fugitive emissions. Udall and Al Franken (D-MN) raised the fact that oil and gas is the second largest methane emitter in the country. Franken promoted investing in renewable technology development now given that the Department of Energy invested in research in the 1970s that paid off 30 years later with the current natural gas boom. Medlock agreed and praised the “remarkable foresight” of government investment. Hickenlooper also agreed but noted that renewables can be intermittent and that natural gas is the “perfect partner” for renewables to ensure efficient and consist power. Maria Cantwell (D-WA) inquired about responding to climate change so as to reduce future spending on natural disasters. Beinecke insisted that “natural gas isn’t a solution in the long term” and that there needs to be a switch to renewables. She again mentioned the unknown potential health consequences and “lack of safeguards” associated with natural gas. Opening statements, witness testimonies and an archived webcast of the hearing can be found on the Committee’s web site. - KAC
Witnesses: Committee Members Present: On February 5, 2013, the House Committee on Energy and Commerce Subcommittee on Energy and Power held a hearing to receive testimony assessing North America’s energy resources. The hearing was the first in a series on “American Energy Security and Innovation.” The recent and ongoing oil and gas boom in the U.S. has led the subcommittee to reevaluate the development of policies passed on the previous “belief of ever dwindling energy resources.” In his opening statement, Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) hailed the increase in oil and natural gas resource production as “a very pleasant surprise” that prompts a “wholesale rethinking of energy policy” so that it is no longer “rooted in the assumption of domestic energy scarcity,” but in “energy abundance.” He referenced the Energy Information Administration’s (EIA) prediction of continued increase in domestic oil and gas production and a need to approve the Keystone XL pipeline. Whitfield promoted domestic production as a means to “lower energy prices, create jobs, and strengthen national security,” but also recognized the need to use a “diverse mix of our resources: coal, oil, gas, and renewables.” Energy and Commerce Committee Chairman Fred Upton’s (R-MI) opening statement focused on domestic oil and gas production as providing “game changing potential for North American energy independence.” Noting previous concerns over heavily relying on oil from countries in the Organization of the Petroleum Exporting Countries (OPEC), he emphasized the new standing of the U.S. as the “world’s leading producer of natural gas” and predictions “that by 2020, U.S. oil production will exceed Saudi Arabia’s.” Upton expressed concern that federal laws will hinder domestic production while listing benefits of such production, including boosting our economy, creating jobs, and enhancing energy security. He also mentions the need to improve infrastructure such as by approving the Keystone XL pipeline. In his opening statement, Energy and Power Subcommittee Ranking Member Bobby Rush (D-IL), outlined the importance of “enacting an energy blueprint” that focuses on four areas: providing “safe, reliable, and affordable energy to all Americans,” providing “additional jobs and economic opportunity to all sectors of our populations,” addressing the “consequences of climate change,” and becoming “self-sufficient and energy independent.” Rush promoted the use of renewable energy sources and emphasized the National Renewable Energy Laboratory’s finding that the U.S. could meet 80 percent of the nation’s energy needs with renewable sources by 2050 given existing technologies. In his testimony, Adam Sieminski of the U.S. Energy Information Administration provided extensive data on the state of domestic energy resources. He announced that “EIA estimates that U.S. total crude oil production averaged 6.4 million barrels per day in 2012, an increase of 0.8 million barrels per day.” New technologies in tight oil extraction generated this increase and production should continue to increase to 7.9 million barrels per day in 2014. Average 2012 natural gas production equaled 69.2 billion cubic feet per day. While oil and gas production excelled, domestic coal production fell by 12 percent over the past four years. Sieminski discussed the 17 percent wind and 32 percent solar increase in renewable energy consumption. Biofuel consumption increased, but hydropower decreased due to drought conditions. Overall 10.3 percent more renewable resources were consumed in 2012 than in 2010. Daniel Yergin, Vice Chairman of IHS, began his testimony stating, “The United States is in the midst of the ‘unconventional revolution in oil and gas’ that...supports 1.7 million jobs.” He continued with statistics that domestic shale gas production increased from 2 to 37 percent in 10 years and U.S. oil output “by about 38 percent since 2008.” Yergin noted that such changes in domestic resource production stimulate questions on the environmental impacts and exporting of said energy. It alters global geopolitical interactions with effects on the Iranian sanctions, discussions of exporting LNG to Japan given their energy shortage, and concerns of European countries over the U.S.’s increasing energy competitiveness as expressed at the World Economic Forum. The Director of the Climate and Energy Program at the World Resources Institute, Jennifer Morgan detailed in her testimony the need to “factor in both opportunities and risks” when dealing with energy resources, and “consider the risk of climate change” for current and future resource development. She addressed a number of key points including creating bipartisan legislation to support improving energy efficiency, diversifying domestic energy production, funding low-carbon and clean energy technologies, and minimizing environmental impacts. Morgan emphasizes that any plan must consider climate change and policies “should be comprehensive, long-term, targeted, and inclusive.” In her testimony and posted summary, Mary Hutzler, a distinguished senior fellow with the Institute for Energy Research (IER) said that the “question is whether the federal government will permit us to have access to our abundant energy resources not whether sufficient resources exist.” She outlined the abundance of resources noting the 400 percent increase in shale oil production in the last 10 years and more than 300 percent increase in shale gas production between 2007 and 2010. Combining hydraulic fracturing and horizontal drilling “revolutionize[d] the industry” and Hutzler used the 25 fold increase in estimated technically recoverable oil in the Bakken Formation as an example of the results of this “energy miracle.” An IER study showed that, were the U.S. to open federal lands and offshore areas to development, the nation’s “economic activity” would gain $14.4 trillion in 30 years. During the question and answer session, Gene Green (D-TX) asked about the future of natural gas production. Sieminski replied that the EIA expected production to “hold even” as price increases will allow coal to better compete with natural gas. Ed Markey (D-MA) questioned the reliability of EIA data and projections citing discrepancies between projections for 2010 to 2012 and the “real data.” Rush raised the issue of job creation in unconventional oil, to which Yergin responded that jobs would be spread across states because there are direct, indirect, and induced jobs to consider. He stated that he believes the U.S. is prepared for this level of job growth but it will require some training. Given the increase in domestic resource production and availability, Joe Barton (R-TX) asked if the U.S. could be “self-sufficient in oil production in 10 years.” Sieminski said that it was possible but more still need to be done, such as spacing wells closer together. He projected that 30 percent of the U.S. oil would remain imported. Lee Terry (R-NE) asked the panel to comment on the likelihood of liquefied natural gas (LNG) use in vehicles in the future. Yergin and Hutzler agreed on use of LNG fuel for heavy trucks but noted that the level of infrastructure needed for expanding that use to private vehicles was too difficult. Vidas indicated that while LNG use in vehicles would triple, it would still be only a small percentage increase and LNG would contribute more to private vehicle fueling through generation of electricity for electric cars. Steve Scalise (R-LA) inquired as to why there was such an increase in production on non-federal lands as opposed to federal lands. Hutzler claimed that the fact that 96 percent of production was on non-federal lands because it takes 300 days to obtain a federal permit and only 30 for a state permit. She advocated for streamlining the permitting process. Michael Doyle (D-PA) challenged her statements with a map showing the lack of overlap between federal lands and the location of shale reserves, stating that “geology works in the favor of private owners.” John Shimkus (R-IL) and Mike Pompeo (R-KS) brought up the status of pipelines for transporting oil and gas. Yergin, Hutzler, and Vidas described pipeline as the “most efficient,” “least expensive,” and a “safer” means of transporting materials. Shimkus inquired as to what effect increased domestic production would have on global geopolitical affairs in terms of exporting LNG. Yergin responded that given the huge supply, the U.S. needs a larger market. Bill Cassidy (R-LA) emphasized the need to provide Japan with LNG to “protect their economy” after the loss of the Fukushima reactor. Yergin agreed with this statement. Pete Olson (R-TX) focused on “geopolitical challenges” asking about how foreign affairs would be affected, particularly with regard to Eastern Europe. Yergin responded that the U.S. would become more self-sufficient causing countries in the Middle East to increasingly export to eastern Asia. He spoke about Brazil being “on course to be a global energy powerhouse” and Poland and Ukraine desiring to develop further energy independence from Russia. Democratic members focused their questions on topics of energy efficiency, renewable energy, and the relationship between climate change and energy policy. Their questions primarily addressed Morgan. Rush inquired as to what prevents the further development of renewable energy and how the U.S. can become an exporter of renewables. Doris Matsui (D-CA) asked about the “economic benefits of expanding renewable energies.” Morgan replied that with the expansion of renewables, there is a prospect of having “more jobs created than in oil, fossil fuel, and coal combined.” She projects that if the U.S. had 30 percent of its energy from renewables, there would be four million jobs created by 2040. Waxman’s questions were exclusively on how to factor climate change into policies. Morgan stated a need to address greenhouse gas emissions as the carbon dioxide reduction rate has reached a plateau and methane continues to increase. She advocated for a “carbon pricing” policy as is in place in Europe. Waxman and Morgan focused on the idea that environmental considerations should be taken into account when developing policy. Opening statements, witness testimonies and an archived webcast of the hearing can be found on the committee’s web site. - KAC
Sources: Hearing testimony. Contributed by Wilson Bonner, AGI Geoscience Policy; Kimberley Corwin, 2013 AAPG/AGI Spring Intern. Please send any comments or requests for information to AGI Geoscience Policy. Last updated on March 26, 2013 |
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