WASHINGTON, Jan. 20, 2016 - The Senate Energy and Natural Resources Committee held its first hearing of the New Year on Tuesday to discuss America’s long- and short-term energy outlook.
In 2015, “we laid the foundation to modernize our strategic oil reserves, we lifted the ban on oil exports… and we passed, in an 18-4 bipartisan vote, the Energy Policy Modernization Act, that (has since) moved out of this committee,” Chairwoman Lisa Murkowski, R-Alaska, said in her opening statement.
Now, the committee is focused on moving the Energy Policy Modernization Act to the Senate floor – as early as this week, according to Sen. John Hoeven, R-N.D. – where Murkowski told reporters there would be an open amendment process.
Murkowski and the panel’s ranking member, Maria Cantwell, D-Wash., have differing views on how best to approach energy policy – Murkowski supports opening up more federal land to oil, coal, mineral and gas extraction, while Cantwell favors expanding the use of renewable energy.
But both agreed the hearing’s expert witnesses had vital and timely information to share with lawmakers ahead of the Senate floor debate on their committee’s bill. The witnesses, for the most part, stressed the unpredictable future of the oil and gas market, and explained the surge in renewable energy technology adoption.
Adam Sieminski, administrator of the Energy Information Administration (EIA), told the committee that the recent decline in U.S. fossil fuel-generated energy was offset by an increase in renewable sources, a phenomenon he predicted would continue into 2016 and 2017.
In 2015, natural gas made up 33 percent of the nation’s total generated energy. Sieminski says natural gas’ share of the domestic energy pie will drop to 31 percent in 2017 as natural gas prices rise, and hydroelectric power’s share would edge up from 6 percent to 7 percent. He expects coal’s share of domestic energy generation to fall from 34 percent in 2015 to 33 percent in 2017, and solar and wind power to increase from 7 percent share to 9 percent in 2017.
Sieminski also shared the following data and predictions:
- Crude oil prices ended in 2015 below $40 per barrel, the lowest level since early 2009. Sieminski said the price drop is attributable to a 3 percent production increase by OPEC, led by Iraq. EIA estimates lower gasoline prices will save the average U.S. household $280 in 2016. The agency also expects U.S. crude oil production to decline through 2016 and most of 2017, from an estimated 9.4 million barrels a day in 2015, to 8.7 b/d in 2016, and 8.5 b/d in 2017.
- U.S. natural gas prices in 2015 were, on average, $2.63 per million British thermal unit – $1.76 less than the average price in 2014. Total dry natural gas production in the U.S. during 2015 reached about 74.5 billion cubic feet a day – 5.6 percent more than in 2014. EIA forecasts U.S. natural gas demand will increase as supply growth moderates, resulting in prices rising from 2015 levels.
- U.S. coal production in 2015 is estimated to have fallen below 900 million short tons – 11 percent lower than in 2014, and the lowest level since 1986. More than 11,000 megawatts of coal-fired capacity were retired through October 2015, and an additional 2,600 MW were expected to be retired by December. EIA expects U.S. demand for coal to remain weak, and coal exports and coal production to decline in 2016 and 2017.
- In April 2015, natural gas-fired electricity generation surpassed coal-fired electricity generation for the first time in history. The same happened in the months of July through October 2015.
- Wholesale electricity prices at major trading hubs on a monthly average basis for non-peak hours were down between 27 and 37 percent across the nation in 2015, compared to 2014. Lower natural gas prices were key to driving down these prices.
- Hydroelectricity was still the largest renewable energy source in 2015, accounting for 6 percent of the nation’s total energy generation, despite lower-than-normal water and snowpack levels.
- While solar power only accounted for 1 percent of the nation’s energy in 2015, the net generation from distributed solar photovoltaic (PV) systems increased 28 percent, and utility-scale PV systems increased 50 percent over 2014 numbers. Wind power accounted for 4 percent of the nation’s energy in 2015.