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.
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