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[Senate Hearing 114-155]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-155

                THE ENERGY INFORMATION ADMINISTRATION'S 
                     ANNUAL ENERGY OUTLOOK FOR 2015

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                THE ENERGY INFORMATION ADMINISTRATION'S
                     ANNUAL ENERGY OUTLOOK FOR 2015

                               __________

                             APRIL 16, 2015

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                   LISA MURKOWSKI, Alaska, Chairman 
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
STEVE DAINES, Montana                AL FRANKEN, Minnesota
BILL CASSIDY, Louisiana              JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
ROB PORTMAN, Ohio                    MAZIE K. HIRONO, Hawaii
JOHN HOEVEN, North Dakota            ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           ELIZABETH WARREN, Massachusetts
SHELLEY MOORE CAPITO, West Virginia
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                    Karen K. Billups, Staff Director
                Patrick J. McCormick III, Chief Counsel
                Tristan Abbey, Professional Staff Member
           Angela Becker-Dippmann, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
     Tara Billingsley, Democratic Senior Professional Staff Member
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                            C O N T E N T S

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                           Opening Statements

                                                                   Page
Murkowski, Hon. Lisa, Chairman, and a U.S. Senator from Alaska...     1
Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from 
  Washington.....................................................     2

                               Witnesses

Sieminski, Hon. Adam, Administrator, U.S. Energy Information 
  Administration, U.S. Department of Energy......................     5

          Alphabetical Listing and Appendix Material Submitted

Cantwell, Hon. Maria
    Opening Statement............................................     2
Murkowski, Hon. Lisa
    Opening Statement............................................     1
Sieminski, Hon. Adam
    Opening Statement............................................     5
    Written Testimony............................................    10
    Responses to Questions for the Record........................    57
    For the Record:
        Annual Energy Outlook 2015 by the U.S. Energy Information 
          Administration dated April 2015........................    75

 
 THE ENERGY INFORMATION ADMINISTRATION'S ANNUAL ENERGY OUTLOOK FOR 2015

                              ----------                              

                        THURSDAY, APRIL 16, 2015

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:06 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski, Chairman of the Committee, presiding.

  OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM 
                             ALASKA

    The Chairman. I call to order the meeting of the Energy 
Committee.
    Good morning, everyone. I would like to welcome you, Mr. 
Sieminski, here to present on the Energy Information 
Administration's (EIA) Annual Energy Outlook for 2015.
    Mr. Sieminski, you have appeared before the Committee many 
times. We appreciate your work. You have ably served as EIA's 
Administrator since June of 2012, and again, we are pleased to 
have you back before the Committee today.
    The EIA, as we know, is an important agency and one that we 
take very seriously here on the Energy Committee. The volume, 
the breadth and the frequency of its many publications are 
very, very impressive.
    The publication that brings us here today is the Annual 
Energy Outlook for 2015 which was released earlier this week. 
It is a lovely, glossy, thick, not too thick, very readable 
book with good charts and great information as well as the 
Executive summary that's in there--but it is chock full of good 
information.
    It is my understanding that this is a projective document 
rather than a predictive one. 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 under 
certain assumptions.
    This is a useful annual exercise. Over the past five years 
the EIA's projections in the Annual Energy Outlook have painted 
a picture of a brighter American future at least in the terms 
of energy.
    So before we proceed to your testimony, Mr. Sieminski, I 
want to highlight two items from EIA's Executive Summary that I 
found interesting. I think that Committee members will, 
perhaps, have a number of questions on these items.
    First, according to EIA we could see zero net energy 
imports in 2028 under the reference case or as early as the 
year 2019 in the high oil price and high oil and gas resources 
scenarios. I believe this is enormously good news for our 
nation. The projected zeroing out of our net energy imports 
portends a future in which the United States is a net energy 
exporter. It does not require much of an imagination to see how 
that will potentially enhance our geopolitical position around 
the world.
    The second point is that EIA's report also recognizes the 
growth in crude oil and dry natural gas production vary 
significantly across regions. As a result increased investment 
or realignment of pipelines and other midstream infrastructure 
is necessary.
    Now as we all know this Committee is working on a 
bipartisan energy bill. We will have both infrastructure and 
supply titles in that bill, along with titles on efficiency and 
accountability. It is my hope this morning in this hearing as 
we look at the Annual Energy Outlook that we will gain some 
numerical grounding to that effort and that EIA will continue 
to be a resource for the Committee going forward.
    So, Mr. Sieminski, we look forward to your presentation on 
this annual report. Again, thank you for the good work that has 
led up to this point in time.
    With that, I will turn to Senator Cantwell as the Ranking 
Member and then we will turn to you, Mr. Sieminski.

 STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Madam Chair, and thank you for 
this annual hearing and for the update.
    Mr. Sieminski, thank you so much. It is a pleasure to be 
working with you on such an important issue. We are here today 
to look at the findings in this report.
    First, I think it is important that the U.S. is likely to 
become less reliant on imported energy but will still remain a 
net oil importer for the entire forecast period. Within the 
context of the debate about current export policy, this is a 
key factor that we have to keep in mind.
    Second, carbon pollution is still expected to increase, 
even while it remains below the 2005 levels. This highlights 
the fact that we must take steps to bend the curve even further 
downward, given the tremendous cost to our climate and what is 
already being imposed on businesses and communities in my state 
and around the country.
    We need to look at policies where we can be mindful that 
these analyses, as my colleague just said, are predictive about 
what is happening right now, but not 100 percent certain about 
what is going to happen in the future. Keeping that in mind we 
need to increase energy efficiency, make it a larger variable 
in the equation and keep carbon pollution below the 2005 
levels.
    For example, carbon pollution from the residential sector 
is projected to decline by five percent from 2013 to 2040. 
These reductions come from appliance and building efficiencies, 
which more than offset the growth in the number of houses that 
will need to be heated and cooled. I know a lot of my 
colleagues appreciate that we can do much more to drive energy 
efficiency solutions into the marketplace, and it is a policy 
that ultimately pays for itself.
    Another important finding in the report is that electricity 
prices are likely to increase because of fuel costs. In the 
reference case national electricity prices are projected to 
rise 18 percent between 2013 and 2040, and these price 
projections are driven by coal prices rising by nearly 25 
percent and natural gas prices rising by 88 percent.
    In contrast, the renewable generation technologies, which 
use wind and solar and fuel, are going to be comparatively less 
expensive, potentially seeing different technology costs 
dropping 10 to 20 percent. These projections don't even take 
into account the rapid technology changes that can further 
drive the cost curve down.
    So it seems like sensible policies to me that we should 
still do more to connect these technologies to the electricity 
grid. Along those lines I should note that I do have an ongoing 
concern that EIA continually underestimates the potential of 
renewable energy in the Annual Energy Outlook report, but maybe 
that is something we can work on for the future.
    In these projections renewables meet much of the growth in 
electricity demand. In fact, renewables are likely to become 
cost competitive in many regions in the coming years. According 
to the Department of Energy's own 2014 Revolution Now Report, 
``by 2014 roof top solar panels cost about one percent of what 
they did 35 years ago and solar PV installations were about 15 
times what they were in 2008. So between 2008 and 2014 the cost 
of PV model declined from $3.40/watt to $0.79/watt.''
    Also in the same report DOE found a similar finding for 
wind. There seems to be an internal disconnect at the 
Department of Energy because other offices at DOE are noting 
how much better these technologies are performing than 
forecasted, and yet, EIA is predicting the same high-cost, low-
growth scenarios.
    So I cannot imagine your job, Mr. Sieminski, balancing all 
of these variables any time you have this many scenarios and 
trying to keep them all on a similar line of a level of whether 
it is now or in the future. Maybe we can talk again about how 
we get some of this in future reports.
    Another example, as of the end of 2014, the American Wind 
Energy Association's market report reported that the United 
States had a wind capacity of over 65 gigawatts. Your 2013 
report, just two years ago, projected that wind capacity 
wouldn't exceed 65 gigawatts until 2034. So in reality it 
happened 20 years before that.
    Many organizations and associations have found that EIA's 
assumptions are lagging behind the real world when it comes to 
clean energy development, and these assumptions, if incorrect, 
drastically impact the projections of renewables and can paint 
a misleading picture about the power of renewables.
    So while this EIA analysis is very useful, I think we need 
to take a holistic approach about how different energy sources 
are faring against others and the policies. This analysis is 
just one tool that helps us look at market predictions.
    I am a very big supporter of EIA and actually want to 
enhance its capacity because I think in an information age 
energy policy is so important and you can play a role on so 
many different avenues. I think it is very important we 
continue to strengthen your office and organization, and I am 
sure we will get a chance to talk about it in the Q and A.
    I would also like to commend the EIA on its announcement 
that effective in March it is now able to provide monthly data 
on rail movements of crude oil. I suspect that reaching an 
agreement with the U.S. Surface Transportation Board and 
Canada's National Energy Board to get this data were not a 
simple task. The data shows that over the past five years 
crude-by-rail shipments have increased 17 times nationally. Let 
me put it in the percentage. That's a 1,751 percent increase in 
the shipment of crude-by-rail. 20,000,000 barrels in 2010 to 
370,000,000 barrels in 2014. That is, to say, a big impact on 
us in the Pacific Northwest. The hard facts make it clear the 
responsibility lies with policy makers to consider the public 
health and safety-related impacts of this emerging trend.
    Neither the oil industry nor the rail industry should enjoy 
unfettered profits from the shale boom without being required 
to step up and make sure that they have the safety precautions 
in place for the kinds of rail explosions that we are seeing 
across America.
    So once again, Mr. Sieminski, thank you and your staff so 
much for providing this information. I want to continue to work 
with EIA to make additional progress in this area.
    One other thing I want to mention, a lingering concern 
about the data and analysis associated with another pressing 
topic before the Committee, namely the completeness of EIA's 
crude oil export analysis. In February 2014, Senator Wyden, who 
was the Chair of this Committee, and I joined to ask you for a 
comprehensive analysis of the regional price and transportation 
impacts on any change to current export policies. We live in a 
part of the country, Washington and Oregon, that depends on 
Alaska crude oil, and our market has been relatively isolated 
from the rest of the country.
    I am sure my colleagues will remember that both Senator 
Wyden and I constantly talk about this issue.
    We have to talk about it because we have some of the 
highest gasoline prices in the nation, and we are always asking 
why. Let's just say that now as we look at the discussion in a 
few weeks in our export hearing we want to understand more 
completely this issue. From what we have seen thus far in EIA's 
piecemeal analysis on crude oil exports, there has been no 
analysis on what this policy change might mean for consumers in 
the Pacific Northwest, who pay, as I said, among the highest 
gas prices. We also see headlines from other organizations 
suggesting that crude-by-rail traffic could double if the 
export ban is lifted. We need EIA to provide some enlightenment 
and additional analysis on this. I do not think Senator Wyden 
and I are satisfied with where we are, and we want to see this 
information as soon as possible.
    Again, Madam Chair, thank you for holding this hearing. And 
again, Mr. Sieminski, we want more information. That is the 
bottom line, and we want to help build as robust an 
organization underneath you as we possibly can in an 
information age where this is such a vital, important issue to 
our country. Thank you.
    The Chairman. Thank you, Senator Cantwell.
    Mr. Sieminski, again, welcome to the Committee. We look 
forward to your comments this morning.

 STATEMENT OF HON. ADAM SIEMINSKI, ADMINISTRATOR, U.S. ENERGY 
     INFORMATION ADMINISTRATION, U.S. DEPARTMENT OF ENERGY

    Mr. Sieminski. Thank you very much, Chairman Murkowski, 
Ranking Member Cantwell, Senator Manchin, Senator Gardner. It's 
a pleasure to be here. I really appreciate the opportunity to 
talk about the Annual Energy Outlook.
    And I'd like to start off with a request. I hope it would 
be okay if I would run over by two or three minutes of the five 
minute allocation in trying to summarize that.
    Thank you.
    The Chairman. Absolutely. We don't have to turn to anybody 
else on the panel----
    [Laughter.]
    Mr. Sieminski. The second thing that I would like to say is 
that when I appeared before this Committee in early 2012 during 
my confirmation hearing I mentioned a number of things that I 
thought that EIA needed to do. And one of those was to do 
crude-by-rail information. Another one was to have much better, 
more timely data on the production of light, tight oil in the 
United States.
    And EIA has delivered on both of those promises. And we 
have a few more things that we're working on but in general, I 
think, that the flow of information is pretty good.
    EIA is the statistical and analytical agency within the 
Department of Energy. And by law, EIA's data and analyses are 
independent of approval by any other Federal office. So my 
remarks today really represent EIA and not the Department of 
Energy or any other Federal agency.
    I'd like to start off with just a few comments about the 
short term energy outlook. What's happening in the global oil 
markets, in particular. And then discuss the recently released 
Annual Energy Outlook in more detail.
    In the short run EIA is expecting generally rising crude 
oil prices over the next few years. But we recognize the very 
high uncertainty as reflected in recent transactions in the 
futures and options markets. EIA forecasts that Brent crude oil 
which is a global water borne bench-mark will average about $59 
in 2015 and $75 a barrel in 2016.
    West Texas Intermediate or WTI crude, the land-locked U.S. 
bench-mark is expected to continue to sell at a $5 to $7 
discount to Brent.
    Some of the key factors in the near term pricing 
uncertainty include the global economic outlook, what's 
happening in China, especially. And geopolitical issues 
affecting supply in countries as diverse as Venezuela where the 
economic situation is really bad and Iran where the nuclear 
talks are underway and might result in a lifting of sanctions. 
And this could have big impacts on the availability of oil in 
the global markets.
    Total domestic crude oil production averaged about 8.7 
million barrels a day in 2014. We think that it hit close to 
9.2 million barrels a day in the last quarter of 2014, but 
should be relatively flat in 2015 then rising to 9.3 million 
barrels a day in 2016. EIA expects drilling activity to begin 
to increase in the second half of 2015 as companies respond to 
somewhat higher prices and lower costs for leasing, drilling 
and completion.
    On the consumer side there's some really good news from 
lower oil prices. This should save the average household 
something like $700 in 2015 compared to 2014. U.S. average 
regular gasoline prices at the retail level, about $2.40 or so 
now, are expected to remain near that level through the summer 
and might hit $2.75 or so next year.
    Natural gas storage and working inventories are in much 
better shape at the end of this winter than they were last 
winter. And EIA projects that natural gas inventories will end 
October 2015 looking out towards the end of this year at nearly 
3.8 trillion cubic feet following an injection season that's 
expected to be the fourth highest on record.
    Natural gas spot prices averaged just under $4.40 a million 
BTUs in 2014. And we think that that number will be down closer 
to $3.10 a million BTU in 2015. And still under $3.50 in 2016.
    That's pretty good news for consumers in the mid part of 
the United States that depend on natural gas for heating fuel. 
Primarily because lower natural gas prices relative to coal 
prices generators are using more natural gas than they were 
last year. Natural gas' share of generation is projected to be 
30.4 percent of total generation this year compared to 27.4 
last year. The share of coal fueled generation is forecast to 
be down about three percentage points from about 39 to 36 
percent in 2015.
    EIA expects the share of total electricity generation from 
renewables, all renewables, including hydropower to increase 
from 13 percent in 2014 to a little over 14 percent in 2016 
with wind alone providing more than 5.2 percent of total 
generation.
    I'm going to turn now to the Annual Energy Outlook which 
provides longer term projections focused on factors that shape 
U.S. energy markets through 2040 under the assumption that 
current laws and regulations remain unchanged throughout the 
projection period. Consistent with this approach neither EPA's 
proposed Clean Power Plant rules for existing fossil fired 
electric generating units, nor the effects of possible changes 
in current limits on crude oil exports are considered. These 
topics will be addressed in two forthcoming EIA reports.
    Senator Cantwell, let me just mention very quickly that 
using the assumption that current law and regulations remains 
in place, generally tends to underplay EIA's forecasts for 
renewables simply because of the positive impact on renewables 
that come from the tax credits and other Federal incentives. 
And since we allow those to sunset as they do in existing law, 
it shows lower numbers in the reference case. If you look at 
our no sunset cases, which assumes continuation of the tax 
incentives, the results are in line with the recent experience 
of short term extensions.
    The AEO reference case and the five alternative cases 
really do provide a good basis for examination and discussion 
of energy market trends. And they serve as a starting point for 
the analysis of potential changes in U.S. energy policies.
    I don't have any doubt at all that there are going to be 
big differences with our forecast for what 2040 looks like and 
what will really be the case in 2040. But it's super, super 
helpful to have a reference case against which you can test 
changes in law and regulation and changes in the economy, 
changes in oil and gas and other prices to see what the 
sensitivities are. It's really important we do that.
    In the reference case Brent crude oil rises steadily after 
2015 in response to global oil demand and keeps moving. The 
variation prices that we show in the AEO is quite wide. There's 
a high case of oil getting to $252 a barrel by 2040, a low case 
of $76 a barrel.
    I think of these as stress tests. It's not that we really 
believe that oil is going to go to $250 a barrel, but we want 
to look at what happens in the economy if we were to have such 
an event take place.
    Figure two in my testimony shows net energy imports 
aggregated across all fuels. And that's the point that we were 
making earlier. In our reference case net energy imports cross 
over at around 2028 to zero net energy imports.
    Most of the heavy lifting in those numbers occurs actually 
in the period running up to 2020. So it's possible that the 
U.S. could become a zero net importer of energy even sooner 
than the reference case numbers. A lot depends on geopolitical 
events and what happens in the markets, what happens with the 
economy.
    Strong growth in domestic crude oil production from tight 
formation leads to a decline in petroleum imports in all of the 
cases. In the reference case, the U.S. is importing about 20 
percent of its consumption in 2015. That's in contrast to 60 
percent of demand for liquid fuels being met by imports back in 
2005. It was only ten years ago.
    The possibility, that with higher oil prices or a high oil 
and gas resource case, that the U.S. would become a net 
exporter of total liquids is a real one.
    Turning to natural gas.
    Prices in the U.S. market are mainly influenced by domestic 
resource availability and technology. They're also affected by 
world energy prices and natural gas demand. In the reference 
case, the Henry Hub price rises to nearly $5 a million BTU in 
2020 and to nearly $8 a million BTU in 2040 as increased demand 
in domestic and international markets leads to the production 
of increasingly expensive resources.
    In alternative cases the Henry Hub price could be 
substantially lower, $3 a million BTU in 2020, 36 below the 
reference case. That would be if we simply find more oil and 
natural gas than is in our reference case.
    Beyond 2020 prices vary across the different cases, closer 
well spacing, greater technology than the reference case that 
give significantly lower numbers for gas prices and to oil 
prices as well than are in our reference case.
    Figure four in my testimony shows exports of liquefied 
natural gas in the reference case, the high oil and gas 
resources case, in the low oil price case, that natural gas 
trade including LNG exports depends largely on the effects of 
resource levels and world energy prices. In all cases, as we 
show in the testimony, the United States transitions from being 
a net importer of natural gas to a net exporter by 2017.
    Senator Murkowski said that we would be a zero importer 
before the end of the next decade and that growth differences 
across regions were important. And Senator Murkowski, we do 
find that regional variations in domestic crude oil production 
and natural gas production could drive significant changes in 
flows between regions requiring an investment or realignment in 
things like pipelines and other midstream infrastructure.
    Some of the biggest differences in the high oil and gas 
resource case, for example, are a lot more oil in the Dakotas 
and Rocky Mountains area that requires transportation out to 
refineries and markets and a lot more production potentially of 
natural gas in places like Pennsylvania, Ohio and West Virginia 
that would require the movement of gas out of those regions.
    Figure six in my testimony shows manufacturing output, 
where all of the growth in natural gas goes that the United 
States is going to see, in our view, over the next 25 years or 
so. Both chemicals industry, the food processing industry, the 
refining industry and metal smelting, would all be 
beneficiaries of this growth in natural gas production.
    Figure seven in my testimony talks about the rise in 
electricity prices and increasing with rising fuel costs. The--
one of the key things there is that electricity demand itself 
is not growing very much, only by about eight tenths of a 
percent per year. And as a consequence it's very hard for new 
fuels, like renewables, to penetrate the electric markets. 
Although renewables are growing quite substantially in EIA's 
forecast, it's still very hard for renewables to compete 
against some of the established, coal, nuclear and natural gas 
base load plants.
    Rising costs for electric power generation, transmission 
distribution coupled with relatively slow growth of electricity 
demand lead to an 18 percent increase in average retail prices 
in the reference case over the period. And we see that in 
virtually all of our cases.
    I'm going to conclude on just a couple of comments 
concerning growth in wind and solar generation.
    By the end of the forecast period even with the existing 
law and regulation constraint that we have in the Annual Energy 
Outlook, wind power generation exceeds power from traditional 
hydropower by the end of the forecast period. And across all of 
the cases wind and solar generation meet a significant portion 
of the projected growth in total electricity load. So to the 
extent that electricity demand would rise faster there could 
even be more room for things like renewables generation. We'll 
just have to see how that works out.
    A final comment on carbon dioxide emissions.
    CO2 emissions are very sensitive to the 
influence of future economic growth assumptions and energy 
price trends. They vary across all of our cases. In the 
reference case, however, carbon dioxide emissions remain below 
5.5 billion metric tons, well below the peak of six billion 
metric tons that was reached back in 2005, 6 and 7. And they 
shift away from more carbon intensive fuels, especially for 
electric power does help to stabilize those numbers.
    The last comment I would make and I appreciate the extra 
time very much, Senator, is that this is a shorter edition of 
the Annual Energy Outlook. It was completed under a new two 
year cycle.
    The reason I bring this up is that is that by doing a 
somewhat shorter version every two years it enables us to use 
those resources, people, time and money, on doing an 
international energy outlook in the international energy 
outlook is increasingly important in trying to understand 
what's happening in the United States. Most of the energy 
growth globally is going to be occurring outside of the 
developed economies and it's critical that EIA do more work in 
the international area. And we're finding ways within our 
existing budget to do that.
    I'd like to thank you very, very much for the opportunity 
to be here this morning. And I look forward to your questions.
    Thank you.
    [The prepared statement of Mr. Sieminski follows:]
  
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    The Chairman. Thank you, Mr. Sieminski. I appreciate not 
only your recap here this morning, but again, the very serious 
and substantive work that EIA does.
    I want to remind members we do, apparently, have a vote at 
11:00. I am assuming it is just one vote, so we will move 
through our questions. We will keep going through that vote in 
case you have not had an opportunity to ask your question by 
the time the vote is called.
    You started off your comments this morning by referencing 
the short term energy outlook and some of the information 
contained in that. There is a lot of focus here in the Senate 
on the situation with Iran and the negotiations that have been 
taking place, so I want to start my questions on the topic of 
the Iran situation.
    In the short term report it is noted that Iran holds about 
30,000,000 barrels of crude in storage and that they can ramp 
up in production by some 700,000 barrels a day by the end of 
2016 in the event that sanctions are lifted. Obviously there is 
a great deal of discussion about when any sanctions might be 
lifted but one thing that we do know is that we understand that 
sanctions have cost Iran some $40 billion in oil revenues just 
last year alone.
    A couple quick questions for you this morning, Mr. 
Sieminski.
    If an agreement is reached that does lift those sanctions 
on Iran's exports would you expect that most of these new 
barrels to be exported would be to global markets?
    Mr. Sieminski. Thank you for the reminder.
    Iran has, we believe, about 30,000,000 barrels of oil in 
storage. The removal of sanctions and how the sanctions are 
removed and whether it happens slowly over time or immediately 
is still undecided, as far as we can tell in the negotiations, 
would make a big difference.
    Iran's production of crude oil, very recently, is around 
2.8 million barrels a day, a couple million barrels a day of 
that is being used internally. So their exports are fairly low 
now. They will go up if the sanctions are removed.
    How rapidly the oil in storage goes into the markets will 
depend a lot on how the markets behave themselves.
    If they were to try to put all 30,000,000 barrels a day on 
the market very quickly it could lower the price and they would 
get lower revenue than they would expect.
    If you assumed that they might try to move that over, let's 
say, a 100 day period the impact would be .3 million barrels a 
day.
    We believe that Iran, over time, could increase its current 
production and exports by about .7 million barrels a day. So 
the total amount would be about a million barrels a day of 
production coming on to the market. It's really hard to see 
right now, Senator, how that could be absorbed without causing 
either other production to go down or the price to go down.
    The Chairman. The direction of my question is if we are 
assuming that if sanctions are lifted and there is that 
opportunity for export, not just internally within the country 
but opportunity for export, that there will be additional 
revenue that is generated to Iran that they would otherwise not 
have had. Then our situation here in the United States is 
American companies are subjected to an export ban here. So you 
have got an incongruence going on here where we will have Iran 
able to make money off selling oil to our friends, our allies 
and using that new revenue for whatever purposes, perhaps 
nefarious purposes. We do not know.
    At the same time, if we were to go to this snap back that 
everyone keeps talking about or re-impose sanctions, it would 
be helpful here in this country if we were willing to lead from 
the front on this and lift our own outdated restrictions on 
exports, helping other countries. This is more of a political 
statement than the analysis that you have given us.
    I think it is important for us to recognize that if these 
sanctions are lifted and we, in fact, keep our own domestic 
sanctions in place, if you will, our ability to export a 
product that, again, could help our friends and allies and help 
our own country. It effectively ends up being a liability for 
us.
    Mr. Sieminski. I did bring with me a list of the studies 
that we've completed on the topic of crude oil exports in 
response to the letter that I received from you and Senator 
Cantwell. And one of those does deal with the issue of how 
gasoline prices are set in the U.S. markets. They generally 
tend to be tied to the global oil price rather than the West 
Texas Intermediate bench mark.
    What that does suggest is that if more crude oil enters the 
global markets whether it's from U.S. exports or from Iran or 
from production anywhere, it would tend to lower the global oil 
price which would tend to lower gasoline prices in the U.S. So 
one of reports does suggest that allowing more exports of crude 
oil would either be neutral or lower the gasoline price.
    There were a few studies that suggested that it could cause 
gasoline prices to go up. That seems to be a pretty low 
probability in our view.
    The Chairman. We appreciate the work that you did on that 
report. Again, I thought that the overall conclusion there to 
be drawn that we would see an ultimate lowering in price, not 
only worldwide but here in this country, was very beneficial 
for the discussion and the debate going forward.
    Senator Cantwell.
    Senator Cantwell. Thank you, Madam Chair.
    Again, let me just reiterate how important I think good 
information is.
    Mr. Sieminski. Thank you.
    Senator Cantwell. Good information is, I think, like 
science. Usually like science you can get people to agree on 
that because it is basic information, so I hope we can do more.
    I did want to make a point about what you just said about 
the renewables and the tax credit. It is almost like we have a 
perverse relationship, because we have permanency in the oil 
and gas tax credits and so they receive better treatment in the 
report. The renewables don't have as much predictability and 
certainty so they don't receive as good of treatment in the 
report. And then conversely the people look at the report and 
then make assumptions about policy. So it is really a perverse 
incentive that is demonstrated, because they do not have the 
same permanency and treatment.
    I personally believe that you incent things that are 
nascent early technologies, and once things are well 
established that is when you stop the incentives. But we can 
continue that debate in the future. I want to ask you a couple 
questions.
    One. What do you think the increase in the Dakotas and 
Rocky Mountain region in crude oil production could mean for 
those crude-by-rail numbers compared to the historic pattern 
that we've already been seeing? Are we going to see an even 
greater increase in crude-by-rail if the Rocky Mountain 
production increases?
    Secondly, when can Senator Wyden and I likely see our 
regional data on energy price impacts of lifting the crude 
export ban?
    Third, can you talk about why coal is going to become more 
expensive even under current law?
    Oviously the biggest, if we move more quickly than your 
forecast shows on electricity with no-cost fuels like the 
renewables, could consumers see even lower overall electricity 
costs?
    Mr. Sieminski. Senator Cantwell, on a number of these 
things it would probably help if I try to give you the best 
view that I have now and get back to you for the record.
    Senator Cantwell. Yes.
    Mr. Sieminski. With some more detailed numbers.
    Senator Cantwell. I appreciate that.
    [The information referred to follows:]

    The Annual Energy Outlook 2015 Reference case projects an increase 
in crude oil production from the Dakotas/Rocky Mountains region; with 
growth from 1.7 million barrels per day (b/d) in 2014 to 2.5 million b/
d in 2020 and 2.6 million b/d from 2021 through 2025, followed by a 
slow decline. Much of the increase is projected to come from the 
Bakken/Three Forks play in North Dakota and Montana, which increases 
from 1.1 million b/d in 2014 to 1.7 million b/d from 2020 through 2025 
before slowly declining. If resources and/or oil prices are higher than 
assumed in the Reference case, projected production would be higher and 
production growth would persist for a longer period. Lower resources or 
prices would lower the projected production trajectory.
    The Dakotas and Rockies production region includes parts of 
Petroleum Administration for Defense District (PADD) 2 (Dakotas and 
Midwest) and PADD 4 (Rockies). EIA's crude-by-rail (CBR) data, which 
are developed at the PADD level, show that rail shipments do not have a 
1:1 to field production in those regions. Analysis CBR data from July 
2012 through December 2014 indicates that the rate of growth of PADD 2 
and PADD 4 field production far exceeds any increase in crude-by-rail 
movements from those regions to PADD 5 (West Coast). Future increases 
in rail shipments to West Coast refineries will depend on the economic 
viability of crude-by-rail versus imported crude oil, the type of crude 
oil refineries are able to process, and the regulatory outcomes for new 
or existing crude-by-rail facilities.
    EIA will be releasing a report on transportation fuels in Petroleum 
Administration for Defense Districts 5 in July. The study covers the 
market with a detailed analysis of infrastructure from refineries to 
retail facilities.

    In our October, 2014 report titled ``What Drives U.S. Gasoline 
Prices'', EIA concluded that gasoline prices throughout the United 
States are more related to changes in international crude prices than 
to changes in domestic crude prices. To the extent that changes to 
current crude export policies would increase global crude supplies, we 
would expect international crude prices to directionally decline, 
thereby lowering gasoline prices. On a regional basis, however, many 
other factors can influence gasoline prices, potentially negating any 
effect from enhanced crude exports.
    The effect of a relaxation of current restrictions on crude exports 
on the actual level of such exports would depend to a significant 
extent on the level of U.S. crude oil production. Projected production 
is sensitive to both resource and technology assumptions and oil 
prices. In production scenarios where domestic production increases by 
enough to result in more crude oil exports than would occur under 
existing crude export policies, the most likely export pathway for 
crude from the Dakotas/Rockies region would be for increased pipeline 
capacity to move crude to the Gulf Coast, where it could be most easily 
exported.

    Mr. Sieminski. But let me try to go through that.
    Thinking about production in the Bakken area and that's 
where most of the growth is occurring in the Rockies, some in 
the Niobrara which is also an oil area in Colorado in that part 
of the country. About a million barrels a day is coming out of 
the Bakken now. The upper end of the estimates that I've seen 
for the next few years are in the neighborhood of a million and 
a half, possibly as high as two million barrels a day.
    So it's potentially possible that another half a million 
barrels a day, let's say, could be on the rails or in pipeline 
systems coming out of that region over the next few years.
    Senator Cantwell. I would just say no one is proposing 
these East/West pipelines. So while I appreciate where this 
debate has been about the Keystone pipeline, the issue is that 
we're talking about the demand. Our refineries are telling us 
it would have minuscule impact on the amount of crude that 
would move from the central part to the West Coast. So no one 
is proposing that pipeline.
    Mr. Sieminski. Right. In the crude-by-rail data that we 
have put out, most of the oil from that region is actually, the 
greatest portion of it, is moving toward the East Coast, some 
towards the Gulf Coast and a smaller amount towards the West 
Coast. How that would change over time would depend on a lot of 
things.
    You also asked about regional price variations. I think 
that's something that probably I could come back to the record 
for you.
    Mr. Sieminski. There are----
    Senator Cantwell. When do----
    Mr. Sieminski. Regional variations in gasoline prices. They 
tend to be high on the West Coast and East Coast and lower in 
the Gulf Coast. A lot of that has to do with state and local 
rules on taxation and fuel, quality rules. And location of 
refineries makes a big difference and that sort of thing too.
    On your question of why electricity prices go up.
    There are going to be with relatively low growth, but the 
need for replacing existing plants as retirements occur for 
improvements in transmission and distribution. There's just not 
as much--there aren't as many people to spread the cost over, 
so the cost gets spread over roughly the same number of people 
and it causes rates to rise.
    We also have increasing natural gas, oil over time and coal 
prices over time as well, kind of in line with inflation. So an 
18 percent increase in electricity prices over a 25-year period 
is significant but it's, you know, less than one percent a 
year.
    Senator Cantwell. Could you get this information for 
Senator Wyden and me by the end of this year?
    Mr. Sieminski. I'm sure we could get something to you.
    Senator Cantwell. Okay. I have a feeling the export debate 
is going to continue, and I think every member of this 
Committee is going to be interested in what that would look 
like and the impact on U.S. pricing. So it won't be just 
Senator Wyden and me, but we certainly appreciate that 
commitment. Thank you.
    Mr. Sieminski. Thank you.
    The Chairman. Senator Gardner.
    Senator Gardner. Thank you, Madam Chair, and I appreciate 
Mr. Sieminski for being here this morning.
    A couple questions to follow up on what the Chairwoman had 
asked about the Iran sanctions. You say you don't have an idea 
on what impact it would have on price because you don't quite 
know how much would be released daily, monthly, what would be 
released and put on the market by Iran. Is that correct?
    Mr. Sieminski. We actually did say in the short term energy 
outlook that depending on the timing and how much could 
actually be moved into the markets that there could be as much 
as a $5 to $15 per barrel impact lower on oil prices from 
Iranian crude reentering the market.
    And the basis of that, Senator, is just sort of looking at 
what happens when you add a million barrels a day, let's say, 
to the global oil markets, what kind of effect does that have, 
you know, relative to supply and demand balances. And typically 
we come up with numbers that for a million barrels a day would 
be something like $10 a barrel.
    Senator Gardner. Do you know what production impact that 
would have? Did you make a production impact projection on the 
U.S. then?
    Mr. Sieminski. We did not, but it would certainly be the 
case that lower oil prices would lead to, in the short run, 
lower production.
    We have actually seen and EIA has published this in 
something we call the Drilling Productivity Report that three 
of the four big shale areas. So the four big areas are Eagle 
Ford and Permian Basin in Texas, the Niobrara, kind of in the 
midcontinent and the Bakken in North Dakota and Montana. Three 
of those areas, so the only area that's still, where oil 
production is still rising, is the Permian and those other 
three areas we believe oil production has flattened off.
    And I would believe, Senator, that that's a reaction to the 
difference between $100 oil that we had, you know, a year ago 
and $60 oil that we had this year.
    Senator Gardner. Would it be possible to get a projected 
economic impact of Iranian oil exports as it relates to a 
decline in U.S. production?
    Mr. Sieminski. We could try to do some back of the envelope 
calculations for you.
    Senator Gardner. That would be great to see.
    [The information referred to follows:]

    The economic impacts of increasing Iranian exports will depend on 
whether and how much oil prices and production in other countries, 
including the United States, change in response. Generally, all things 
equal, when oil prices decline, the U.S. economy should benefit as the 
U.S. continues to be a net oil importer, with oil consuming activities 
making up a larger share of the overall economy than oil production 
activities. Certain regions in the U.S. where oil production is 
concentrated may experience reduced growth, especially if that region 
specializes in energy production and does not have a varied industrial 
base. Other factors will impact economic growth more than oil prices, 
such as what happens to exchange rates or whether consumers will spend 
or save the additional savings coming from lower energy prices. Many 
macroeconomic models estimate increases in U.S. GDP of between 0.1 and 
0.5 percent for every 10% reduction in the oil price if exchange rates 
do not change. A strengthening exchange rate could affect the 
competitiveness of U.S. exports.

    Senator Gardner. Just a question as we talk about crude oil 
exports, as we talk about LNG exports. You and I have talked 
about this before. We would not be in a position to even have a 
conversation on exportation of LNG if it weren't for hydraulic 
fracturing. Is that correct?
    Mr. Sieminski. Well, we could be talking about LNG, 
Senator, but we'd be talking about LNG imports instead of 
exports.
    Senator Gardner. And it's the hydraulic fracturing, the 
capabilities, that have allowed us to enter into the export 
conversation on LNG.
    Mr. Sieminski. That's correct.
    Senator Gardner. Thank you, and we count rig counts. We 
have seen rigs being laid down in Colorado across the United 
States, but recent news reports have shown that we are actually 
increasing production in Colorado with several of our wind 
energy manufacturing centers. Wind turbine production is up.
    Do we have a way of counting production at facilities like 
that in Colorado? I mean, we count rigs. Do we count turbines 
being produced in this country?
    Mr. Sieminski. I don't think that EIA actually has that on 
the state-by-state numbers for production of things like wind 
turbines, but we are looking at generation electricity on a 
state regional basis.
    Senator Gardner. Right.
    Mr. Sieminski. And in fact, one of the things that we'll be 
doing before the year is out here is reporting generation of 
electricity on an hourly basis. As far as I can tell when we 
begin this, this will be the first time that any statistical 
agency has collected data on anything on an hourly basis. So 
we'll be showing electricity generation hourly.
    Senator Gardner. Very good. In the Energy Outlook it talks 
about the capital costs of renewable technology decreasing over 
time resulting in more competition accounting for about 18 
percent of total electricity generation in 2040. Do you believe 
at this point that we are accelerating renewable energy and 
efficiency technology into the grid at the scale we need to 
meet that energy production by 2040?
    Mr. Sieminski. I think on that I'd like to come back to you 
for the record so that we could get our electricity people to 
have a look at it.
    These things get really complicated. I was thinking even 
about your earlier question about GDP with lower oil prices, 
you know, what effect does that have on the economy. And it 
actually, in the very near term, the lower oil prices tend to 
boost economic growth because there are more consumers of oil 
than there are of producers.
    So in the United States we would expect GDP to go up a 
little bit, but it would obviously vary across states and 
states that are more dependent on production would tend to 
suffer.
    And in trying to answer your question, I think I would, I'd 
like to be able to dig more into the numbers.
    Senator Gardner. Absolutely. Absolutely.
    Mr. Sieminski. And make sure we get the right numbers.
    [The information referred to follows:]

    In EIA's Annual Energy Outlook 2015, electricity demand grows 
slowly, less than 1 percent per year between now and 2040. The slowing 
growth in demand for electricity is in part due to improvement in 
energy efficiency in buildings and industry. During this period, 
renewable generated electricity grows by 2 percent and natural gas-
fired generation grows by 1.3 percent. The projections include electric 
generating technologies that are commercially available or reasonably 
expected to be so over the time frame of EIA' s projections. EIA 
believes that the capacity expansion for renewable electricity 
generation resources and energy efficiency improvements projected in 
the AEO 2015 Reference case are achievable under current laws and 
policies.

    Senator Gardner. Thank you, Madam Chair.
    Thank you.
    The Chairman. Senator Franken.
    Senator Franken. I do have some questions I want to ask but 
can I give Senator Manchin my spot, then go next? Am I allowed 
to do that?
    The Chairman. No.
    Senator Franken. I'm not?
    The Chairman. You asked?
    Senator Franken. I asked and I'm not?
    The Chairman. Well, we typically go back and forth from 
side to side.
    Senator Franken. No, no, no, no, no. I would not go next. I 
know that would be Senator Barrasso, but could I be next in 
order on this side? That is what I meant. I know the back and 
forth thing.
    I yield to my good friend from the great State of West 
Virginia.
    Senator Manchin. Thank you to my friend who has allowed me 
to have this opportunity real quick before we go to vote.
    Mr. Sieminski, thank you so much for being here, and I 
appreciate it. We have had a chance to speak before, and sir, 
you know I have a real problem with what is going on. The 
demonizing of coal, it seems by a whole group of people who do 
not seem to understand the life that we all have is because of 
the domestic energy that we have right here in this country. We 
have developed to be one of the greatest industrial mites and 
built the middle class off of coal.
    Now, with that being said, if there is another source of 
energy that will replace that we, in West Virginia, are fine. 
The bottom line is that we produce a lot of gas and a lot of 
coal and we do wind and we are trying to do everything. The 
thing that I am concerned about is no one has raised the alarm 
as far as the reliability of the system that we have right now 
and how we are dependent on that reliability, and that is 
basically base load fuels. And base load fuel is something that 
24/7 will run.
    It will produce whatever you want. You want to keep your 
refrigerator cool. You want your house cool. You want your 
factory to be working to where you have a job. You want all 
this to happen, but you have to have something that produces 
that energy and it has to be 24/7.
    The only two base loads you have right now are coal and 
nuclear. Gas, I think, will become a base load fuel. It is not 
integrated enough yet because of the supply chain, correct? 
With the pipelines and things that we are----
    Mr. Sieminski. Well there certainly are places now where 
natural gas----
    Senator Manchin. Has become----
    Mr. Sieminski. Is being used as base load.
    Senator Manchin. Right.
    Mr. Sieminski. In our forecast we see more of that going 
out into the future, but you're absolutely right.
    Senator Manchin. Let me just ask this question.
    Mr. Sieminski. I mean coal is more than a third, almost, 
right now, close to 40 percent of electricity.
    Senator Manchin. And it anticipates being that until 2040. 
If there is a difference, if there is another fuel on the 
horizon, fine. But why in the world are we beating it to death 
and making it so impossible to produce the energy the country 
needs? The only thing I would ask you is this, sir. The aging 
of traditional electric base loads, the aging of these plants 
of coal and nuclear since they have been demonized and beaten 
the living crap out of. The age of them by 2040 will be the 
unit age of 60 years old. Those plants cannot expect to give 
the energy this country needs past 2040 at the reliability 
factor we have now.
    What do we do? I have read your report. We have gone 
through your report. If we do not do any upgrading to the 
plants that are producing the energy right now, what do we do 
in 2041? Do you expect they will all be replaced in one year or 
do we just fall on our face as far as reliability? That is what 
scares me, and no one has raised that alarm.
    Mr. Sieminski. We have coal, nuclear and natural gas still 
accounting for a huge amount of our----
    Senator Manchin. 75 percent.
    Mr. Sieminski. Yeah, exactly.
    Senator Manchin. Yeah.
    Mr. Sieminski. And renewables do grow very rapidly, but 
they're, you know, a little below 20 percent.
    Senator Manchin. Right. They're never going to carry the 
load, and we know that.
    Mr. Sieminski. Or the generation mix.
    Senator Manchin. Right.
    Mr. Sieminski. Right.
    Senator Manchin. I am just saying though you have 
particularly for 250 gigawatts of coal units remaining in 2040 
with an average unit age of 65 years the expectation of 
operating of 75 percent of capacity. Your report says----
    Mr. Sieminski. Well, we don't have everything retiring in 
2041.
    Senator Manchin. Could you conduct?
    Mr. Sieminski. It would happen over time. We could show 
you. I'd be happy to provide for the record, Senator, how we 
see the retirement schedule. In our reference case, there are 
coal retirements, there are also nuclear retirements, and even 
some of the older natural gas plants retire. They do get 
replaced by better technology.
    [The information referred to follows:]

    The AEO2015 only extends to 2040, so projections for the 
post-2040 period, including coal plant retirements, are not 
available. Although EIA does not project beyond 2040, some 
inferences can be made about retirements in the early years 
after 2040 given our understanding of retirement decisions.
    Coal plants do not retire upon reaching a certain age. 
Instead, a decision is made on the economics of the continued 
operation of the plant. In its modeling, EIA assumes $7 per kW 
annualized capital charge is incurred for coal plants that 
operate beyond 30 years of age. These added age-related costs 
account for major repairs or retrofits, decreases in plant 
performance, and/or increases in maintenance costs to mitigate 
the effects of aging. In our projections, coal plants are 
assumed to retire if the expected revenues from operating the 
plant are lower than the annual going-forward costs (including 
age-related costs, fuel, O&M costs and annual capital 
additions) and if the overall cost of producing electricity is 
lower by building and operating new replacement capacity.
    In addition, the majority of the retirements that occur in 
the AEO2015 occur early in the projection period, and two major 
factors contribute to these retirements--low gas prices and the 
implementation of the Mercury Air Toxics Standards (MATS). Of 
the 40 gigawatts of projected coal plant retirements, 78% 
retire by 2016, the year that EIA models MATS implementation. 
The last projected coal retirement takes place in 2025, well 
ahead of the last AEO projection year of 2040.
    Both market and policy factors do affect projected 
retirements of coal-fired plants. For example projected coal-
pant retirements are higher in EIA' s High Oil and Gas Resource 
case, which assumes more resources and better technology that 
results in significantly lower projections of natural gas 
prices than the Reference case, which increasing the incentive 
to increase gas generation and reduce coal generation. Policy 
also matters, as exemplified in EIA's recent analysis of the 
Environmental Protection Agency's proposed clean Power Plan 
rule; compliance with that rule, as modeled in EIA's analysis, 
caused projected coal-fired generation to decrease 
substantially and coal plant retirements to increase 
substantially.
    Presuming current laws and regulations, rising gas prices, 
and rising electricity demand while continuing to include age-
related costs, and no other explicit technical limitations on 
expected plant life, a sudden onset of coal plant retirements 
in the early 2040s would seem unlikely. Because of the inherent 
uncertainty in aging related costs, EIA periodically reviews 
its methodology and gathers industry expertise and advice on 
the subject of aging. EIA held a workshop on the subject 
following its 2015 Energy Conference.

    Senator Manchin. Here is the other thing. To properly 
reflect the energy security benefits of combined CTL, basically 
with EOR, enhanced oil recovery, it seems to me it would make 
good strategic sense for us as a country to where we have these 
oil productions now. If you go to coal to liquids and use the 
EOR so we have no emissions. It is going down to produce more 
oil that gives us the reliability.
    We do not see anybody planning out for this. Everybody 
thinks in this perfect world that we're going to be able to 
extract out of the air or the water, the energy that we need. I 
hope that day would come, but I like to prepare in case it 
doesn't come and the demands we have we are able to meet. That 
is all I am trying to find is the balance, sir. You all have 
been pretty balanced and realistic. What do you recommend and 
how should we proceed from here?
    Mr. Sieminski. Well, as I said at the beginning of my 
remarks, we try to stay out of the business of making 
recommendations. We leave that to the policy makers.
    Senator Manchin. But has anybody questioned in your----
    Mr. Sieminski. I'd be happy to pass your concerns along to 
the Office of Fossil Energy at DOE and they could probably help 
answer.
    Senator Manchin. But you have heard us all. We all trust, 
and basically we know, that you have people who are doing 
pretty accurate forecasts.
    Mr. Sieminski. Right. Right.
    Senator Manchin. These forecasts have not been that far off 
in the past, yet no one seems to be heeding your forecast 
warnings of what we are going to be facing as a country. That 
is what scares me. I do not know how to get that to a level. It 
is just like you are saying, well, you come from West Virginia. 
We expect you to rattle the cages.
    If someone told us in West Virginia you could have 
commercial hydrogen by 2040.
    Mr. Sieminski. Right.
    Senator Manchin. And you do not need any fossil whatsoever. 
We will find a way to make it, trust me. We always have in West 
Virginia.
    But you are going to be needing the products that we 
produce. We want to make sure that we are able to do the job 
you need for our country, and we need somebody to help rattle 
the cages with us.
    Mr. Sieminski. Well, we do try to provide the information, 
and we try to let the policy makers come up with the solutions. 
[Laughter.]
    Senator Manchin. What you are saying is I need more help, 
right? [Laughter.]
    Mr. Sieminski. Well, we'll do as much as we can with----
    Senator Manchin. Your job and you are doing a good job and 
I appreciate it, sir.
    Senator Franken. Madam Chair, may I say I regret allowing 
the Senator from West Virginia go before me? [Laughter.]
    The Chairman. You cannot pull back that, Senator Franken.
    Senator Manchin, the monkey is still on our back here to 
make sure that we do this.
    Let's go to Senator Daines since Senator Barrasso has 
stepped out, and then we will turn to Senator Franken.
    Senator Daines. Thank you, and Senator Manchin, I am 
grateful for you, just so you know--you betcha.
    Mr. Sieminski, your assessment talks about strong growth in 
domestic crude oil production from the tight formations. I 
assume that includes the Bakken formation in Montana as well as 
North Dakota?
    Mr. Sieminski. Yes, Senator, yes.
    Senator Daines. As you know when you cross the state line 
going west from North Dakota into Montana we have a lot more 
federal land in Montana than our neighbors in North Dakota. How 
much of the projected growth in production do you believe will 
come from Federal lands versus state or private lands?
    Mr. Sieminski. I'd be happy to try to supply some of that 
for the record for you. We do a report. We published one that 
shows the location of oil production by private, Federal and 
American Indian lands. The bulk of the resources and we have 
overlaid the shale basins that we know of with a map of who the 
landowners are, tends to show that the bulk of the shale 
resources are on private lands. That is obviously going to vary 
from state to state, and perhaps we could get you some 
information on that.
    Senator Daines. You would not want to venture a prediction 
on that at all or just wait to get the information from you?
    Mr. Sieminski. I would rather have the numbers.
    Senator Daines. Yeah.
    Mr. Sieminski. Than to make a guess.
    Senator Daines. I think----
    Mr. Sieminski. I do know that the production on private 
land is way above the level of production on Federal land.
    Senator Daines. I think over the last six years or so the 
production on private and state land is up around 50 or 60 
percent. I think we are actually down single digits on Federal 
lands over the last six years, but I would be interested to get 
your----
    Mr. Sieminski. Yeah.
    Senator Daines. Go forward.
    Mr. Sieminski. And we will provide you with those numbers, 
Senator.
    [The information referred to follows:]

    Roughly 35% of the nearly 2.0 million barrel per day 
projected growth in domestic crude oil production between 2014 
and 2020 is estimated to come from federal lands, defined to 
include both onshore and offshore areas. The federal Gulf of 
Mexico accounts for 95% of the growth in production from 
federal lands during this period, as new deep water projects 
start up.
    Historical oil production information is available from the 
ETA study ``Sales of Fossil Fuels Produced from Federal and 
Indian Lands, FY 2003 through FY 2013'' at http://www.eia.gov/
analysis/requests/federallands/pdf/table7.pdf.

    Senator Daines. Another question. Was the Department of 
Interior's recently announced rule on hydraulic fracturing for 
Federal lands factored into your projected growth numbers?
    Mr. Sieminski. Not specifically. There are different views 
about what that possible impact would be. The industry itself 
is moving towards greener completions across the board. So on 
both private and Federal lands it does tend to lift costs a 
little bit, but there are offsetting factors too.
    It's one of the issues and greenhouse gas emissions. 
Perhaps we could come back to you on that with more information 
too.
    [The information referred to follows:]

    The BLM hydraulic fracturing rule was released in March 2015, after 
the Annual Energy Outlook 2015 analysis was completed. The rule is not 
expected to have a major impact on drilling because (1) the rule only 
applies to drilling on federal and American Indian lands and tight/
shale formations that are primarily situated on nonfederal lands; (2) 
many provisions in the rule are similar to or based on current 
practices and State requirements; and (3) BLM estimates the incremental 
cost will be less than 0.25% of the cost to drill the wells (e.g. less 
than $12,500 on a $5 million well).

    Senator Daines. Yes, we were disappointed in Montana. We 
have very robust and rigorous regulations.
    Mr. Sieminski. Right.
    Senator Daines. Because we have got to live near where the 
activity is occurring. We want to make sure we protect our 
environment and just do while this additional layer of 
regulations. We did not see that as helpful, certainly in 
Montana, when we think we have got that well regulated 
ourselves. Your assessment talks about an 18 percent increase 
in the average retail price of electricity over the projection 
period. What were the factors contributing to the projected 
increase in electricity rates in your assessment?
    Mr. Sieminski. Senator, let me just take a quick look at 
what some of those numbers were.
    Senator Daines. As you are looking that is important, 
certainly, for many, many states and for all of us. I think we 
are about 40 percent of things like----
    Mr. Sieminski. Right.
    So what we said was----
    Senator Daines. Coal.
    Mr. Sieminski. You have rising costs for electric power 
generation, transmission and distribution coupled with the slow 
growth of electricity demand or what add up into that 18 
percent number.
    So within the generation area some of that is going to be 
fuel increases and some of that will be the capital costs of 
expansion.
    Senator Daines. I do not think your assessments, though, 
take into account the EPA's clean power plan.
    Mr. Sieminski. That's correct.
    Senator Daines. I can tell you Montanans are very concerned 
given that 51 percent of our electricity comes from coal that 
this plan would further increase electricity rates for 
Montanans, for Montana families, while also damaging our 
state's ability and our tribe's ability to produce coal.
    I did a field hearing on the Crow Reservation last week. 
Their unemployment rate is 47 percent today. If they lost those 
coal jobs it raises to over 80 percent unemployment rate. 
Certainly it is a concern back home. It is killing jobs, 
affecting our tax revenues which fund our schools, our 
teachers, our infrastructure and supporting overall essential 
services.
    Given these factors to electricity rates I remain highly 
concerned about the EPA's proposed actions which would severely 
impact Montana's coal sector. We have the most recoverable coal 
deposits in the United States.
    I am out of time, thank you.
    Mr. Sieminski. Thank you, Senator.
    The Chairman. Thank you, Senator Daines.
    Senator Franken.
    Senator Franken. Thank you.
    I am actually concerned also about climate change, so that 
is why I regretted yielding to the Senator from West Virginia. 
[Laughter.]
    And coal and we had all this coal talk. Okay. [Laughter.]
    You state very clearly in your report that energy market 
projections are subject to a lot of uncertainty, and one reason 
for this uncertainty is that you cannot predict technological 
breakthroughs, for example. No one could have predicted the 
magnitude of the shale revolution when hydro fracking was in 
its infancy. Now because of decades of major Federal 
investments, the commercialization of this technology has made 
the United States an energy super power. Similarly advanced 
energy storage will be a game changer for the utilities 
industry. It will allow us to incorporate more renewables so we 
can utilize wind and solar power when needed, if you can store 
wind that blows at night then that is the game changer.
    So instead of very modest growth in renewables which you 
project in this report, advanced energy storage could allow 
renewables to play a much more prominent role in our 
electricity generation mix.
    Can you talk about the next big breakthrough in grid scale 
storage and how it would impact the amount of electricity that 
would be generated from renewable sources?
    Mr. Sieminski. I'm sure we could supply you with some data 
for the record.
    [The information referred to follows:]

    Availability of grid-scale electricity storage could impact the 
amount of renewable resources that could be accommodated on the grid. 
Wind and solar resources produce variable, intermittent generation that 
may or may not match patterns of local or regional electricity demand 
on a daily or seasonal basis. Incorporating electricity storage with 
renewable generation could enable better operator control of these 
resources by storing excess generation and redeploying it during peak-
demand periods. While the presence of energy storage may help the grid 
accommodate higher levels of wind or solar generation, EIA does not 
believe that renewable generation levels projected in the AEO2015 or 
its side cases would require the addition of storage to be realized.
    Currently EIA collects data from a number of utility-scale storage 
facilities located within the U.S. These technologies include pumped-
hydroelectric generation, compressed air energy storage, flywheel, and 
a variety of battery technologies. EIA does not specifically model new 
storage technologies in the Annual Energy Outlook and does not predict 
which technology might be the next breakthrough technology.

    Mr. Sieminski. In general, battery technology simply makes 
things like wind which tends to be stronger at night and solar 
which, obviously, is during the daytime, usable across the 24 
hours of demand.
    There are some interesting things. Just recently I've been 
reading about aluminum as a battery material rather than 
lithium. It's cheaper. It would have more cycles associated 
with recharging. It could be a huge development.
    That kind of thing doesn't really have--doesn't work its 
way, as you said, Senator, into EIA's forecast because----
    Senator Franken. Sure.
    Mr. Sieminski. We're not. We try to forecast the future, 
but we don't have our own crystal ball in that sense.
    We do have workshops at EIA and conferences all the time 
and one of those conferences coming up is actually going to 
deal with questions like yours. I'd be happy to make sure that 
your staff is invited to that. We'd be delighted to have you 
come, if you'd like to.
    Senator Franken. When is it?
    Mr. Sieminski. Um.
    Senator Franken. Well, you can get that information to us.
    Mr. Sieminski. Yeah, well----
    Senator Franken. I would love to----
    Mr. Sieminski. Love to do that.
    I think it is important. I mean we have looked from time to 
time at the technology, even on the generation side. I think we 
are doing pretty well with our wind numbers.
    A lot of the issues associated with whether or not we're 
capturing, the number is properly, along the lines of Senator 
Cantwell's questions, are in the solar area where the costs 
have been coming down. The technology is improving. And whether 
we're fully capturing that or not, you know, I grant you, it's 
an open question.
    Senator Franken. Okay. I want to turn to LNG exports. The 
different scenarios considered in the Annual Energy Outlook 
highlight the risk that large volumes of LNG exports can drive 
up domestic natural gas prices. For example, in one of the 
scenarios where LNG exports exceed eight trillion cubic feet 
per year you project a 35 percent increase in domestic natural 
gas prices. The EIA found similar price increases in its 
previous studies which looked specifically at how increased 
levels of LNG exports would impact American consumers and 
industries.
    That is very serious to a state like Minnesota which 
produces no natural gas, but uses a lot of electricity for its 
manufacturing and uses a lot of, also, natural gas in its 
manufacturing.
    What impact would these kind of price increases have on the 
manufacturing sector, particularly for natural gas intensive 
industries such as the paper pulp and primary metal 
manufacturing sectors?
    Mr. Sieminski. The EIA actually did a report at the request 
of the Office of Fossil Energy at the Department of Energy on 
the impact of increased LNG exports to the U.S. energy markets. 
First we were asked to look at possible export rates as high as 
20 billion cubic feet a day.
    Across all of the cases in the current Annual Energy 
Outlook the highest we get is 13 or 14 billion cubic feet a 
day. I would kind of look at that 20 billion cubic feet a day 
request as a stress test, sort of like, what happens if oil 
goes to $250. We don't really expect it to. What if LNG exports 
were to go 20 billion cubic feet a day? What would it do?
    Across all of those estimates we had end use consumer bills 
in residential, commercial and industrial sector going up 
anywhere between one to eight percent. I would think that in 
thinking about this it probably would be towards the lower end. 
We do find that prices would go up.
    A couple of other things, Senator, that I think actually 
would be important.
    One is that we, although natural gas prices would go up and 
it could have a differential impact as you said between those 
states that are producing gas and those that are doing more 
consumption. But a state like Minnesota actually has a fairly 
decent industrial base in things like heavy construction and 
services that would be useful in the producing industry. So 
there would be opportunities for the State of Minnesota to sell 
to those people who are making more money.
    One of the other things that I think would be important is 
that if we are right about how gasoline prices are set in the 
U.S. markets. That is based on the global oil price. Putting 
more U.S. natural gas into the global markets would probably 
tend to lower the prices for all fuels, including oil, which 
would then be reflected in lower gasoline prices in the U.S. 
and Minnesota, obviously, is a consumer of gasoline as are all 
the other states.
    So there are offsets, and I think some of the times I know 
about the EIA models. Look, we try really hard to get it right, 
but we can't possibly get a lot of these secondary and 
complicated effects in there. And some of them that would go 
the other way and would actually help, I think, rather that 
hurt a state like Minnesota.
    Senator Franken. Alright. Well, thank you for your answer.
    We are way over my time, but I want to continue this 
conversation.
    Mr. Sieminski. Thank you, sir.
    Senator Franken. Thank you, Madam Chair.
    Mr. Sieminski. It's very serious because----
    Senator Franken. It is.
    Mr. Sieminski. And it should be addressed. We're trying the 
best we can.
    Senator Franken. Thank you.
    Mr. Sieminski. Thank you.
    The Chairman. Well, it is serious. It will be continued in 
this Committee and in others because as we look at those 
policies that may, in fact, inadvertedly be keeping our prices 
higher than we might like. We need to look to how we might 
refresh those policies.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Madam Chairman.
    I want to continue on this line of questioning because in 
February of this year President Obama's Council on Economic 
Advisors issued its report. It said, ``An increase in U.S. 
exports of natural gas would have a number of mostly beneficial 
effects on natural gas producers, unemployment, on U.S. 
geopolitical security and the environment.''
    The President's advisors explain that natural gas exports 
of six billion cubic feet per day could support as many as 
65,000 jobs. They go on to say that expanded natural gas 
exports will create new jobs in a range of sectors including 
natural gas extraction, infrastructure investment and 
transportation. So the President's economic advisors also go on 
to say that the natural gas exports for the United States would 
have, ``a positive geopolitical impact.''
    Specifically they explain that U.S. natural gas supply 
builds liquidity in the global gas market, reduces European 
dependence on the current primary suppliers of Russia and Iran. 
So I am encouraged that your agency, the EIA, predicts that the 
U.S. will be a net exporter of natural gas by 2017. Would you 
expand on additional benefits that you see the natural gas 
exports bring to the United States, if you see additional ones?
    Mr. Sieminski. Senator, I think it's actually hard to 
expand on the list that you just went through. I didn't hear 
anything in there that I would disagree with.
    One of the things, if Senator Franken were here, the NERA 
study did find that there might be some impacts on wages from 
higher natural gas prices. And from what I can tell in the 
models, many of the models don't deal very well with questions 
like that. And the effects seem to be pretty small so that I 
think that the overall direction that virtually everybody who 
has looked at this comes to is that trade, generally speaking, 
has positive benefits across the economy. And LNG trade is no 
different.
    Senator Barrasso. Great. I also wanted to follow up on 
Senator Gardner's questions about Iran. Last month the Wall 
Street Journal ran a front page article that I have here. 
``Iran Nuclear Deal Portends Rush of Oil, New Price Drop.''
    The article explains that independent observers believe 
that lifting sanctions on Iran could result in boosting Iran's 
exports by 800,000 barrels per day within the year. Meanwhile 
the Wall Street Journal yesterday, that was a month ago, ran a 
story yesterday, and this is on page B1. ``Oil industry layoffs 
hit a 100,000 and counting in the United States.''
    Would you discuss the impact that lifting sanctions on Iran 
would have on American workers in the oil and gas industry?
    Mr. Sieminski. We, EIA, actually published in our short 
term energy outlook our assessment. And we talked a little bit 
about that earlier. But refreshing, there's 30 million barrels 
of oil that Iran has in storage that could come out at any 
time. And how quickly that comes out is hard to decipher.
    We believe that the Wall Street Journal article that you 
mentioned said 800,000 barrels a day of growth in production. 
We think the number is 600,000 to 700,000 barrels a day, could 
be 800,000 barrels a day, let's say, by the end of 2016.
    Senator Barrasso. Yes, the Economist this past week said 
800,000.
    Mr. Sieminski. Right.
    Senator Barrasso. Well, but roughly, yes.
    Mr. Sieminski. So, again, our roughest estimate is that 
this could lower the price. If everything else held constant, 
that much more oil on the market would lower the price anywhere 
between $5 to $15 a barrel. That lower price implies lower 
drilling activity which would then influence the numbers that 
you were citing.
    How quickly all that comes to pass? Whether something else 
might happen in the global markets?
    Just as an example, Senator, we are seeing a little bit of 
a lift in demand over the past few months. EIA has increased 
its estimate of gasoline demand on the back of better income 
and lower gasoline prices, along with interestingly, 
employment, that as the employment numbers have recovered we're 
beginning to see people drive more which leads to gasoline. And 
trying to get all those numbers to balance is tricky.
    Senator Barrasso. I had a final question on the predictions 
that EIA makes on the average retail price of electricity. It 
predicted it will increase as much as, I think, 28 percent by 
the year 2040.
    Mr. Sieminski. Right.
    Senator Barrasso. It explains that its predictions now do 
not take into account the EPA's forthcoming Greenhouse Gas 
Regulations for the existing power plants. In other words any 
increases in electricity prices resulting from these greenhouse 
gas rules will be in addition to the increases that you 
currently predict, the 28 percent.
    So I understand that EIA plans to issue a separate report 
on the impact of the EPA's greenhouse gas rule. Can you tell me 
when you expect to see that report?
    Mr. Sieminski. Yes, Senator.
    I think the reference case number was 18 percent out to 
2040 for retail electricity prices. A lot of that coming from 
higher generation costs because of fuel and largely because of 
our assumptions of rising natural gas prices.
    Specifically to your question of will we look at the Clean 
Power Plan impact? Yes, we will, and I hope to have that report 
out in May.
    Senator Barrasso. Because I know that in the past EIA has 
sometimes underestimated electricity prices in the reports. I 
am just curious if any specific steps are being taken now to 
ensure that there isn't an underestimation of the impact of the 
EPA's rules on retail electricity rates.
    Mr. Sieminski. Well, we're looking very closely at that, 
and I would be happy to come up and discuss it with you when we 
have the report.
    Senator Barrasso. Thanks, I appreciate it.
    Mr. Sieminski. Thank you, Senator.
    Senator Barrasso. Thank you, Madam Chairman.
    The Chairman. Thank you, Senator Barrasso.
    Senator Hirono.
    Senator Hirono. Thank you, Madam Chair.
    Aloha, Mr. Sieminski. In 2008 Hawaii set a 40 percent 
renewable energy goal and a 30 percent increase in energy 
efficiency both by 2030, and this is the most ambitious goal in 
the country. Why? Because Hawaii residents were paying, still 
do, pay the highest electricity rates in the country. We needed 
to get away from our over reliance on imported oil for 90 
percent of our energy, so Hawaii now produces 18 percent of its 
electricity from renewable sources and achieved a 16 percent 
improvement in energy efficiency.
    I see that EIA projects that nationwide the U.S. will only 
achieve 18 percent renewable energy by 2040 if we continue our 
current policies. Do you agree that the U.S. could develop much 
greater use of renewable energy if we establish national 
standards for renewable energy and energy efficiency like 
Hawaii has done? Because when we set these national standards 
it does spur the private sector to engage in research and 
development into alternatives in renewables, we think. Do you 
agree with that? And if we did that, couldn't we achieve 
renewable goals greater than what you are projecting by 2040?
    Mr. Sieminski. Senator, my opinion on whether we should do 
that or not is--I like to think of myself as one policy remark 
away from returning to the private sector. [Laughter.]
    Senator Hirono. Oh, take a chance. [Laughter.]
    Mr. Sieminski. On the issue, you know, if we had state 
renewable standards. In fact, state renewable standards and the 
Federal tax credits are a very important part of what's driving 
renewables in our models, the technology and the role that cost 
reductions driven by technology would also be very important. 
Yes, it's certainly possible that the numbers that we're 
showing could be higher, and they definitely are, even under 
our no sunset case.
    John Conti and Paul Holtberg, who are here with me today, 
they are the ones generating a lot of this material. I could 
ask them, you know, have we in the past done a high technology 
case to look at things like this? I think we have and we'll be 
doing more of that in next year's Annual Energy Outlook. We'll 
have a broader set of cases. And so perhaps next year I could 
come back and report on those outcomes.
    Senator Hirono. Yes, I think there definitely is a 
connection between setting certain standards and the spurring 
of developments that would help us meet those standards.
    In looking at your figure eight, you show the growth of 
wind and solar. So that makes energy storage, I would say, a 
priority for us. According to a recent analysis by the Rocky 
Mountain Institute, a system of solar panels and battery 
storage that is connected to the electric grid would be the 
most affordable option for places like Honolulu, Hawaii in 2016 
and many other states in the next decade.
    A March 2014 analyst at Morgan Stanley concluded prices for 
energy storage could drop by more than half in the near future, 
and they expect batteries, including them, to be cost 
competitive with the grid in many states and think investors 
generally do not appreciate the potential size of the market, 
meaning the storage market.
    Does EIA acknowledge or appreciate the potential size of 
the battery storage market? And has the EIA include a recent 
assessments of storage costs in its projections of renewable 
energy deployment in the Annual Energy Outlook?
    Mr. Sieminski. Our electricity group does look at things 
like that, very carefully, and cost is still an issue. I do 
understand the position that states like Hawaii and some of our 
territories, Puerto Rico and the U.S. Virgin Islands are 
largely dependent on oil for generation of electricity, and it 
does put them in a very tough position.
    I guess the good news, Senator, is that oil prices are half 
the cost of this year of where they were last year which should 
make electricity lower in Hawaii. And it would be interesting 
to see those numbers as they come out. Can we move to these 
other fuels?
    One of the things you didn't mention that I know is being 
looked at by people in Hawaii is whether or not liquefied 
natural gas.
    Senator Hirono. Yes.
    Mr. Sieminski. Possibly coming from Alaska could help to 
generate power in Hawaii at prices competitive with some of the 
other fuels and lower than what you're currently paying.
    Senator Hirono. Madam Chair, if you don't mind?
    Clearly when we rely on oil then we do have climate change 
issues. So states like Hawaii will make a commitment to get 
away from oil reliance and into the renewables and 
alternatives. I would say that the developments R and D are 
making on storage are a really important part of our energy 
future.
    Thank you, Madam Chair.
    Mr. Sieminski. I absolutely agree with you, Senator, and we 
could look at a range of how electricity prices could change or 
how renewables could move into the mainstream faster with 
improvements and things like battery technology and some of the 
transmission. And as I said, I think in the next year's Annual 
Energy Outlook we'll have more of that. Thank you.
    The Chairman. Senator King.
    I also want to acknowledge that, in reference to your 
comment, Mr. Sieminski, we would love to be supplying our 
friends to the South in Hawaii with some of our natural gas. 
[Laughter.]
    The Chairman. We have got to get there first.
    Senator King.
    Senator King. Thank you, Madam Chair.
    First, I want to thank you for the work that you do. I 
consult the data from your agency probably two or three times a 
week and now that I am on this Committee it will probably be 
even more frequent.
    Mr. Sieminski. Thank you, Senator.
    Senator King. This is 50 shades of grey for a data geek. 
[Laughter.]
     I just really appreciate the work you do, and I also 
appreciate your resistance to being dragged into the policy 
discussions because the data is so important.
    In my experience having good data is what drives good 
policy, and if people can share an understanding of the data 
they can generally get to the policy conclusions without that 
much difficulty.
    This has been a fascinating hearing because of the regional 
differences. I would ask Senator Barrasso to come to Maine and 
tell the people of Maine the virtues of higher oil prices. How 
$1.00 diminution in gasoline and heating oil prices is $1 
million into the pockets of the people of Maine.
    I just did the calculation, and that comes to $770 for 
every man, woman and child in the state.
    Mr. Sieminski. Right.
    Senator King. So lower oil prices. I noticed he used the 
phrases would cost jobs in the oil and gas industry, but the 
larger question, of course, is what would be the benefit to the 
economy at large?
    We are seeing a rejuvenation of manufacturing in this 
country, for example, because of the low prices of energy which 
is a competitive advantage we now have with other parts of the 
world, particularly in natural gas. So a fascinating discussion 
all about your point of view, I think.
    The other piece, of course, was the Senator from Montana 
talking about electricity prices and coal. New England prices 
are about 35 percent above places that are dependent on coal. 
The problem is we do not get the cheap power, but we do get the 
pollution.
    We did a study some years ago in Maine that if we shut down 
every factory in Maine, took every car off the road, we would 
still have ozone violations along our coast because of 
pollution being transported by the westerly winds, so it is a 
very interesting regional discussion here.
    I just have a quick couple of questions. I apologize for 
the speech.
    In a nutshell, what will the effect of opening up oil 
exports be on domestic oil prices? My assumption is it will not 
be much because we have got a worldwide oil price anyway. But 
is that what your data shows?
    Mr. Sieminski. Yes, sir. At least looking at history what 
our study showed was that because gasoline prices in the U.S., 
heating oil prices as well, tend to be tied to the global 
markets. And the reason for that is we're both big exporters 
and importers of oil products like gasoline, diesel fuel, jet 
fuel and so on. The net effect that we saw was a slight 
decrease in the price of petroleum products if the U.S. were to 
export crude oil.
    Senator King. And that would include decrease of those 
products in the U.S.?
    Mr. Sieminski. In the U.S.
    Senator King. Okay. By the way, on the question of Iran 
that 30,000,000 barrels that is stored in the ships, they 
think.
    Mr. Sieminski. Yes, sir.
    Senator King. What is the daily worldwide consumption of 
oil?
    Mr. Sieminski. Worldwide consumption is about 92,000,000-
93,000,000 barrels a day.
    Senator King. So we are talking about an eight hour supply 
on ships.
    Mr. Sieminski. Worldwide.
    Senator King. I just think we need to put that in 
perspective.
    Mr. Sieminski. What you wouldn't want is to see it all come 
in at the same time.
    Senator King. Clearly, I understand that, but it is not 
like it is a month's supply. It is a third of a day's supply.
    Mr. Sieminski. Correct, and Iran would have its own 
financial incentives to try to minimize the impact on the 
global market.
    Senator King. When you did your estimates about the 
penetration of renewables, did you make any assumptions about 
technology advancements in storage or energy storage capacity 
because as you've testified that would make a big difference in 
the ability to integrate wind and solar into the grid, for 
example.
    Mr. Sieminski. We do make assumptions about improvements in 
technology across all of the fuels, and I think where the 
arguments come, Senator, is on the pace of those changes in 
technology.
    Senator King. And the only thing we can say for sure about 
any of our predictions is that they will be wrong. [Laughter.]
    Mr. Sieminski. I know that we're going to be wrong. I'd 
like to not be wrong right away. [Laughter.]
    Senator King. I would subscribe to that as well. I would 
like to be proven wrong long after I am gone. [Laughter.]
    But how about any assumptions about CO2 
sequestration in your calculations because that could make a 
huge--Senator Manchin is right. We have a huge coal asset. If 
we could figure out how to deal with the CO2, that 
would be that would be a plus for everybody.
    Mr. Sieminski. There actually is one of the things--and 
Senator Manchin didn't mention it directly, but he alluded to 
the Kemper Facility that's being built by, I think, the 
Southern Company that will take coal and turn it into natural 
gas and hydrogen, capture a good portion, I think more than 
half of the carbon dioxide. And move that by pipeline to an old 
oil field that would benefit from having CO2 
injection to help increase the oil production. What we found. I 
mean, this is a very early stages, really nobody has tried to 
do this at this scale before, is that it's been costly. I think 
that if we're going to do this economically at scale where you 
have more of these, we're going to have to find ways to improve 
the cost of doing it.
    Senator King. One of the realities here is that none of us 
can really predict where the technology will go. Hydro 
fracking, I think Senator Franken mentioned, was developed 
under Federal research and development support. Nobody 
predicted that even eight or nine years ago in terms of the 
impact that it was going to have, and there may be some kid 
somewhere who is figuring out how to sequester coal 
CO2. And it is going to change the whole world.
    Mr. Sieminski. It would really help actually. And finding 
ways to do that, the Department of Energy, other part, 
obviously not EIA, but there are parts of the Department of 
Energy, Fossil Energy and the labs who are working very hard on 
trying to find ways to make that happen.
    Senator King. I am over time. Thank you very much. I look 
forward to continuing the discussion.
    I think another issue is distributed energy. Distributive 
solar on the roof is going to have broad effects, but I will 
leave that for another time.
    Mr. Sieminski. Senator, with your permission, 30 seconds on 
that. We're really interested in that issue at EIA. It's very 
hard for us, actually to do because it's behind the meter. It's 
hard for us to do that. We tried it on an annual basis.
    We have looked at rooftop solar and its impact, residential 
and commercial. It's easier to get the commercial numbers than 
residential.
    We are looking for ways now, and I think we'll be 
successful at this. This year I think we're going to start to 
find ways to make estimates on a monthly basis of what the 
impact is of rooftop solar on the electricity generation 
markets, and it's one of those other areas that we've been 
trying to emphasize as an important part of the ongoing effort 
at EIA to stay up with current technology.
    Senator King. It could very shortly turn into a true 
disruptive technology.
    Mr. Sieminski. It could very well do that. I mean we do 
know that the combination of tax incentives and the 
environmental positive nature that many people who were 
installing it want to see is pushing this, so the growth in 
that area----
    Senator King. It could dramatically lower costs----
    Mr. Sieminski. Right. Correct.
    Senator King. Thank you. Thank you, Madam Chair.
    Mr. Sieminski. Thank you, Senator.
    The Chairman. Thank you, Senator King.
    Senator Hoeven.
    Senator Hoeven. Thank you, Madam Chairman. Thanks for 
holding this hearing today. Mr. Sieminski, thanks for being 
here.
    Mr. Sieminski. Thank you, Senator.
    Senator Hoeven. And for your very, very important work. I 
would mention, pursuant to one of the last questions brought up 
by the good Senator from Maine, in North Dakota the Dakota 
Gasification Company takes lignite coal and converts it to 
synthetic natural gas. That natural gas is put in the pipeline 
and sent off to a number of different states for use.
    We also capture the CO2, condense it, cool it, 
condense it, put it in a pipeline and ship it to what is called 
the Weyburn oil fields which are actually in Canada just over 
the border from North Dakota. That CO2 is put down a 
hole or sequestered and used for tertiary oil recovery in the 
Weyburn oil fields.
    So we are doing just exactly what you described, producing 
natural gas from coal, capturing the CO2 and 
sequestering it and producing more oil and gas in the process.
    I think, Mr. Sieminski, your point is exactly right. The 
problem, the reason we are not doing more and more and more of 
it is we have got to make it economically viable, and that 
means we both have to reduce the cost of carbon capture and 
there has to be enough benefit in the molle patch to use 
CO2 for tertiary recovery rather than water floods 
or something along those lines.
    Mr. Sieminski. That's correct.
    Senator Hoeven. My question to you is right now today the 
world price for oil as posted for Brent crude is $63 a barrel. 
The domestic price for oil is West Texas Intermediate crude. 
That's $55 a barrel. That means our producers get $8 less per 
barrel of oil than foreign producers.
    So here we are locked in a battle to determine who is going 
to supply energy in the future, who is going to produce energy 
in the future, and our producers are at an $8 disadvantage 
against producers in places like the Middle East and Russia and 
Venezuela.
    At the same time our consumers do not benefit because 
gasoline is benchmarked off world crude which is the higher 
price at Brent, so we lose both on the production end which 
hurts our ability to produce more energy, be more energy secure 
here at home. It also hurts our consumers at the pump, so we 
need to lift the export ban on oil. Everybody wins in that 
equation all the way from the producer to the consumer at the 
pump.
    How can you help get that information out so that when we 
go to the Senate Floor we can get more than 60 votes and pass 
that legislation?
    Mr. Sieminski. Well, Senator Hoeven, we appreciate the 
support that you've shown us over the years in terms of our 
budget. Our budget enables us to do that, and I know that 
you're there.
    You know, on this difference, it actually goes back to 
something that Senator Murkowski mentioned at the very 
beginning of the hearing that measurement of the WTI price is 
in the midcontinent at Cushing, Oklahoma. And as long as you 
can't consume as much of oil in that midcontinent area as 
you're producing, prices are going to be depressed. And you 
know very well, Senator, that prices can often even be lower in 
North Dakota because you're even further away from the 
refineries that will consume the oil.
    I think that the infrastructure issues are critically 
important as we build out.
    Senator Hoeven. I am glad you brought that up. Thank you. 
[Laughter.]
    Mr. Sieminski. As we build out the infrastructure some of 
that differential could disappear and our producers would be 
getting closer to world prices.
    Senator, you also missed an interesting dialogue between 
Senator Murkowski and the Senator from Hawaii. Hawaii is paying 
very, very high prices for electricity. And you know, that 
might be helped if you could get LNG from Alaska down to 
Hawaii, for example.
    I remember last time I was up here Senator Baldwin was 
saying that the paper industry in Wisconsin was really getting 
hammered by high energy prices, and they don't use a lot. They 
could use more natural gas there, and I remember you saying 
that you'd love to sell some of that gas that's not being used 
and get that down to Wisconsin.
    Those are the kinds of infrastructure issues that need to 
be addressed so that we can get the energy from where it's 
being produced to where consumers need it.
    Senator Hoeven. So infrastructure is vital. But also in 
your expert opinion the ability to export LNG, liquefied 
natural gas, and the ability to export oil will benefit our 
consumers because we will produce more here at home. The price 
at the pump is benchmarked off the world price. More supply 
pushes prices down so the consumer benefits. Is that correct?
    Mr. Sieminski. I'd say that in general, trade generally 
tends to boost GDP and GDP is obviously, ultimately, helping 
everybody. I think there are some very serious regional issues 
that----
    Senator Hoeven. But apart from the regional issues, overall 
you are always going to have imbalances, particularly when we 
can't when we are blocked from building vital infrastructure. 
To build an energy plant for the country we need the right mix 
of pipelines, rail and road. We need the energy infrastructure. 
We need transmission lines.
    You cited some great examples, but producing more energy at 
home, more supply here at home, helps our consumer, correct? At 
the same time that prices are priced off a global market.
    Mr. Sieminski. That is correct.
    Senator Hoeven. And we are competing in a global market.
    Mr. Sieminski. I agree with that. Yes, sir.
    Senator Hoeven. Yes, sir.
    My second question is the imbalance of light and heavy. 
What can we do to help our refiners modify their refineries so 
that we can process more of the light, sweet crude we produce 
which would help us, of course, with energy production here at 
home, energy security and again, benefit the consumer? What 
kinds of things can we do to help our refiners address this 
imbalance of light and heavy crude?
    Mr. Sieminski. The----
    Senator Hoeven. In terms of refining capacity?
    Mr. Sieminski. Yeah, you know, I'm not--beyond the issues 
that have been talked about in terms of what happens if you 
allow exports or don't allow exports EIA has been looking at 
this from a couple of different angles.
    In April, we published earlier in this month, we published 
a paper on the options for petroleum refineries to run more 
light, sweet crude oil. So it was, kind of, along the lines of 
what they could do. You know, what are the things they can do 
in a refinery to run more light, sweet crude oil?
    In another month and maybe by the end of this month we will 
have a report out that looks at the question of well what would 
they do given the existing set of costs and so on. And it will 
try to look at the question of what refiners would actually do 
in response to the current production of light, sweet crude oil 
and the refining kit that's available to run it.
    The final report that we'll have out, I hope in June, will 
look at the costs, the impacts on production and the impacts on 
trade from either having the crude oil export ban, you know, or 
rules continue as is or changing those to make it more open.
    Senator Hoeven. So you said your next study will actually 
focus on some of the things refineries can do to address----
    Mr. Sieminski. We will do that. Yes, sir.
    Senator Hoeven. This imbalance between light and heavy and 
process----
    Mr. Sieminski. Right. We'll have that out relatively soon.
    Senator Hoeven. Madam Chair, I do have one more question. I 
am certainly willing to wait, but I would like to ask one more 
question.
    The Chairman. We are going to do one more quick round, if 
you do not mind waiting.
    Senator Hoeven. Thank you.
    The Chairman. Okay.
    Mr. Sieminski, thank you for, kind of, the continual plug 
here for Alaska to move its LNG. We believe, of course, that we 
have considerable opportunity, not only for our state, for 
Hawaii, but what it represents beyond that. Know that we are 
working it, but the need is clearly there.
    We are talking about the infrastructure and the alignment 
that is going to be needed going forward. I appreciate some of 
the specifics you've outlined here just with Senator Hoeven, 
but as you know within the State of Alaska we have an 
extraordinary piece of energy infrastructure, the TransAlaska 
pipeline.
    Right now we are moving about 500,000 barrels a day, but 
your forecast projects 420,000 barrels a day by 2020, 320,000 
barrels per day in 2025 and then just 180,000 barrels a day 
when we hit 2035. This is a terrifying prospect for us right 
now because the concern is that there gets to a point where 
that throughput is so low it brings into question the ability 
of that pipeline to function as safely as we need it to be.
    If it cannot function safely then we stop moving the oil 
through the line, and when you stop moving the oil through the 
line the law requires that we decommission that incredible 
energy infrastructure. For those who wonder how long it might 
take to permit a new TransAlaska pipeline, I do not even want 
to speculate about where that might take us.
    So when we are talking about infrastructure and the need to 
realign, I think we also need to recognize that we have very 
good infrastructure that effectively needs to be filled up in 
Alaska's case.
    The question to you this morning is in your reference case 
I am assuming you have factored in a steady state in Federal 
policy.
    Mr. Sieminski. Right.
    The Chairman. Some of what we are dealing with in Alaska, 
of course, is being able to access other areas, other Federal 
areas so we can fill up that pipeline whether it may be the 
ANWR area, our offshore prospects or being able to tap into 
some resources within the National Petroleum Reserve. How does 
the issue of access factor into your projections?
    Mr. Sieminski. Well we do follow existing law and 
regulation, and unless there are changes to the ability to 
lease in the Arctic refuge, for example, or we see other things 
like a lowering in the cost of doing shale oil developments. 
There are shale oils on the North Slope of Alaska that right 
now it seems in our models uneconomic to do that.
    At $100 it was getting closer at $60 or $75, maybe not as 
much, but those sorts of things would enter into those 
calculations.
    Senator, we did do a study specifically of the Alaska oil 
pipeline in, I think it was the 2013 Annual Energy Outlook, 
where we highlighted the fact that there could be a step change 
down at some point as production flow through the TransAlaska 
pipeline gets down to about 300,000 barrels a day. The 
mechanical ability of the pumps to work at that level of 
throughput comes into question, and it's very possible that it 
would have to drop.
    It was one of the things that we thought should be looked 
at because a change of 300,000 to 500,000 barrels a day in the 
global oil markets is enough to make a difference, and it was 
something that we wanted to look at.
    I understand your concern. It's policy issues. That's 
another one of those policy issues that EIA generally tries to 
provide the facts so the people can understand what's happening 
but not a recommendation to----
    The Chairman. That is greatly appreciated, but I think it 
is important for people to not assume this is just going to be 
continuing with a flow from the north if we cannot have access 
to these resources, those reserves.
    Mr. Sieminski. Right.
    The Chairman. That are, in fact, in place up there.
    Can I just ask one quick question about, again, Alaska LNG 
and the fact that the reference case does include a completion 
of the Alaska LNG project? Which, of course, I fully support 
and Alaskans fully support. But in terms of the economics that 
derive from that project coming out of Alaska, can you speak 
briefly to that?
    Mr. Sieminski. Sure. We have LNG from Alaska coming in 
around the year 2025. It seems like a long way away, but 10 
years is not a lot when you are developing a project the size 
and scope associated with that.
    It is dependent on our reference case forecast for oil 
hitting $75 a barrel next year and then moving up over time. 
Higher oil prices make LNG more attractive in overseas markets 
where fuels tend to get priced against each other where there's 
oil linked contracts for gas. So the higher oil prices would 
help that.
    Two other cases that we ran, Senator, we don't have Alaska 
LNG coming in.
    One of those is the low oil prices case. As I said low oil, 
low global oil, prices just make it harder for the economics to 
work for Alaska LNG.
    And the other one, interestingly, is high oil and gas 
resource case. If there are more oil and gas resources let's 
say in the lower 48 states relative to Alaska then Alaska's 
standing in the queue of projects that would get done on an 
economic basis might slip down. So there's a lot of moving 
parts.
    The reference case though does have LNG from Alaska coming 
in. And it would, I think, most of it would probably go to 
Asia. But I think some of that actually might end up in Hawaii 
as well.
    The Chairman. As I have told Senator Hirono, Hawaii is on 
the way to Asia. [Laughter.]
    So we can make that work. Thank you for that.
    Senator Cantwell.
    Senator Cantwell. Just to clarify on that point. So Alaska 
being able to export LNG and possibly being successful on a 
pipeline would not have an impact on the U.S. market?
    Mr. Sieminski. It would have a minimal impact mainly 
because it's separated from the lower 48 state markets.
    So it would have more of an impact on the global markets. I 
mean, you know, again, to the extent that you get more fuel 
whether it's oil or gas or renewables into the markets you're 
going to tend to lower prices. Certainly that would be the case 
for oil and gas. And the net effect of that would be to bring 
fuel costs down for everybody.
    Senator Cantwell. Can I talk for----
    Mr. Sieminski. And Senator Cantwell, if I, just a second.
    We are working really hard on a study of gasoline on the 
West Coast markets. And we hope to have that out fairly 
shortly. And I think that's something that you'd be very 
interested in.
    Senator Cantwell. Good because I gave you up to the end of 
this year. Now that it is going to be very shortly, I love that 
answer. So, thank you.
    Mr. Sieminski. Right.
    Senator Cantwell. I liked this part of your report on page 
four about liquid fuel consumption falling, and I am sure that 
is directly related to transportation fuel.
    Mr. Sieminski. That's correct.
    Senator Cantwell. Do you see that trend continuing?
    Mr. Sieminski. In the reference case total liquid fuels 
consumption comes down a little bit over the forecast period. 
It's very different between the different fuels of gasoline 
comes down pretty sharply. Diesel fuel and jet fuel actually go 
up a little bit. The reason jet fuel goes up is there's just 
more people flying.
    Senator Cantwell. Yes.
    Mr. Sieminski. And diesel fuel----
    Senator Cantwell. Which is why----
    Mr. Sieminski. Diesel fuel goes up because, with population 
and economic growth, there is more trucking occurring and train 
transportation as well. And both trucks and trains use diesel 
fuel.
    Senator Cantwell. Well, we are definitely working on those 
on the R and D side. [Laughter.]
    Both on jet fuel and on other biofuels, so that is why it 
is so important. But----
    Mr. Sieminski. Biofuels are in that forecast too in a 
portion of the diesel fuel category there's bio diesel.
    Senator Cantwell. I am sure tax credits, but I am sure the 
tax credits are not. So then their predictions are not as 
robust. Okay, we will not go there.
    Mr. Sieminski. We would love to get help from the Senate 
and House of the United States on clarity on the path forward 
for those tax credits. It would help in our analysis a lot, but 
I'm not counting on it.
    Senator Cantwell. One of my top priorities for energy is to 
get that predictability. We are going to continue to see a 
savings at least within transportation fuel. We are going to 
continue to see that consumption savings.
    Mr. Sieminski. Right.
    And it's an important part of our forecast for the question 
of net oil imports and the benefits to the economy as we 
produce more of the fuels that we're consuming. The flatness in 
the overall liquids fuels and the drop in gasoline consumption 
that's being encouraged by fuel efficiency standards and 
changes to other fuels in the transportation sector helps to 
keep that oil import number down at that 15 percent level that 
we have in the reference case. And that's a huge improvement 
over what the U.S. situation was just ten years ago.
    Senator Cantwell. Yes, I agree. You had some interesting 
projections on hydro. So what are some of the factors that are 
driving those projections? It sounds to me like there are 
efficiencies being implemented, new turbo----
    Mr. Sieminski. One of the charts in the Annual Energy 
Outlook basically shows all renewables. And EIA includes hydro 
as one of the renewables. We, right now, hydropower is just 
about equal to all of the other renewables combined.
    But we think hydropower over the 25 year forecast is going 
to be relatively flat. The reasons behind that is there just 
aren't that many more places where you're going to put big dams 
in the United States. So with hydropower relatively flat and 
increases coming in in other renewables like solar and 
especially wind--we have a lot of growth in wind that by the 
end of our forecast period wind generation, actually exceeds 
hydro generation for the first time ever in the United States.
    And it could then happen sooner. Yes, it could, you know, 
if we ran that in the no sunset case we would have more growth 
than wind and solar than are shown in our current charts.
    Senator Cantwell. Thank you for bringing that point up 
about wind. I was definitely going to go there, so thank you 
for explaining that.
    On hydro, I just want to emphasize how much new technology 
is helping us drive efficiencies there.
    Mr. Sieminski. Right, to the extent that better generators 
can convert the energy that's in the water into something 
that's deliverable across the lines. It would be a real benefit 
out in the Northwest. Also the transmission, I mean, we're 
making progress in the efficiency associated with the 
transmission grids and the more of that electricity that you 
can get to the end user the better off everybody is. And so 
there is progress being made in that area.
    Senator Cantwell. We definitely want a dialogue with you 
about how you would start to model some of that information. 
Again, you are modeling what is in place, right, not what is 
not in place?
    Mr. Sieminski: Right.
    Senator Cantwell. We are seeing huge efficiencies from 
smart grid technologies, and they are just basic things in the 
various sectors, everything from synchophasors to other things, 
resulting in huge savings. So I think your report is actually 
showing the end result in some of that data already, and that 
is why we want to keep emphasizing how important efficiency is. 
So thank you.
    Thank you, Madam Chair.
    The Chairman. Senator Hoeven.
    Senator Hoeven. Thanks, Madam Chair.
    I just had the one question that I wanted to follow up with 
you on.
    I know you have addressed it to some extent but let's talk 
for a minute about the impact on Iran's economy that would 
result from a lifting of the sanctions. You addressed some of 
the front end aspects in terms of the oil that is currently 
being stored, but the fact is our sanctions have reduced Iran's 
ability to sell oil from 2.5 million barrels a day in 2011 down 
to 1.1 million barrels a day in 2013. Very, very significant 
for an economy that is pretty much entirely dependent on petro 
sales.
    Would you please talk about both the immediate term and the 
longer term impact on Iran's economy that lifting of the 
sanctions would have.
    Mr. Sieminski. I think in very rough numbers, Senator, that 
you could think about another million barrels a day of oil 
could be out on the global markets from Iran at $60 to $75 a 
barrel.
    Senator Hoeven. Again at a higher price than our domestic 
producers get by $8 a barrel. Correct? 63 Brent versus 55----
    Mr. Sieminski. I think we'd want to look at that to try and 
see whether or not the quality of the oil that Iran is selling 
is, what the differentials would be there. But in rough terms 
if you just said $60 at a million barrels a day it's $60 
million a day of additional revenue that Iran would be 
receiving.
    Senator Hoeven. Thank you.
    Mr. Sieminski. About $25 billion a year. I wish I had a 
million barrels a day of production.
    Senator Hoeven. So you would say it is a huge impact to 
their economy?
    Mr. Sieminski. Oh yeah, it would be very big.
    Senator Hoeven. Thank you, I appreciate it.
    Thank you, Madam Chairman.
    The Chairman. Senator Hoeven, I appreciate you drilling 
down on that. There have been several questions about the 
impact of removing these sanctions on Iran and just the value 
to Iran and how it effectively puts us at a disadvantage then 
when we are not able to export our oil into that global market.
    I think it does just push the discussion on what we do here 
in this country to relook, critically relook, at these export 
policies that are inhibiting not only our job growth, our 
economic opportunity, but really our ability to utilize a 
resource, a strategic resource, for the benefit of the 
geopolitics surrounding, not only oil, but other resources as 
well and how the United States can play as an international 
leader with, effectively, this oil diplomacy, if you will.
    What we are seeing right now playing out in real time 
should be a reminder to us that we have in place policies that 
were put in place many decades ago for reasons that are no 
longer necessarily applicable. I think that is our role and our 
job here as a Committee to look at these policies and see if it 
is time that we address and change them. I believe it is time, 
and I think you would agree as well.
    Senator Hoeven. Madam Chairman, if I may, I want to again 
thank you for holding this hearing. I think it is so important 
because it not only demonstrates the economic benefit and 
impact of the right policies here at home, but also the 
geopolitical influence we can have on a global basis with the 
right approach both in terms of what we do with our energy 
policy and in terms of what we do with our international 
approach to energy as part of diplomacy. I think you have done 
an excellent job with the Administrator highlighting that here 
today.
    It is so important on all these fronts, not just on the 
economic front here at home, but the impact we can have in 
terms of foreign relations and diplomacy above and beyond 
military strength. We can have a real impact here, and I think 
the Administrator highlighted this when he talked about a 
million barrels a day and what that does for Iran's economy if 
these sanctions are lifted.
    We have to understand how powerful that sanction is and 
certainly make sure that when we are dealing with something 
like a nuclear Iran that we understand the leverage we have 
with these sanctions. So I thank you, again, for holding this 
hearing today, Madam Chairman.
    The Chairman. I think we also need to appreciate that these 
sanctions that have been in place, that have brought Iran to 
the table with these negotiations, these sanctions could not 
have been near as effective if we did not have our own 
resources to rely on. The figures that you gave us, Mr. 
Sieminski, were back in 2005 when we were importing 60 percent 
of our oil. Today, it is 15 percent. That is incredible. It is 
absolutely incredible how quickly we have moved that dial.
    When we were more than 50 percent dependent on a resource 
coming from others, including others who do not like us, there 
is a vulnerability. When we can move to the place where we are 
today where we are not only in a position to influence and lead 
but to ultimately get to that point where we are a net 
exporter, this is a dramatic change, a dramatic shift, and I 
think only for the betterment of our country.
    So this is all good information today. I know you have, 
again, couched all of this in terms of these are reference 
cases. We are not always right, but you hope to be proven not 
wrong today. I appreciate that. [Laughter.]
    The Chairman. We recognize, again, that this is projective. 
You are projecting out. It is not predictive. We put it in 
those terms, but I think the good work that EIA does not only 
with your Annual Outlook, but truly on a day-to-day is greatly 
appreciated. We thank you and your work and that of your great 
staff that stand behind you.
    Know that we will use this as a resource going forward. I 
understand you will be traveling to the State of Alaska, so you 
will have an opportunity to become even more informed with 
the----
    Mr. Sieminski. Senator, before you hit the gavel, just 30 
seconds.
    The Chairman. Please.
    Mr. Sieminski. The impact of U.S. production goes beyond 
just the Iranian sanctions issue. Back in 2012 and '13 there 
were some really serious interruptions in oil production in 
countries like Libya.
    The Chairman. Libya.
    Mr. Sieminski. Sudan, Yemen, Syria and others. They add up 
to a huge amount of oil, over 2,000,000 barrels a day, at one 
point approaching something like 3,000,000 barrels a day. And 
had it not been for the growth in shale production in the U.S. 
and production in a few other countries, including Canada, the 
price of oil would have been a lot higher.
    Obviously that would have been a benefit to producers but 
the overall impact to the economy could have been pretty 
devastating. And I think that the growth in production in the 
U.S. played a very important role in stabilizing that global 
oil markets.
    The Chairman. That is an important factor to keep in mind. 
Because when we do not see the disaster that could have come, 
it is like, well, nothing really bad happened. The fact of the 
matter is nothing really bad happened because we had built a 
cushion, a cushion that we did not have before. It becomes more 
difficult for people to appreciate exactly how significant that 
was, that we were able to weather those pretty considerable 
disruptions.
    Mr. Sieminski. Right.
    The Chairman. Because of what we were producing here in 
this country at an unprecedented rate, again, going from 60 
percent reliant on imports to the level that we are at today.
    So we thank our friends from North Dakota. It really 
bothers us that North Dakota has pushed Alaska out of its 
leadership position there, but we are just glad somebody is 
doing it.
    Senator Hoeven. If I may, Madam Chairman? You made such a 
great point today. You talked about the Alaskan pipeline and 
how it is in jeopardy if we do not have the right policies.
    The Chairman. Yes.
    Senator Hoeven. So that we can continue to produce domestic 
energy rather than rely on energy from the Middle East. You 
have highlighted that so well here today with the 
Administrator. I hope people are really paying attention, not 
just what it means to us here at home and our economy, but to 
our security in the world.
    The Chairman. Yes.
    Senator Hoeven. I think this hearing has really brought 
that out very dramatically. So, thank you.
    The Chairman. I wish all 100 of us were here instead of 
just the two of us concluding it. [Laughter.]
    But we will make sure that that word gets out.
    Again, Mr. Sieminski, thank you so very much.
    Mr. Sieminski. Senator, thank you very much. Senator 
Hoeven.
    The Chairman. We stand adjourned.
    [Whereupon, at 12:10 p.m. the hearing was adjourned.]
   
   
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