Benefits of 2007 Energy Bill Quantified

March 4, 2008
03:49 PM
Experts have called the Energy Independence and Security Act of 2007 (EISA) a historic achievement by Congress.  With reviews like that, it’s easy to see why Chairman Bingaman, who played a leading role in developing and moving the bill through Congress, must have liked what he heard this morning from the head of the independent, non-partisan, policy-neutral Energy Information Administration (EIA).
In a hearing, EIA Administrator Guy Caruso testified that EISA would have a significant impact on increasing America’s energy self-reliance, and he projected reduced energy import dependence and slower growth in energy-related carbon emissions.
Specifically, Caruso noted that because of EISA: net imports of crude oil and refined petroleum products are expected to decline from 60 percent in 2006 to 51 percent in 2022; inflation-adjusted prices for oil, natural gas and coal are expected to be lower in 2030 than they are today; electricity prices are expected to peak in 2009 and remain below today’s prices in 2030; total domestic energy demand is expected to increase by about 24 percent through 2030, but the pre-EISA figure was closer to 31 percent; and energy-related emissions of CO2 are forecast to grow by 25 percent from 2006-2030, down from pre-EISA’s prediction of a 35 percent increase.  (This reduction is the equivalent of the current annual amount of CO2 emissions of South Korea, the world’s 9th largest source of CO2 emissions).  
It’s hard not to be pleased with these projections.  Here is Chairman Bingaman’s statement from today:
Hearing on the Energy Information Administration’s
Revised Annual Energy Outlook
“Thank you for joining us today, Mr. Caruso.  We are always pleased to have you speak with us, and I look forward to discussing your Administration’s recently revised Annual Energy Outlook.  We know that the Energy Information Administration had just completed this year’s Annual Energy Outlook last December, when the Energy Independence and Security Act was signed into law.  We are very appreciative that, on your own initiative, you took the effort to re-run your models so that we might all begin to better understand the effects of the new energy legislation.
“The effects of this legislation will be substantial and creates great strides toward reducing our energy dependence and curbing global warming pollution.  In 2006, 60 percent of our oil, gasoline, and other transportation fuels came from foreign sources.  In 2022, only 51 percent of those fuels will come from foreign sources.  This is a phenomenal achievement, and reverses the trend of becoming ever more reliant on imported oil.  It appears that OPEC will meet tomorrow and decide not to increase oil production, despite new record high prices for oil – we hit a new high of $103.95 per barrel just yesterday.  OPEC’s decision to sit by and watch as oil prices skyrocket highlights how important it is to wean ourselves off of imported oil to the maximum extent possible.  This new energy bill takes a strong step away from oil dependency, and toward greater efficiency and homegrown biofuels.
“I am also very pleased to see that your revised outlook suggests that the energy bill will lead to substantially reduced growth in greenhouse gas emissions.  Through the greenhouse gas emission reduction requirements included in this legislation’s Renewable Fuel Standard, Congress passed and the President signed into law this country’s first global warming legislation.  Your testimony states that you now expect energy-related carbon emissions in 2030 to be 500 million metric tons below what was published in December.  This is a substantial decrease, and a step in the right direction.  It demonstrates that government policy can and will move toward reducing greenhouse gas emissions.  I hope we will use this first step to build momentum for comprehensive global warming legislation.
“I would also like to thank Mr. Caruso for his responsiveness to Congress’ request that EIA facilitate more transparency on refinery capacity and utilization.  Senator Domenici and I cosponsored an amendment that was adopted in the energy bill, requiring EIA to analyze refinery outage data and report its findings to the Secretary of Energy.  EIA has now decided to go one step further, publishing aggregated data on refinery outages every month in its Petroleum Supply Monthly.  This kind of data transparency is critical to free and properly functioning markets and I applaud EIA for making this effort.
“Again, thank you Mr. Caruso, and I look forward to your testimony.”
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