Energy and Oil Market Outlook
February 3, 2011
11:09 AM
Opening Statement -- Feb. 3, 2011
Energy and Oil Market Outlook
“This is an oversight hearing on the energy and oil market outlook for the 112th Congress. As many of you know, we usually try to start a new Congress by having a sort of ‘scene setting’ hearing, which looks at the broad energy trends that we expect to influence our thoughts on energy policy, and also, more specifically, on items that come before the Committee during this Congress.
“Today we will start that discussion by hearing from Dr. Richard Newell, the administrator of the Department of Energy’s Energy Information Administration. He is going to give us highlights of EIA’s latest short- and long-term energy market forecasts. This committee is a heavy consumer of EIA products, so we always appreciate having EIA share its data and analyses with us.
“We will also hear from Ambassador Jones, who is the Deputy Director of the International Energy Agency, in Paris. We look forward to discussing the IEA’s forecast of total world energy supply and demand out to 2035. I’d also note that the IEA was founded as a forum for responding to oil supply disruptions, and it still has an important role to play in that capacity. Executive Director Tanaka, who was scheduled to be with us today, found that the current situation in the Middle East required him to stay in Paris, but we’re in good hands with Ambassador Jones, whose impressive resume includes service as the U.S. Ambassador to many countries in the region. Given the current situation we’re seeing internationally, we are especially grateful to hear IEA’s perspective.
“We are also pleased to have with us two leading energy analysts, both of whom are familiar to the Committee. They testified in 2008 as we attempted to understand that year’s historic oil price spike. Mr. Diwan and Mr. Burkhard can offer their own thoughts and insights on where energy markets are headed, and they also each have considerable expertise in the geopolitics of oil. So we very much appreciate them being here today.
“Since this hearing was announced early last week, I think it’s safe to say that Members and witnesses alike have been following the developments in the Middle East with much interest. Fortunately, it appears unlikely that the political turmoil will result in major disruptions in oil production or transportation. That’s my impression, at least at this time. However, I note that whenever geopolitical events remind us of our vulnerability to world oil supply disruptions, it is a spur for us to consider energy policies that help to reduce that vulnerability.
“That’s why I am particularly pleased to see that EIA is forecasting a decline in U.S. consumption of imported oil between now and 2035. Until very recently, reversing the decades-old narrative of ever-increasing U.S. dependence on foreign oil seemed all but impossible. We now see that 2005 might well have been the high water mark in U.S. oil import dependence. Increased vehicle efficiency and a transition to increased reliance on biofuels, together with gains in U.S. oil production – all of these are creating national and economic security benefits; I am optimistic that further technology advances in both vehicles and fuels could make us even less reliant on imported oil than the current forecast predicts. I hope that we in the Congress will have the good sense to remain on this path toward increased energy independence.”
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