    [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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           Printed for the use of the
                   Committee on Energy and Natural Resources

                   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
                                     ------
                        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

                                  ----------

                               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:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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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