US energy policy must adjust to abundance – House panel

05 February 2013 18:42  [Source: ICIS news]

WASHINGTON (ICIS)--US energy policy must adjust to a new paradigm of abundant domestic resources and avoid legislation and rulemaking that could thwart the nation’s potential for energy independence, leading House members said on Tuesday.

Representative Fred Upton (Republican-Michigan), chairman of the House Energy and Commerce Committee, told a hearing on US energy resources assessment that “what was once believed to be unthinkable is now within our grasp – the game-changing potential for North American energy independence”.

“For more than three decades, the American people have been told that we are a nation of declining resources at the mercy of OPEC,” Upton said.

However, he said, “thanks to American ingenuity and advanced technologies, the trends in domestic oil and natural gas production have been turned upside down” and “by 2020, US oil production will exceed Saudi Arabia’s”.

In the hearing before the Subcommittee on Energy and Power, Adam Sieminski, head of the US Energy Information Administration (EIA), noted that the increase in US oil production in 2012, up by some 800,000 bbl/day from 2011, was the largest one-year advance in output since the first US crude oil well was drilled in 1859.

Sieminski said that US domestic oil production, drawing on new output from tight oil formations, is expected to reach 7.9m bbl/day in 2014, the highest level of production since 1988.

Harry Vidas, vice president at energy industry analyst group ICF International, told the panel that continuing developments from natural gas shale plays has raised the US recoverable gas resource base to 3,850 trillion cubic feet (tcf), representing a 155-year supply at current consumption rates.

He said that the currently assessed US oil resources base is 264m bbl, equivalent to 110 years of consumption at present rates.

Vidas pointed out that breakthrough developments in shale gas have created an upsurge in domestic chemicals production, noting that “chemical manufacturers in the US have a large advantage over international firms whose energy and feedstock costs are higher”.

Citing EIA data and other sources, subcommittee chairman Ed Whitfield (Republican-Kentucky) said that “the news is so promising that some analysts are talking about the possibility of achieving North American energy independence by the end of the decade”.

Whitfield said that the impact of newly abundant US oil and natural gas supplies “are profound and only beginning to be understood”.

He cautioned that “so much of our existing legislation is rooted in the assumption of domestic energy scarcity, not energy abundance”.

“Needless to say, a wholesale rethinking of our energy policy is in order,” he added.

Upton said that the new flood of fossil energy resources “is good news – but only if we are wise enough to let it happen”.

“It is up to us to ensure that our federal laws are not continuing to introduce roadblock after roadblock to enhanced energy security,” he said.

But Jennifer Morgan, director of the climate programme at the World Resources Institute (WRI), urged the subcommittee to consider risks posed by climate change, “both on our resources being developed and utilised today and on our choices for development into the future”.

She argued that despite the new abundance in US fossil energy resources, policymakers should focus instead on building low-carbon and renewable energy options to become “climate secure”.

“We must deliberately think longer-term and consider the range of risks and costs that will be compounded if today’s investments lock in a pollution-intensive energy future,” she said.

The subcommittee hearing was the first of several that will be held by the Energy and Commerce Committee in weeks ahead to provide definitive data on overall US fossil energy resources, according to a committee memo, and to determine “whether policies that are guided by scarcity should still be in place”.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles