Shell Oil President and Director Marvin Odum speaks during a plenary session on the first day of the Energy Information Administration energy conference April 26, 2011 in Washington, DC.
EIA Administrator Adam Sieminski highlighted the administration’s rapid response efforts during the recent hurricane crisis in the northeast and was enthusiastic about the organization’s prospects going forward while giving a breakfast presentation at the US Association of Energy Economics North American Conference in Austin, Texas.
The EIA was able to successfully demonstrate its first Guiding Principal under Sieminski’s watch – “Better, Faster Cheaper” – as it navigated government bureaucracy in order to get vital storm recovery information to the public in a matter of hours.
A survey that gathered data about gasoline station outages and their causes was used to create graphics that were posted on the EIA’s website in the immediate aftermath of Hurricane Sandy. Surveys typically take months to get approved by requisite government agencies, but given the storm’s severe impact and urgent need to get information to affected areas, Sieminski said approval was received in 12 hours and the information was posted within 24 hours.
The EIA also posted information about power outages, their duration and resolution on a daily basis during the recovery.
Though not EIA-specific, additional government initiatives were quickly taken to help ameliorate the gasoline shortages, said Sieminski. That included temporarily waiving the Jones Act, so foreign-flagged tankers could make deliveries where needed. Rules against cross-state fuel delivery by tanker truck were also temporarily suspended so gasoline could be transported to communities that had run out.
Keeping with the “Better, Faster, Cheaper” mantra, Sieminski said he anticipates EIA will release its popular International Energy Outlook this spring, after missing a year due to a 14% budget cut that prevented the administration from compiling several reports and surveys.
The other three Guiding Principles that will steer the EIA in coming years are “Best Practices,” “Faster Delivery” and “More Good People,” including energy industry practitioners, said Sieminski.
Industry Turned Upside Down
The resurgence in North American oil and gas production was not overlooked, as he pointed out the US and Canada currently lead non-Opec production growth for crude and liquids – a fact few would have predicted five years ago. The EIA estimates the US will become a net natural gas exporter in 2022, based on existing fundamentals.
The US natural gas export debate will receive a key piece of information when the Department of Energy releases a much-awaited study on the potential US economic impacts associated with gas exports, which Sieminski said should be out “by the end of the year.”
In addition to exporting natural gas, there has been a discussion about exporting crude oil from the US as well; a move that Sieminski has previously said could make sense based on market fundamentals.
The regulations that prohibit US crude exports are a legacy of the 1970′s when imports soared, domestic production sagged and few imagined the output renaissance the industry has engineered in recent years. “Policy makers may have to rethink these rules,” he said.
If production continues at rates similar to those currently being recorded, the US could have a surplus of the light sweet crude being produced from the Bakken, Eagle Ford and other tight deposits. At the same time, the US Gulf Coast refining complex will have excess heavy sour crude processing capacity. As such, it could make sense to export light sweet crude and import more heavy sour grades, which are also less expensive in the global market.
Policy makers will need to do the appropriate cost/benefit analysis on this issue, said Sieminski.