Global Warming Hearing on the Future of Oil

June 11, 2008

The Select Committee on Energy Independence and Global Warming is currently holding a hearing, "The Future of Oil - Peak Prices, Peak Production, Piqued Consumers." Witnesses will be Guy Caruso, Administrator of the Energy Information Administration; Adam Sieminski, Chief Energy Economist at Deutsche Bank; Amy Myers Jaffe, Energy Studies Fellow at the James Baker Institute for Public Policy; and Athan Manuel, Director of Land Protection Programs for the Sierra Club.

Watch the hearing live via committee webcast or on C Span 3.

Chairman Ed Markey gives opening remarks:

Chairman Markey: "Today we will hear that the consensus view is that oil above $100 a barrel is going to be with us for some time. So we have two choices: 1) continue exporting our wealth overseas, which drives down the value of the dollar and hope that American consumers can outbid the Chinese and Indians in the world oil market, or 2) we can commit to blazing a new path, one that frees our country from the shackles of loyal and unleashes renewable energy revolution will save the planet and drive our economy in the 21st Century. The choice is simple, this hearing is very important."

Chairman Ed Markey questions the witnesses on projections of future gas prices:

Chairman Markey: "Would you recommend, Mr. Caruso, that the Department of Transportation use the high case scenario in planning for what the efficiency of the vehicles that Americans drive in 2020 and 2032 should be, or do you think that they should use $2.26 a gallon in 2016 and $2.51 a gallon in 2030 as the basis for their planning as to what the efficiency of the vehicles that we drive should be?"

EIA Administrator Caruso: "Well of course that's obviously the prerogative of NHTSA (The National Highway Traffic Safety Administration), but we're on the higher price path right now. If you were to ask me today what I would use, I would use the higher price."

Chairman Markey: "You would use the higher prices, but NHTSA doesn't, NHTSA has to use your lower price. I would recommend to the Bush Administration that they change this formula and that they not use this low cost per gallon of gasoline for the basis for the fuel economy standards for the vehicles we drive."

Rep. John Larson (CT-01) questions the witnesses about the secrecy in which the Bush Administration energy policy was developed and the role of speculation:

Rep. Larson: "Mr. Caruso, what do you think about that? Should we be regulating these unregulated dark markets?"

EIA Administrator Caruso: "I think we need more information from those markets to..."

Rep. Larson: "How do you get it if they're not regulated?"

Caruso: "Well... they may need to be. And the CFTC, FTC and Department of Justice are meeting tomorrow in their first task force meeting to look at that issue."

Rep. Larson: "After more than two and a half years of our pleading that they do so but it still doesn't answer the question of the dark markets and their ability to be unregulated and to speculate on what's happening and drive these costs up, people on my district call that economic terrorism and something we ought to make sure that the Justice Department's involved in."