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Commentary: ASPO-USA Meets with DOE Officials -- Some Things We Learned

On Monday, December 17, representatives of the Association for the Study of Peak Oil and Gas USA (ASPO-USA) met with senior officials of the Energy Information Administration (EIA), including Administrator Adam Sieminski, and staff from other offices within the U.S. Department of Energy (DOE). The meeting was arranged following a letter that ASPO-USA sent to Energy Secretary Steven Chu and Sieminski after his appointment as EIA administrator earlier this year. The letter outlined key questions and concerns regarding oil and gas information that EIA provides.

The meeting was intended to help ASPO-USA and DOE-EIA better understand each other’s perspectives and explore ways that ASPO-USA might collaborate with DOE and EIA’s to enhance their information products. EIA officials discussed their priorities and the challenges they face, while ASPO-USA representatives discussed the goals of our work and our specific concerns.

ASPO-USA’s concerns generally followed two themes: 1) projections for future oil and gas supply should properly consider technical and economic factors that may constrain U.S. domestic production; and 2) DOE and EIA need to recognize broader trends that may be increasing the risk of a world oil crisis. While it was an important opportunity to present analyses by ASPO-USA-affiliated experts, the greatest benefit of the meeting was gaining a clearer understanding of the factors that are shaping EIA’s work and the opportunities for ASPO-USA to provide constructive ongoing input.

Of relevance to our concerns, we learned that EIA information on drilling costs and other costs of oil and gas production may not be very robust. Their projection models, therefore, may grossly underestimate the significance of increasing production costs as a constraint on oil or gas supply. EIA’s projection models seem to be more demand-driven than supply-driven in general (we will be reviewing the assumptions and inputs of their models to confirm how supply constraints are or are not factored into their projections). In addition to offering assistance in gathering and evaluating such cost data, we suggested tracking different types of oil and gas separately, so that their varying technical and cost constraints can be more properly and clearly assessed.

Moreover, in pressing issues regarding world oil production and rising global consumption, we became more cognizant that EIA, despite being the nation’s central source of energy information, does not have a clearly defined mandate to track global trends nor collect and report international energy data. ASPO-USA representatives conveyed that this was an issue where we and other outside experts could be helpful in providing both assistance and an impetus to address such issues more thoroughly. We discussed and mutually recognized that there are major problems with inconsistent and unreliable data from different countries. However, we also noted that there are analyses and interpretations of global trends that can be made based on existing data from reliable sources.

Perhaps most importantly, we learned that EIA’s interaction with and input from experienced experts in technical oil and gas issues may not be as regular and rigorous as it should be. EIA receives advisory support from the American Statistical Association’s Committee on Energy Statistics, but this input is primarily focused on statistical methods. EIA conducts and participates in various meetings and conferences where special technical issues are discussed, but these meetings seem to be relatively ad hoc and lack continuity. As a way of building a closer working relationship between EIA and ASPO-USA, as well as promoting input from a broad diversity of outside experts, we offered to help organize a series of meetings or workshops to address in-depth the questions and issues that ASPO-USA has raised. We also posited the need and potential benefits of a broader standing advisory body of outside experts, though establishing such a body is a somewhat longer-term prospect.

In sum, we opened direct channels of communication and created a solid foundation for future cooperation. At the same time, we are developing a more concrete understanding of their work, so that our questions, input, and criticisms of their work can be more specific and constructive.

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