Good morning, members of the Standing Committee on Natural Resources. Thank you for giving me the opportunity to appear before you today to provide testimony on the roles and responsibilities of the U.S. Energy Information Administration.
I believe strongly in the value of relevant and credible national energy information in developing national and international energy policies. I am proud that the EIA plays a significant role in providing that kind of information. EIA is the statistical and analytical agency in the U.S. Department of Energy. It was created by federal statute in the late 1970s with a mission to collect, analyze, and disseminate independent and impartial energy information to promote sound policy-making, efficient markets, and public understanding regarding energy and its interaction with the economy and the environment.
EIA is the primary source within the U.S. federal government of energy information and, as firmly established within the law that created EIA, its data, analyses and forecasts are independent of approval by any other officer or employee of the United States government. The EIA is headed by an administrator who is appointed by the President and confirmed by the Senate. The administrator is the only political appointee at EIA, and the EIA's independence is vested directly in her. Every nominee for the position of administrator has been asked during the confirmation process in the U.S. Senate to commit to upholding EIA's independence, regardless of the party of the President or the leadership of the Congress.
My statement will provide an overview of EIA's stakeholders, organizational structure, and data collection and analysis. A wide range of stakeholders makes use of EIA's energy data and projections, which we generally make available through our website, www.eia.gov. Our 2017 web survey found that most active users of the website included interested business and industry, private citizens, and consultants and researchers, who together made up two-thirds of EIA's website customers. Other important users identified themselves in the areas of education, finance, energy, and government.
EIA data and analyses meet many of the diverse needs of our stakeholders. For example, business, industry, and financial professionals require good information about production, consumption, and prices to develop their own strategies and processes. Policy makers and interested private citizens need contextual information about energy activities and markets, and the opportunity to examine trends that affect their lives. Even consultants and media who are in business to produce their own energy data analysis need some of the statistics we produce to provide context and benchmarking for their work.
In fact, although media made up only 2% of our web users, it represents another important channel for disseminating EIA analysis and statistics. Many of our reports, data updates, and forecasts are actively used by trade and public press. By focusing both on statistics and their interpretation in the service of providing context about energy, EIA's work is accessible by a wide range of users, and consequently helps inform a wide variety of interested stakeholders.
EIA is organized to develop and integrate its statistics and forecasting into useful information, disseminate that information effectively to interested stakeholders, and manage its internal operations. To do that, EIA is organized into four offices. The two largest, the office of energy statistics and the office of energy analysis, focus on developing statistics and forecasts respectively, and on developing interpretation and analysis of their implications together. The office of communications focuses on the dissemination of our products, and the office of resource and technology management manages the budget, procurement, and technology.
I'd like to describe our approach to statistics, forecasting, and analysis in a little more detail.
As an official government statistical agency, EIA is dedicated to producing objective energy data that are relevant to market and policy questions. That means maintaining a strong commitment to the principles of official statistics as interpreted in the United States and as applied to all federal statistical agencies. The significant components of these principles include producing relevant, objective data; establishing and protecting credibility with data users; maintaining trust with data providers; and clearly operating outside political influence.
EIA has developed its statistical program in the context of U.S. law, with the U.S. Office of Management and Budget implementing standards and guidelines, and EIA implementing these standards and guidelines independently.
Maintaining effective and efficient management systems is an important component of EIA's statistical systems. We have developed a view of a statistical life cycle for identifying important information, developing efficient strategies to provide useful information, disseminating that information, and evaluating the results.
Our approach has been heavily influenced by international practices, and we've made good use of what we've learned from Statistics Canada, from the UN Oslo group work, and the International Energy Agency, among others in developing our life cycle.
In recent years this has led to increased use of third-party data sources, including administrative data, close-to-real-time business operating information, and crowd-sourced data, to bring vital energy context and information to our stakeholders. The role of official government statistics is often to provide timely and accurate information that is difficult to get.
For example, in the past few years EIA determined that it needed to introduce a monthly oil production survey to keep up with recent U.S. oil production growth. Prior to the EIA survey, oil production information had been estimated from state data. When the new survey was released, issues with some of the previously used administrative data became clear, and everyone's understanding of oil production in the United States improved significantly.
In total, EIA produces approximately 57 surveys and other data collections, with regular and irregular cycles ranging from one hour to four years. They cover a varied landscape of energy facilities, types, and uses. Often, these parts of the overall energy landscape don't seem to have much relation to one another, but we find that a working understanding of the pieces that make up energy in the United States and a focus on how they fit together brings genuine insight into our work, making all the parts work better.
Another important dimension to EIA's collection of energy data is our effort to look all along the value chain. This is evident from our weekly petroleum stocks report on Wednesday mornings and our natural gas storage report on Thursday mornings, which are known for routinely moving their respective financial markets.
The EIA's consumption surveys, which are among the most difficult and expensive and least regular, are acknowledged to provide information about energy consumption for industry, residential, and commercial sectors that is virtually unmatched in the world and invaluable in understanding those sectors' energy use.
The changes in commercial and residential consumption patterns in just the last decade are notable. The rapid expansion of distributed, off-grid solar photovoltaic systems for commercial and residential customers is changing utility planning in some areas.
In addition to energy statistics, EIA prepares a short-term domestic energy outlook examining monthly trends over the next one or two years and a domestic and international energy outlook with annual projections over the next 20 to 25 years. Also, when requested by congressional committees or the administration, EIA develops forecast analyses around other energy issues.
EIA derives tremendous value from both operating as a statistical agency and having a mission for forecasting analysis. Each side benefits. EIA forecasting has access to well-organized detailed statistics about U.S. energy activity, often having had input to the survey design.
EIA's reference case analyses and outlooks are developed using current laws and policies. This provides a common framework against which policy changes may be transparently assessed through sensitivity cases, using methodologies that are accessible and well documented for EIA stakeholders.
EIA statistics benefit from being combined with forecasting analysis as well. Our forecasters are deeply engaged in trying to understand energy activity. As a consequence, their identification of information needs tends to be closer to the cutting edge of new issues. That kind of feedback is invaluable in planning a relevant energy information program.
EIA's place as the recognized source for U.S. energy information over its more than four decades of existence arises directly from the intersection of statistics, analysis, and independence in its mission and operation. The legislation that created EIA enables it to propose what data is needed to serve its missions to perform analysis that policymakers and markets rely on and to solicit stakeholders' views while maintaining its independence.
Combining statistics and analysis in one governmental organization has worked well for the United States. As you consider a framework for providing Canadian government energy information, I would urge you to consider our experience with that combination and the value it has added for us in our work.
I'm happy to answer any of your questions.
Thank you.