Subcommittee Examines Decades-Old EPCA in Era of Energy Abundance

Press Release

The Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today held a hearing on "The Energy Policy and Conservation Act of 1975: Are We Positioning America for Success in an Era of Energy Abundance?" The hearing examined the current law and its effects on domestic energy supplies, including the impact of crude oil export restrictions. The members heard from a panel of energy experts about America's changing energy landscape and what it means for the economy and the future of U.S. energy policy.

"This morning's hearing lays the foundation for our discussion of oil exports with a thorough historical review of current law and its origins. There are a number of questions that need to be answered, but first we need a better understanding of how we arrived where we are today," said Whitfield.

Adam Sieminski, Administrator of the U.S. Energy Information Administration, explained the history of the Energy Policy and Conservation Act (EPCA) and contrasted the market conditions at the time of the law's enactment with those of today. "Petroleum market conditions today are very different than they were in the 1970s when the ban on crude oil exports was enacted. Key trends in U.S. oil markets have reversed. Then demand was rising rapidly and production was falling. Now, production is rising rapidly and demand is falling. U.S. crude production may soon hit an all-time high, surpassing the previous record set in the 1970s," said Sieminksi.

Dr. Charles Ebinger, Senior Fellow of the Energy Security Initiative at the Brookings Institution, also noted the dramatic changes in the energy market and urged lawmakers not to repeat policy mistakes of the past. He said, "The US could not have been more ill-prepared for the 1973 Oil Embargo. In response, one of the primary actions taken was the creation of the Federal Energy Administration which was immediately charged with administering oil prices and allocation controls. Unfortunately these were so ill conceived that they only accentuated the impact of the crisis and exacerbated gasoline shortages, causing long lines of angry motorists buying highly regulated volumes of fuels often on odd and even days of the month." Ebinger also noted that while some policies of EPCA have been modified or reversed, some parts of the law remain intact, including the ban on crude exports.

Lucian Pugliaresi, President of the Energy Policy Research Foundation, Inc. (EPRINC), added "As we look back on U.S. energy legislation policies since the 1970's, we cannot help but be stunned by the systematic failure to predict the future and the unintended consequences of U.S. energy policy. Often these policies, in an attempt to either promote the development of alternatives to petroleum or to insulate consumers form price volatility, prevented more productive responses from both consumers and producers. … Given the vast changes in our energy landscape we should now revisit the entire range of regulatory programs that were put into place in a much different era. Petroleum is no longer an instrument of economic distress, but a major driver of economic growth and a much-improved strategic outlook for the U.S."

Members questioned today's witnesses about the market implications of EPCA and the potential consequences of changing the law, particularly the effect on consumers and gasoline prices. Witnesses pointed to recent studies suggesting that lifting the ban on crude exports would not increase domestic gasoline prices, but acknowledged the issue is complex. EIA's Sieminski committed to further analysis, stating, "EIA is undertaking further analyses that will examine other issues relevant to discussions surrounding oil exports and expects to report additional results over the coming months."

Full committee Chairman Fred Upton (R-MI) added, "Increased domestic energy production is great news, but it does present a host of new challenges. Most significantly, we need to construct an Architecture of Abundance to make full use of this energy bounty and maximize the benefits we can get from it. That means we must take steps to upgrade and modernize the energy infrastructure system, including the Keystone XL Pipeline as well as many other job creating projects to transport America's energy to the businesses and consumers who need it. We will continue to reconsider existing energy laws and advance new ones in order to fulfill our energy potential."

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