Founding Director Jason Bordoff testified before the Senate Energy and Natural Resources Committee on the challenges and opportunities for oil and gas development in different price environments. In his testimony he makes three main points:
First, the oil price collapse has hurt many workers, families and communities by causing job losses in oil-producing states, with U.S. oil production now falling sharply after a lag. While low oil prices, on net, are a boost to the U.S. economy, that benefit has been more muted than many expected based on past experiences.
Second, while oil prices are low today, it is far from clear they will remain low. The oil industry has long known cycles of boom and bust, and there are many factors today that may combine to cause a price spike more quickly than anticipated. Moreover, oil prices moving forward may be more volatile than in the past.
Third, as the committee knows, the federal government has a diverse set of responsibilities regarding energy production, including to protect air and water quality, regulate oil and gas production on public lands, correct market failures, and more. These roles are necessary, and government should design smart and cost-effective regulations regardless of oil prices, particularly as this commodity’s future supply, demand, trade, and price trends are notoriously difficult to forecast.