Former federal officials: EIA budget cuts could result in ‘greater price volatility’

The officials argue that cuts to the EIA budget would “send the wrong signal” to other countries that do not adequately analyze energy data.

“It is universally acknowledged that the reduction of price volatility requires enhanced transparency,” the letter says. “Decreasing investment by our government in information and transparency sends the wrong signals to other governments whose lagging efforts to improve data and transparency have unwanted consequences for consumers in the US and elsewhere in the world.”

The letter comes one day after Newell announced that he is resigning to return to a professorship at Duke University.

The letter was signed by former EIA Administrator Guy Caruso, former Environmental Protection Agency Chairman William Reilly, former Energy Secretary Bill Richardson and former Energy Secretary Spencer Abraham, among others.

Here is the full letter:

June 14, 2011

The Honorable Daniel K. Inouye, Chairman Appropriations Committee United States Senate
The Honorable Dianne Feinstein, Chairman Subcommittee on Energy and Water United States Senate
The Honorable Harold Rogers, Chairman Appropriations Committee U.S. House of Representatives
The Honorable Rodney Frelinghuysen, Chairman Subcommittee on Energy and Water U.S. House of Representatives

The Honorable Thad Cochran, Ranking Member Appropriations Committee United States Senate
The Honorable Lamar Alexander, Ranking Member Subcommittee on Energy and Water United States Senate
The Honorable Norm Dicks, Ranking Member Appropriations Committee U.S. House of Representatives
The Honorable Pete Visclosky Subcommittee on Energy and Water U.S. House of Representatives

Dear Chairmen and Ranking Members:

As Americans face $4 pump prices for the second time in three years amid high and sustained uncertainty about global energy supply, demand, and geopolitical disruption risks, Congress should reconsider budget reductions to the Energy Information Administration (EIA), the independent statistical and analytical agency within the Department of Energy. EIA must have adequate resources to provide timely and thorough energy data and analysis, and we believe the reductions to the EIA budget went too far.

Countless businesses, officials, and analysts – and many branches of the US government – rely on EIA’s unbiased, comprehensive, timely data and analysis on US and global energy markets and industry trends. Research institutions that Congress and the White House rely on agree that EIA data is vital to their research and policy analysis.    Convulsions in our oil, natural gas, coal, and renewable fuels markets have caused demand for EIA information and analysis by the private sector and policymakers to skyrocket in recent years. Restricting EIA’s ability to collect and publish energy data and analysis could unintentionally exacerbate market uncertainty, possibly curtailing investment and contributing to greater price volatility.

It is universally acknowledged that the reduction of price volatility requires enhanced transparency.    Decreasing investment by our government in information and transparency sends the wrong signals to other governments whose lagging efforts to improve data and transparency have unwanted consequences for consumers in the US and elsewhere in the world. The US has been the world leader in energy data collection, analysis, and publishing, and in recent years leaders of both parties have urged other countries to expand their data in order to improve transparency and reduce volatility. EIA is held up as the model and must remain in a position of leadership.

One of the key principles that the US has learned over decades of energy crises is the importance of high-quality, consistent information. Since its inception, the EIA has served as the unwavering embodiment of this principle.

The energy sector is entering tumultuous territory, with profound risks and opportunities for US economic vitality and national security. We will continue to debate the causes of energy market turmoil and proper energy policy responses, but we must also recognize our dependence on EIA for the data and analysis to inform our understanding. While each of us appreciates the need to make difficult decisions and cut spending, the last thing consumers, businesses, and investors need now is for us to turn off the headlights and drive blindly in today’s energy market. The cost of failing to invest adequately in the EIA could be very high to American economic and national security interests – and ultimately to consumers. We urge you to avoid that outcome and instead set a course for success for the EIA to fulfill its purpose for the American people.

Very Sincerely,

Spencer Abraham, Chairman and CEO of The Abraham Group and Former Senator and Secretary of Energy
Samuel Bodman, Former Secretary of Energy
Kevin Book, Partner, Managing Director, ClearView Energy Partners, LLC
Guy Caruso, Former Administrator, Energy Information Administration
Lynn R. Coleman, Attorney, Former General Counsel and Deputy Secretary at the US Department of Energy
Kathleen Cooper, Senior Fellow, Tower Center for Political Studies, Southern Methodist University, and Former Under Secretary for Economic Affairs, Department of Commerce
Lisa Epifani, Partner, Van Ness Feldman Law Firm and former Assistant Secretary of Energy for Congressional and Intergovernmental Affairs and Former Special Assistant to the President, National Economic Council
David Garman, Principal, Decker Garman Sullivan and Associates, LLC, and Former Undersecretary of Energy
Leslie J. Goldman, LJG Innovations, Attorney, and Former Assistant Secretary for International Affairs, US Department of Energy
Larry Goldstein, a Director of the Energy Policy Research Foundation
David Goldwyn, President of Goldwyn Strategies, LLC and Former State Department Special Envoy and Coordinator for International Energy Affairs and Assistant Secretary of Energy for International Affairs
Robert Graham, Former Senator, Governor of Florida, and Co-Chairman of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling
Karen Alderman Harbert, President and CEO, Institute for 21st Century Energy, U.S. Chamber of Commerce and Former Assistant Secretary of Energy for Policy and International Affairs
John Hofmeister, Founder of Citizens for Affordable Energy and former President of Shell Oil
Amy Jaffe, Wallace S. Wilson Fellow in Energy Studies, Director of the Energy Forum at the Baker Institute, and Associate Director of the Rice Energy Program
General James Jones (ret.), Former National Security Advisor & Supreme Allied Commander Europe
J Bennett Johnston, Former Senator
Michael Levi, Director, Program on Energy Security and Climate Change, Council on Foreign Relations
Robert McNally, President, The Rapidan Group, LLC and Former Special Assistant to the President, National Economic Council and Senior Director for International Energy, National Security Council
Elizabeth A. (Betsy) Moler, Former Chair, FERC, Deputy Secretary of Energy, and Executive Vice President, Exelon Corp. (Ret.).
Edward L. Morse, Global Head of Commodity Research, Citigroup Global Markets, Inc. and Former Deputy Assistant Secretary of State for International Energy Policy
Lucian Pugliaresi, President, Energy Policy Research Foundation, Inc.
William Reilly, Former Administrator, Environmental Protection Agency and Co-Chairman of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling
Bill Richardson, Former Secretary of Energy
Benjamin Schlesinger, President, U.S. Association for Energy Economics
Mark Schwartz, President, PIRA Energy Group
Adam Sieminski, Chief Energy Economist, Deutsche Bank
Linda G. Stuntz, Partner, Stuntz, Davis & Staffier, P.C., Former Deputy Secretary, U.S. Department of Energy
James L. Sweeney, Director, Precourt Energy Efficiency Center, Stanford University
Philip K. Verleger, Jr., David Mitchell/EnCana Professor, Haskayne School of Management, University of Calgary
Daniel Yergin, Chairman, IHS CERA

This story originally misstated the first name of former EIA Administrator Guy Caruso.