Budget Cuts Hit EIA's Data Collection Efforts

Budget Cuts Hit EIA's Data Collection Efforts

Image CC licensed by Flickr user Peter Kaminski

Congressional efforts to rein in government spending will torpedo some of the U.S. Energy Information Administration's (EIA) data collection and analysis programs that provide a non-industry source of statistics and forecasts on energy supply, demand and pricing.

News of the budget cuts comes as rising fuel prices have cast a spotlight on energy issues in the U.S. Under pressure to respond to energy costs, Senate Majority Leader Harry Reid (D-Nev.) said today he plans to bring clean energy legislation to a vote this month.

In the future, however, legislators may not have all the energy data they need to inform their decisions. Some liken the EIA to the Congressional Budget Office, which provides non-partisan analysis to help Congress make economic and budgetary decisions. With its multi-million shortfall, the EIA will have to limit the number of special analyses it conducts in response to policymaker requests.

The EIA announced last week it would also suspend, reduce or terminate several programs due to a $15.2 million shortfall in its fiscal 2011 budget -- a 14 percent decline. With the fiscal year already more than half over, the agency said it must move quickly to meet its new budget constraint.

The list of casualties is long and more than a little depressing. As the EIA put it in a statement announcing the news, the cuts are "undoubtedly painful" for both EIA data users and staff. Among the items:

  • The EIA's annual published greenhouse gas inventory, which includes the latest estimates of emissions for carbon dioxide, methane, nitrous oxide, and other greenhouse gases
  • The EIA's International Energy Statistics, which are used by organizations and governments from around the world
  • The 2012 International Energy Outlook, which provides international energy forecasts through 2035
  • Work on the 2011 Commercial Buildings Energy Consumption Survey suspended
  • Curtailed efforts to study linkages between energy markets and financial trading

Michael Levi, a senior fellow for energy and environment at the Council on Foreign Relations, bemoaned the decision to stop preparation of the 2012 edition of the EIA's International Energy Outlook, in particular: "This is one of the basic reference points for discussions on where things are headed," he said.

The budget cuts carry unfortunate implications for energy users, regulators and the business community. Businesses and institutions in all sectors of the economy use EIA information when making strategic investment decisions, explained R. Neal Elliott of the nonprofit American Council for an Energy-Efficiency Economy, in a blog post.

"As any investor knows, uncertainty in market intelligence will discourage investment," he wrote. "This uncertainty can have many deleterious effects, from hospital administrators who will be unable to decide upon energy efficiency measures which could save hospitals money that could be directed to patient care, to owners of energy-related businesses such as heat-pumps or motor manufacturers who would be unable to determine potential market demand for their products."

Policymakers, too, may find themselves making decisions without the benefit of what many consider to be unbiased data. The sorely outdated Commercial Buildings Energy Consumption Survey, for example, could have provided accurate data for use in designing and implementing energy efficiency programs across the country, Elliott noted at the ACEEE blog.

It's hard enough to analyze energy demand and supply in ordinary circumstances, but the situation becomes more complex when you factor in the demands facing businesses, consumers and governments in today's volatile energy environment, said Christine Ervin, the U.S. Green Building Council's first president and CEO and a GreenBiz.com contributor. At the same time, there is a need to make our systems cleaner, safer and smarter.  

"Having access to basic, timely data is just fundamental to any of these strategic pursuits," Ervin said in an email. "It's such a basic governmental function. We’re not talking about luxury investments here -- the commercial building database is already nearly a decade old." 

Meanwhile, the EIA's move to slash data collection from smaller entities on electricity and coal surveys comes as the U.S. Environmental Protection Agency lays the foundation for regulating electricity generators. The EPA needs accurate data if it is to craft emissions regulations that impose minimal business impacts.

Ultimately, these cuts reduce the nation's visibility into energy and emissions trends as energy costs grow for U.S. businesses. As Senior Contributor Paul Baier has noted, energy is often second only to health care in terms of growing expenses for many companies.

Image CC licensed by Flickr user Peter Kaminski.