The head of the Department of Energy's independent statistical arm told a Senate committee Americans could begin to feel relief from the current high gasoline prices by the end of the year.
During a Senate Energy and Natural Resources Committee hearing on Tuesday, acting Director of the Energy Information Administration (EIA) Stephen Nalley said, while domestic oil and gas production has not rebounded as quickly as demand, he expects the imbalance to lessen noticeably over the next 14 months.
"And as these refinery and inventory issues are resolved, we expect gasoline prices will drop closer to $3.00 per gallon by the end of year and continue to gradually decline throughout 2022," Nalley said.
Nationwide, the current average price for a gallon of regular unleaded gasoline is $3.41, according to AAA.
Committee Chairman Sen. Joe Manchin (D-WV) opened the hearing on domestic and international price trends by stating the importance of “ensuring we do not see energy prices as high as Europe and Asia.”
The price of natural gas in Europe has soared 450% since January and the EIA recently projected, for the approximately half of all U.S. households that use natural gas for heat, costs this winter will be up about 30%.
Europe's International Energy Agency also reported Tuesday a likely decrease in crude oil prices by the end of the year, as production begins a gradual uptick.
Still, Republicans in Washington said prices would never have reached their current heights, if not for Biden administration policies that they say are nothing short of an effort to "cancel" traditional energy.
Sen. John Barrasso (R-WY), the ranking member of the committee, stated the president and House Democrats will only push prices higher if they pass the climate-sensitive Build Back Better bill.
"This bill surrenders America's hard-won energy independence, and it makes our country dependent on the OPEC cartel and Russia," Barrasso said in opening remarks.
Sen. James Lankford (R-OK) has repeatedly criticized the Biden administration for policies that he says have destabilized the domestic energy market.
A member of the committee, Lankford raised the issue of depressed U.S. production with Nalley.
“Why is American production not increasing at the rate to be able to keep up with American consumption as well—with the prices like $80 on West Texas Intermediate and $5 a unit for natural gas, you would think that the production would have continued to accelerate—why is it not accelerating?” he asked.
Nalley replied that the nation is still relatively early in the recovery from the pandemic.
“We’re about 93% of where we were in oil production, relative to 2019,” said Nalley. “I think one of the major contributing factors is the economic downturn. A lot of those P&E [production and exploration] companies and investors were hit pretty hard financially. I think they’re trying to reposition themselves for the long term.”
Lankford also asked Nalley about a recent statement by U.S. Climate Special Envoy John Kerry that America won't have coal plants by 2030.
Nalley said, looking at EIA's annual economic outlook, that is not the case.
"We show coal reducing about one percent per year out through 2050. I think in 2050, we show it being roughly 75% of what it is currently," he said.