Are the Government's Energy Statistics Reliable Enough?

How much oil does the United States import each year? How costly would a cap on carbon dioxide emissions be? How quickly did gasoline demand fall in 2008?

These questions lie at the heart of the country's urgent debates over alternative energy, and the answers are being shaped by statistics that come almost exclusively from the Energy Information Administration. Long considered "the gold standard" of energy information, the numbers from EIA, which is run by the Department of Energy, are regularly cited by the media and politicians alike.

And yet today, with energy at the top of the Obama administration's agenda, there are growing concerns that the agency's statistics are incomplete, outdated, or, in some cases, inaccurate. Budget shortfalls, large staff cuts, and neglect under past administrations, observers say, are compromising both the quality and quantity of EIA's data, leaving the agency frustratingly handcuffed as energy markets are moving faster and becoming increasingly complex.

In practice, the consequences of EIA's budget limitations are sweeping. Without resources to track foreign oil markets, observers say, EIA underestimated China and India's rising oil use. Then, last year, it initially failed to register how quickly U.S. oil demand was falling, partly because it has limited resources to monitor biofuels. The agency lacks adequate funds to update its statistical models, some of which were originally developed in the early 1990s. And for some data reports, such as electricity consumption surveys, there's now a painfully long and growing gap between when data are collected and published. As Jeffrey Pillon, who chairs the energy data committee for the National Association of State Energy Officials, says: "When you are waiting two years to find out what happened, how can you base a policy off that?"

In 1981, the EIA's budget was $90 million. Today, in real terms, it's less than half that. The petroleum division—its largest—has been forced to downsize considerably. From 1995 to 2005, its contractor budget was cut 40 percent, while staff levels fell 53 percent. "Those numbers give you a good gloss of an agency that, in my opinion, is struggling from years of neglect for resources," says Diane DeVaul, policy director of the Northeast-Midwest Institute, which tracks energy and other issues for members of Congress. "We say we're trying to change the country's reliance on fossil fuels and curb greenhouse gas emissions. But we know that you can't manage or deal with something unless you can measure it."

The concerns are not being ignored completely. In 2007, Congress was sufficiently worried that it told the EIA to undertake an internal review of its needs. The first part of the review, which came out last month, outlined 34 new initiatives in need of funding to help close existing data gaps. For 2009, the EIA has requested $110.6 million, a roughly 15 percent budget increase. But that's still only about one half of 1 percent of the DOE's budget.

Timely, high-quality data might seem to fit well with Congress's energy priorities in the economic stimulus package. And yet the stimulus package—which contains about $1 billion for the national census to count people—contains nothing to help EIA track energy.

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