Transcripts For CSPAN2 Global Energy Outlook 20180116

2008. Id like to provide specific welcome this morning to our new member, senator smith. It is good to have yes part of the committee. I think youll find that this is a committee that does good work it would like to focus on policy, and would like to do things in a bipartisan way every now and again. So looking forward to starting the new year off with that good foot. We dont have senator capito with us this morning but she is also returning to our committee and i look forward to welcoming her and her ongoing contributions. We do have a lot on our agenda today. Our broad Bipartisan Energy Natural Resources bill where again were looking forward to continuing that as the year progresses to our efforts to increase our nations mineral security, our need for wildfire funding fix, for Street Management reform, innovation, islands and territories. With a wide range of public lands come so theres just do the things that we have on deck for this new year. We were probably have a lighter attendance this morning. I think many members are still returning to washington ahead of this evenings vote, but i truly thank you, dr. Birol, for your attendance this morning. I think as i mentioned to you we look to the iea for its guidance, for its forecast, or better understanding of what is happening around the world. And so you being here this morning to upset the state for the year and provide your agencies perspective on the domestic and Global Energy outlook is greatly greatly appreciated. The good work done by the iea helps to identify Market Trends and provides valuable information to guide policy decisions both here in the United States and around the world. Ieas insight and analysis helps us move our policies in the right direction. And in turn our work helps the iea with its core mission, or modi to Energy Security, cooperation stable markets. We cannot emphasize to strongly have significantly the role of the United States has evolved in recent years. As dr. Birol notes in his prepared statement he says the United States has become the undisputed global oil and gas leader. Now, during my time here on the committee both as Ranking Member and as chair, weve gone from discussing the need to cite lng import terminals all along arcos to now expediting lng export terminals. Weve gone from lamenting our reliance on foreign oil and thea steep price of that oil to the United States in the worlds swing producer and an air of abundant energy. Technology innovation and the shale revolution that led the way and the administration is regard to reduce barriers to energy development. Allowing for increased exploration and production in the United States as we did at the end of last year with the opening of alaskas 1002 and he will provide for a longterm security and allow us to extend our influence in world markets. At the same time we know these markets are cyclical and prices could rise substantially in the future if we do not take proactive steps to spur investment and supply. Just last march the iea warned Global Oil Supply could lag after 2020 if new investments are not made in the near term. Thats a warning for all of us. I know the iea is continue to conduct Significant Research on this matter and i look forward to delving deeper into that this morning. Although the iea was established on the premise of cooperative oil security, the agency is also evolved and expanded its mission to cover wide range of Energy Related topics. These include Energy Efficiency, the digitization of energy, and one that i am particularly interested in and thats the Cost Reduction in Renewable Technologies which portend neighbor unto major shift in how we use energy. Our committee has examined these topics largely to a domestic lens, so today with the benefit idea of an international perspective, a broader view that ties together world trends and events. We certainly look forward to it. So again dr. Birol, thank you for taking time this morning to come and testify. We know your schedule is very, very busy and you travel from paris and we appreciate your willingness to share your expertise in the work of the iea with our committee. With that i turned to senator cantwell for her opening comments. Thank you, madam chair, thank you for scheduled twoday shipping for coupling think i did suggest at 11point that we visit dr. Birol instead but we work on that. We were not able to do that but i so appreciate him being here today and for the discussion on the iea primary focus on increasing Energy Security for its member nations and i appreciate his continued focus on expanding the definition of Energy Security as well. Because Energy Security means more than just oil and gas flowing in and out and across borders. And also meet protecting Critical Infrastructure from attacks and the cybersecurity attacks that event much of the subject of a lot of the past administrations focus on quadrennial review and but we need to do to upgrade that an upgrade the security of our nation. We must take action to protect her Critical Infrastructure from cybersecurity attacks and ensure the security of energy. A good and networks are under constant Cyber Attacks from 2012 in 2016, reported Cyber Incidents against you is Critical Infrastructure more than doubled pics and now that our vulnerabilities have been exposed by various attempts including russians to attack a electricity grid, Cyber Threats to longer just a threat. We have been hacked and we must take additional steps to protect our energy infrastructure. I very much appreciate the chair master, to the Pacific Northwest to see some of the latest and greatest both technologies and approaches to cybersecurity, and she and i have worked on legislation and we passed out of the senate. We are just hopeful that sometimes our colleagues in the house will make this a priority and move forward on working in a bicameral basis on cybersecurity since its infrastructure so important. Obviously diversify our energy mix is another key part of the Energy Security puzzle, and security needs minimizing the consequences of Climate Impact which threatens our wellbeing at home and around the world as well. Investing in Renewable Energies and putting away from fossil fuels and moving it to Energy Efficiency in ways to drive down costs. Weve seen great, great examples of a for getting the right terminology, but the fact that the Energy Savings from Energy Efficiency is continuous flow of investment into business that makes them even more competitive which then allows them to be on a competitive basis. Those numbers on Energy Efficiency as we look at everything from the Bullitt Foundation building to a focus on how to make more these developments worldwide very, very exciting. Technology that we are very proud from the Pacific Northwest. Northwest. According to the iea is world Energy Outlook, renewable will make up twothirds of the global electricity as they become the cheapest source of generation. The cost of new solar has come down 70 . The wind by 25 and battery costs by 40. So Energy Efficiency as a just mention is also a key on the Energy Security side and having the ability to use more than double according to iea without Energy Efficiency so this is been saving us in so many ways. As you noted, i think its onethird the cost to develop a kilowatt to say become and develop it. Its so important we continue that. While we discussing socalled Energy Dominance and Energy Security hope will hear a lot less about just these exporting issues although again we work hard on the committee to come up with strategies a clip of what our National Policies were on that, and focus on what we can do to again try the cost effectiveness of energy. Whoever has the most costeffective Energy Solutions are going to continue to win in the marketplace. I look forward to hearing your comments on that today and again thank you for being here. Thank you, senator cantwell. Dr. Birol, welcome again to the committee. For those who are not familiar with dr. Birol, he took office as iea executive director in september of 2015 after 20 years with the agency itself. Previously dr. Birol held the position of chief economist with responsibility for directing the flagship world Energy Outlook publication. Hes been the found and the chf the iea Energy Business council. He has a whole series of accolades and awards that have been conferred upon him over the years, and again dr. Birol, we appreciate the insight that you will provide for us and the good work of your team at the International Energy agency. We welcome you and we invite your comments this morning. Typically ask those who are testifying before the Committee Try to limit the comets to five minutes. Because you are the sole panel before us, i welcome your extended remarks and then will have an opportunity to query you with regards to other issues. So thank you, and good morning. Madam chair, Ranking Member cantwell, distinguished members of the committee. Thank you very much for the opportunity to appear before you today and present the International Energy agency workers. We wish everybody a happy new year. For the International Energy agency, 2017 was a very successful year, a year of growth and continued success. The highlights of our success with your 2017 was that in november, our ministers across the world came together together with Business Leaders to discuss Global Energy issues, challenges, how they see the challenge in Different Countries and provide guidance to International Energy agency. I would like to thank the u. S. Government, especially secretary perry for his personal engagement throughout our ministerial meeting. Several businesses join our meeting at least part of it, several ceos from the United States join us, ceo of exxon mobil, general electric, ceo of dow chemicals another ceos shared across the world and we had a wonderful ministry the meeting with a very good discussion. I will not reflect some of the discussions today. Before going to some of our coats and funny i would like to just very briefly, madam chair, if i may tell you what iea is all about. We were founded in 1974, in the wake of oil crisis. Basically by mr. Henry kissinger himself, and several other statesmen across the world. And we are now 43 years old. The motivation was the oil security, to look after the ol security issues, fighting at oil security mechanism across the world. But throughout these years a mandate has evolved as madame chair mention. Look at the oil, gas, renewables and Energy Efficiency in alignment to issues of investment and look at all the technologies, i. E. A unique organization which looks all the technologies and the implications for the markets and our wellbeing. We have several member governments in all the continents, and energy [inaudible] in many countries, so we tried to bring some information for the government, for the decisionmakers to discuss, to debate and come up with hopefully solutions for the countries and for their citizens. Now, to provide a basis for our discussion i would like to tell you how we see the Global Energy markets in the next years to come. And i will highlight four major trends which will affect all of us. I would like to say that countries, even the United States, one of the most Important Energy countries in the world, even the United States is not an island. Other countries affect all of us, as i was showing will affect everybody else. So, therefore, these four major trends, a peoples peoples we call them, affect all of us in the next years to come, given the size of the changes at also the speed of those changes i think it is important for all of us to take note of them. But that is four major upheavals which i would transfer Energy Markets, and some of the definitions, discussion we used to know but perhaps we need to change it now. Number one, madam chair mentioned, United States set to become the undisputed leader of portland Gas Production for many years to come. With huge implications. This is number one. Number two, the host of Renewable Energies are going down so significantly that they are becoming the first choice of power come near power plants in several countries across the world. And these choices are not necessarily driven by concerns, but only for the [inaudible] because of becoming very cheap and when isa renewables this is mainly solar and wind. This is number two. Number three, china. China recently changed its economic policy, namely, moving from being an industrial workshop, workhouse, manufacturer, slowly but surely to [inaudible] and with new model making the skies of china blue again. China is moving in the direction of clean energy, which will help major implications for all of us, even the sheer size of the chinese markets. When isa clean energy, this is gas, renewables, Nuclear Power and others. Fourth and the last of people of people. Within the system, energy, the share of electricity is going very strongly. Electricity consumption is growing much faster than oil and gas and coal, everything, our lives, our socialist, economic lives are becoming more connected. So these are the four major upheavals that we see very important. If i can elevate them and put in the is, perhaps most important one, to the end of these for important upheavals, starting with a Clean Energy Technologies. As chair of the mentioned the cost of solar felt unsubstantial. In the beginning [inaudible] a special European Countries subsidize the solar, but now especially in emerging countries, especially china pushed solar pv and theres a concept in the economy, learning by doing. The more you do something, the better you do it and the cheaper you do it, and the cost of solar is now going very, very low levels. The second [inaudible] its going down and in addition to industrial countries, major growth of renewables are coming from, today, emerging countries, especially china and india are the leaders. If china is the date number one country in terms of solar and number one country in terms of wind. And when we look at the future, we see that the cost of solar and wind continued to decline, and theyre going to compete very soon in subsidies and competing with the traditional sources of electricity. This is something important, and why china and others are pushing solar. It is not necessarily as some people may think for primary reason is not Climate Change. Primary reason is because it is cheap. And the second is that another issue a special in china and india is the city, local pollution in the cities, to reduce the local pollution, those countries are pushing solar and wind and they are becoming cheaper and cheaper. We are seeing a bit of growth of solar and wind in the next years to come, and if i can give you one number, give us something to focus, in the year 2016, of all the power plants built in the world, solar alone was more than 50 . Solar, other 50 , other renewables plus call plus oil plus gas postnuclear put together, 50 , other 50 solar capacity alone. This is something that we need to take into consideration. I should also mention that the renewable electricity especially solar and wind also has a shortcoming. Namely, they are very much [inaudible] to weather conditions in india when the family comes home, the first thing do is turn on the evening from work, turn on the air condition, turn on the television when there is no sun. So it is difficult, not very easy i should say, to match the sun [inaudible] and there are some technologies were working on, and others are working on it. But to sum up, it is coming stronger and cheaper. Another point is on electricity as i said, electricity is going very strongly everywhere. Electricity consumption grows two times faster than the Overall Energy consumption. [inaudible] industrial processes are becoming more and more electrified, and cooling needs, airconditioning are become a major driver across the world. This is important to note and, therefore, what kind of power plants were going to build is a key question. And at the same time, electricity will be more used, the more dominant in our social and economic lives, they electricity security becomes a critical issue. In the case of consumption from our entire economic social life and the community and processes will be our allies. So, therefore, is in any that the agency is working on the issue of security. Third, china, third upheaval. China is today the Largest Consumer by far, and in the last years president xi said we want to make the skies of china blue again. Once again, pushing the chinese into prospect into cleaner direction. Lots of support for Renewable Energies. Lots of support for Energy Efficiency. Lots of support for natural gas, and electric. China is today in terms of coal markets, to give the size, half of the coal in the world is using china to everybody else put together. And china today is putting a check on the coal consumption in order to limit the pollution in the cities basically. Chinese gas and it is a major part of china and within one year of time process in asiapacific jumped from 6 to 11 because its almost doubled because chinas new policy but this will affect everybody, exporters and others. China is going to be the largest oil taking over the United States. In other area i would like to bring to your attention is the Nuclear Power in china. China today is the country which is the most engaged the Nuclear Power industry and we see that more than one third of all Nuclear Power is under construction in china and looking at what is happening in the United States, our numbers show that in ten years of time Chinese Nuclear capacity will overtake United States and china will be number one in the United States will be number two in terms of Nuclear Capacity if the current policies do not change. In general chinas policies are changing and it is a result of of the chinese boom. It impacted the core markets and oil markets, emissions and in other policies and this will affect the markets. My final point, madam chair, is about the United States. What do we say as is of a shared revolution the us is becoming the undisputed leader of oil and Gas Production worldwide is. In terms of oil Oil Production is going very strongly and will continue to grow all of our in that direction and we think its unprecedented. The size of the growth and the pace of the growth and we have seen such a big growth and history of oil only once when in the [inaudible] expanded their very famous oilfields its the Biggest Oil Field in the world. In terms of natural gas the United States again is increasing instruction strongly and will bring a lot of energy to the market and we expect the us will be the Largest Energy exporter in 2020s. Both of these developments have indicated for the process for Energy Security worldwide trade and of course for the economy. This is good news the us economy. It will develop and our projects ensure that this leadership of the United States in terms of oil and gas will continue especially if it is combined direct domestic policies at home. These are the four major, madam chair. Mainly the cost of renewables are going down substantially and will be the mainstream behavioral constant as the fuel in the past. It remains second its becoming very important fuel in our society and are socialized in Economic Life take efficiency gains but also bring challenges especially in the context of the security picture. Third, china is changing its Energy Policies going from cold heavy industry is slowly but surely to Clean Energy Technologies and making more natural gas and perhaps most important is becoming the undisputed leader of oil for the years to come. I would like to finish my efforts, madam chair, at the Energy Agency developing developments in the United States and across the world. We are talking with all the governments around the world and we are trying to bring the best advice based on facts, analysis and data and we are, today, at your disposal to answer your questions. Thank you very much. Thank you dr. Birol. A great deal to think about here this morning and to understand how the United States has assumed this role, as you say, to be the undisputed leader certainly when it comes to oil and gas but recognizing the nature of how we got there and how quickly we have assumed this position. It is certainly something to consider but also recognizing what you have shared with us and the role that china is playing and how that, too, will not only Impact Energy production and consumption on the world but more specifically to us here in the United States. You have mentioned that with regard to oil and Gas Production here in the United States that this is good news for the us economy and portrayed especially and im quoting you here especially if combined with the right domestic policy. When you make that statement are you referring to tax policies or Energy Policies or is it a combination of of all of that . If you could go more into that i would be curious. Of course. The United States is a very fortunate country because you have oil, gas, Renewables Energy resources and you have innovative business here. By the improvement of technology you will get more and more oil and gas from the existing resources if the right incentives are provided to the industry. This is number one. Number two, i believe, us has huge potential to make more use of Renewable Energies, solar and wind especially and i was excited to see that the current support for the renewable Energy Policies are continued in a strong way. The production tax credit . Exactly. Third, there is one concept in the United States which is very important the independents energy in the independents and this is based on two factors. One is the increasing the production and second keeping the consumption at a certain level and not to waste energy. Mainly, energy and efficiency. When i mentioned domestic Energy Policies i believe in addition to the supply policy [inaudible] we must also emphasis on using Energy Efficiently so that we dont waste energy but have the same productivity for the system. All in all i think Us Energy System is going in the right direction with lots of resources and the mystic policies and to help. I appreciate that. Let me ask you a question specific to the arctic. I focused a lot in these spaces and not just the us arctic but the arctic broader than last year i had an opportunity to visit the facility in norway and significant amount of natural gas is processed and shipped to europe and of course over in russia what we are seeing on the peninsula and elsewhere as they are exporting their lng across the world including to china and what role do you see their Energy Resources from the arctic whether it be oil or gas and this is again not just looking at the United States but the bigger Energy Picture specifically coming from these arctic northern countries. Thank you very much. We have huge deposits of oil and gas in the arctic you across the world and there are two challenges there. One challenge is the economic challenge [inaudible] we have a lot of shared oil and will be able to get the investors in seconds, some of the arctic resources may pose insurmountable questions. Those are two issues. Moving from that i would put oil and gas if its differently because oil is a huge ecological survey we have huge deposits and if you look at especially in the one area of the arctic resources area we see that there is a very important attractiveness they are because the Alaska Pipeline which is underutilized today substantially. You have the chances of if the production takes place you have the chances of or possibility of transporting its in an easy way. This is an advantage. The challenge however is in terms of oil the economic attractiveness in the current price and the shared oil context and meeting with the current context it would be difficult to believe is that there would be substantial amount of Oil Production coming from the region before 2030 unless we see surprises in the markets. Having said that if a significant source of production come from that this is good news for the economy and implement in alaska. Coming to lng this is a different story. We know that if we unlock the oils we have infrastructure here and the main button is the infrastructure building the pipeline here and the plans but i see here significant marketing chance especially for asia. Also, given the advantage. If i may bring to the point i said a few minutes ago, madam chair, today china is moving in the direction of yes, they will import a lot of lng to replace their call and basically and i see that there is a lot of opportunity in china and japan. I often visit japan and made the japanese government there and you may well know they are thankful to you for bringing lng to japan and they never forget this good gesture coming from your governments. To sum up ic from an energy point of view significant chances to provide gas from to the asian region. Thank you very much. Thank you madam chair and on that point i think the chair would note that i have many times suggested to her that that should be a good focus for alaska, natural gas, as opposed to the more recent discussion on the and more. As you point out china being this huge Market Opportunity for the future poses with the shift in policy as you clearly noted to a bluer sky being the largest Market Opportunity for the us so i wanted to ask you about what policy on that clean energy front do you think we need to continue to focus on here that would help us in looking at asia more as a market in the us leadership and i say that both on the Energy Efficient side in the Nuclear Policy side. Energy efficiency in the context of i thank you stated it well where we are saving so much and we need to continue to move forward and i look at it from everything from the efficiencies that we have achieved within our region to some of the technologies that are now being used in other countries. For example, one of our northwest companies is provided metered energy in south africa so that they can buy the power that it takes a turn the lights on when the kids come up from school. Energy efficiency is making our businesses competitive and it is also reaching remarkably so what else do we need to be doing to focus on Energy Density and other export policies on the client side . Thank you very much. First of all us becoming an exporter to china and asia in general i imagine china but i should have mentioned another country which is very important in the region and growing strongly which is india. India is also important because their Economic Growth is very strong and they have, in my view, wise, sound Energy Policies and both of these countries use gas at the minimum level. In the global share of gas is about 25 and in both of these countries is less than or around five theres a big gap between them and both of them both of these countries are facing major challenges in terms of environments. Mainly, local pollution in the citys and this is the issue for many countries both of these countries and others the social and one solution is replacing call by a natural gas and that will get the gas markets and we see the us is coming very strongly in terms of Energy Exporter and its a good news for everybody and i should say almost everybody except for the tradition pipeline exporters in europe because the us also providing to europeans visavis the major established pipeline exporters making the hands of europeans stronger in terms of their negotiations of the price with the pipeline exporters when they make new contracts. Even if they dont import one bcm of us gas and they can import us gas because they have a strong cut in their hands. Coming to china i think on that point could you elaborate on the russians as well because are they trying to play in this marketplace . Yes, in fact the russian government is a result of the us sharing a room in the russian government is less stronger when it comes to the contract negotiations with european customers because if the european customers negotiate the price down russians would say no then theres an option which is us gas so in the past in the district there was only one shop in europe which is the russian and they need to know by the gas from that shop but now there are other shops open which is United States. They can choose which one is cheaper which one has the better conditions which provides better opportunity energy and in some countries the security and Foreign Policy so us gas is providing an alternative to europeans meaning the russian gas and this is important both in terms of Energy Security but also the competitiveness of the gas and the context for you. Many European Countries renegotiate with existing contracts and bring the price of gas down as it is out of the new opportunities from the United States. In terms of china and india future opportunity for us gas it is in the next five years going to reach the amount of energy, communities and asian region will be the primary destination for the us energy and theres a huge opportunity to make money for years those countries to diversify their system and make gas part of the system and make it much more flexible and for the europeans to diversify their source of imports and provide and minimize the economic social and maybe political risks. I see my time has expired but i thank you, training, for elaborating what some may not fully understand about what russian issues are as it relates to europe and to us and why some of these things are so important. People in the administration in complex Something Else and so, i thank you for thats all. I will submit other things that order. I want to thank my colleague and welcome her to the committee. I failed to do that in my opening remarks so i will turn my portion over to her in the next round and let her continue on my path. Thank you for your testimony and i so appreciate senator smith joining our committee along with our returning colleagues from West Virginia so would be great to have her back. This must be a Record Number of women on the committee and that is a good thing. Thank you, madam chair. Thank you. Go to senator cassidy. Thank you. Great testimony. I am intrigued by the electrification of transportation, if you will but let me ask you comment on this. Yesterday the ceo of Fiat Chrysler was quoted saying i dont know of a business that is making money selling electric vehicles unless selling at a very, very high end of the spectrum so and this has made it to the Detroit Auto Show and i guess how do you position that versus your bully statement which was a relatively short period of time we will transition to a primarily or almost equally electric car marketplace in your thoughts . Thank you very much, senator. I think electric cars in the number of cars will grow but our numbers show that even the case from now the biggest chunk of the cars are running will be the existing combustion engines but electric cars will grow especially in some regions in europe where theres a lot of incentives and subsidies for electric cars. In china lots of support for electric cars and with the cost of batteries and plus very generoUs Government subsidies in some countries when you see electric cars are increasing substantially. Having said that some people say you say that electric cars will increase it at the same time you think that there is a need for oil. How does that combine . Mr. Senator, the cars are not the biggest part of the oil demand growth. Oil demand growth today in the world is driven by trucks, jets, ships and most important, chemical industry. Even there will be a lot of electric cars coming into the market and running in the streets of the world we will still see there is a need for new Oil Production let me ask you this then. Theres been a move but to transition diesel vehicles, votes and trucks to natural gas powered vehicles and do you see that impact what you just said customer or will oil continue to dominate . It will continue to dominate as long as the cost of gas remains lower or moderate and then we see the long [inaudible] there is a chance of substitution for oil by natural gas and also not only for trucks but for the ships is a big opportunity but you made specific projections regarding the of electric vehicles of a number and have you done a similar analysis of what will be the rate of conversion longhaul vehicles or barges for tow votes to natural gas . The expectation is that they will increase at least three times compared to today but still the big portion will be coming from the oil products. I dont have it here in your testimony but you speak of the sustained model or something such as that that word is in there and i gather that would be compatible with the low carbon mandate. The degree to which we achieve that, to what degree is at conversion of natural gas, excuse me call to natural gas or nuclear and what degree will that be renewables . If i can give you a few headline figures. We have different scenarios. One is the current policies and the other is as you mentioned sustainable, keeping a close eye on Climate Change and in all of them natural gas does increase in natural gas is a winner in all of them. We will start growing stronger in all of them especially sustainable for solar and wind and the wall will be depending on whether or not we can use coal in a cleaner way especially in the context of Carbon Capture and storage. This is for me in extremely Critical Technology and this is an area that i mentioned in our ministerial meeting to the secretary and myself on Carbon Capture but let me ask and continue on natural gas and renewables and your current policy in the sustained policy what are the relative growth of renewables and not only the relative growth but by 2040 what is the percentage of the International Energy mix that would be held by either the renewables or the natural gas . Natural gas is as now 20 but the volume will increase. In terms of Renewable Generation it will also substantially and coming mainly from solar and wind but cool will be a significant loser unless we can make use of Carbon Capture and storage technologies. One Technology Technology is Nuclear Power and which can produce electricity without having emissions but this would also be depending on the policies of the government whether or not they would like to see nuclear play a more Important Role. Thank you. Are you back. Senator smith. Thank you, madam chair. Im pleased to be here and part of this committee and i must say as a former resident of alaska and a person who works on the trans Alaska Pipeline when it was first constructed this has always been a matter of great interest to me. Please to be here. Dr. Birol, its interesting to have a chance to visit with you and im quite struck by what your conversation about the transformation that we are seeing around the world in advancing renewables and Energy Efficiency in minnesota and in my state its been a focus of our energy policy, a bipartisan focus, of our energy focus and we get 21 of our Energy Renewables and well on her way to hitting our goal of 25 which i think could be even higher. This means jobs for minnesotans, 27000 Clean Energy Jobs in minnesota so i think a lot about the benefits of this strategy. Also, my business background has taught me that diversification contributes to Risk Management and to security and so im quite interested to hear you talk more about how how more affordable renewables and Energy Efficiency contribute to our overall Energy Security which is the primary focus of the iea. Thank you very much, senator. Us has huge oil, gas, coal, Renewable Resources and it is important that we make the most out of it in a costeffective manner and secured energy and in a sustainable manner. I think those three important parameters and we see a growing chance of us making more use of the Renewable Energies. Costs are coming down and as madam chair mentioned aftertax we see the industry will support Renewable Energy and one area that we need to come in my view Pay Attention do is the efficiency. When we say us will soon and they dont need to import any single bail of oil this is for two reasons. One is the biggest of the shared interest boom and this is the Us Government and us invest in the shared oil boom production and the second is that in my view the standards in the United States keep the diesel consumption for cars and others vehicles at a certain level and save oil at home. We did have these efficient standards we would use more oil at home in the imports would be higher and therefore i see in addition to oil, gas, nuclear i see there is also a role for renewables and Energy Efficiency for a diverse and sustainable mix for the government sector and will make the economy stronger and resilient. Thank you. Let me ask you how do you see and where do you think where were headed in terms of overall Cost Reductions for renewables . I think we expect the year 2020 most of the renewables in the world may not need any more subsidy and they can be competitive visavis traditional sources of energy unlike ten or 15 years ago, ten or 15 years ago in order to compete with natural gas and coal and others they needed to get a lot of subsidies and sometimes in five years or so we may see in many countries most countries, i should say, especially for solar and offshore wind we may not need subsidies may be for offshore wind we need a longer term but the main message is we are becoming cheaper and cheaper and their mainstream people in many countries. Thank you. Thank you, madam chair. Thank you, senator smith. I have so many things. This is fascinating this morning. I thank you. As you know a couple of years ago we reversed a 40 year policy that we have had here in the United States that banned the export of oil. We were successful in lifting that in december of 2015 and there were speculation at the time that not much would change in terms of the volume due to the price of oil in the bridge structure improvements and other Global Supply factors. We havent necessarily seen it and we havent seen the price back so we havent seen the supply shortages that some claimed and can you discuss how the export of us oil has changed the world dynamic. You referenced earlier in response to the question from senator cantwell how with four lng the United States can put out there on that Global Market how that has impacted not only europe and russia but can you speak to the role that we are playing in the world Energy Market now that we are able to export . Of course. December 2015 you took in my view a very good decision to lifting the us oil export because we look after the Global Energy security and its a positive contribution to Global Energy security. In 2016 was the year where the Us Oil Industry had a difficult year because of the oil prices and low oil prices and we have seen the exports just under 600,000 but by 2017 last year we saw an increase in the exports and it was about 1 million a day but most of the time after 2 million [inaudible] a day it was a significant contribution and the important area here is that not only the size but the quality of the oil is important that you are exporting. It is light and sweet and the quality which is very much in demand and therefore can be used in many countries one of the major buyers is china today and so a few years from now 600,001,000,000 liters a day in 2017 with the increasing us Oil Production and increasing Global Market we expect a us oil experts will play Important Role even though we are not there compared to natural gas lng but it makes a significant and important contribution in terms of size and in terms of good quality. Interesting. So, when you think about where we have been historically with world conflict that comes about because of the virtual advantage that some nations have when it comes to Energy Resource whether its the middle east, other parts of the world, you have given us a new view of where we are going with energy and Energy Worldwide and all that is coming on with regards to renewable this means that countries that might not have fossil fuels that at their disposal have other ways that they can achieve their own level of Energy Production. When we think about the potential hotspots for conflict that comes about over energy we have had presentations here in this committee in the years that i have served on the committee and is always seems to have been focused around who has the capacity when it comes to those sources of past fuels. Do you see this changing now that the broader world Energy Portfolio is a greater mix whether its what you are saying, china is looking to with regards to nuclear and the price competitiveness and the advent as nobles are truly becoming more Viable Solutions and how do you see these things changing or am i over simplifying with my example and and we still have this same Historical Energy hotspots . It is extremely important issue, madam chair, if i may say so. There are two important changes happening in terms of energy. One of them is having renewabl renewables. It is important. For some countries more important than others but if i may renewables we are using may leave for electric generation and transportation. For home heating and for the use of gas natural gas in some countries coal, some countries electricity and others. The renewable is changing the operations of energy and its not something i know not. It makes a small dent but it is not going to change the job potentials of energy oil and gas but second change on the Job Opportunities is coming from the United States. This change in the us is a major oil and gas country and being a major exporter changes thinking and changes issues. Let me give you one example. Several years ago the United States was importing a lot of oil from the middle east. Nowadays its zero or close to zero and this is something important. Us is competing with russia for european tax market and today we are exporting gas to poland for example with russia is just make it change the dynamics significantly and from the us perspective im sure the secretary tillerson in the negotiations is sitting on the chair much more competitively to his predecessors on a having said that if i have to pinpoint one in terms of oil and gas many countries in the middle east and some major countries economy are single productive economies oil and some case gas. As the price of the commodities go down as we discussed in the future electric cars one day become a major, major part of transportation they may suffer the economies and they are not prepared for that. The entire economy social life is based on oil revenues and this made her one is a special today when the oil crisis will be expect more and more volatile and Technology May make big surprises. Therefore the at the internal Energy Agency we focus our outlook on these vulnerabilities of the countries and madam chair, i would be happy to report to you which countries in which one measures can be taken there. Once again for the development in the United States and big times introduction of real energies. Very interesting. Think that. Under smith. Thank you, madam chair. Twentyeight, i was interested in the report about how Global Energy uses to increase by 34 by 2040 witches like adding another china or india to Global Demand and i remember reading that there is still significant portions of the world where people dont have access to electricity at all. There is a dramatic economy in terms of where people are and i would like to hear your views on what countries can do to take advantage from the competitiveness perspective and the position themselves and their economies as relates to what you were talking about what countries can do to position themselves in their economies so that literally the trillions of dollars will be invested that this can position the companies to be competitive in that arena. Thank you very much. We look at the investment in the years to come we see Huge Investment opportunities for a generation and transmission. Asia and Subsaharan Africa have less opportunities and hear course as applied to the us companies they can play an Important Role. They provide a capital and also provide providing leadership in those countries. Having said that those countries especially in china, the Energy Policies targets and when i look at those policies they are geared to having energy lowest possible cost and keeping an eye on the environment and also diversification of energy as you imagine. Those countries will welcome the less opportunities from us and elsewhere if the investments are in line with three goals mainly the Energy Security the affordability of energy and the production. Many us companies but the demand for energy are huge and the cost of the huge intersection needs especially in asia and africa. What about this question in terms of research and technology and what would you and how do you see that in terms of how we can encourage the innovation and research and technologies . The analysis and how much the government and the private sector is putting money in the research and the new technologies. To be honest with you despite the rhetoric in discussions in the last five years [inaudible] what is surprising also is that we talk about clean energy i personally thought the bulk of the need is coming from the private sector and this from the governments but it showed opposite for Clean Energy Comes from the government, 80 and 20 coming from the private sector. There is a need for the private sector to be part of the game and to push the Clean Energy Technologies. Great. Thank you, madam chair. Let me follow up to make sure i understand. Your statement that the r and d and clean Energy Around the world, the vast majority are sending 80 comes from government, 20 industry, and that is worldwide. What about here in the United States . Is that breakdown still the same about 80 20 that we are not seen the r d and Clean Technology development . I need to contact you but for me it was surprising, as well. The intel Business Leaders and i thought the biggest part was coming from the industry and less from the private but public was the main type of [inaudible] if you learn otherwise in a particular on the assize id be curious to know about that because that is not what is typically we would think. You have referenced Energy Security many types and we think of this were copes with abundance of supply and how we can provide security that way. You have also referenced the electrification that we are seeing around the world. You highlight in your testimony the increasing digitalization of Power Systems and again that can assist with levels of efficiency that is important but i think we also recognize that with these opportunities it can bring challenges certainly when it comes to the issue of Cyber Security. You have not really mentioned the role that that place with these interconnected Energy Systems and can you speak as to how you think digitalization provides levels of benefits that also vulnerabilities. It is an area that we just started to work, madam chair. Its very important because Digitalization Energy is becoming more and more interwoven and promote us formal Government Official organization is at work and what we have seen is that the digitalization provides a lot of benefits by increasing the efficiencies of our systems we save money and we save opportunity and we need to [inaudible] we are improving our power system. This is something we continue. It will help us to make for example the Renewable Energies that i mentioned and theres a mismatch between sun and wind are available and when the electricity is the highest the digital a half to this is a mismatch as well this is very good that our Energy System and Economic System is more and more with internet devices but this also raises the issue of Cyber Security is the surface is becoming much bigger in terms of unexpected production and this is the area we are working with our government how we can increase the resilience of our assistance to minimize such attacks and what kind of measures with technical measures need to be taken in order to minimize the undeserved effects in terms of making our systems more formidable. Its also with the position of the United States. It is something that we focus a lot on here because as we work to enhance our system and truly make them more efficient and more cost competitive you realize that you are also building in another level of vulnerability, if you will. One more area of vulnerability that i want to bring up in i speak to a lot here in this committee. Some years ago when we were more reliant on other nations for our sources of oil the cost of the vulnerability and it was energy, vulnerability, but vulnerability from a security perspective Financial Security perspective and as you pointed out we are in a much better situation now with regards to oil and natural gas and that we now refer to around the world coming from the United States and there is another area where i see a growing vulnerability on others and that is as it relates to our Critical Minerals and resources and the resources that we need to help build out whether it is Wind Turbines or the within i am batteries or the reality graphite, cobalt, nickel, these are what will allow us to help build out when we build out the capacity of electrification and electric vehicles we have to have these sources so i view that as a bottleneck of potential bottleneck that will allow us to make this transition for these moved to these other areas you have referenced in your for to them as a peoples with renewables. Can you speak about this vulnerability and where you see the direction of the trend here . Another excellent point, if i may say so. With the tradition of fuel sources, oil, gas and the Energy Security the moral is understood and mechanisms are therefore oil and gas. We are working many years and especially for natural gas with the g7 meeting in japan we asked the par minister to look at the security issue and i matched to you with Cyber Security and we are working on that. Yet another security issue indirectly but also in terms of the [inaudible] this goes from lithium and it happens that the issue of the sources several years ago this is the number of countries and again here we have resources and some of and Latina America and other chile, peru, but china happens to be the country with a lot of reserves in that context. When we talk about the Clean Energy Technologies this is very good and its good for the environment and Domestic Production but one has to go one step further to think about that where it will come from and what kind of security we can develop in order to address some of the problems as those technologies are in a few number of countries. Important. Is iea not concentrate necessarily but do you factor in the vulnerabilities as you look to your world forecast . We mainly look at in terms of Energy Sources the oil, gas, renewables but these are important. Thank you. I picked it up. Senator smith, further questions . I dont think i have further questions but i would like to thank you very much, dr. Birol, for your comments. It was quite interesting and im very happy to be a part of the committee. We are delighted that you are a part of the committee. Ive got one final question for you, dr. Birol, before we conclude. I thank you for your time this morning. I have long maintained that nuclear in this country and part of our Energy Portfolio is significant, important and we have seen the United States in our role with nuclear and in my view slack off in recent years. Weve got one remaining construction project in nuclear, the plant in georgia but you have indicated in your comments here this morning that china is coming on in a quite considerable and substantial way. Weve got the traditional nuclear in the Global Marketplace and we also have the role of advanced nuclear and i think we are seeing some positive signs coming out recently in terms of these emerging technologies and how they might factor in to the Energy Marketplace. Can you just share the committee your view of how nuclear here in the United States factors in in these out years whether it be traditional nuclear or the advanced nuclear opportunities . Thank you very much. I think the Nuclear Technology is worldwide. It can provide electricity uninterrupted without emitting carbon use of the missions but it became a challenge in many countries to be in Nuclear Power plants. The challenge is not only its also in the financing part of the equation to be a Nuclear Power and in some countries like in the United States the demand is law and the renewables are going to find that its a challenge. This government dont take any measures. For it will becult to go with the traditional power plants with a small reactors can provide the opportunity to address the management risks and finance problems so this can be a solution. I believe go from the countries where it is accepted and they play an Important Role in Energy Security and also for the issues can make a positive contribution. There is one more issue globally. As you also mentioned we look at the Nuclear Power plant in europe and its similar in japan and these countries use Technology Supporters but since they dont contain Nuclear Power plants they are forgetting how to build it and china and russia are building a lot of Nuclear Power plants and they will not only build power plants at home but they may well be the countries that exported to other countries which is an important from Energy Perspective but from other so i have to give props from that angle as well. They established new technology exports as well as europeans and others facing strong challenge from china and russia for the other countries the build nuclear apartments. When you think about when you think about where nuclear has dominated and again, here in the United States and europe and it certainly in japan that reversal in a very short order really in terms of the Energy Spectrum worldwide and now moving that over to china in russia where we hadnt seen that much of a significant presence. It is really kind of an interesting phenomenon that it has moved as quickly and as i would say dramatically as it has in terms of moving the Energy Portfolios around. I wonder whether and i am just going to talk off the top of my head here but i wonder if an increase role in the presence in russia and china particularly will promote or secure the United States to renew its efforts within the Nuclear Space or whether we continue to seed and take a backseat. It is not something i think has been good and i greatly appreciate the role that nuclear plays in providing for not only a reliable power source but a clean power source. And i regret that we are losing the skilled workforce, the level of leadership that we have played not eat only from the production perspective but how we then export the technologies and the smart people that come behind them. Do you think that we change or with low Natural Gas Prices we continue in the direction that we are. I think natural gas is cheap and its good and its getting cheaper but having a diverse patient in my position is a strong want to keep is a policy and i wouldnt let it go but was up to the government we perceive the policy but it is regrettable in my view of one of the leaders in years and its been developed in this in the 1980s so give it up and the position may not be the best way in my personal view. Do you see europe going back to more nuclear or is that an irreversible direction. In many countries irreversible but i think japan will be going back slowly and Nuclear Power but the Biggest Development coming and many come from will come from china and india and the russians are building in europe and elsewhere in the Nuclear Power plant by building a lot of Nuclear Power plants they are bringing the cost down and making it cheaper to emerging countries. In my view and energy but maybe not only. One last question. I said my last one would be nuclear but we prompted another and that is regards to india. He focused on the comments today on the role that china is playing in the role world Energy Market and does india, will india move toward natural gas or coal or nuclear or is there any Energy Portfolio . I think energy under an idiot uses a policy with all the policies and they are pushing especially natural gas strongly and once again to replace coal but coal is also growing because in india people have no access to it in india and more than 200 million have do not have access but more and more neutral gas and Renewable Energy and nuclear and they are pushing all friends and to be frank the government is seen it as inadequate and in a very short period of time almost 11 years there bringing electricity to about 500 Million People and thats a big big and they are using gas and coal and using the nobles all of the technology, much more diverse and i expect to share gas in india in the next years to come. Very interesting. I will look forward to learning more from the support that you referenced earlier that will focus on those nations that perhaps have greater vulnerabilities because they are more reliant on a single Energy Resource production or for their consumption and what that means. It is interesting to hear that with india it truly is one of those all of the above approaches to energy. I truly appreciate what you said committee. It is always good and important for us to understand what is happening with the Global Energy and the trends out there. As one who has been a strong proponent of us Energy Production certainly within oil and gas it makes me feel pretty good to hear you say that of the upheavals you have referenced, the first one is the us being a leader in oil and Gas Production, as i say, just in the few years i have been here in the senate in serving on this committee we have gone from a perspective on discussion on elegy import terminals to export terminals to a vulnerability and reliance on oil on countries that we dont like and they dont like us and now we are truly in the drivers seat so that is significant. I think it is important to hear clear what you have identified at the cost of the nobles and that the direction so that solar and wind and they can stand on their own and mightily in terms of the direction that we move from a policy perspective and paying attention to what is happening in the world and the leadership of china and it has been easy for us to say that china is the biggest polluter out there but when they are advancing policies that are keyed in on cleaner energy and Energy Resources and whether that is, again, importing elegy that they come from a place like alaska or elsewhere but to recognize that their leadership in nuclear. Also, your point about the share of electricity growing faster than the other sectors in the implications then that that portends. A lot to think about as we begin the new year but thank you for your insight, for your guidance. We look forward to learning more from you about these very important geopolitical issues in the energy space. He have been most helpful and even generous with your time and we wish you safe travels when you return to france. They give. Thank you very much, madam chair. With that, the committee stands adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] there much remains to be seen about whether the proposal will take but what i have been telling people is dont get to exercise about it. This is a draft in this draft proposal puts everything out there on the table. So well get the feedback good, bad and indifferent and i would expect that he would then take whether its the letters from senators like this or the feedback from the communities and from the governors and he will weigh all of that. Your question about whether or not is pushing some who might otherwise might have been inclined to be more cooperative at the negotiating table pushes them to a different spot and that is possible but i am not part of those conversations but is he generating the conversation, yeah, so i dont know. We will see how it moves forward. One way to motivate people is revenue share [inaudible] i was hoping you would ask. Well [inaudible] revenue sharing is one of those issues that for me as a producing today crystal state revenue sharing has been something that i have introduced or been engaged in since i came here. I will continue to try to advance that conversation and the fact that there is a lot more who are now looking at this issue perhaps the long time for a while the reality is during the Obama Administration there wasnt much conversation about ocs production much less revenue sharing because we dont have production theres nothing to share. I think it does prompt more discussion about what revenue sharing might look like outside of the gulf state. Have you had those in the draft plan . I have not. That was just last week, right . To the. It has just been a blur. [laughter] is in this october already . [laughter] no, i have not had those specific conversations. What about energy build and . You mentioned before and [inaudible] in fairness, i think most of us thought that these issues that we have in front of us now we would have dealt with alrea already. This is not my plan. My plan was to have a much cleaner slate in january. Obviously, the plan did not happen. We will get beyond where we are right now with uncertainty about putting the government and uncertain about all these other things and sooner is better obviously because we do have a lot of things we need to work on and we need to start moving on this energy bill. We have a lot of other initiative that focus on. To get to and they like. Senator, the chair has to do a lot of things before it can occur and do you have any of you talk to any on the imagination about what will happen and assurances of what will get done this year, next year since passage of the bill we have all recognized there is a great deal that is preliminary to any level of activity out there. Red interior have put together and theyve put together and are working on things but before we can give them and asked for the timeline they need to map out and lay it out. Will have an opportunity for further sit down but as of right now there is no schedule other than what we put into law which was the timeframe of the sale but most dont fully appreciate the extent of preliminary work that this department will have to conduct and to basically organize and set up for you will see much of anything and it is because this is i wouldnt call it a frontier area in the sense that that is my secret refrigerator there. [laughter] no one has been allowed or permitted to explore in this area and so we are setting up a whole new process here. We said this is to be managed similar to the National Petroleum reserve alaska but having said that it is not the and pra and it is different and so there will be extensions and it will take some time but will keep people on there. I was home this week and had a chance to visit with in the fairbanks area and they are keyed into this prospects in the opportunities that more oil in our trans Alaska Pipeline can bring and what it means from labor perspective and jobs and working and i fully expect are we moving things today but there is a level of pragmatism. These are a new area and this is the arctic and we will be patient and wait but hurry it up but recognize it turned takes time. [inaudible] keep in mind that we have been laying the groundwork for the prospect of opening it for a long time and sitting with the people who live in the 1002 area, the town hall meeting that i had back in april there were concerns from the community about how the move forward and what environmental protections will we have and will there be coastal impact assistance like we had talked about in previous iterations of the bill and as you know through the reconciliation process your very limited in terms of what you put into that legislation so there are other things that we would like to provide by way of production whether environmental or process and we will be looking to do that. [inaudible] you can do anything to the upper patient process but i do think this is important that we have a process to the committee to take it up. No reason to. Okay. So happy to be back. I looked through the [inaudible] and women on the committee and i think it would help. No, no, i counted how. I think there is eight on [inaudible] but i to get more on members and health and energy. Yes, check that one out. I think we should get more women on your side. We got capped it out and six here yeah, that is very good. [inaudible conversations] i am pretty sure that there are more members there is probably two more members on health so dont give them that edge. We got it. Women are taking over energy, just saying. [inaudible conversations] [inaudible conversations] [inaudible conversations] we will have more live coverage at 1 00 p. M. Eastern as ivanka trump who is the Senior Advisor to the president and White House Press secretary, sarah sanders, join a white house conference on empowering women. Congress turns to capitol hill picking a Government Shutdown of midnight, friday. The house meets for building weight at 2 00 p. M. And working later on the week on an abortion bill which coincides with the march for life rally in front of the court. The senate gavels and at 4 30 p. M. Eastern which includes foreign intelligence surveillance. Watch the house live on cspan and the senate live on cspan2. The cspan bus continues its 50 capital for this month with stops in raleigh, columbia, atlanta, in montgomery. On each state official during our life washington journal program. Follow the tour intern is on wednesday at 9 30 a. M. Eastern for our stop in raleigh, North Carolina on a washington guest North Carolina attorney general, josh