[ room noise ] okay. all our new mayors that are in the audience, please stand up. we need to see you and know who you are. [ applause ] all right. we know this group will be instrumental in defining our priorities and helping this organization go forward. i am now very pleased to bring to the podium one of those rookie mayors. she is from the great city the district of columbia. mayor bowser served as a city council member for eight years prior to being elected. for yearly 35 years the conference has been fully supportive of full voting rights for the district of columbia. [ applause ] mayors let's give a round of applause for muriel bowser! >> thank you. well, good afternoon, mayors. and welcome to your nation's capital, my hometown, our capital city, washington, d.c. and thank you, mayor johnson, for your kind introduction. but most importantly for your leadership of this conference and your great city. i'm honored to stand before you as mayor of the district of columbia and bring you greetings on behalf of all 60000 of us. as a new mayor this is my first time at the conference of mayors but it won't be my last. i loom forward to welcoming you every january to our city. here in washington as you know we are a little bit different. we're a city a council and a state all rolled into one. we are a city that is growing and certainly on the move. you probably heard we're adding about 1,000 people every month to d.c. that we're attracting businesses at almost an equal pace. we're focused on technology and innovation in our city and becoming a healthier greener and safer washington, d.c. we're investing in our future every step of the way by building highways sewer systems, schools to ensure that our children are inheriting an even better city. and we are most importantly investing in our people. i just left one of our schools over a $100 million investment where the chancellor and i announced a focus on young men and boys of color. and i want to acknowledge another great mayor in addition to you, k.j. our friend and former mayor of the district of columbia adrian fenty. give him a round of applause. [ applause ] and i do that because as a new mayor i know that i'm building on quite a lot of the progress that we've been able to make in our city from leaders like adrian and many others who've worked to build our city to where we are today. we know as mayors we don't have the luxury of kind of wringing our hands. but we are charged by residents to get things done. and we need to get big things and small things done each and every day. we set aside partisanship to deliver for our residents. and we have to lead by example. just like kevin did in sacramento when he secured $34 million in state and federal funding to strengthen police fire, and emergency preparedness in sacramento, we do what we need to do to protect our communities. just like mayor nutter was able to do when he increased high school graduation rates and enhansed college readiness in philadelphia. we do what we need to do to ensure our children's success. like my sister mayor to the north of us stephanie rawlings blake, who closed baltimore's largest deficit in modern history. we do what's needed to be done to balance our budgets and govern in a fiscally responsible way. as demonstrated by so many mayors in this audience, we set aside politics and focus on the future of our cities. the gridlock in congress does not reflect how we operate in our cities. across this nation under the leadership of mayors in this room we get things done. and we understand that while our cities are on the rise we still have major challenges to overcome. while we have growth and wealth we also see staggering inequality. affordable housing is out of reach for too many and too many lack the skills necessary to get good paying jobs. my goal, our goal is to take those challenges head on. like many of you i believe in making bold and pragmatic plans and executing on them every single day. during this conference i look forward to exchanging best practices, sharing ideas, and leveraging our resourcefulness as an organization. we will continue to get things done for our city. and i pledge the support of the district of columbia to this organization to get things done for all of us. so i want to thank you again for being in washington. i hope while you're here that you will enjoy the restaurants, the nightlife the museum, the art and culture that are available to you in your capital city. welcome, everybody. >> all right. thanks, mayor. and appreciate those comments. and we will certainly enjoy the capital while we are here. i want to thank wells fargo for being our title sponsor for this particular winter meeting. this is a major commitment to our organization. so again please join me in giving wells fargo a round of applause. 345ry coffin, executive vice president of wells fargo is here with us. she collaborates with leaders across the entire wells fargo enterprise to deliver differentiated customer service to every wells fargo customer every day. mary will be sharing an important announcement. mary, welcome to this meeting. we thank you for your commitment. come on up mary. [ applause ] >> thank you mayor johnson, for that warm welcome to your luncheon, your conference, and to washington, d.c. before i get started i want to personally ask you, i did travel here and i have three children back home, and one of them is a 6'3" 15-year-old aspiring basketball player who has no clue what his mother does. but i think if i took a picture with you he might think whatever it is i do i'm pretty cool. >>. [ applause ] thank you. it truly is my honor and privilege to be here with all of you today and to provide the opportunity to share just briefly a few comments about the exciting and energizing work happening across our country and in your cities. from strategies that stabilize and revitalize local neighborhoods to those who create and support jobs and especially those that help support our veterans, may i commend you all for your efforts and the leadership that you are in this room. it's just incredible what you have been doing as we have worked to turn around our country, our communities, and our cities. wells tar goh is appreciative of the opportunity we've had to partner with you and our alliance and stands ready to continue to support you with the efforts needed to stabilize, rebuild and grow the communities in which we live and work. over the last few years our collaboration are the united states conference of mayors has of course first centered on the practical needs of our steeds. but our alliance through the last few years has become so much more as it has established a solid foundation for us to build on into the future. together we worked effectively on important issues represented directly to the nation's crisis. they were practical. they were focused on foreclosure prevention, property maintenance and care, and the promotion of responsible home ownership. together we shared concerns we created plans from best practices, and then we developed the necessary unique actions needed within your communities with answers directly provided to the constituents at our outreach events directly held in your cities. one of those events is our neighborhood lift. we are very proud, energized, and excited about our neighborhood lift program. it is one that helps promote affordable and sustainable home ownership through down payment assistance and home buyer education, something that continues very important to us today. and it you will allow me, i'd like to share with you a brief video from one of our lift events. i think it was held in new orleans, and one of the grant recipients in a testimony. please run the video. ♪ >> like many who visit new orleans, vallie guillet never got around to leaving. originally from france she's called the big easy home for more than a dozen years now. living in apartments in some of the city's historic neighborhoods. >> i came to new orleans out of curiosity and just fell in love with it. renting was easy. it was affordable. so i was a happy renter for years until katrina hit. and then post-katrina the situation was a lot different. we had landlords more than doubling our rent overnight. and that was a wake-up call for me. >> she decided to buy a house. and as a single mom wanted a duplex or double, as they're known in new orleans, so she could earn rental income to help with mortgage payments. >> i also wanted a real neighborhood where you could walk to places. and also something where i would feel safe living with my daughter. >> valerie found this bargeboard house built in the late 1800s from pieces of the barges that sailed the mississippi and once again fell in love but knew the renovations it needed would push her financial resources to the limit. >> it's a beautiful old house but there's some structural work to do reinforcing the outside walls, some foundation work. i had to put in a lot of other things that needed to happen. >> so when valerie heard about the neighborhood lift program, which provides home buyer education and down payment assistance she was immediately interested. >> i contacted the wells fargo representative, who guided me through what i had to do to make it happen. the program allowed me to have an extra $15,000 that i don't have to pay back that i could use toward the renovation of the house. and in five years it's forgiven. so it's just equity for me. >> since 2012 lift programs rngs a public-private collaboration between wells fargo and the non-profit neighbor works america, have helped make more than 8,000 people like valerie become home owners in locations hit hard by the economic downturn. now with the renovations complete she and her daughter sophie are enjoying their new neighborhood and their home. >> i like the back yard with my tree house. >> it's a piece of new orleans history. i'm really excited about that. i have a tenant. i have a very comfortable situation financially. it's not a perfect place but just knowing that this is ours and they're not going to tell us to pick up and move, this is a good feeling. [ applause ] >> thank you. as i said, we believe in programs such as neighborhood lift that we believe have a real impact to the communities and the families that live and work in those communities. and while we are very proud of our accomplishments and the housing market does appear to be improving, wells fargo understands there is a lot more work to be done. we believe it's not time to take a step back but to continue to move forward and bring best practices that deliver tangible benefits directly to your constituents. wells fargo as a company knows this. we are only successful when your communities are successful. when customers and con stifts can afford and sustain home ownership, and when the communities in which they live continue to thrive and grow. so as i stated a moment ago, our work continues. and last summer wells fargo committed to a new three-year, $3 million grant program through our wells fargo foundation. and today i have the opportunity i'm delighted to share with you, that we're ready to begin encouraging non-profits in your communities to apply for this program. it's entitled community wins. on your tables are the flyers about the program. it is aimed directly at providing support to local non-profits who engage in efforts such as workforce development, cleaning up neighborhoods and renovation of housing. it will be $1 million per year awarded through a competitive application process that is going to be administered by the united states conference of mayors. these grants will assist cities of all sizes. and we hope that you'll want to be educated and find more information out about community wins either by the flyers or you can see our booth outside. so we're closing to keep my remarks short and brief. i hope all of you see that our work together is both practical and inspirational. and as we continue to expand our programs and our alliance with you, we know that we can have and will achieve great things into the future. thank you so much for the opportunity to speak to you today. [ applause ] >> ladies and gentlemen it is my pleasure to rise and to announce that this is a historic moment. a defining moment for the organization. last night's state of the union by the president was a command performance. you asked who commanded him. article 2 section 3 of the constitution provides that the president must give a state of the union. in 1790 george washington gave the first state of the union in a provincial city called new york. thomas jefferson said i will not sit on a throne like a king, i will send a written message, and a clerk read the state of the union to the congress until 1913, when woodrow wilson said i'm going to do it. in 1934 franklin delano roosevelt dubbed the words "state of the union," taking them from the constitution. we know that governors give state of the states address. we know that mayors give state of the cities address. we know that universities give state of the university address. and we know that tom donahue last week gave the state of the business address. but ladies and gentlemen i'm here to tell you for 82 years no president of this organization has ever stood before its members, republican and democrat, and given a state of the cities address. and so today we are commanding our president and all presidents forward from 2015 to appear before you and your members and give a state of the cities address. we thank -- [ applause ] please note that is a vote of approval. we thank our current president for establishing this initiative initiative. it's very important as we go forward. ladies and gentlemen, it is my distinct on and pleasure to present to you, to give the 2015 state of the cities address, the one, the only from sacramento, california the 72nd president of the united states, kevin johnson! [ applause ] >> thank you. thank you. that was a heck of a build-up. i just want to say again how humbled i am to be here before you today. and if you're a mayor, you know what i'm talking about. there's great jobs. there's no jobs we'd rather have in america. and to be able to come together and gather with our colleagues a few times over the course of the year is really, really special. so it's an honor that i stand before you today. tom, thank you again. the u.s. conference of mayors staff. i've also already thanked the past presidents as well as our second vice president and the leadership of mayors that are out in the audience. you guys do an amazing job. and this is just a heartfelt thanks for all you do. so mayors give yourself a round of applause for all the great work you do in your respective cities. [ applause ] so i'm not one for long speeches. so let me jump in. last night president obama addressed congress and the nation to say that the state of the union was strong. today we convene at our 83rd winter meeting of the u.s. conference of mayors and as your president i'm here to say that the state of the union is strong because the state of our cities is strong. [ applause ] i'm halfway through my presidency. i got a chance to give my first address in dallas. and i want to thank really quickly the mayor of dallas, mayor rawlings for your leadership. stand on up. let's give mayor rawlings a round of applause. [ applause ] and we're so glad that you decided to run again. we were all going to send our posses out and security to make sure we twisted your arm and got you to run, but you did the right thing. we wish you the best on that. i also want to take a moment and thank a past president who was a past president he ran for governor, but he's a mayor of all mayors. is scott smith here? mayor smith, please stand. [ applause ] when it began in dallas six months ago i came before you and introduced the concept of cities 3.0, a new era of american cities. at the heart of this vision is the fundamental idea that cities of yesterday are not the cities of today. which means that we must function and be governed in a more innovative and efficient and effective manner. in cities 1.0 cities were built around ports rivers freight rail, transportation routes. they served as the center of commerce and trade. the second generation of cities or cities 2.0 came much later than the industrial revolution. these cities were marked by factories, big industry smoke stacks, automobiles, electricity. in cities 3.0, where we are today, cities have become the leaders, the hubs of innovation entrepreneurship, and technology. they are the epicenters for economic progress. in order to adapt to our new reality, we as mayors must practice what i call open source leadership. which means we have to be pragmatic problem solvers who look for common sense solutions regardless of where they come from, democrats, republicans, labor, business. it doesn't matter to us. we want to just make a difference in our communities. our focus must be meaningful and measurable in terms of results so that our promise, the promise that we make o'our cities becomes a reality of our cities. today i want to expand on that vision of cities 3.0. because it's not just about what we do within our cities but a 3.0 city is how we interact with the federal government and that must be done in a different way in my opinion. i began with the simple truth. as a nation we face major challenges. and washington has simply not stepped up to solving those challenges. powerful forces are transforming the way we interact in terms of our jobs, of our neighborhoods and our cities. consider the following. globalization pits american workers against the world. new industries are replacing old manufacturing, while new technologies threaten to automate their jobs. income inequality is eroding the middle class making it harder for hard-working taxpayers to support a family, own a home, and get a good education. major demographic changes are bringing in very different cultures into closer contact. while baby boomers are entering into retirement age, which is straining pension and health care budgets, climate change threatens our homes and infrastructure. and what has emerged to be the most critical issue of the day and certainly of my presidency is the growing gulf of the mistrust between communities of color and law enforcement in many of our cities. we are a nation built on trust. and when that trust is broken we must find ways to rebuild that trust. clearly, the challenges are significant. and it is clear the federal government has been unwilling or unable to design and implement a meaningful solution to these problems. so what does that mean? it means they've landed firmly on the doorsteps of our nation's mayors. that means that being a mayor is no longer just about making sure the trash is being picked up or buses are running on time. today we are the ones grap well these real big picture challenges. the good news is the american people generally think mayors are best suited to do this work. as noted pollster frank luntz will tell you later this afternoon, that washington and americans have a perspective that may be different. americans want washington to do less and they want cities to do more. and the u.s. conference of mayors and zogby we released a poll today. think about this, mayors. nearly half of the american public believes that cities are on the right track compared to 29% who think the nation is on the right track. although america's trust in elected officials generally is not something to write home about, but mayors rank higher yerer among the public thn the president, congress and their state legislature. that means we rank top as it relates to our constituents and who and where they have trust. the federal government and states have historically had the capacity and mandate to confront our global challenges. but right now they are out of step and out of touch with people and the new metropolitan realities we all face. so it's up to us. this is our opportunity to lead. to say what we mean and to mean what we say. it's up to us to deliver the results our citizens deserve. as steve jobs said it's time for us to think different. so what does that mean, mayors? it's time for a new understanding between the local and national powers. cities simply cannot be expected to be passive players waiting around for resources and direction that may or may not materialize. these dynamics need to be flipped on their head. we need to organize differently to demand and deliver better results. we're modernizing the way we run our cities. so we have to modernize the relationship we have with our federal government. we need what i'm calling a new federalist compact that recognizes the areas that require federal attention while leveraging and strengthening what truly drives the prosperity in our nation. it's our cities and it's our metropolitan areas. [ applause ] mayors, you know all too well these ideas have been written about extensively in a book i've often cited. it's called the metropolitan revolution. bruce katz and jennifer hadley. bruce, are you here? stand on up. let's give bruce a round of applause for his great leadership. [ applause ] so what exactly does a new federalist compound mean? first, we desperately need our federal government to lead where it must. only the federal government can act with the national vision, direction, and purpose because some of the problems we face transcend local borders and require federal action. metropolitan areas aren't able to provide a robust safety net for the elderly and the disadvantaged. the safety net provides stable economic foundations upon which everything else grows from. metros can't overhaul our enormously inadequate immigration system. metros lack the resources to fully fund economy-transforming research and development or new infrastructure without federal help. in a world of climate change cities can't change the behavior of companies and consumers. these are the areas where the federal government must lead because they reflect the realities of global forces that dwarf states and local capacities. so the federal government must take the commitment forward and they must act now before it's too late and they have to do so aggressively. second, while the feds are working on those issues we need our national government to empower cities where it can. think about this mayors. we have said this over and over again. we want the federal government to empower cities where it can. because american cities are the metropolitan areas, where the ones who can deal more efficiently and effectively with some of the challenges that are before us. it's simple common sense that one size cannot and does not fit all in a nation as large and as diverse as the united states. the federal and state programs and policies will be successful only if they're flexible and are individually tailored to meet the unique challenges facing our cities. because it's in the american cities that the challenges are being met with innovative, pragmatic results. oriented around solutions. in philadelphia, i'm going to give mayor nutter a shout out. i don't do that very often. i'm going to make an exception. in philadelphia mayor nutter, who co-chairs my brother's keeper task force has engaged in deep partnership with his police commissioner to establish an innovative community policing model because of the long-standing us versus them mentality between the african-american community and philadelphia and law enforcement needs to end. in bridgeport mayor finch who co-chairs the energy independent and climate protection task force has transformed an old unused landfill into a green energy park. this clean energy project generates five megawatts of power through solar panels and fuel cells. be only that, it's supporting bridgeport's local economy, creating 92 jobs and generating 7 million in new tax revenue. knowing that a regional export-driven approach was needed to foster a 21st century economy at keeping jobs in the united states, mayor fisher and mayor gray have initiated an innovative partnership between louisville and lexington to spark the growth of high-quality jobs in advanced manufacturing. in an effort to reviet lait the desolate downtown of tacoma mayor strickland has driven an urban renewal for a city's business district through light rail, affordable housing and retail development. there are countless examples like the ones i mentioned with many mayors in the room here today. we're the ones who are best suited to meet the demanding needs in a better way where we're delivering real results. is mayor lee here from san francisco? i was going to give him a shout out but he doesn't get it since he didn't show up. we're going to skip -- roll the teleprompter. is mayor cabaldi here? where's mayor cabalden? if he's not here i'm rolling -- i love it. here's what i'm going to do in my next segment of the state of the city, tom. i want to say that these cities have modernized their ports and their freight rail and airports. miami, jacksonville, chicago, denver, l.a., and dallas. let's give all the mayors a round of applause. [ applause ] imagine how much more we could do if the federal government had empowered us rather than hindered us with rules and restrictions and regulations. which brings me to my final point. we need the federal government to invest where it should. because we all know that solving some of the national problems it takes not just resolve but resources. all of those examples for mayors taking the lead that i just talked about require significant investment. that's why we need resources to come directly to cities and give us more autonomy. mayors you need to clap for that. [ applause ] if the money just come through the states, it must come with the flexibility to be spent on local priorities. but even better, if those dollars can come directly to cities, then we can make a bigger difference, and we've shown and proven that time and time again. imagine the power of a modern-day wpa that's focused on local public work projects. whether it's water mains or street repairs or sewage system upgrades every city has significant infrastructure needs. investing in local infrastructure creates a win-win-win situation. [ applause ] first, it's an economic win because thighs public work projects, they create jobs. second, it's an environmental win because we can modernize our infrastructure in more sustainable ways. and lastly, it's a public safety win to upgrade our deteriorated pipes, sewers, and streets. and we all know -- think about this mayors. the role of the federal government is to ensure that the u.s. is competitive in an increasingly global world. one of the things that will allow america to be more competitive is to improve the integrity of our infrastructure especially in our cities. the bottom line is we need our federal government to fundamentally restructure the way it does business. the days of solutions that are exclusively made in washington, d.c. are over. because progress begins where the status quo ends. let me conclude with this thought. today we are facing an inversion of the hierarchy of power. we're flipping the old paradigm on its head. cities are now the leaders in the nation experimenting, taking risk making hard choices. yes, mayors you're doing that. if we can adopt a newist compact that can ensure the federal government leads where they, empowers cities where they can and invests where they should the cities can drive the nation to economic and civic heights that we've never seen. although we have many challenges, my message to this conference is clear. this is our moment. it's our time. steemz, let's seize the day. let's make measurable difference in our cities, our communities and our nations. thank you very much. and god bless mayors and the cities. [ applause ] all right, mayors thank you so much for that. excited for this next part of the program. as you're thinking about your trip in washington and while we're here, please really think about what a 3.0 city looks like, what's our role in that 3.0 city, and how can we redefine the relationship between cities and our federal government. we have a real opportunity because they are listening to us in real ways. so i'm proud to leave that message. tom is our first one. and i know mayor cornet, you know, next year will do the same and do great things beyond that. it is now my pleasure to introduce dr. frank luntz. he's one of the nation's top messaging experts. he has visited our winter our leadership meetings. he's no foreign person to us. we see him on a regular basis. he has an unbelievable ability to help take what our priorities are, frame them in certain ways. he wrote a famous book called "words matter." he understands policy leaders. he's a republican but what he grap wells is trying to find common ground in how we communicate in a responsible way. let's give a round of applause for frank luntz. [ applause ] >> and actually as i stand here, i'm neither a republican nor a democrat. i'm an american. and it gives me such great pride to speak. [ applause ] but i need to ask the mayor, the reason why i actually agreed to do this is because i wanted an autograph. so if you can help me out. okay. i do the jokes here. >> i'll set it right down. >> thank you. wait a minute. i got -- who is kevin johnson? you told me you were michael jordan. it's a pleasure. and i welcome you also to washington. i see the mayors left. i blame this on congress. thanks to congress you can drive 25 miles in any direction and never leave the scene of a crime. i also know that c-span is here. i want to say hello to the viewer. you will not forget today. mayor, perfection. absolute perfection. if the public could hear what you just said, and i hope that this is replayed and replayed, they would have faith in their leadership that they do not have now. i begin -- [ applause ] thank you. and i begin with humor because i'm nervous and i'm intimidated. and i mean that. of all the things i will do this year, there's none more important. because i listen to these people every day. i do focus groups every day, every night. and if you could hear the fear, the anxiety the skepticism, even cynicism with the american people right now and the only people that they have faith in, the only people that they think that can lead is the people in this room. you have no idea how important you are. you have no idea the potential that you have. and i'm going to do my best over the next 15 minutes to give you the language to succeed. i urge you to take notes. these words weren't chosen lightly. these are the words of the american people. it's hard to follow the mayor because he did it so well. and i'll try the best i can. but of all the things the public is looking for it's not about budgets or welfare or education or taxes. they're simple day-to-day concerns that matter to them. and if i were advising you i would create this check list. and these are the things that they're asking from you. by the way you all know those of you who have seen me i'd rather be down there than up here. because one of the things they want from mayors is to be able to touch you, to be able to get to you feel their fear and anxiety and standing behind a podium doesn't do it justice. but i've been told i have to stay here. how do your policies deliver fewer hassles, more choices more money, more time. how do your policies deliver a better lifestyle a better work-life balance? these are day-to-day concerns that everyone has whether they're 60 or 65. so it isn't philosophy. it isn't even policy. it's what happens to you during that day-to-day existence. and in fact this is the question people are asking. not many of the people in this room are living paycheck to paycheck. do you realize 40% of americans do? for many of you it's 60% or 70% of your cities. and they think that politicians don't understand that. living paycheck to paycheck learning to do more with less. if they have to do it, why can't government? that's the question they're asking of you. and it's a legitimate question and a 3.0 city which i loved that phrase 3.0. because it fits with what's happening in america. here's the deal. every time that you talk about a problem from this point forward you've got to provide a solution. don't just talk about what is wrong until you give them specific ideas about what is right or your ideas for what is right. they live it. they know it. and a 3.0 mayor will be focused on results and solutions, not just what's going wrong. and there's another aspect the mayor talked about. this isn't just about your turn. or even the person who follows after you. but the public is so deeply asking for leaders that look a generation ahead, that see the challenges of cities not in 2015 but 2025 and 35. they're asking for you to start it now so that 10 15 20 years from now long after you're gone they'll feel the benefits of the future. by 2-1. they would rather have you focused on tomorrow than today. in terms of language we heard about efficiency and fevlth effectiveness. and i've got two more words to add to that. accountability and results driven. and the reason why accountability matters so much. and by the way i just caught myself in the monitor over there, and i am really fat. can you put the thin person's veil up back there? look at this. i feel like governor christie. my god. accountability -- i have to live it every day. you know, i turn -- >> you want me to hug you? >> i don't believe in hugging. i turned 51 last week, and i blew out all the candles on my birthday cake. they asked me what did i wish for. another birthday cake. okay, no more jokes. accountability and results driven. washington has failed them on this. they want to know if you make a promise you don't keep they have a chance to hold you responsible. and results-driven because they're tired of the rhetoric that they get out of this town. and they want you to deliver for them. you deserve -- about the most powerful thing you can do as a 3.0 mayor. if you give them an agenda that says you deserve schools that actually teach children, you deserve a police force that keeps the cities safe and keeps us feeling secure, you deserve a cleaner, safer healthier environment, you list five or six points and you do it now in your state of the city speeches you deserve, i promise you that that empowerment, that how you -- the people you represent, how they will take that is that you respect them, you appreciate them, and you want to deliver for them. you deserve is the most empowering way you can communicate your agenda going forward. and now i want a get it done checklist. in fact, i've got one more thing here. of all the things you can do you want to prove that you have a record of results. action solutions. so i want you to deliver a get it done commitment. no more conversation, no more talk, no more excuses. you will get it done. so mayor, i know it's the wrong sport, but i want to give you my get it done football. it is fully inflated by the way. and if you will leave that in your office, it will remind you every day of so many good things that you've done for the city of sacramento. you know he's not just a brilliant player. he's a brilliant mayor. and your work gives me faith in the future. i've not given that ball to any democrat until today. [ applause ] dallas. that's pretty good. dallas and sacramento. both teams not in the super bowl. and for the record the mayor of ft. lauderdale -- fort worth throws better than the mayor of dallas. proactive, pragmatic problem solvers. it's a tough thing to say, but it's exactly what your citizens are looking for. proactive because they don't want you to wait. pragmatic because they really don't want the ideological politics on a city by city basis. and problem solvers because you'll actually get it done. the combination of those three is what they're seeking from you. that's who they want you to be. and i'm going to give you a check list for you. a 3. 0 mayor doesn't know from partisanship. they don't think of themselves as republican or democrat. a 3.0 mayor has a partnership with the business community and the labor unions and they're all brought in together. you're holding town halls. and by the way, the key to a town hall, do this for me, please. how many of you mayors here hold town halls at least once a month? raise your hands. not many. the ones that do, do me a favor. let your audience speak first. let your citizens go first. let them talk. for 10 or 15 minutes first. the person who came the furthest to get there, let them go first because something obviously matters to them. and if you let your citizens go first, they'll know that you're listening to them that you're learning from them. engaging community leaders organizations is bringing more people in rather than less. yes, the meetings may last a little bit longer, but the public values a variety of voices and the more voices the better. i'm going to give you some language now. of all the words -- and some of you heard me say this. of all the words you can use the most powerful of all is imagine. if you imagine people to imagine cities of perfection. everyone in this room, 350, 400 people in here. each one of you would have a different imagination of cities at perfection. you speak with imagine, it allows people to dream and then allows you to accomplish. a healthy economy's so much more powerful than economic growth. because a healthy economy means good things are happening. by the way healthy schools, healthy neighborhoods, healthy families. it's not about health care. it's about what we want in our day-to-day lives. stability and security. by the way, something we found which i think is very one and women put stability but either way it communicates peace of mind which is the highest value of all. you're in control. in any city 3.0, citizens are more engaged than what they're doing in their lives and by the way, i welcome you to take pictures, if you want, of this. because i really do this is the language of your constituents and if you attach this language around the people that you represent they'll understand you better, they're more likely to follow you, they're more likely to invest in you and that's good for cities. let me show you a couple more. in terms of phrases, that idea an uncompromising commitment that's what you're all about. it's why you work probably 20 hours a day seven days a week. uncompromising commitment means you are all in, that you're not going to give up, you're not going to give in and you're going to get it done. a more efficient, effective, accountable government. you heard it from the mayor. of all the things the public is looking for, that is the number one attribute. efficient, effective and accountable. you demonstrate you can do more with less. you demonstrate you spend their tax dollars wisely, you prove efficiency, effectiveness and accountability and you've done your job well. because we can clearly say no matter what party we are that is not happening here in washington. local resources with a neighborhood approach, we are becoming smaller and smaller as we look forward. we are now looking and we are engaged in our neighborhoods but we want to make a difference in the places and the people who are close to us and that's the idea of a neighborhood approach because it's how we live and it's how we think. no fine print. it means there's no out. there is no excuses, there are no exceptions. what you say is what you mean and this last one, cities of opportunity. i got that idea from the mayor because the greatest innovations are happening in america's cities. the greatest changes, the greatest focus on the future, an opportunity is the number one value when you ask americans what are they looking for for themselves or for the future. a couple more points and then i'll close. even more important results -- and you'll hear that a lot -- is the idea that you're working together to get the job done. this is why i love this organization. yes, i have been here a lot because i actually feel good when i leave here. i feel optimistic watching these people work together trying to get the job done. this doesn't happen in washington. it doesn't happen in congress. congress has a 14% job approval rating. gadhafi had a 19% job approval rating. and that was among the people that killed him. [ laughter ] you show that you work across the aisle that there is no pittsburghship and you are communicating the philosophy that they appreciate. another point which i need to challenge some of you on. you talk about creating jobs. jobs are great. jobs are particularly important for those that don't have it. but what do the american people really want? a career. a job is 9:00 to 5:00, a career is 24/7. a job is something you get up to go to and you can't wait to get home from. a career is everything and that's what your residents, that's what your citizens, really want from you. if you talk about experimenting -- this is a warning for you -- or taking risks, it's not what they're looking for. they expect from you proven leadership, proven results. they're not laboratory animals, they're human beings and they do expect you -- and they have the right to expect for you to get it right. i hear economic prosperity, economic justice, economic growth. a healthy economy is all of that and more. and that's what we hope for in america. in terms of the infrastructure it isn't just a road or a bridge, it's quality of life. you need to focus on the benefit not just the process. you need to focus on what it does for safety. what it does for -- makes life hassle free or worry free. if you focus on what you're going to spend on the public sees the expenditure. if you focus on what it does, the public is willing to make the investment finally just a couple points of education. i used to believe that accountability was number one and it's number two. number one is every child, every family every school, every community. what i've learned about education in terms of what they expect from you is it's every and all so that every child benefits. every child has that opportunity. that is so essential. you see up there number 11, prepare for college career and life? that takes in every child. you know 40% of kids still don't go to college -- don't graduate from college i should say. because for some kids it's vocational training and the fact is, the more we do in that area the more rounded this country will be. and let's not forget those parents who want their kids to have a trade, to have a skill and how profitable that can be. look at number 13. it's not how much we spend it's how we spend it. that's the efficiency and effectiveness because in a 3.0 city is really is about the result. it's not about the process. and this last one here, every student deserves an effective education. it's not about education reform, it's about education excellence. it's about what we do. and one more point on education. you have to do it because they don't trust washington to. and they've seen the schools fail under washington control. they truly are looking to you to make a difference to get into those schools, to demand accountability, to measure them, to ensure that their children are getting the education that they deserve. this is how you define schools, the parents, the curriculum, teachers that are inspiring and passionate, parents that are involved, public schools that are challenging, motivate, and effective. don't pass it off. take responsibility for it. finally, here's your daily checklist. the things that they expect from you. they want you to know what they live, which is why you need them to speak first. they want to know that you understand their daily concerns, that you respect their hard work. and i use that term deliberately. because americans feel like they're working harder than ever before and they have less to show for it. they want to know that you hear their fears and anxieties. another word that they use. because if you hear it and you know it, then you can use it and you can change because of it. they expect you to do it differently. and they want to know that the day to day life is going to benefit. of all the things that i will do this year, this is by far the most important. i know that every day is tough and i know that you can look back on a day or two where you'd say i'd rather not have this job. but in most cases you ran for it, and you wanted it, and you have it. you're going to have a great conference here because you've gotten a amazing leader here. but when you go back to your rooms tonight, don't just go back and look at the agenda for tomorrow or respond to e-mails. i want to inspire you to inspire your constituents. i want to encourage you to tell them to ask for more and demand more. a 3.0 city does not accept the status quo. a 3.0 city does not say, well, we've made it better so that's good enough. a 3.0 city deliver what is washington cannot do, and this is the quality of life and a standard of living and the inspiration of hope and opportunity for everyone you represent. in my mind, you people in here are heroes for what you do. deserve that label. earn the position that they have given to you and do what mayor johnson has done, make a daily difference in the quality of life of the people that you represent. thank you very much. [ applause ] >> come on, give a round of applause for frank luntz. [ applause ] all right, mayors. we are supposed to get done at 2:15. we are going to get done early. you'll have a little extra time. i want to remind you if you don't have your security clearance please make sure to see a u.s. conference of mayors staff person to make that happen. there are standing committee meetings and task force meetings throughout the rest of the date and tonight. there is an open reception honoring women mayors. thank you very much, god bless you. thank you! on the next "washington journal," a discussion about the obama administration's call for more authority over international trade agreements. with linda dempsey at the national association of manufacturers and robert scott at the economic policy institute. then rob morrison, executive director of the national association of state alcohol and drug abuse directors on heroin use in the united states. and a look at the well being of young adults today, compared to the 1980s with the u.s. census bureau and the pure claritiable trust. join the conversation with your phone calls and your comments on facebook and twitter. "washington journal," live at 7:00 a.m. eastern on c-span. coming up tonight on c-span3, a senate hearing on exporting liquefied natural gas. then attorney general eric holder and fbi director james comey speak about human trafficking prevention. then, transportation secretary anthony foxx discusses the expiration of the highway trust fund. later, governor bill walker delivers the alaska state of the state address. thursday the senate energy and natural resources committee examined a proposal to increase exports of liquefied natural gas. the house has already passed a bill on the subject. this hearing chaired by senator lisa murkowski of alaska is about two hours. meeting of the energy committee this morning. thank you to members and thank you to those on panel joining us. as you know, we've had kind of a busy week here on the committee. senator cantwell and i have logged a few hours standing up in chambers there trying to move a keystone bill through. and our hope is that we're on the final run of that. but i appreciate committee members coming a little bit earlier. we had initially noticed this for 10:00. but in an effort to try to get through this important hearing, then tndend to our business on the floor, we bumped it up. so thank you to our witnesses for the accommodation. i want to recognize the lead bipartisan sponsors of s-33. we'll have some remarks this morning so i'll keep my comments brief this morning. i want to recognize, congratulate them and their co-sponsors, senator capito on the committee, hoeven and gardner, as well and senators udall, toomey. i have long argued that exports of liquefied natural gas should be expedited from the united states to our friends and allies overseas. i made the case in my energy 2020 two years ago and again in two more recent white papers. one called "america's opportunity to join the global gas trade," as well as "signal to the world." know from the outstart that i fully support the bill that we have in front of the committee. i think it is the culmination of years of wroshg here in the legislative congress. i can remember when senator dick lugar introduced in december 2012 laid out concept exports for nato members should receive expedited treatment at the doe. as proposals came forth more countries were added. eventually the entire world trade organization. yesterday we voted on senator cruz's wto amendment as part of the ongoing keystone xl debate. last year thewe saw proposals to give the department of time limit for authorizations of these licenses with the clark starting start at various points. after final authorization, after prefiling and so forth. many colleagues co-sponsoring this current legislation were involved in those efforts as was our former colleague, senator mark udall. i think we would all recognize that this legislation in front of us, ds-33 is a xromcompromise. imperfect in certain ways. but i do think it is the result of some very serious work by very serious people coming together to try to address an issue. i thank my cleegszolleagues for all that they have done together on this. i will turn to my ranking member for comments. >> thank you. as you said, we're on the floor on a pretty serious policy discussion on energy and we're having this hearing this morning. i think it is obvious to everybody we're two female committee chairs but we also have two female staff directors. i think the fact we're having this hearing and the floor debate at the same time just shows we are capable of multi-tasking when it comes to energy policy. makes for a busy day. at this hearing we are here to discuss s-33. that is a bill to seek accelerated and more certainty to the process of determining natural gas exports. and whether they are in the public interest. as we consider this bill, and how to discuss it with be we obviously are interested in taking advantage of america's abundant natural gas and its ability to help transnorm our economy. it was only ten years ago when we were discussing how we would need to import narg gas and how many new term nals wreed's need to build to meet growing demand. today's natural gas has become so plentiful and inexpensive that we reverse the flow and turn those l and g import facilities into e port facilities. today we'll discuss some of my colleagues -- i think five members of the committee -- are looking for ways to speed up the export permitting process. i appreciate that they are doing so in a way that respects the critical nipa process, maintains the legal requirements for exports to receive a public interest determination, and i would note however that the department of energy recently changed the process to approve these new projects and the goal of this was to speed up the overall approval process so as we consider s-33 and whether this legislation i'm interested in finding out whether these issues have actually been addressed. so is the new revised doe process actually working in the five months since the department of energy adopted its new policy it has issued four separate approvals for l and g export facilities. currently 32 are pending. we must consider whether the revised process the -- is the best way to evaluate throws projects. and determination about the public interest. a fixed deadline is not necessarily always the best in the applicant's best interest as well. what if the authorization can't be made in 45 days but could be made in 60 or 90 days. it would be unfortunate the applicant would get turned out rather than from a public interest determination. third, is it appropriate to make the decision before the ferc process is completed. right now doe starts its process after approval. but that requires more than just review review. all of these are important questions that will have for today's hearing. thank you so much for giving our colleagues a chance to be here to discuss this issue. i would say besides the five members who have very -- support for this legislation and some of it has already been implemented, we have great concerns about what is the impact of in as it relates to pricing midwest and to natural gas. i being from a hydrostate am always very aware of how energy is the lifeblood of the economy and how it has built the northwest economy over and over again. i want to understand how this will impact also our big industrial users and the impact. look forward to having questions from the panelists who are here today to testify. thank you. >> thank you, senator cantwell. i want to note for the record senator portman was added was co-sponsor to this bill as we appreciate his involvement as well. >> thank you very much, clarm murkowski. thank you for holding today's hearing on lick wide natural gas export exploration. the lng permitting certainty and transparentscy act would expedite the permitting process for lng exports to countries that do not have free trade agreements with the united states. it would require the secretary of energy to make a final decision on an export application within 45 days after virnlt environmental reviews process is complete. it would provide for expedited judicial review for export projects. final finally, exporters will publicly be required to disclose. the legal challenges to l and g export projects will be resolved expeditiously. in short our bill will give investors greater confidence that export projects will be permitted and built. our bill is carefully crafted and it is a bipartisan compromise. our bill offers congress the best chance to do something meaningful for lng exports. study after study has shown that lng exports will create good paying jobs across america, in states like oregon, west virginia coll next mexico and wyoming wyoming. it will reduce our nation's trade deficit. it will even help president obama fulfill his goal of doubling our nation's exports which he set five years ago this week. finally, it is a powerful means to bring about positive change throughout the world. it will help increase the energy security of key u.s. allies in partners throughout europe and air shah asia. lnge ports will also give countries an alternative to energy from iran. in conclusion i'd like to thank senator hinrich for his leader ship on leadership on this bill. he's been a great leader on this project. finally i would like to thank the witnesses for their willingness to of it t here today. thank you. >> thank you for your lone leadership on this issue and that of senator hinrich's as well. thank you for holding this hearing. i very much appreciate the work of senator brasso and his staff in putting together this bibill. i am incredibly pleased to join my colleagues, senators in sponsoring this bill.in sponsoring this bill. in sponsoring this bill. at chair mentioned, our bill follows directly from the work in the last congress of our former colleague senator udall and senator gardner. and my home state of new mexico, some of you flowknow, ranks seventh in the nation in good production. the main producing region in the region is san juan. in farmington, aztec. the good news is we have large reserves of natural gas. but prices have been depressed to less than $3 per million btu negatively affecting the gas producing regions. i support the cautious approach taken at the department of energy. it makes sense for d ochltdoe to complete its review of application for exports after the review has been completed. recent studies show that the industry can fully support modest levels of exports of lng with minimal impacts on consumers while boosting the nation's economic output and jobs in states like senators brasso's and mine. i co-sponsored this bill because i believe it will help stimulate job opportunities for my state's gas industry while fully preserving both environmental and safety reviews and doe's determination of public interest. including the authority to approve or deny applications to export lng. the bill will also provide much needed transparency by making available to the public the countries to which lng has been delivered. thank you again for holding this hearing and i look forward to hearing from our witnesses today. >> thank you. now we turn to our panel. we'll begin this morning with mr. smith and just go down the row. i will introduce everyone at outset here and then we'll move for five minutes presentations, then followed by questions from the members here. we first have mr. christopher smith, assistant secretary for fossil energy at the department of energy. mr. paul cicio welcome. martin durbin. mr. ross eisenberg. and then our last panelist this morning, mr. david korunyi. welcome to each of you. >> thanks you, clarmhairman murkowski and members of the committee. i appreciate this opportunity to be here to discuss the department of energy's program regulating the export of lick wide natural gas and to answer questions about s-33. since 2010 when we began receiving long-term applications to export lng to non-fta countries the department demonstrated its compliment to protecting public interest. we conduct a thorough public interest determination process, one that's expeditious judicious and fair. that includes ample opportunity for public input to evaluate in an export is in the public interest, a determination allows balancing a range of important factors including xlik impacts, international dynamics, security of natural gas supply environmental concerns and market dynamics and developments. i testified before this committee last july. and at the time we just announced a new procedure for processing lng applications. i told you that by focusing our efforts on the projects that had completed the safety evaluation process, that reviewed that it would help us to make our decision making more effective and efficient and that it would allow the department of in rg to focus on those projects that were most mature and therefore most likely to be constructed. since the announcement of the new procedures the decision making process has been completed on two projects. in total the department has approved 5.7 billion cubic feet per day and long-term e baltimoration. we've issued thorough orders that can stand up to the scrutiny that they are sure to receive and we've done it within days of the project getting sign-off. i believe this demonstrates our commitment to act expeditiously and effectively in addressing the department's responsibilities under the flarl gas act requirements. in done seclusion i appreciate the xlit's interest in discussing this very important issue with the department of energy and i look forward to this discussion. we understand the significance of this issue. i'll be happy to answer any questions the committee might have. >> thank you, mr. smith. >> chairman murkowski ranking member can't well and members of the committee, thank you for this opportunity to be here today. my name is paul cicio president of the industrial consumers of america. we are an industrial consumer advocate. we are not opposed to lng exports. however, today there is no energy public policy decision more important whether or not than to approve an export facility for 20 to 30 years. reason is all risks associated with the export of lng fall on consumer. the larger the ln ghchltg export volume, the larger the cumulative risk. today because of unfettered lng exports, domestic prices have tripled in australia because the australian zbvlth aregovernment failed to protect the consumer. we do not want to see that here long term. if policy makers do not fully implement the act. lng objection ports create winners and losers. it explains how higher natural gas prices can be expected to have a negative effect on outfit an employment particularly by sectors that use large amounts of natural gas. that is us. figure 12 of our written testimony is directed from the report and shows how exports result in loss of labor income wages. capital income and indirect taxes. combined these accelerate wage disparity. the net economic gain at its peak is a meager $20 billion in 2020 and declines from there. bottom line is that the bulk of the population is negatively impacted to the benefit of a few raising questions about how it can be in the public interest. >> announcer: the in their wisdom congress passed the natural gas act. congress understood that unlike so many other tradable products, natural gas is different. because consumers do not have a substitute and it is not renewable. congress felt a responsibility to act in their behalf to protect unknowing consumer who does not have the ability to understand the long-term implications of lng exports. for this reason the natural gas act includes a provision called the public interest determination and it is completed for each application to export to non-free trade governments 37 governments. the government accountability office says the doe has not defined public interest. it is a glaring omission if not a legal issue. if the doe has not defined public interest how can they make decisions on 145 million consumers? without a definition of public interest, how much public hardship can be inflicted before the doe denies the next application? the defenses anything of public interest is not a macro economic number like the so ln called net economic benefit number of the report. the real definition of public interest was pioneered by justice brandice. the public interest is that which produces the most good for most people. the national gas act specifically anticipates that adjustments to lng exports would be in the public interest when it states that doe "may from time to time, after opportunity for hearing and for good cause make such supplemental order in the premises as it may find necessary and appropriate." so the natural gas act creates an obligation for the doe to monitor and to do economic impact assessments at regular intervals to be sure that exports do not harm the economy and jobs long term. however, contrary to the natural gas act, the doe has stated it does not plan to monitor impacts and make such adjustments. to do the no do implies that u.s. policy is designed to protect capital investment of lng exporters around not u.s. manufacturing assets. in closing we urge the support of this committee to conduct oversight and require the doe to conduct rule making to define public interest create up-to-date decision making guidance, to condition applications for monitoring conduct economic assessments at regular intervals and be prepared to protect the public. we urge the doe from refraining from further approvals until such time as it makes these necessary rule makings. thank you. >> morning chairman murkowski ranking member cantwell members of the committee. thank you for the opportunity to appear before you this morning. america's natural gas alliance strongly supports s-33 to establish a timely review process for export facilities. this will send a strong sflal to the investment community and a clear message to our allies and adversaries that the u.s. is determined to play a leadership role in global energy markets. given the sheer magnitude of u.s. shale gas resources, there is no question that our nation can be a global energy leader without sacrificing our domestic advantage. now is the time to seize this opportunity. while some have raised concerns regarding supply and price the markets and experience speak for itself. as recently as 2009 the u.s. energy information administration forecast energy prices would rise to $13 by 2015. just this last year in 2014 and multiple interpend prot projection-- right now in the dead of winter peak season for natural gas demand, prices are less than $3. even lower if you are in pennsylvania. the markets are screaming for new and diversified demand outlets for natural gas. l flchlt the u.s. is now world's leading producer of natural gas. the u.s. consumed 26 trillion cubic feet of natural gas in 2013. the only remaining uncertainty around natural gas supplies is -- where is the top? as technology continues to advance, reserve estimates din to grow. as a result public and private sector experts agree that the u.s. has enough natural gas at reasonable prices to sustain substantial increases in domestic consumption and significant levels of exports. as a result, eia projects natural gas exports will account for less than 10% of demand for u.s. natural gas by 2040. those same global market dynamics underscore the sense of urgency. lng facilities cost billions of dollars and take several years to construct. unless we act quickly to provide greater certainty in the approval process we miss the opportunity to become an integral player in international markets. far from competing with domestic interests, lng exports markets will strengthen the u.s. economy. simply put, more dry gas production means more natural gas exports. the chemical industry alone as listed projects representing $137 billion in investment all linked to natural gas. as markets scream for demand exports provide a win-win opportunity. of course lng export terminals are just one aspect of energy infrastructure. timely approvals of new and expanded pipeline projects also require the priority attention of policymakers at all levels. as several members of this committee know firsthand and it is particularly true if the northeast where expanded pipelines would unlock opportunities we see flourishing in so many parts of the country. thanks for working to ensure america's competitive advantage. i look forward to our continued work together to build this energy revolution in a sustainable economic mfrg and environmental success story for nation. thank you. and environmental success story for nation. thank you.a and environmental success story for nation. thank you.n and environmental success story for nation. thank you.u and environmental success story for nation. thank you.f and environmental success story for nation. thank you.a and environmental success story for nation. thank you.c and environmental success story for nation. thank you.t and environmental success story for nation. thank you.u and environmental success story for nation. thank you.ri success story for nation. thank you. >> good morning. on belaugh of thehalf trade association in the united states, im'm dilateelighted to share our views. the departments of placed placed all license applications on temporary hold while it studied the macro economic impact of exporting lng. the study forecast the u.s. would gain net economic benefits. it urged the committee that the free market will find equilibrium here and exports should be governed by principles of free trade and open markets. some witnesses at that hearing took the opposing view calling into question the validity of the doe study's findings and warning of constrained natural gas supplies "unfettered lng exports," and skyrocketing natural gas prices. fast food to today. doomsday predictions have not come true. only five of the terminals out of 37 are under construction. overwhelming numbers of economists who have looked at this issue including the doe have concluded the lng exports and a strong manufacturing sector can co-exist. as of last night, gas stood at $2.98, a full $2 lower than two years ago when i was here to testify. study after study has confirmed and continues to confirm that manufacturers are investing in the united states thanks to a competitive abundant and secure supply of energy. manufacturers in arkansas california, coll iowa louisiana, maryland, minnesota, nerve, new york, ohio pennsylvania oklahoma, texas, utah, virginia and many others are taking part already in the explain chain to support terminals already under construction. in maryland 14,600 jobs, created across the supply chain. we applaud the doe for taking look at the inefficiencies and trying to fix them. we once again find ourselves in a situation where the approvals are starting to lag. a project that received conditional approval as far back as 2013, now approaching the fourth month of deliberations on a final license. we believe s-33, is both timely and warranted. this bill ensures that the free hand of the marketplace will govern international trade by providing a 45-day deadline on the doe to approve or deny pending lng export applications. it do is not affect any other requirements. but eliminating unnecessary delays, the bill protects rubbing arub ing -- running afoul of our obligations.running afoul of our obligations.running afoul of our obligations.rubrunning afoul of our obligations.running afoul of our obligations.running afoul of our obligations.unning afoul of our obligations. developers looking to build an lng facility must subject them soefsthem themselves to a multi-faceted permitting process. s-33 provides certainly while ensuring that all environmental laws will be complied with to their fullest extent. manufacturers support this bill and urge the committee to approve this legislation. >> finally, mr. ckoranyi. >> thank you. i am honored to appear before you today to discuss the geopolitical implications of the act. i will make three brief points in support of the act. point number one. european energy security is matter of natural security for the united states. as mr. putin continues his aggression against ukraine that threatened the trangzsatlantic community as a whole. as a hungarian i witnessed firsthand devastating effects of 2006 and 2009 gas crisis in the region. we cannot be sure that another cut-off does not happen. if not this year, then the next. furthermore, compromising energy security and corrupting the energy sector are at the heart of moscow's strategy to divide our alliance and render it ineffective. opec deals with the kremlin question the country's ability to conduct an independent foreign policy that is both in the national and in the allies interest. this is especially unnerving as the european union needs anonymity to upholdrussia. the good news is that europe is finally stepping up to the plate. but europe cannot succeed without the help of the united states. europe has access to multiple sources of pipe gases as well as lng supplies. but current and prospective supplies from both the south and the southeast face their own challenges due to the turmoil in north africa and across the middle east. most lng supplies outside the u.s. are not without risk either. nigeria and yemen are facing terrorist and insurgent activity. producer such as egypt and indonesia have to grapple with increasing domestic demand that limit their export capabilities. qatar, the biggest energy producer to date, its energy tankers have to press to the strait of hormuz and suez canal. meanwhile, u.s. lng supplies do not face political qualms. u.s. energy would rely reliable and competitive alternative to the allies in central grurp and provide liquidity to the global gas markets. sending a critically important message ever strategic reassurance to a region that is under the most serious threat since the end of the cold war. point number two -- even if another single drop of gas makes it to europe, which i believe is a very unlikely prospect, u.s. energy exports will nevertheless substantially improve european energy security including that of ukraine. u.s. energy is admittedly no panacea. in and of itself it will not solve europe's energy security problems but clarity in the lng export licensing procedure would put a downward pressure on gas prices abdz celebrate the interconnection between the european gas markets well before or even in the absence of a single american gas molecule reaching europe. that is because lng markets are global. markets are slapd by future expectations and the mere existence of a credible alternative will incentiveize infrastructure investment. terminals enable both greece and lithuania recently to ensure substantial gas discounts. exports in particularly important. the u.s. has been promoting transparency and open markets. to the great benefit of the whole world. introducing that transparency into the export licensing procedure would be critical to bolster trust in america's global leadership. thank you, madam chair. >> thank you. all of you, this morning for your testimony, your comments. we greatly appreciate it. we'll now begin questions from the members. i would ask members to be sure to limit your time to five minutes as we've got a lot of folks to get through. and we've got votes that are theoretically going to begin around 11 111:00. mr. smith i would like to start with you. reading through both your written testimony and the comments that you've provided here this morning, you you havehave outlined steps that doe has taken, that really get us to a point where there is -- there is less time between the approvals. i appreciate what you have done with re-alignment. your testimony states that this legislation is "not necessary." now, this is not saying that you don't support the legislation. i certainly understand that you have, again under your leadership, and with secretary moniz, you've issued several final tlorauthorizations. again, i appreciate the xlentscomments and direction that you are taking. but i think we here in congress need to be thinking long-term. secretary moniz has made very clear that he wants to work through this process, but i worry that perhaps a future secretaryondretary of energy might not be as favorable to lng exports connelling out of this secretary around the administration. so i question that i would ask you very directly is whether or not you think s-33, as it is written, is workable and acheevl. achievable. >> thank you, madam chair, for the question. first of all, we understand the intents and interest of this legislation and in fact as i listened to many of the comments that have been made here in opening statements, we share many of these drives, many of these core values of transparency, make being prudent public interest determinations. so i think we have a lot in common in terms of what we want to accomplish and we understand the intent of the legislation. in fact, the changes that the department of has made to our internal process has been along those exact same lines make sure we are making good, solid public interest decisions that withstand scrutiny. so we think we are currently moving in that direction and we're using the current statute in a way that protects the public interest. that said, your direct question about the workability of the legislation that's being proposed certainly if this legislation is passed as currently written the department will be able to accomplish the mission. we will, as always, accomplish the letter and spirit of the law. we believe there is a solution we will be able to comply with. >> well i appreciate that. what you're telling me is you can do it you have been doing it 45 dies is workableays is workable. >> yes sfloertenator. if this is the legislation that is passed, we can comply with the law. >> i understand. let me ask you a question regarding lng and alaska. as you no he, the facility there as has been exporting lng since 1969. some forget that alaska has been engaged in the export business for a long long period of time. granted, these have been small amounts but it has britain a proeen a process without interruption, the longest export contract that we've had in the country. so i think it has laid the groundwork most certainly for things to come. of course we also have the bigger project, the alaska lng project that i believe merits a conditional authorization from doe on the basis of what the department itself has described as these u niknique features of an lace alaska project but you have an 800-mile pipe. is it doe's understanding this legislation would no no way affect lng alaska ooh eleligibility to x port to non-lng countries and the project will receive an extended deadline. >> thanks for the question. i have actually visited the facility in alaska. spent time on the north slope. so we have a keen understanding of opportunities and some of the challenges with all of those projects. it is my understanding that we've already stated that we have held the right to do a conditional authorization torefor projects coming out of alaska. it is my view this bill would not change that we still have the ability to issue a conditional authorization for both of these projects. the north slope project has additional complexities that might require additional authorization. in addition as we read the law as currently written, it doesn't appear to make any distinction between the lower 48 and alaska in terms of the time limit that two impose on the department. >> thank you. i appreciate you going out there and spending some time. >> thank you, madam chair. i want to be clear, i like natural gas juxtaposed to what we are discuss something on the floor. which is a dirtier source of fuel. dempbtly like exports. but i like something even better than those two bsh -- i like cheap domestic sores of energy. i think part of this discussion is how we ensure that we're going to make sure that the u.s. economy takes best advantage of this. so i have a bunch of different questions. maybe i can cue it all up. mr. durbin, talk a little bit about the democratic natural gas markets. the potential for the transition of the maritime energying to natural gas as a fuel source again to dpli with environmental issues aurl up and down the coast. how do we get that right. mr. cicero what price point -- again, those were very exaggerated rates. but the aluminum industry an several other mineral industries just had no choice. the price pluck waitfluctuation came. guess what? those factories shut down forever. those long-term prices get locked in for a preferential rate for a language period of time because the nature of those contracts. then the domestic market is based on that international market not locked in to long-term contracts. what price point do you start worrying about the impact to you industry? my guess is it is a lot narrowing than people might imagine. then the doors shut and factory is not open again. it is not like you turn the lights back on again. aluminum plants shut down forever and ever. okay? so this is very important to midwest industry issues. third point is mr. smith, i just don't know what happens when you get this list, you say okay we're to the done -- denied. sock. so is that denied now like you're back at the bottom of a 100 permit list? or denied and like maybe in two years i'll think about you gwen? my question is i think the denial part of this legislation is a good idea in concept but i think what it might actually mean on projects that really shouldn't be denied is an interesting question. i wonder if you have -- as quickly as people can answer that that would be appreciated. >> to start with the markets on natural gas going forward. we think there may be some additional opportunities as an industry but nonetheless first is power generation. no question we'll continue to see natural gas grow in the power generation market. second is the industry and manufacturing. petrochemicals will be a luge part part of that.hge part of that.uge part of that. over the road -- rail, road, but that's not a huge demand draw. then exports of course. >> on the price. >> my energy intensive consumers consume about 75% of all the natural gas of the entire manufacturing sector. their operating costs range from about 20% energy to as much as 80% of the cost of making anything from plastics chemicals, fertilizer cements, steel, glass. there's two parts to that answer to that question. there is no specific price point. but first on the table is the fact that natural gas is subsidized and regulated in so many countries across the world that is kept at a low price. for example china may buy last year they bought lng at $16 but they were providing that gas to mr. non-residential consumers -- manufacturers -- at 1. $1.78. we are looking long-term, not short-term. the fact is there are uncertainties in the domestic market in terms of what price point can producers produce gas. okay? they can impact investments. no one forecasts that the price drop of crude oil. that was a surprise. that's impacting investment oil and gas going noordforward. that will impact the supply. no one forecast it. what we do know is from 2000 to 2008 the price of natural gas increased by over 200% in the united states. that was over a 20% increase per year. over that time frame we lost 44,000 manufacturing facilities. now those plants shut down were not entirely because of energy. but i have those types of companies and they were a major part of the plant shutdowns. >> thank you. maybe mr. smith can get us a longer answer -- i mean a more -- that's a pretty big question. i mean our time is over. but we can either get a short answer and a longer written answer. however, madam chair, you want to proceed. >> i can give a quick answer. i think it is important to emphasize that when we look at each applicant we are being loolooking at each on a case by case basis. each order is a long, detailed document that we've endeavored to write in good clear common sense english that has to address all points made by the intervineeneors in each case. we get varied xlentscomments. some strongly pro, some strongly have to make our public interest determination based on a variety of factors. what we do subsequently to that would depend on the individual case. so there's not a rubber stamp. there's not a particular answer that comes out of a spread sheet. it would depend on the case. >> thank you. >> thank you. i'm now going to turn to senator barrasso, going a little bit out of order with the early bird rule. next in order to those who have based on when they have to return to the committee. no, i understand that i said we would go to the sponsors of the bill for their questions, and then go to those who are next in line which would be senator davanau after that. >> thank you, madam chairman. mr. smith, you correctly state as to add regulatory insurance to the applicants for the lngx exports, and as you said the department does share the goal of transparency and certainty of process. the -- one of the areas that we disagree a bit is the department you said is committed to act expeditiously, but i don't think we've gotten those results, because the d.o.e. has given final approval of final applications. there are 33 export applications pending at d.o.e. a dozen have been pending for more than two years. an additional 13 have been pending for more than a year. so could you explain a little bit this discrepancy that we're seeing here? >> thank you, senator. first of all, yeah, as we understand the intent of the legislation, there's some agreement. in terms of how far the process currently operates, the way the department's operating is there are two important things that a particular exporter needs in order to build a plant. they need to have to show they can build the plant in a way that it's safe. and with the department of energy to export the molecules and those two together create a project. our process now says that we look at a particular -- an applicant after it's completed that first process to show they can actually build the plant safely. in that aspect we've moved very quickly. essentially as soon as these projects have come out of the queue, or out of the foot process, we've moved very quickly. with one of the applicants, we acted the next day, within 22 hours. so i think we've demonstrated that our intent certainly is to move quickly. but we also have to act in a way that's judicious and write these orders in a way that withstands the scrutiny they're sure to receive. there's a variety of views that we have to balance. >> so is it fair to say the department of energy would be able to comply with the deadline that's set in the bill? >> that's my view, yes. >> thank you very much. mr. carney it's my understanding 21 countries import more than 40% of their natural gas from russia. in your testimony, you say that the united states is in an excellent position to improve liquidity on the global lng market, to european countries to access lng, and accelerated process, licensing would put downward pressure on gas prices in central and eastern europe well before even a single molecule of american gas might even reach europe. so could you further explain how u.s. lng exports help european nations if lng is not actually shipped to europe? >> thank you senator that's an excellent question. it actually already has. because the mere fact that the united states no longer imports in large quantities lng outside the u.s. actually put a downward pressure on european prices already. one of the reasons gas has to be negotiated long-term natural gas supply contracts in europe and in central and eastern europe as well is that these countries built up terminals and they have access to the energy market. and supplies from qatar from nigeria, from other places that were supposed to go to the united states ended up in up. so this has already happened in the past couple of years. looking forward, if there are additional quantities on the international gas markets, that will put a further downward pressure on these prices, especially if central and eastern europe manages to complete its market integration into the eu. there is the single unified energy market. >> mr. eisenberg, you stated that the overwhelming number of economists have looked at this issue, including the department of energy itself have all repeatedly concluded that lng exports and domestic manufacturing sector can co-exist. can you expand on your comments there? >> that's a really excellent point. i've read most of the studies at this point. i'm not an economist, i know a lot of smart ones and i've read most of them. the list is pretty long. they've basically all come out to the same place. they all come to the same spot. if i could read you something from the updated -- nara actually updated the study for the d.o.e. a couple of years ago. the last page of the executive summary has the title, u.s. manufacturing renaissance is unlikely to be harmed by lng exports. they say our analysis suggests there's no support for the concern that lng exports even in the unlimited export case will affect the renaissance in the united states. we're also seeing this in real life on the ground. everybody's winning here. >> thank you madam chairman. >> thank you madam chairman. mr. durbin i want to start -- you've heard the claim that u.s. liquid natural gas exports could result in the kind of inflated lng prices that australia has experienced. can you talk a little bit about -- and explain to the panel where the australia example is not directly analogous to the u.s. markets, particularly in light of the dramatic differences in market size? >> sure. i appreciate the question, senator. i would say it would be like comparing apples and oranges. i'm not even sure they're both fruits. if you look at the size of the economy, you know, in gdp, we're more than ten times greater. our production of natural gas is more than 11 times greater. the infrastructure that we have in the u.s. for being able to produce natural gas, there is no comparison, which allows us to be able to produce the gas at a much lower cost. and i think the real important point here is that right now, what australia is experiencing, is because they are exporting literally 50% -- more than 50% of what they're producing, they're exporting. even in the most -- in the eia projections. we'll be exporting between 9% and 10% of our production in 2040. i think there really is no comparison to make there. and no threat that the united states would end up experiencing the same type of thing. >> my understanding is our market is roughly about 40 times the size of australia? and we're talking about much lower levels of overall exports correct? >> that's correct. >> mr. smith i want to turn to you real quick. if it were enacted this legislation is passed and signed would you expect our bill to change the number of applications for exports to non-fta countries that would eventually be approved or disapproved by the d.o.e.? >> thank you for the question, senator. i honestly think it would be impossible for me to determine based on the language if this is going to impact the number of final applicants. the applicants on the condition of the time et cetera. so i would demure from making any prediction or forecast, because these are case-by-case evaluations that we make. >> all right. as you know, our bill also requires d.o.e. to publish the list of countries that receive shipments of liquid natural gas from the united states. do you have a view as to whether or not that would be important information for the public to have access to? >> we think that more transparency is good. so we've endeavored to create a process that's open, that is transparent, and that makes all this information available to potential intervenors. so we think that is important. >> great. i'll have one last question for you, and then i'll yield back the remainder of my time. one of my interests is making sure that we continue to grow jobs while sort of reordering our energy infrastructure to recognize the challenges that we have with carbon pollution and climate change. natural gas has a sort of unique place within those changes. we have limited capacity right now to do electrical storage for example but natural gas allows us to seam together different sources of energy in more realtime. much more effectively than old-fashioned coal generation just because of how fast you can ramp up and down the turbines. do you want to talk about -- a little bit about your thoughts about how relatively low natural gas prices that we have experienced with current policies will affect the ability to deploy those other sources of clean renewable energies? for example solar and wind power? >> thank you, senator. i'll focus on the natural gas portion, the technology program that i oversee. one general comment that i'll make is that these are long-term important and decadal challenges. so we don't manage our technology programs based on the short-term fluctuations of the futures curve. we think these are important existential challenges, that it will drive the clean energy economy of the future. all of these solutions

Related Keywords

Arkansas , United States , Louisiana , Qatar , Australia , Alaska , China , Minnesota , California , New Mexico , Russia , Washington , District Of Columbia , Ukraine , West Virginia , San Francisco , Mexico , Nigeria , Egypt , Wyoming , Sacramento , Chicago , Illinois , Greece , New York , Miami , Florida , Moscow , Moskva , Texas , Iran , Philadelphia , Pennsylvania , Virginia , Suez Canal , As Suways , Indonesia , Kremlin , Oregon , Mississippi , Denver , Colorado , United Kingdom , Oklahoma , Farmington , Hungary , Maryland , Lithuania , Dallas , Yemen , France , Utah , Americans , Australian , America , Britain , Hungarian , American , Martin Durbin , Kevin Johnson , Jennifer Hadley , Woodrow Wilson , James Comey , Bruce Katz , Anthony Foxx , Thomas Jefferson , Stephanie Rawlings Blake , Shah Asia , Ross Eisenberg , Franklin Delano Roosevelt , Adrian Fenty , Christopher Smith , Tom Donahue , Scott Smith , Lisa Murkowski , Frank Luntz ,