Transcripts For CSPAN3 Politics Public Policy Today 2024062

clean air permits unfairly that plant can be fined and sued by others for doing so. one regular says go another says stop. that plant has to decide whether they want to acquiesce in a power shortage may be a blackout or break the permit for just a few days maybe a few hours. i have a bipartisan bill with representative doyle in green to fix this in the energy package we're working on. this is not about a company running roughshod over environmental laws. we're talking about days or hours in a crisis. the other week ferc and nerc endorsed our bill, secretary chu told me he's very supportive of the idea. the bill has passed this committee three times now and whole house twice. and 112th 113th congress. can i count on your support in the 114th congress? will you be supportive of the bill like your predecessor? >> mr. olson, you've asked this question before and let me say the answer is basically yes. i know our d.o.e. staff worked with both sides on this and we're quite comfortable with it. thank you. >> thank you for the clarification. my home state of texas has half of our southern border over 1200 miles with our neighbor to the south of mexico. we know how important that relationship is for our trade. your qer points out that we trade tens of billions of dollars in energy each year with mexico. >> 65. >> 65, i like that even better. >> in fact, some of texas only power line outside come from our neighbor to the south mexico. you might recall those lines prevented rolling blackouts and brownouts with the crises in the fall -- i'm sorry the early winter of 2011 and august of that same year. my question is we know this all plays -- that the shale plates don't stop at the southern border. new administration in mexico is reforming its energy economy. i think those opportunities will expand in the future. your qer energy package will address the topic north american energy. better coordination trade will be critical in the years ahead. my question is, can you please tell me what you see as the next major opportunities for north american energy and where that relationship is headed? >> in particular the -- i would say actually last week i spent four work days in mexico with western hemisphere and other energy ministers. the energy reform in mexico i think offers tremendous opportunities for us. clearly in the hydrocarbon sector, we know that. our companies are going to mexico in the current auctions and are prepared to offer lots of technical assistance to get engaged in the shale plays as well. however, in discussions with minister joaquin, he emphasized something i agree with that is that the form of the electricity sector may offer new opportunities because the reform i think will bring our systems of regulation et cetera and standards much more into alignment as we have with canada, where we have a completely integrated electricity system. so we are looking forward to that. it's going to be a major focus. we have both a bilateral working group that i chair on the american side with the multiagency group with the minister of environment in mexico. and then i also am one of the three chairs of canada u.s., mexico trilateral energy ministers and we're already well along into a tri lat cal data cooperation and just last week we have a release that went out, be happy to get it to you, where the three of us announced we're going to expand the cooperation to the full agenda laid out, which will include things like emissions in hydrocarbon production and energy infrastructure issues. >> thank you. i'm out of time. come see you work in the current position, the petro nova product, come down and see it. i yield back. >> mr. green for five minutes. >> thank you mr. chairman. mr. secretary you'll get an overdose of texas. i see my colleague joe barton is not here but i don't know if our members heard that his mom passed away last week -- >> sorry. >> wanted to express regret to joe. mr. secretary, welcome back. according to d.o.e. website for projects across the u.s. international board he, they must comply with deeper requirements to consider environmental consequences of proposed projects. are you familiar with that requirement? >> yes. >> when making cross border decisions did d.o.e. adhere to regulations and guidelines set for by the council on environmental quality? >> uh-huh. >> does this include cumulative indirect impacts? >> i'm sorry? >> quantify the question. >> when makes these decisions the d.o.e. here, set forth by ceq, you said yes, but does that analysis include cumulative and indirect impacts? does the nepa process include that? >> i guess i'm not quite sure if that's actually part of the processor not. >> okay. clearly there are in general when we make public interest determinations cumulative i am packs are part of that. >> okay. >> ceq requires an environmental impact for major actions affecting quality of human environment. is it reasonable to conclude d.o.e. would require environmental impact for a cross border project in eis? >> we always require on eis yes. >> would d.o.e. consider a major federal action? >> i'm getting down to the whole -- >> yes. >> ceq has determined that nepa applies to significant federal actions and can't be avoided by segmenting a project. that means that a project coming across from texas to mexico, not just across boarder crossing but the project itself would d.o.e. decision-making on cross border segments of a cross border project require compliance with nepa? >> certainly, we always require nepa compliance. >> it would eliminate the presidential permit process and grant cross border decision-making to d.o.e. for electric transmission facilities. the d.o.e. will be charged with prom prom promul gating a rule. does reason to conclude new regulations, these regulations including nepa requirements about the cross border project? >> if i may take a step back. there's two principles we would insist upon. one is proper environmental review. and secondly would be a judgment that this is in the public interest. i think those are the two basic principles. >> okay. there's language in section 3104 of the bill that would limit department's ability to fully comply with nepa requirements. do you believe that that language is needed? >> well again clearly i think we need to make sure the environmental requirements are met. so if the bill -- if the proposal would curtail that, obviously i would not support it. >> are you familiar with what's called the federal nepa small handle issues? >> no, i'm not. >> okay. if federal small handle issues relate to how much federal control should be exercised over a private project, specifically whether a full nepa review is required to control only a small segment and otherwise private project. courts have determined if an otherwise private project cannot proceed without federal permits, then federal agencies are required to satisfy nepa requirements. mr. secretary is it possible for a cross border project to proceed without a presidential permit under current law now? >> i really had better check that with my general counsel. i would have thought not but i'm -- >> my concern is that we've been trying to set a standard in this bill in previous legislation on cross border electric transmission, natural gas pipe lines and of course crude oil pipelines. and in this case the department of energy would have the authority over electric transmission -- >> wires -- >> -- and whether department of energy would use the nepa process to approve those cross border -- >> again, my assumption is that again, the two principles are there, the environmental impact the nepa process for the part in the united states and the determination of public interest. those are the two requirements and two principles i would uphold. >> i'm out of time i appreciate -- i know d.o.e. if we pass with this particular section in it would have that thought and i wanted to see what the regular tri process would be with d.o.e. >> he would be happy to discuss that -- >> are you saying under 3104 our legislation would not require nepa review? >> it does require nepa review. >> okay -- >> that's what i was wondering. there's been confusion on our legislation that we've done separately that nepa review is not required. and i want to make sure folks understand that -- >> it is. >> it's in this bill and it was in the previous bill we passed out of the house last session. and cross border issues not just for d.o.e. thank you. >> thank you for clarifying. >> this time i recognize the gentleman from illinois. >> thank you, mr. chairman. mr. secretary welcome. your department really was developed and instituted based upon our nuclear heritage as you know. and also focus on our nuclear future and then you have to deal with a lot of legacy issues not really part of the hearing but the introduction is to let you know i appreciate the support i receive from your professionals down at is asavannah river which i visited yesterday and contractors there. and they took good care of me. and i want to put that on the record. the -- now to the qer, the qer devotes an entire chapter to improving north american energy integration but makes no mention of issues belying presidential permitting in general or keystone xl pipeline in general. do you agree that the -- and i quote, ad hoc or siloed permitting process as the qer puts it, creates significant uncertainty? >> yes, it certainly can in many cases. >> has the inability to render a decision on keystone pipeline impacted other energy projects in canada? do you know of -- >> i'm not aware of it but -- >> and if -- can you check back with us? obviously there might be otherwise i wouldn't be asking this question. >> only in the sense that obviously, i have seen discussions about other pipelines to take out things east or west, for example but -- >> right. the think the public and as a whole -- sometimes i put up the transmission system on a map just to identify how much cross border pipelines and transmission lines we already have, both north and south -- >> i think it's like 74 pipelines or something. >> right. and obviously curious we have problems with one and the debate is will we have problems with the future or is this uncertainty kind of slowed down the process? the cross -- and so part of the legislation which the chairman is pointing to talked about this cross border energy infrastructure language in the committee's energy diplomacy discussion draft, would attempt to address unnecessary delays and permitting of cross border pipelines and transmission lines. have you looked at this and is there room for improvement when we're talking about pipelines or wires? >> well, obviously, as was already stated the pipelines are not in our jurisdiction. the wires are. and i think it's going pretty straight forwardly i might add that just the projects discussed over the last five years for new transmission lines would total about 5 gigawatts of capacity coming into the northeast. >> we had a hearing just a week ago, i think, on the really the natural gas desert of the new england states. we had the governor of maine here which would address obviously pipeline infrastructure and probably cross border also with them. i think a lot of people would kind of shake their head understanding that we still heat with fuel oil in some major states in our union, where access to natural gas pipelines might help them transition especially with the abundance that we seem to be having now with our production. >> if i may just -- about a week and a half ago we did approve for potential fta re-export a project to canada -- natural gas project to canada. >> the energy diplomacy discussion draft also talks about improving the process for permitting major energy products. do you agree it would bring greater clarity and predictable to the process and help in this energy diplomacy part? >> can you clarify if we did what exactly? >> the formulation of procedures and criteria balanced energy security impacts with environmental consideration. you've got especially in energy diplomacy, shimkus is lithuanian lithuanian, i've toured the lng terminal. for our friends around the world, whether it's japan or the eastern european countries it's really critical to give them choices of energy. and so the question is cost benefit analysis and how can you expedite it. i think you're quadrennial review addresses this a little bit. >> again, the whole issue of energy security is -- we are looking at in a broader sense than the traditional way. by the way, maybe not here but if you would like, we would be happy to come to your office and discuss the work on ukraine specifically since that seems to be an interest. >> that would be a great interest to many members. >> be happy to do that. >> thank you. we are trying to expedite these issues. >> at the time the chair recognizes the gentle lady from florida for five minutes. >> good morning, mr. secretary. i would like you to elaborate more on the transmission storage and distribution beyond what you've already testified to because america's energy infrastructure is aging. it is not well matched with the new sources of supply. it is exposed to increasingly dangerous extreme weather events associated with climate change such as sea level rise. in my neck of the woods we're concerned about more intense electrical storms. then drought and wildfires and i know you're sensitive to the potential for cyber and physical attacks as well. part of america's policy is to encourage these new clean energy supplies and greater energy efficiency such as the availability of rooftop solar that holds great promise for powering households and businesses across the country. and our growing energy efficiency sector that relies on smart meters and smart grid. but these run counter to the traditional electric utility model. now, you've testified already today about well energy assurance grants for states, maybe you need to go into greater detail on the microgrids. i've never heard of a synchro phaser. what must we look for to modernize america's grid and infrastructure going forward? >> well in terms of the grid, including both the transmission and distribution systems, i think one major theme is that we need to really push forward on what we've just barely started and that is real integration of information technology into the grid and all of the associated requirements to take data to be analyzed, of course. synchro phasers are part of that. we can discuss that another time. control systems, cummings information item noelg into decision-making so the grid can respond quickly if there's something developing on the reliability side, for example. so that really is i would say the overarching theme, more and more information technology integration into that system. the -- that does of course potentially exacerbate another thing you mentioned, which is the cyber risk that we have to stay ahead of. and i would say there i just might add under the leadership of our deputy secretary, we head something called the energy sector coordinating council which has eei and number of ceos that meet three times a year to discuss these kinds of risks to the infrastructure grids especially. on the grid there are other issues besides those i mentioned such as the role of potentially d.c. long distance dc transmission, where that's much more prevalent than other parts of the world right now. but again, i.t. i would say number one in terms of where we have to go. >> back on pt energy assurance grants, would they be open only to states or would local communities and businesses be able to tap into those? >> i think there's still really a lot of program design to do and we would be happy to talk with the members about that. i think the way we've been envisioning is is principlely through the states but hoping states to be competitive would be working with localities and tribes inappropriate states for example. that's a detailed program design -- >> i would hope you would open it up to local collaboratives or regional collaboratives. sometimes you have rekals trant states and there's a unwritten state policy in florida, you can't even say climate change. i have -- >> we will take that under consideration. yeah, it's been raised before in terms of cities wanting to be able to be direct applicants. >> absolutely. there's been some discussion today about experts of oil and gas. how much -- you've used a number today. how much is america importing in petroleum and gas? >> i think we're still importing close to 7 million barrels a day of crude oil. although, we are net exporters of about 2.5 million barrels of oil products. our net imports are maybe 4.5 million barrels -- >> doesn't the export heavy focus run counter to america's policy imperative to reduce carbon pollution? >> well as i said frankly i think in our current situation where we are still major importers, relaxation of export is probably likely to more or less just swap around different oil qualities in different places as opposed to lead to tremendously increased production or demand. that's my view. >> so you do not think that exporting additional carbon fuels would exacerbate the problem of carbon pollution? >> i think the key is that even as we are producing more and this debate is going on in terms of exports i think the important thing is and we satisfy this is keep your eye on the ball for reducing oil dependence, we are aggressive on efficient vehicles. we are aggressive in terms of developing low carbon fuel alternatives like next generation biofuels and we are aggressive in supporting the move towards electric fiction of vehicles with clean electricity supplying those vehicles. >> the gentlelady's time -- >> go ahead. >> if you look at it, we are succeeding for example in the last -- i think it's five -- forget, some number of years maybe a decade even as our population is increased, as our gdp is increased, 13%. we have actually decreased petroleum fuel use. >> gentle lady's time has expired. i recognize the gentleman from pennsylvania, mr. pitts for five minutes. >> thank you mr. chairman. thank you, mr. secretary, for coming today. the chairman upton mentioned his interest in ukraine and meetings over there with the ukrainian parliament and e.u. getting resources over there. you said something that you're doing a lot with ukraine. would you care to elaborate, please? >> i would be pleased to. the starting in middle of 2015 the g-7 energy ministers together with the eu met to discuss energy security issues and that included specifically the russia/ukraine situation. out of that came a commitment to work with ukraine for that winter and so d.o.e. led a team of several u.s. agencies plus canadian experts that went to ukraine several times and guided them to a winter contingency plan for energy. so that occurred including, by the way, a tabletop exercise at the level of the deputy prime minister. then we are back there helping them again look forward to next winter but other things as well. for example, we pointed out the dependence, not only on natural gas but on russian nuclear fuel. you may have seen now that's led to westinghouse now has a contract to be a fuel supplier for the russian reactors in ukraine. this has caught the attention of some. breaking a monopoly again. we're working in a number of ways to help ukraine on the energy situation. >> thank you. the department of energy has made progress on a fuel lng export applications but the fact of the matter is that more than 30 applications still await final decision from d.o.e. i realize you decided to reconfigure the process to allow for -- to go first with its environmental review but the process as a whole remains complicated and unpredictable, especially for u.s. allyies unfamiliar with the process between d.o.e. and ferc. when will they finalize their study of economic exports in the 12 to 20 billion cubic feet per day range? >> i can't give you an exact date but i expect it quite soon. i don't think it's going to be an impediment because today we are at 8 -- 8.5 bcf per day. approved for nonfda countries. >> would the trans pacific parts partnership clear the way for automatic lng export approvals? >> i think that will depend on the specifics of how it's negotiated but it may very well provide fta status to more countries in which case the approval is more or less automatic. although i would caution because this statement is often raised with with regard to ttp and europe, the reality is that the market prices probably have a bigger impact than whether you're labeled fda or non-fda. >> do you support the provisions within the discussion draft which would effectively give d.o.e. 60 days to act on an application following the ferc environmental review? >> we made our statements very clear on that particular in a hearing in the senate that we frankly find it unnecessary. we have been -- we've been acting quite quickly. it's workable. we've said it's workable. we can work with it but we don't think it's necessary. >> u.s. oil production has risen rapidly in the last several years and imports are falling. in fact, only about one quarter of petroleum consumed by the u.s. is imported from foreign countries, which is the lowest level in 30 years. when asked about lifting the ban on oil exports, you've made the point that the u.s. still imports oil, which is a fact. but given our role in the global market, would it make sense to both import and export oil? >> well, again, we need -- i imagine we're going to meet our needs. so if we right now if we export a barrel we're going to import a barrel to replace it. so as i said earlier, the only real issue in terms of the exports is whether that would lead to any material increase of production. as opposed to just in effect swapping oil. there could be some issues there in terms of oil quality. for example, the mexicans have specifically petitioned for a swap in which we would send light oil to mexico in return for heavier oil coming back. that's an example of a swap but i have to say, it is not as though we have not been able to absorb all of the oil production today in the united states. it's been -- you know, so -- anyway. >> thank you, my time is expired. >> the gentleman's time is expired. we recognize the gentlelady from california for five minutes. >> thank you, mr. chairman for holding this hearing and i thank you, mr. secretary, for your testimony. the discussion of our nation's energy infrastructure is very important. and the as is the administration's work on the quadrennial energy review. particularly interested in the pipeline safety aspect of it. over my years on this committee, i have referenced very many times this santa barbara oil spill of 1969. that oil spill had tremendous local and national ramifications, giving birth to our modern environmental movement and changing much the way our nation as a whole viewed the environment and oil development. sadly, the santa barbara community was recently hit with another terrible oil spill along the coast. on may 19th more than 100,000 gallons of crude oil spilled from the plains all american pipeline along the treasured coast north of santa barbara. the oil quickly flowed under the highway onto the beach and into the ocean. where the oil slick spread south for miles along the coastline. while the exact causes of this bill are still being investigated shlgs it is already clear that woefully inadequate federal pipeline safety standards played a significant role. it turns out that the plains all american pipeline is the only federally regulated pipeline in santa barbara county. also, the only transmission pipeline in the county that does not have an automatic shut-off valve built into this system. this is not a coincidence. every other comparable oilpipeline has a shutoff valve because the county required it. but the federal pipeline and hazardous material administration does not make this requirement of pipeline operators. while an automatic shut-off valve may not have prevented it it could have minimized it. plains was allowed to squirrel away tens of millions of dollars into what they called a contingentcy fund for when their pipeline would inhe have itably fail. this to me defies common sense and cannot be allowed to continue. this is just one example of lack safety standards. my constituents are understandably angry and i share their anger. with all due respect for my seat mate mr. green, appropriately isn't here right now oil and gas development at its core is dangerous and dirty business. the mere fact plains and other companies have oil spill contingentcy fubds shows there no such thing as a safe pipeline. spills do happen and they will continue to happen as long as we depend on fossil fuel for our energy needs. we obviously cannot end in dependence overnight but we need to take bigger and bolder action. secretary moniz, i appreciate the president's and strong commitment to renewing and the objectives of qer are important. we cannot billed a clean energy future without modernizing infrastructure and preparing for new challenges. but we must do everything in our power to ensure that infrastructure as is safe as possible. congress has repeatedly directed fimsa to strengthen standards. the qer specifically mentions a draft fimsa rule that would help strengthen some of the standards. but fimsa began taking comment on this rule nearly five years ago and nothing has been published so far. and in 2011 congress enacted legislation explicitly directing fimsa to issue a rule requiring automatic shutoff valves. not even a proposal let alone a final rule. i find this really inexcusable. d.o.e. does not have direct control over this agency, transportation does or rule making, but what's the point of replacing aging pipelines and building in ones if they are all built using ineffective safety standards. pipeline in my district was not only 30 years, age is not the only factor here. mr. secretary, my question for you and i appreciate if you can get back to me because i've taken most of this time, what is the administration going to do now to ensure -- there's a lot of attention focused on this topic, to ensure a new pipeline infrastructures as safe as possible? >> as you said fimsa is in the department of transportation and i certainly happy to talk with the secretary fox and get back to you. but obviously the qer focus is we've got to rebuild infrastructure in a way that is reliable and resilient. i would say this is an example of resilience by having safety systems in place, that maybe cannot avoid but dramatically limit the impacts. so this is just part of why we need this discussion. >> thank you very much. >> thank you. the gentleman from ohio for five minutes. >> thank you mr. chairman. mr. secretary welcome back to the committee. always good to have you here. if i can follow up with the gentleman from pennsylvania, mr. pitts, was asking. you mentioned about the swap light versus heavy with mexico, maybe some folks might not understand why you have to have a swap. why is that? that you have to swap for light for heavy crude? >> i just mentioned that's what mexicans have petitioned for because i think in the currently we do not have authorities for exporting oil directly to mexico. so they recommend -- my understanding is it isn't d.o.e. but my understanding is they asked for this kind of idea of a swap. >> thank you. >> under consideration, i believe the department of commerce, i believe. >> thanks very much. another issue not only has some subcommittee taken up but also especially the telecom subcommittee in regards to cyber attacks and physical attacks that could occur to our infrastructure in this country. it's really not only a growing concern but a great concern we all have as to what could happen. the committee's discussion draft provides the secretary of energy the authority to take emergency measures to protect the power system from grid security emergencies. are you generally supportive of the d.o.e. have grid security emergency authority? >> well, i believe we have that -- we have the authorities but only under emergency conditions. >> well, let me ask, what other grid security recommendations you make to this committee we should considerate this time? >> well i don't know what is appropriate for statutory direction but i think utilities for example, on physical security, many of them have taken significant steps since the california incident. they are not always advertised for obvious reasons but they have been doing that. similarly by the way many of the utilities but the reason we need to complete a study on the transformer issues whether because of a physical is a tack or just wear and tear, a number of utilities have really moved in terms of their backup there. but it's not uniform. and of course we have very, very different utility structures, organizational structures. so it's very different for ious versus co-ops, et cetera. there is some -- that's an example where maybe after a study some statutory action could be called for in terms of how do we provide appropriate resilience to the low probability but high consequence of not having access to big transformers. >> let me ask this. how concerned are you about electromagnetic pulses against the grid system? >> well, that's another risk that we identified. there are studies on that national academy has studied that. i would say it's once again an example of probably low probability but significant consequence possibility. >> when you say low probability what percent probability would you put on it? >> i'm not going to give a number but just say it's low. there has been hardening done by many to key transformers et cetera. >> can you explain the importance of information sharing and public private partnerships as it relates to securing the electric grid? >> i'm sorry? >> could you explain the importance of information sharing and public/private partnerships as it relates to securing the electric grid? >> that's very important. once again the energy sector coordinating council, our deputy secretary heads is part of that public/private partnership. and i have to say groups like eei have been excellent partners in that. and in terms of information sharing, just one particular example, there's a lot of information sharing in terms of reliable operations et cetera. but one area i would highlight that this council does is including through providing selective security clearances, sharing cyber threat data with the private sector. >> okay, and finally, the very short period of time i have in analyzing recent power plant retirements the qer mentions market factors and low cost of natural gas and changing prices behind retirements. would you agree that environmental regulations like the mercury air toxic standard and proposed clean air power plan played a role in retiring electric generating units? >> well certainly things like mercury restrictions, obviously raise costs. and that's always the cost calculation. but again i think by far the dominant issue over the last years has been gas prices of 2.50 and for certainly inefficient coal plabt plant, even the variable cost is beat by natural gas combined cycle. >> thank you. mr. chairman, my time is expired. i yield back. >> this time the chair recognizes the chairman from vermont, mr. welch. >> thank you very much. i have one comment and four questions so i'll go lickedty split. the comment you've been getting praised for being a great secretary of energy and sideline as a nuclear negotiator but i don't think people know you do the best imitation of louis windup delivery of pitch. all members sh ask for a demonstration. >> they'll look to god. >> that's right. the whole thing. >> but the questions, this committee has been doing great work on energy efficiency and energy efficiency in vermont has been fully embraced and led to our transmission company being able to avoid $400 million in expenses associated with transmission lines. i want your comment on what we can do as a committee and federal government can do to help get the benefits of avoided cost. second, we've been trying to get realtime information on electricity rates in new england and significant part because our rates are very high. your department has been helpful trying to get realtime information in all of the states and canada and mexico but has been having real challenges in actually getting that information. i'm curious to know, what you find is the reasons why it's so tough to get that and what the department and ferc can do to help reduce the electricity bills for new englanders. third, this is a smaller issue but quite important. we have some biomass stove manufacturers in the standards evolve of the one of those stove company is hearth stone, having a hard time getting base beingically an answer on what the standards are so they can comply. we need -- >> that's right. >> they have a great product but if they don't get a real definition of what the standard is, it makes it tough for them to stay in the market and he's been having an awful time with that small company and important company to real jobs to vermonters and finally net metering, that's tough because you have to have net metering if you want to deploy energy efficiency. on the other hand it has an impact on the economic model. vermont has gone in a different direction than most states led by our biggest utility to embrace and promote expansion in net metering. what could we do at the federal government to help that process that's going to help deploy energy efficiency but also deal with the economic realities of many of our big power producers? thank you. >> thank you, mr. welch. so the four questions, the third question on pt emission standards of biomass stoves is something we'll get back to you on. i don't know the answer right now. but that's one we can take care of. the energy efficiency in vermont, again as you know i was in vermont with the delegation and vermont has done a fabulous job in terms of efficiency with novel novel business models for supplying energy. but i would say there the -- the main thing the recommendation in the qer relevance to that and to a certain extent to the net metering discussion as well is that we need to develop and d.o.e. we'll start really delving into this much more, we need to deadvise a better way of valuing all of the services that can be interpreted in the system, efficiency storage diversity, capacity, power quality. all of these issues and when we had the traditional business model and it was basically within way from a central plant to a house, well, kind of all got lumped together. but now with much more diversity, with storage coming in some cases and distributed generation, we know that energy efficiency, this involves another hot issue right now that's in the courts, is to what extent does end use efficiency come back all the way to the wholesale market? which ferc is engaged in. i think this valueissue of valuing services is really core and that's something we want to over the next months really work hard on. that's something that needs dialogue with the members. so that's i think an absolute critical recommendation. and in terms of electricity prices and real time prices i would note that the eia has in fact not so long ago launched a new product, which has much more realtime data being collected from the rtos and combined together so that one can research it and one can understand how prices are moving. >> someone's time has expired. in time we recognize the gentleman from west virginia, mr. mckinley for five. >> thank you, mr. chairman. thank you again for coming before us. last week during that break, i returned to west virginia and was on overload of negative information coming at us in west virginia. the first newspaper i got when i got back there was dark day for minors. they just announced that 2268 coal mining jobs were lost. 2268 families now are looking for jobs as a result of this. then i got soon thereafter another power plant closed down, the camera power plant even though ferc has said and they've testified before us that the concern they have is that we're going to have rolling blackouts in the midwest if we don't start replacing these power plants. we're continuing to shut these power plants down. then there was another one that went on to say in one community one small community, that it's going to -- they are going to lose $61 million in wages as a result of this. so i'm dealing with all of this crisis when you add the additional losses 2268 now we're up to -- i believe the chairman mentioned it earlier today. that we have now lost in west virginia 45% of our coal mineers are unemployed, just in three years, three years we've lost 45% of our coal miners are looking for work. last friday i met with the coal association and i could see there, they said there's going to be further contraction as a result of policies that are happening nationally. so they are very concerned about what's going on with it. this loss of the cammer and other power plants, it challenges the grid stability, this dependability. it also -- but it's not -- it goes beyond that. that is what about the property taxes? what about the local income tax that people will pay? you can take away the power plant but now you're affecting the schools and affecting how our community operates with this happening. my first question would be, what is -- what would you suggest that would to the coal industry to reverse this decline? >> well mr. mckinley, first of all, of course we all feel for whatever reason when there are major disruptions in communities, it's obviously something we need to pay attention to and administration does have some programs to look at some retraining particularly in the overlap areas with natural gas production, the power plus plan, that has been put forward but i recognize that these don't address a 45% of a work force. so they have help in the right direction but they do not certainly, quote unquote solve the problem. >> keep in mind too, mr. secretary, coal miners, average age is in their 50s. so when are we going to retrain them. and unfortunately you don't have a quick answer either as to how to stop the hemorrhaging. but the second question, if you are sitting in the kitchen with this 55-year-old that just lost his job, he's been working 30 years in a coal mine, what do you tell him? >> well, look, again -- look, i'm completely with you. this is very difficult. it is very difficult. i think in the end, it is about having to try to produce some other economic opportunities. revitalization, some retraining -- >> but you understand these are real people that have lost their job. >> yes, i understand. and the following is not on the right time scale for you. but i've said previously, i think in front of this committee as well, we do have many programs, many different kinds of programs that are addressing the issue of a future of coal, even in a low carbon world but that won't solve that gentleman's problem tomorrow. i completely agree with that. >> so in the 23 -- what do we tell him? he has a mortgage payment and a health care bill? what are we doing for him? >> the key has to be economic development and providing other opportunities. and i might just mention, mr. mckinley, i'm happy to say here that -- recently, senator manchin asked me to come to west virginia and i would be happy to join him and you and come to west virginia and try to understand the situation and what we can do. >> thank you mr. secretary. >> at this time, recognize the gentleman from new york, mr. engle, for five minutes. >> thank you, very much, mr. chairman and secretary monis, and thank you for your good work and so many good things. we really appreciate it. i would like to join everyone in applauding your efforts. >> i'm having a hard time hearing you. >> i will do this. this is better. generally not so hard to hear new yorkers talk. i'll try to talk louder and not slur my words. i want to applaud your efforts and the efforts of everybody involved in producing the first report of the qer task force. i believe it really establishes a sensible blue print, making our electric grid more resilient and to identify and improve vulnerabilities in our current energy transmission distribution system. as you know, superstorm sandy swept through my district in october 2012 knocking out power to over 8 million people and causing fuel supply and distribution problems. some new yorkers in my district waited more than two weeks for lights to turn back on and struggled to keep their families safe and warm. and so i'm focused on our grid and our energy transmission and distribution system to withstand future shocks and also to recover quickly from any outage that might occur. so could you please discuss how we're better prepared today than we were in 2012 for a storm like sandy and how the suggestions in the qer would build upon the improvements that we've head? in particular, touch on the northeast reserve and the expansion of distribution generation through the rev initiative in new york. >> thank you. well, first on the regional gasoline reserve, as you know, that has been established with a million barrels. distributed in three locations from the new york harbor area up to portland, maine. and that complement to the heating oil reserve that was established some years back. i might point out that one of the recommendations by the way, which i would put in front of the committee, is that it would be very useful if the authorities for using those reserves could be harmonized, because they are quite different. and this would not help in terms of a coordinated response in terms of an issue. so that is -- that successfully put in place. it is paid for as well for 4.5 years of operation. and i might add, we are currently now about a third of the way through to reusing the remainder of the money to repurchase 4.2 million barrels of crude oil to go back into the reserve because we took out 5 million so it will be 4.2 crude and 1 million gasoline and 4.5 years of operation at the reserve. secondly, with regard to the grid and resiliency, again, i would like to highlight what we consider to be one of the most important recommendations, and that is the -- actually, two recommendations. one is to support in our fy '16 budget request state assurance grants to allow planning for hardening infrastructure and then -- and this is a case, we have to find out working with you, how to raise the revenue, how to raise the resources, but to establish several billion dollars for competitive resiliency projects. that could include things like microgrids, but designed for resiliency of the energy system. >> thank you. let me ask one more question. the qer report also recommends ways to further integrate the energy infrastructures of the u.s., canada and mexico, and the idea is to enhance market opportunities and security and sustainability. some transmission lines already send hydropower from quebec to the northeast united states and the potential exists, obviously, for more capacity and more transmission lines in the region. could you please talk about what role, if any, these transmission lines should play in our energy future? >> i think these are very important. of course, one that was approved recently was the champlain-hudson line that would take power to new york from -- hydropower. and there are a variety of projects for 4 to 5 gigawatts of additional hydropower that could be available to the upper northwest. this would mean clean energy to meet our needs. >> thank you, mr. secretary. thank you, mr. chairman. >> the chair recognizes the gentleman from virginia, mr. griffith, for five minutes. >> thank you very much, mr. chairman. i do appreciate that. let me reference the comments made by mr. mckinley of west virginia. we've had hundreds of layoffs in my district alone. of course, in my neighboring state of west virginia and kentucky there have been thousands. and it has been devastating. you reference natural gas in relationship to the closing of some of the coal-fired power plants as one of the factors. of course, it is one of the factors. but the regulations coming in also yesterday we closed down the glen lynn facility in my district. it was paid for by the rate payers. wouldn't cost them any additional. it was only being used at this point for peak periods. that's now gone. the clinch river facility in my district had three egus, electric generation power plants. they are converting ñwo of the three over to natural gas. however, the third one is not going to be converted. and the two-thirds that used to be there will produce about half of the electricity. i'm just concerned that in the peak periods of use, now that they're gone, how are they going to be replaced in southwest virginia and in other parts of the a.p. footprint? >> well, of course, i don't know well enough the exact geography and the distribution of power plants. clearly, if i talk more broadly, one of the issues clearly is the continuing buildout of the transmission system to move power around effectively. i might say i was a little bit surprised with the data that came out in the qer that the spending on transmission in the country has actually reached $14, $15 billion per year with a continuous increase basically over the last 10 to 15 years. so we actually don't think that any significant increase in resources will be required. the issue will be to make sure that the lines are configured, of course, to make sure that energy gets to all of the various places. >> i get that. that brings up natural gas pipelines in talking about all of this, and they're building them in my district with great opposition from many people who don't like the pipeline concept. they're also building them in a district just north of mine. pipelines are going everywhere. but i noticed in the qer, you note the need for pipeline replacements for existing pipelines and that you suggest a d.o.e.-run grant program that allows to aid in improvements to pipeline infrastructure. i support improving our current system for existing pipelines. i'm interested in learning more about the details. what new authorities do you-all think you need at d.o.e. or do you want at d.o.e. in order to create this program and will you be providing language to the committee so that we can see about putting that into the appropriate bill? how do you envision the d.o.e. replacement program working? where would -- how would the funding get to the states? would it be the existing funding or new funding? where is the money going to come from? what's the timeline and how would the states apply, et cetera. i'll throw them all at you at once. i'll go back and review them but i don't want my time to get out. >> i'll have to get back to you with a lot of the detail. but let me make several points. on the resource issue we were very clear that we do put -- we had about a half billion dollars proposed in the fy-'16 budget to address various qer recommendations. but there were another $15 billion of need identified, which we were very clear, we have to have a discussion in terms of where can those resources come from. that's over many years, but still. so specifically, the funding for the acceleration of natural gas distribution infrastructure replacement is not in our budget. so that's one of those cases. we have in the past, of course, had many examples of raising resources in various ways for major infrastructure projects. i think that's the discussion we need to have with the congress. are we prepared to find these mechanisms for a significant push on energy infrastructure. >> and as we transition, then, and we use more natural gas, then it would seem that at some point that funding is going to have to come forward, which means it's going to be passed on to the rate payer and yet another expense added on to one of their energy bills. >> right. what we've seen today -- by the way, i have -- at least for these years i have a place in d.c. and my bill there is a specific surcharge on there for replacement of the natural gas distribution pipe. what we are saying is we think this needs to be accelerated. i'll be clear. the -- i guess it's washington gas, i don't know, whoever it is, the surcharge is for a 40-year replacement program. well, that seems like an awfully long time. so what we're arguing is we need to shorten these -- utilities are typically doing this, many, many decades to keep the rate hit low. we're saying, geez, we need to accelerate this. and what we are proposing is funding that would go to help low-income households absorb the rate hit. >> gentlemen's time has expired. at this time i'll recognize the gentleman from ohio, mr. johnson, for five minutes. >> thank you, mr. chairman. and thank you, mr. secretary, for being here with us again today. at the risk of piling on, i want to associate myself also with the concerns already mentioned regarding the coal industry. my district is a district and a state heavily dependent upon the coal industry not only for reliable energy, affordable energy, but also the jobs that it represents. you know, i was on a trip to europe just a couple of weeks ago, and one of the statements that one of our european colleagues in the energy sector made was that, you know, over the last 20 years or so, they have led america in shutting down much of their coal industry in an effort to reduce their carbon emissions. but some of those european countries, when we asked them what their energy profile looked like, they're returning to a higher percentage of a use of coal. and when i questioned them about that, i said, why is that the case and how do you think you're going to be able to reach this 40% reduction by 2030? and this official said, look, we've learned, our rate payers, our businesses and our residential customers have learned -- have said they are no longer willing to pay the exorbitant high prices for energy. you know, the idea is you make coal so expensive by taxing the carbon emissions that renewables and other alternative forms are energy are more economically attractive. they're going back to coal. i don't know why america, mr. secretary, why we have to learn this lesson the hard way, that coal still provides the most reliable, affordable energy on the planet. and so let me get off of this subject because i have some others i want to talk to you about. you expressed a willingness to come to west virginia with senator manchin and representative mckinley. can you swing through ohio at the same time? >> we can try to do that. >> and i'd love to take you to talk to some of our coal mining coal operators and some of the manufacturers who are being asked to idle their plants because there's not enough energy on the grid to meet the peak demand. and that's today. that doesn't even count for what's coming. >> if i may make a suggestion that might be useful, we have a very, very excellent person named dave foster who is really the creator of our job strategy council. perhaps a meeting with those of you with kind of appalachian connections in coal, just to brainstorm around what might be other ways of going. i'd be happy to do that. >> can you help facilitate that? >> yes. >> good. my office will be in touch. >> certainly the two of you and mr. mckinley would be among those. >> all right. we'd like to do that. let me move quickly to these other questions. in march, william o'keefe, the ceo of marshall institute penned an editorial in the "washington times" where he notes that the council of economic advisers annual economic report for 2015 details the beneficial effects for l and g exports. that l and g exports would bring for the energy industry and the environment. he also makes the point that unless we act soon, we're going to lose many of these benefits. he says while the american policymakers procrastinate, other countries are stepping up to meet these needs. the united states has an incentive not to wait. our window of opportunity is closing. so with that in mind, what are your thoughts not only on lng exports, but are there any specific steps and policies we should be putting in place today to realize this opportunity before it's lost? >> well, i have to say, first of all, that we are not procrastinating. again, we have -- now we have approved -- and this is separate from the conditional approval that we made last week for the alaska project because that's a separate gas source. but for the lower 48, we've approved roughly 8.5 billion cubic feet per day to nonfree trade agreement countries. we have no other applications to work on at the moment. and just to give a scale, i mean, the largest lng exporter in the world is gunnar, and they're at about 10 billion cubic feet per day. >> i hear you, mr. secretary. then why does the rest of the world -- why are they still urging america to get into the lng export market on a global basis? why does the rest of the world and the oil and gas industry think that we're not participating in the global export? >> i think that, first of all, there is a lot of misunderstanding, to be honest number one. number two, clearly they're sitting there with $12, $15 gas and they see us at $2.50 and they thing that looks pretty good. now, of course, by the time it reaches them, when you add $6 or $7 for the supply chain, it's not going to be our prices, but it still beats their prices. so clearly they have an interest. they want to see that. well, the fact is that if you look at the economic studies that have been done, not by d.o.e., by others, in terms of what they expect to be a real export market very few of them come in above 10 bcf per day give the competition in various parts of the world. all i know is that's for the private sector to sort out. we have approved -- we have studies that take us up to potential 12 bcf a day. earlier was pointed out we commissioned another study that would look at 12 bcf per day. but in the meantime, we've approved 8.5. the projects are being built. the first cargoes will get on the water probably the beginning of 2016. and then we'll start exporting. another issue and a lot of our european friends say, you know, they want the gas -- i might just point out as an aside, no value judgments, there are a lot of places in the world that don't want to develop their own indigenous resources but would like ours. okay, well, that's fine. but we do not direct where cargoes go. we approve export licenses to non-fda countries. and those are commercial contracts. frankly, it's a constitutional issue in terms of our not doing that. >> mr. chairman, my time has expired. i would submit to the committee and to the secretary, there's a big disconnect somewhere because the experts tell us that our price is going to rise when we get into the global export market. we haven't seen that. we've heard that the global market price is going to come down, we haven't seen that. there's a big disconnect somewhere. >> thank you. this time we'll recognize the gentleman from missouri, mr. long, for five minutes. >> thank you, mr. chairman. and, mr. secretary, the discussion draft provides the department of energy with some new responsibilities beyond your current mission. for example, we direct the department to conduct the feasibility of establishing a federal strategic transformer reserve and arm the department of energy with new authority to address certain grid security emergencies, which i think is foremost in everyone's mind as far as grid security. do you believe the department of energy has the expertise and capability to meet these new duties? >> well, yes, sir. first of all, on the transformer reserve, we are moving forward to study that. we have one study already from our western organization, but we're moving forward on that and we'll, depending on the study, engage then in the appropriate private/public partnership to make sure we are secure. with regard to grid security emergencies, again, we already do a lot of this. we work under the fema umbrella. we are the lead agency for energy infrastructure. and so, for example, you may have read about the typhoon going through guam a couple of weeks ago, i think it was? well, we had a person in guam as part of the fema response for energy infrastructure. we're already doing this. now additional authorities could be helpful. >> okay. in your testimony you mention that one of the key energy objectives is enhancing energy reliability. what impact do you think that the proposed clean power plant will have on energy reliability and transmission issues? >> well, again, first of all, we do -- we analyze these issues, but of course, we don't have a final rule yet to know how to analyze it. but what we've done to date and in terms of technical analysis around the proposal of last year again suggests that the liability will be quite manageable. but we have to wait to get the final rule before we can really do the -- >> so you don't thing the proposed plan will have a big effect? >> well, as i mentioned earlier, one example of something that we did, there was an issue around the projected significant increase of natural gas for the power sector versus coal, and when we look at the infrastructure issues of the gas delivery, we just did not find that there was likely to be any significant challenge. there would be some work to do, but not a significant challenge. >> we, with mr. griffiths from virginia a while ago, you had a discussion about money to the states and things. and with this quadrennial energy review recommend providing state financial assistance, which i think you-all spoke about a few minutes ago, and grants an investment plans for electric reliability and efficiency. can you discuss a little bit of some of the criteria regardless of where the money's coming from, because we know there's a shortage of money but can you discuss some of the criteria the department of energy will require for the states to receive this financial assistance, assuming, again, there would be money there. >> the money issue is relevant, and i must say, i was very disappointed in the appropriations mark which did not provide any funding for either the reliability or the assurance grants, which i think is short-sighted, to be perfectly honest, because i think the states need to have this kind of planning capability. we would provide technical assistance. now, in terms of program design, that remains to be done, but what we envision will be ultimately proposals around things like microgrids, for example, for reliability and resilience. we would see, again, the integration of i.t. and smart grids as providing those services. and, as i said, we hope in the reliability and assurance arenas to then have funding for competitive cost shared grants. >> would the criteria be same from state to state or change across the country? >> i think the criteria, while that still remains to be worked out completely, but the criteria would be around enhanced reliability and resilience. that's the criteria. >> i understand that, but my question was whether it would be the same from state to state across the country or whether different states would face different criteria. >> i think the same criteria, but the way the projects would be structured would look very different depending upon the regional and state resources. >> okay. i'm past my time. so if i had any time, i'd yield back. >> at this time i'll recognize the gentleman from texas, mr. flores. but i also want to thank you for taking the leadership on the forum for oil exports and have an opportunity to examine that more thoroughly today. you're recognized for five minutes. >> thank you, mr. chairman. i hope secretary moniz will send someone to the discussion this afternoon. of course, i want to talk about exports, like my friend mr. barton did. one of the things you talked about is that one of the good reasons for the ability to have oil exports is because you have a better matching of the qualities of grades that are needed by the refineries and different geographical areas around the world. you didn't go quite far enough, i don't think, because one of the things that happens, when you have that better matching, is you have economic efficiency and economic efficiency releases additional capital and that additional capital, based on my experience with 30 years in the business, would go back into reinvestment which stimulates the production. so next time you're answering that question, if you go all the way through that economic cycle, i think that it would be helpful. the next thing has to do with -- i guess i would call it a safety valve question. you know there are multiple versions of proposals for oil exports out there. some of them include giving the president the authority -- the ability to suspend oil exports in the situation where we had some sort of an energy crisis, or -- if it's deemed in the national interests -- or to be able to use the petroleum reserve under the same circumstances. with those two safety valve features in place, doesn't that make it more compelling to allow oil exports? >> well, again, obviously, more flexibilities are always welcome. but i think the fundamentals of oil export question are those that we discussed earlier, i think. and i agree with you, of course, in terms of your economic argument. >> okay. one of the things that was interesting about timing is while your agency and others were working on the qer, the administration was also involved in negotiations with iran. and in early april your agency estimated that a deal with -- with a deal in place and the sanctions lifted, iran might start selling us a stockpile of 30 million barrels or more later this year and raise its output by 700,000 barrels a day by the end of 2016. this would come at a time when we already have a global glut of crude oil. so my first question is this. what analysis, if any, has d.o.e. performed to better understand the implications of iranian oil on global supply and demand -- global supply and prices, rather? >> first of all, you stated the basic conclusion that one would see over some year or two years, certainly several hundred thousand barrels per day, probably of increased production. that would go into the 95 million barrel per day or so pool. there are so many uncertainties in that time scale. in particular on the demand side. for example, a recovering european economy would put substantial pressure on the supply side. clearly, the nuclear negotiation is quite independent of that dynamic that's about nuclear weapons issues that we think are important to block. >> i do understand the independent nature of the two discussions, however, the impact is the same. i mean, the outcomes are the same. >> well, it's all supply and demand. >> exactly. exactly. so i guess under these circumstances, doesn't it seem like the president would have an increasingly difficult time justifying lifting the sanctions on iranian oil at the same time keeping the sanctions on domestic oil in place where domestic oil can't be sold abroad? >> well, i think the big difference is that we import several million barrels a day in crude oil. we're not a net exporter. we're an importer. >> right. but we're on track to be in a position to export. so it makes sense to lift the sanctions. >> well that would be -- that's quite a few years away. we're still -- even if you add in oil products, we're still at 4.5 million barrels a day. >> no additional questions, thank you. i yield back. >> this time i recognize the gentleman from oklahoma, mr. mullen, for five minutes. >> thank you, mr. chairman. and, secretary, thank you for being with us again today. i know -- i believe this is the second time you've been in front of this panel. >> more than that. >> well, i mean, this year, if i'm not mistaken. at least this is the second time you and i had an opportunity to visit. the last time we spoke, we talked about the lack of infrastructure with the power plants as far as the coal-fired plants that are coming down. we have a report from southwest power there will be 12,900 megawatts loss just in their area. just a while ago when you were being questioned, i believe, by mr. long, you said that you didn't see any significant challenges to meet those needs. but yet where is the power going to come from? if we're going to lose 12,000 just in my region, then where is the extra power going to be made? where is it going to be produced. the gas lines aren't there. we're seeing four years to take a permit to just simply get a permit to install a gas line. unless there's power plants that are being built that i'm not aware of in my region, then i believe there is going to be a significant challenge to meet the power needs. >> well, again, first of all, let me emphasize that i did state that what we have seen to date but we, of course, await a final rule. secondly, of course, demand -- now, i'm talking nationally, not in a particular significant region. >> but they're specifically speaking, the coal-fired plants are in a specific region. >> sure. well every plant -- >> i understand that. but we have 12,900 mega watts being lost in one region and you said you didn't see any significant challenges in meeting those needs. where is that extra power going to come from? >> first of all, i made it very clear that the same -- when i discussed the natural gas transmission pipes. there will be local issues that have to be resolved in some places with new infrastructure. but if you look -- again, all i can do is look at the broad picture, and electricity demand nationally is not going up. it's essentially flat. we are building a significant amount of natural gas and wind, in particular, capacity. >> so it's okay because the numbers aren't going up -- >> oklahoma by the way has plenty of wind. >> but it's okay to bring the power down because we don't need it right now? >> i did not say that. all i said was, we are building substantial capacity even as our demand is flat. >> where is the building -- we're losing power. you're saying we're building significant capacity. what are we building it in? because wind cannot replace what we have here. you can have miles and miles and miles of wind farms, which we have in oklahoma, which i frankly don't think is very pretty. i think it leaves a lot bigger footprint than we do in anything else, but that's another topic. but we're losing 12,900 megawatts in one area. i'm going back to what you said with the gentleman from missouri when you said you don't see significant challenges meeting those needs. so what i think i hear you saying -- correct me if i'm wrong -- that it's okay that we lose it because our increase for electricity, the need isn't there so it's okay that we lose it. is that what i'm understanding? >> no. what i'm saying is that -- first of all, we have about 68,000 megawatts of wind. but what i'm saying is that there will -- obviously, all the local planning authorities will have to be planning. but at the macral level, we're not seeing the likelihood of enormous challenges. we are being cautious. we have to wait for the final rule to come into place. >> but you guys are already moving forward with it. mr. secretary, you're over the department of energy and you're saying that the local communities, local areas need to get together. what is d.o.e.'s specific plan to meet this need? is there not a need? it's just saying we're going to let them go down and let everybody else figure it out? it's not our problem? >> the private sector, obviously, builds the power plants. >> but you guys are the ones that pick winners and losers. >> no. >> yeah, it is, because you said coal is going out, wind is the new thing. >> obviously there's a responsibility of government, whether statutory or regulatory,d&xç to set certain rules of the road in terms of environmental protection, et cetera. the private sector and typically state regulatory bodies then respond to that. so -- >> so i'm hearing correctly, there is no plan. we're going to just drop the power and let everybody else figure it out. >> the gentleman's time has expired. >> i yield back. thank you. >> there's no less plan than there always has been. >> thank you, mr. chairman. thank you for your patience today. been with us a long time. we're getting towards the end. a lot of the questions have been asked. maybe i'll open the aperture just a little bit starting with this. do you believe that the american taxpayer has received good value for the tens of billions of dollars that have been spent on carbon captured technologies, federal dollars that have been spent on carbon captured technologies today? yes or no. >> i don't think that it's tens of billions of dollars. >> whatever is number, good value for that? >> the answer is, yes, it will prove to have been very well spent. >> i think they left more like slender than success so we disagree. do you agree with the french foreign minister who has said that the global climate change agreement being negotiated this year should be worded in a way that does not require congressional approval, yes or no? >> i'm not aware of that statement. >> so i'll ask it more directly. >> if i may say, the currently -- obviously the climate action plan that we are executing is based on administrative authorities to get an economy-wide approach, but it would eventually require legislation. >> the government that you're part of is negotiating an agreement this year at the end of the year. it intends to enter into an agreement that made that clear. do you believe that the agreement that the united states enters into ought to be submitted for congressional approval? >> i think we need to see what the nature of this agreement is. there are many agreements -- >> so i get you to say yes, that you think a climate agreement should be approved by congress? >> it depends on the nature -- >> i'll take that as a no. today you've had a lot of questions about crude exports. the only country you're advocating to export crude is iran? is that right? >> excuse me? >> we're going to free up the iranians to export their crude products, but you won't advocate for americans to be able to export their crude products. >> as i said earlier, the situations are completely different. and we are a large importer. >> the situations are identical. it would benefit each country greatly to be able to access foreign markets and sell their products at market prices around the globe and both consumers and exporters would benefit from those in both countries if they're opened up. do you agree with that or disagree? >> see, obviously for -- >> it's a simple question, mr. secretary, not a trick question. >> if iran has sanctions lifted, it helps their economy. >> and it would help ours. >> on the nuclear weapons side. as i said earlier, the only issue on exports in the united states of large scale relevance is whether or not there is a significant increase in production as a result. and i've said in the current oil market that may be a difficult case to make. >> you don't believe in supply and demand when it comes to crude exports. you think no more supply will be launched. so we've been through that. in 18 months, there will be a new president although maybe not a new secretary of energy. one never knows. your qer was prepared based on this president's vision of greenhouse gases, their impact around the world and america's role in diminishing them. if the next president comes in and has a different view with respect to that, tell me what remains of the value of the qer work that you-all did. >> essentially all of it. the qer is really aimed clearly at facilitating more clean energy, but it's about energy security, resilience of our infrastructure. it's about energy, north american energy. it's got huge implications for energy infrastructure independent of the climate issues. >> yeah, i just have a different view of what's in the qer. when i stare at it, i see the analysis and i appreciate that. i agree with your analysis of the requirements for increased infrastructure. we don't disagree there. but most of the qer was aimed at federal intervention in the marketplace. you made several references to classic market failure with respect to public goods. i think much of the conclusions in the qer about how that infrastructure will be ultimately billed out and who will decide which infrastructure will be built out is heavily dependent on this president's vision for climate change and how the eyes can impact that. i just think it was a wonderful exercise, i'm glad we did the work with respect to infrastructure, but the conclusions drawn on the qer will need to be visited immediately by the next administration. with that i yield back. >> gentlemen yields back. that concludes our questions. we have one additional member, though, mr. kramer of north dakota who is a member, he's not on this particular subcommittee, but he's been so focused on these issues that he sat here for 2 1/2 hours with us and we're going to give him the opportunity to ask five minutes of questions. >> well, thank you, mr. chairman, and thanks to my colleagues for the indulgence. it does only take one good north dakotan to represent the entire state. so i spread myself fairly thin, mr. secretary. i thank the members, i also, mr. secretary, want to thank you not only for being here but for at least agreeing to, if not joyfully, although i think you're a joyful person, to holding one of the listening sessions in north dakota. i know it was a late request and it was a late addition to the agenda for you and secretary fox and others, but i thoroughly enjoyed the time that you were out there. and i notice in the qer there's a lot of reference to the things that you learned last august in north dakota, especially as it pertains to the transportation infrastructure. and some of the challenges particularly reflected are the challenges for the railroads that move multiple commodities, as you know. and you heard quite clearly and i think again indicated in the report quite clearly that there were challenges, but at the same time -- i think one of the things i want to do is bring the record up to date a little bit. last august we were following on two record winters and two bumper crops, two seasons in a row that strained the infrastructure for sure for agricultural commodities. one of the more bigger challenges was the fact that not only was it a record crop or a bumper crop, but it was a late harvest due to weather. it was late and a very wet harvest. there was a consolidation of all those commodities and the additional moisture creating other transportation problems, like the movement of propane, for example, for grain drying. that perfect storm created incredible stress on the infrastructure. and along with, of course, 700,000 or so barrels per day of oil being moved by rail. so there's a fair bit of -- there was a lot of criticism last august. there's a fair bit of that reflected in the report. but just in the last ten months the storm has sort of shifted, i think. i want to stress some of those points but also encourage you and the team to continue to monitor it on a very regular basis, because some of the things that were identified have worked. the requirement for the weekly reports, for example, by the class run railroads have been very helpful in transparency, allowed better planning. a warmer winter with a more traditional harvest season and, frankly, lower commodity prices have created more normalcy. and during which time -- and i can be the railroad's worst nightmare, but i also want to acknowledge when they've done their part. i have to say for bnsf, which is obviously our largest railroad by far, they have invested mightily in personnel, locomotive, energy, cars and certainly double tracking much of the bachen region and much of the upper midwest. i want to be sure that the record is clear, but i also again want to encourage you to remain flexible and update the report to acknowledge that this robust infrastructure does exist. and it's my hope and expectation that that additional and more robust rail infrastructure enhances all commodities. i think it's worth noting that because of the reports that we've noticed they're pretty well caught up. not just pretty well caught up, but caught up to the point where there's extra capacity. much like the electrical grid, it doesn't hurt to have a little extra capacity, but it also creates opportunity for growth. so, you know, i would only probably ask that for you to comment on my comments if you'd like to, but again express my appreciation for your attention to the issues. >> well, thank you. we certainly appreciated, by the way, your participation in the qer field hearing in north dakota along with your senate colleagues. first of all, i think you've put your finger on what was the main driver of our discussion on the subject in the qer, and that was the need for more data. to be perfectly honest, the railroads have not been the most transparent in terms of data availability. and i think that's certainly been improved. and certainly the issues around coal, for example, have been certainly relieved. there are other issues, as we know, in terms of oil by rail that are being addressed. i might say that with the department of transportation we have now launched the next phase of the study of relevance to crude properties and rail. it will take about 18 months before we're ready with that. but, anyway, i think you're absolutely right. we've had some progress on the data front, and that allows an eia is playing a role in there as well. >> yes, they are, yes. >> so it's great. >> thank you. thank you again mr. chairman. >> thank you. that concludes the first panel. secretary moniz, thank you very much for your testimony and answers to our questions. and we look forward to continuing to work with you on many pressing issues as we move forward. and thanks again for your leadership. and mr. rush will be notifying you of the formation of the fan club and we'll get together soon with you for that. >> so we'll have our meeting relatively soon. >> and there will be a huge crowd there so -- on our second panel today, we have mr. rudolph dolzer, who flew all the way to the u.s. from bonn, germany to testify, and we appreciate him being here. we have mr. jason grumet and we have mr. gerald kepes who is vice president of upstream research and consulting. we have ms. allison cassady from the center for american progress. we have miss emily hammond who is professor of law at george washington university law school. and i'm going to call on my colleague, mr. pitts, of pennsylvania to introduce one of our witnesses as well. >> thank you, mr. chairman. i'm pleased to introduce mr. scott martin, a county commissioner from lancaster county pennsylvania, formerly chair of that commission and active of the statewide association of county commissioners, outstanding commissioner who i'm very pleased could travel down from pennsylvania to be with us today. thank you, mr. chairman. >> once again i want to thank all of you. we really look forward to your testimony, and i'm sorry that there was such a delay in your testifying. we had to reschedule a little bit. mr. dolzer, i think you came the longest distance, from bonn, germany, and you were in the german parliament at the time and you're a professor at the university in bonn. so we genuinely appreciate you making this effort. i'm going to recognize you to start off with for five minutes. then after everyone has concluded, we'll have some questions for some of you. so mr. dolzer, you're recognized for five minutes. >> thank you, chairman whitfield, ranking member rush, members of the committee. my name is rudolph dolzer. i'm a german national who altogether has lived about eight years in the united states. in germany, i became a law professor. subsequently, i was director general of the federal office of the chancellor, chancellor kohl. this is where my gray hair come from. then i was appointed three times to the german parliament's commission of inquiry. we have that in germany. you can be appointed to parliament without the right to vote in the plenary. in the u.s., i studied in spokane, washington, at gonzaga university. then i stayed for a longer period at the harvard law school. i later taught at five u.s. universities, the last time in dallas in texas. in houston, i'm a member of the advisory board of the association of independent petroleum negotiators. a month ago, i published a larger study of international cooperation in global energy affairs. mr. chairman, the era of abundance, as you say, opens up new opportunities of leadership for the united states, and the world is looking at the united states. this reminds us also, at least me, that energy's not just about energy, it's about foreign affairs. it's about national security, it's about finances. but, ultimately, energy has its own characteristics and dynamics. and this is my first major point. foreign affairs, national security and also issues such as trade must be folded into the fabrics of energy politics and not the other way around. this is also my view as regards climate change. energy politics, mr. chairman -- and when i look at your draft on energy diplomacy, energy politics also calls for arrangements of its own when it comes to international cooperation. title 3 of your bill, the present bill, represents an innovative modern approach, also from an international point of view. this title may even be strengthened by a transatlantic trade and investment partnership. again, trade is just one aspect of energy. recent events -- and this has been addressed this morning -- in russia, ukraine and europe in general have underlined that energy independence will require safe energy supplies and will require political foresight and a robust, long-term strategy. together, we must understand the nature of that issue. europe -- and this is not well known -- europe as a whole will, in the coming decade, become more vulnerable as our resources dwindle, in particular in norway. so this is europe as a whole. the forums as proposed in your bill will serve to provide a common basis. but i propose that we go further and establish a more advanced concept which i call the transatlantic energy agenda. we need to update and broaden existing arrangements with the new involvement, i think, of parliaments and the private sector. we have longstanding arrangements for cooperation in foreign affairs, in national security, in agriculture, for example. for energy arrangements of this kinds are lacking at the moment, and i think that ought to change. we need more exchange, we need better exchange. we need to know what we're doing. and we need exchange about best practice. america's abundance also lends itself to strengthening of regional partnerships. in europe, we have particular experience in this respect. since 2009, the european union has the competence to deal with the establishment of a single market. but the member states have retained their sovereign powers to determine the energy mix. the french made sure that no one touches their right to work with atomic power. this is a very complex jurisdictional situation, which we have in europe. we now have a set of rules promoting competition in europe with liberalization with unbundling. we have less progress. and i think this is of interest here. so far with regard to internal and cross-border connections to overcome isolated domestic markets. the key concept which has been worked out in the last 24 months has been the idea of project of common interest as it's called. the new rules call -- and i think this is of interest here are -- for a much more rapid process of approving permits. so far that time -- don't be astonished, took about ten years or more to have a permit for a transporter arrangement. this is now going down to 3 1/2 years at a maximum, according to the new law. also member states now must introduce one step authorities instead of the multitude of institutional arrangements we've had so far. now, the funds needed for a single energy market will be considerable, but i think the advantage will justify the costs. cost in terms of secure supply, new infrastructure urgently needed, more options for the customers, more -- better position negotiating position on the international level when you negotiate with russia or opec or venezuela, i think the larger your market, the better it is. in north america, i think a new task force by the nafta countries similar to the european commission might help to elaborate a unified energy strategy. mr. chairman, i conclude. in the past, energy issues have at times been a bone of contention between the united states and europe. sometimes of bitter contention. i think your bill with title 3 has the promise and the hallmarks of a new era of cooperation with tangible benefits on both sides of the atlantic. thank you very much for your attention. i very much appreciate this opportunity to express my views before your important committee. thank you very much. >> well, thank you, dr. dolzer. and our next witness is mr. jason grumet, who is the president of the bipartisan policy center. thank you very much for being with us, and you're recognized for five minutes. >> well, thank you very much, chairman rush, and the resilient members of the committee. on behalf of the bipartisan policy center, it's a pleasure to join you in this important discussion on the economic policy architecture governing our nation's abundance. my testimony can be summarized in three main points. first, i want to applaud the committee for focus on significant opportunities to strengthen north american energy integration and collaboration. north american energy security and self-sufficiency are, in fact, realistic goals that must be vigorously pursued and not taken for granted. my second point, mr. chairman, is that increased north american cooperation is a critical component of a larger effort to promote economic growth through efficient markets, to enhance north america's role in global energy trade and to project u.s. power and global interests. and my third point is that we must seize the opportunity to translate this strength of abundance into a long-term and sustainable energy strategy and not allow this strength to result in unintended complacency. in short, mr. chairman, this committee has the disorienting challenge of managing success, which is a new problem for our nation when it comes to energy and i think creates real opportunities that we need to discuss. so let me begin by saying a little bit about the energy integration and collaboration. i believe the provisions that promote that equality and sharing, that coordinate planning and improve permitting and inciting are all essential to achieving the promise of north american energy security. the opportunities are particularly pronounced in the case of mexico. while u.s. companies have much to gain in increased trade with mexico, it is hard to overstate the importance of energy production to the mexican economy and a broader u.s./mexican relationship. even after years of decline, energy production remains a source of high-paying jobs and is responsible for a third of the mexican government's overall activities. if modernization efforts succeed, energy production could be a significant driver of mexican economic development and individual opportunity. and the implications here are quite broad. the bipartisan policy center believes that we must reform our nation's broken immigration system. and while this hearing is not the place to discuss the tm challenges and intricacies of protecting the southern border, there's no question that improved economic opportunity in mexico is an essential component of successful and lasting immigration reform. let me turn now to the issue of siting. while our technology for producing energy has evolved dramatically over the last decades our permitting policies date back to the 1950s and 196 and are poorly matched to our rapidly evolving needs. we commend the effort to make the cross border permitting process more transparent and predictable. we also commend the political judgment in crafting this provision to exempt the still pending keystone decision. it is time to have a broad-based bipartisan energy debate that is i would like to move to the second point which is a focus on the component that north america plays in the larger global picture. our nation has made very good progress as of late supporting lng export. it is undermining our commitment to efficient markets and diminish our ability to promote free and fair trade and our adversariries. i cannot build plon barton's string of studies except to agree that there has been a speight of recent technology that will continue to exert downward pressure. my final point is on the challenge of how we use this abundance to promote our long-term sustainability and security needs. there is a broad critique that must must be grappled with. the concern is that stable local supplies of oil and gas are undermining investment in the supply that we will require to meet global demand an protect security interest and confront the risk of climate change. this legitimate concern leads to very different policy path ways. the bipartisan policy center believes that additional action must be taken to confront policy change. we reject idea we should pursue a low carbon future by erecting barriers. perpetuating inefficient markets and promoting bottlenecks is not an effective climate change strategy. if anything it will result in increased emissions. instead, as we vigorously pursue the benefits of abundance, we must be determined to develop and commercialize the next generation from carbon capture and solar to next generation biofuels and an array of energy saving technologies, we must find ways to encourage greater investment despite the current low price environment. . america's hydrocarbon renaissance has given us the gift of time. what do we do with this time? in closing, the bipartisan center looks forward to continuing to grow as we enhance our security and confront global and environmental threats. >> thank you. >> our next witness is mr. scott martin who is a county commissioner lancaster county, pennsylvania. thanks for being with us. you are recognized for five minutes. >> thank you, mr. chair. just for the restcord, it is lancaster. that's lancaster county. >> i am going to let you and mr. pits work that out. >> thank you, mr. chairman. >> thanks for letting me know. >> thank you, mr. chairman and members of the subcommittee. it is an honor to be here. i serve on the lancaster board of county commissioners. we must work to develop a coherent logical and clear energy strategy. i applaud chairman upton that will stimulate a wide-ranging debate on the need for a long-term national energy agenda, a modern and safe energy infrastructure greater efficiencies increased exports specially with lng, environmental sensitivity, minimal government environment and utilization of free market economic principles. there are certainly many positive developments and trends in energy and issues that need to address. the longer we waltit to solve these will make them more difficult and controversial. energy independence can only be achieved through new and recoverable sources. the regulatory environment is not hostile. capital is available. international markets are functioning properly. thankfully, due toe fracking, america is the largest oil and natural gas producer. energy prices have been decreasing as they should. the united states is able to export large amounts of lng around the world and european countries. the volatile state in ukraine demonstrates why we need to build the pipeline and work to expedite the buildings of pipelines and compressor stations. as noted above, a significant technological improvement has been us the use of fracking and extracting national gas from shale. the use in pennsylvania had widespread impacts. some of these include 96 percent of new energy hires were from the appalachian areas. 45,000 new building trade jobs in that same region. 243 new energy jobs in pennsylvania. over 1 billion invested by the shale industry. including energy industry grants to community colleges and trade workers to train the workers needed with an average core wage of $68,000 a year. this increase shale gas production in pennsylvania has saved the average pennsylvania family between $1200 to $2000 annually in energy saving costs. others have benefited from the availability of cheap natural gags, the pennsylvania national guard and the garden spot public school district and the shady maple companies in our area have experienced significant savings after switching to natural gas. cheaper energy will further a developing industrial and manufacturing renaissance in america. in brief, lower energy costs create more disposable income and hence greater aggregate demand and american products are more globally competitive. the domestic oil and gas can only be successful long-term if the pipelines are quickly built and brought online. the williams company is proposing a pipeline from northern pennsylvania and connect to to their main u.s. gas pipeline from texas to the northeast. the connection point would be in southern lancaster county. 37 miles of the proposed pipeline would go through my county, and we are talking about ai $2.6 billion economic impact throughout the construction of this project. williams has been very cooperative and easy to work with. over 100 route changes, which is more than half the original routes have been made based on stake holder input. they have committed to making the pipeline open access so potential customers could directly access it. a project of this size generates controversy. one early many suggestion was through an yararea parallel to the susquehanna river. they expressed concern and williams completely moved away from the areas. lancaster county has five significant pipelines running through our county. many property owners are not aware of the pipelines that cross their land. based upon discussions with local farmers having existing pipelines on their property williams, including with their major u.s. pipeline has been very responsive to their needs. lancaster county is one of the leaders in agricultural production in pennsylvania and across the country. we have preserved more farmland than any other county in the united states with over 100,000 acres preserved. needless to say, the county ordinances that govern our farmland preservation program have allowed pipelines. since november of 2014, two elections where the proposed pipeline was in a defacto manner on the ballot. the voters were very clear in rejecting efforts to stop the proposed pipeline including an effort to have two town ships adopt a community based ordinance that would declare that federal and state laws do not apply in these municipalities. i believe that many of these voters clearly recognize this pipeline represents the concept of the greater good being served. in closing i-want to emphasize how incredibly important the on going energy revolution is to the future of the united states and, indeed the world. while renewables and greater efficiencies, clean coal and a smart grid are important. it is the unlimited supply of clean, unrecoverable gas from shale that will lead america to the future. thank you. >> thank you, mr. martin. our next witness is mr. gerald keps, vice-president of upstream research and consulting. mr. kepes thanks. you are recognized for five minutes. >> thank you for having me here. >> did you turn your microphone on? >> i'll do that. >> mr. chairman, members, thank you very much. i am actually very pleased to be in front of you here today because in my world, which is. >> mr. kepes forgive me for interrupting. would you mind taking police cassidy's microphone and try that one. >> thank you very much. again, my apologies. i hope this doesn't eat into my five minutes here. mr. chairman members, thank you. i am very pleased to be here today because the world that i usually am in is the business world and the expiration and production business. i am a geologist. i have been around the oil and gas energy for 30 years. you can decide whether that makes me objective or not on this business. i think i'm fairly knowledgeable. i am also representing the work and analysis and experience of my colleagues at my company. what i really want to talk today

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