second increase the safety of both u.s. and chinese military personnel. special ways we find ourselves operating close proximity and with increasing frequency. third, provide each side a greater insight into the come intentions and doctrine of the other with an eye on reducing misperception and miscommunication and misapprehension. fourth, to encourage and influence the pla and the prc to engage as a responsible power in the region globally and locally and including through participation inappropriate regional and multilateral institutions. continuing to rule on these principles which can animate a deeper more meaningful military relationship in maintaining a focus on these areas can allow us to insure that military to military engagement such as those enumerated in the seven points of consensus centered around and focus on substantive exchanges and engagements and

not symbolic displays of engagement for engagement say. it is a framework premise on the obligations and not just the transaction approach asking what one side can do for the other. the framework we've proposed is designed to build a military relationship sustained and reliable that is continuous rather than intermittent and promotes exchanges tall levels across all issues including high-level visit such as secretary gates trip next week. it seeks to establish functional exchanges and in putting those the junior officer and mir to become a career level and gives paramount importance to operational safety and confidence building activities such as through the nm c.a.. it also see is critical the task of conducting substantive and strategic level discussions. during secure ann gates visit to beijing next week we will seek to engage additional discussions with the pla about further developing the framework and how we can work together to see it adopted and implemented.

secure gates will continue to press upon the chinese leaders and important discussion issues of strategic concern to both countries including nuclear missile defense, space and cyber as well as the need for the two countries to work together on a number of regional security issues including north korea. with siccative gates traveling to beijing next week and president hu a week after we have an opportunity in the military relationship. it too long has been a part of the conventional wisdom to know to the military to military relationship lags behind the overall bilateral relationship. but we firmly believe the military to military relationship is far too important to be allowed to lag and moreover we don't view the relationship as separate from the overall bilateral relationship and that when it is split off it can threaten to drag down the entire bilateral relationship with. we are not under any illusions about how challenging tasks ahead in establishing this stand

reliable and continuous military to military relationship is it going to be? what we are committed to rebuilding the military relationship and giving it the ability necessary so when those differences surface between the two countries the relationship is not to be suspended but instead is to be enhanced. only then will be able to reduce mistrust, build habits of cooperation and greater understanding of the long-term intentions of both countries. alternately however if we are afraid to have meaningful and substantive exchanges chinese to buy into the free-market logic we see for the military to military relationship for its own reasons and in pursuit of its own interest of because we ask them to. while sycophant alleges remain, maritime security and north korea considers it to become a transparency and other issues it is precisely because of these challenges that we need to build a strong reliable sustainable military to military relationship. this sort of comprehensive

partnership is not just a matter of building a positive relationship between the department of intense and the pla but between the united states and china. and it is important not just for the two nations, i would add, but for the future of growth, prosperity and stability of the entire region. we have an extraordinary opportunity to begin to define the relationship not by the obstacles that defied us or the issues that drive us apart but by the a opportunities that exist to foster greater cooperation and bring us close together. together the united states, and our partners in a specific region can help build a new century of stability and prosperity. thank you. [applause] >> michael, thank you for that speech. we have some type of question i'm going to take the liberty of the chair to ask the first one. is it fair to say with the secretary's visit to china next week and the talks last month the defense council to give talks last month that the

bilateral security military to military cooperation discussions have moved beyond the issue of the u.s. arms sales to taiwan? >> i think it's fair to say that with secretary gates saw ' visit next week with a defense counsel to the talks that were held last month that we have restored the military to military relationship. our goal now in having restored the military to military relationship is to put it on the sort of stable footing i was describing that will allow us to be able to continue to carry out substantive and meaningful exchanges to do so in a sustained reliable continuous fashion going forward. >> [inaudible] state your name and affiliation. >> josh, foreign policy magazine. thanks for taking the time to speak with us today.

i'm wondering if you can talk more but segregates triplex will he have the opportunity to visit chinese military facilities not previously seen by u.s. officials? will he have other meetings with officials not and the pla but other parts of the chinese government? more broadly, two kasich brigades will announce a range of e efficiency kutz within the defense department, $100 billion he plans to reinvest to other priorities. can you talk about how these cuts are driven by the overall vision of the secretary and the staff at the osd addressing the changing threats and shift of resources that we see going forward in this century? thank you. >> i will take the last part of your question first because that is the easiest to respond to which is a privilege to think that i am wise enough to say the words we will have secretary gates speak for himself, and i

will. as far as your other question is concerned, we do not have any plans presently for secretary gates to visit any facilities that haven't previously been visited by u.s. officials but we are expecting to have a very full agenda with some very substantive meetings with senior chinese leaders across the spectrum. >> jennifer of cnn. recently photographs of surface and are all over the web of the supposed new stealth fighter jet in china. psychiatry gates said in the past china would only have a handful of fighters that would challenge the u.s. and that wouldn't be until 2025. to these new photographs make it look that china is a fairly much closer than we think? and also what kind of threat

does this pose to the u.s. power and pacific? of you know, we don't comment on intelligence issues. the annual report on the military and security involving a the people's republic of china highlight china's comprehensive force modernization efforts and that includes advanced aircraft. the que br also notes chinese to the limit of advanced aircraft. >> can you tell us what you have had any response either during the talks in december to the proposed framework that missile flournoy put forward have you had any response from the chinese on that, and what do you read from their response or lack

and what makes you think that conditions are any different for this upcoming trip than they were in 2007 in terms of prospects of relationship with china military relationship? >> there are a number of elements in the framework that we have had the opportunity to discuss with our chinese friends in the past. we preach to and presented to them the framework at least as it is currently developed in its integrity so we were not expecting to be any sort of response at that time. we are looking for work now with secretary gates trip to receive some feedback, and as i said we are looking forward to working with pla and china to develop this framework in a way that is mutually beneficial and serves

both as our interests. this isn't a question of the united states putting something on the table and asking pla or china to sign up to eight in every detail. if we are going to be about to build and sustain a reliable and continuous military to military relationship as part of our broad security relationship it is a project we need to enter into to get their in a cooperative fashion so we are looking forward to those discussions next week. >> [inaudible] >> i can talk in very general terms about the differences between now and 2007 which is the world continues to evolves. china continues to evolve, the world that china plays in the region and globally in 2011 is no longer the same as that which

it played in 2007, the role that the united states plays globally and in the region is no longer the same in 2007. we hope through our dialogue and discussion and engagements with china and the pla we are able to move closer to a greater share of understanding of why there is a logic for a sustained military to military relationship, reliable military to military relationship and it continues, continuous military to military relationship between the two countries, and that is a process and we are realistic about what that entails. >> my name is matthew robertson. why do you think the chinese cut off the relationship in the most recent instance?

>> i think you would have to ask our chinese friends. 62 >> i think you have to ask our chinese friends. that is an entirely of my thoughts on that issue. >> can we expect some tangible results of a certain trend of cooperation between the two countries, the military, not just the affirmed principles of the military to military relationship during the visit by secretary gates to china. >> it is fair to say from our perspective there are a number of issues we would like to see concrete progress made but this is obviously a process that

requires the engagement and commitment of both parties. there are a number of issues related to cooperation in the maritime security field related to further dialogue and discussion on strategic issues related to adopting and implementing a new and more durable framework for the military to military relationship that we would hope to see progress on, but this is an incremental process i think all too often the military relationship falls victim to people who have very high expectations from what anyone meeting on any one visit our discussion might achieve, and then we go from great periods of expectation to stories in the press about how we may have

achieved some things but not everything or other things that the sky is falling. as i said before, this is a long process and we hope to have some achievements coming out of that next week and to be able to make some progress, but i would much rather see us make modest progress that this real, tangible and as you put it and moves us further towards a system will, reliably and continue this relationship than to put ourselves at risk by heightening unrealistic expectations. >> michael from gw. is there a prospect of working together towards a still pushing

confidence-building measures say joint exercises sea rescue or natural disasters or things of these controversial matters? >> we have sought to work with the pla on a number of issues related and for the mmca we hope to engage with the pla to be about to undertake the passing exercise as search and rescue exercises and other similar events we think are very beneficial from both sides, both in terms of very concrete and practical benefits that flow from them as well as the larger positive equities that can come

and confidence from being able to engage in those sorts of interconnections, but as before, we are looking forward to what ever chinese into lockers have to say when we arrive in beijing next week on what they think is possible as we seek to build precisely that sort of relationship and to further opportunities to deal to conduct precisely those sorts of activities. >> hudson institute. the question indirectly in the tiny press there is a lot of concern that the u.s. containment strategy not through the engagement with them but the way you stepped up the defense diplomacy with vietnam for a simple and others, but this is all in the semiofficial press, wasn't sure if you have gotten

any feedback particularly vietnam if the if said anything to you about the exercises and the talks and so on. >> i guess i would offer again it is for precisely this reason and these sorts of issues widely think it's important that we have a clear and open channel of communication between the united states and china so that we have the opportunity to exchange views and where they have questions for us they have the opportunity to ask those questions we feel we have pretty good answers where we have questions for them we have the opportunity to be able to ask those questions and to take on board whenever the chinese side might offer, and through those conversations and discussions to be able to seek to reduce any misunderstandings or misapprehensions there might otherwise exist.

>> plame with japanese public tv. psychiatry gates is going to visit japan after china, and my question is what kind of role do you plan for japan with u.s. military strategy in the pacific? and also the location issue to the relationship between the two countries. of the u.s.-japan alliance i think this is clear and longstanding -- and longstanding nature i don't think there is anything will change by virtue of secretary gates trip that

speaks to the deep and enduring partnership that exists between the united states and japan and the fact that we view and continue to view as the cornerstone for u.s. policy in the asia-pacific region. we've made some good progress i think in continuing to work through the issues related to the replacement facility, and we've been very, very gratified by the comments the other japanese leaders have made in recent months about the may 28th statement and the progress that is possible. but that remains an issue where there are a number of elements we need to continue to work on

together and we are committed to doing so. >> we have time for one more question. >> [inaudible] from foynes america. what are we expecting from the discussion with china on the north korean issues and how provocations will be discussed in this coming meeting. >> i think as numerous senior administration officials have commented over the past month or so since we have had the shelling incident we believe china has an important role working with us and others in the region in helping to convince north korea that its provocative behavior needs to end and convincing north korea

it needs to return to the process through the north and south dialogue but return to a the commitments that it made in the september 2005 agreement and move towards taking concrete steps for the denuclearization. >> thank you, michael, for taking the time. this was an important statement on the important relationship, security relationship between the u.s. and china. i know it is a busy time preparing for the secretary's to get his speech here today. [applause]

[inaudible conversations] the head of the american petroleum institute this week spoke out against the obama

administration limits on offshore drilling and its plans to increase taxes on giglio and gas industry. he spoke to the press for about 35 minutes. >> but me thank you all for being here today. we appreciate your time and attention to an issue that to us and i hope you heard today very significant to the country so let's open up. eric, we will let you manage it. >> i am penny with cbs news. what you think should be the congress, as they come back tomorrow, should be their top priority when it comes to energy in the united states? >> at this a lot of issues the need to look at but when it comes to energy i think first me to focus on some of the fundamental decisions that have been made. issues like putting off the five-year plan in the outer continental shelf. i think the congress should look at that question. we want to work with the

administration and with the congress and to reconsider that. that has long-term adverse implications for our economy and ability as an industry to create the hundreds of thousands of jobs that we could do if given the right opportunities. we believe that focus should be done and more of an oversight when and non-partisan way. energy shouldn't be partisan and impacts all the fuss. we are consumers of energy, everyone here is impacted by oil and natural gas and you consume it, so we ought to look at it from that vantage point. the second aspect that is critically important, as i mentioned in my remarks, we are truly at a crossroads. we have an opportunity in this very difficult economic environment to create additional well paying jobs. the jobs in the exploration production side of the leal and natural gas industry pay twice with the average american job pace. those are the types of jobs we

need to create. it requires nothing more than the political will to get access and opportunity to create american energy on behalf of all americans. >> state your name and organization. islamic international investor. speaking of jobs, unless i miss her view, you do not state the canadian oil shale could potentially produced the injured 40,000 american jobs -- could you expand upon that? >> as many of you are well aware canada is a were number one trading partner in the area of energy. a vast majority for the produce and export comes to the united states. the great opportunity we have as the expand their oil sands research in canada much of that will be sent to the united states to the development of pipelines and through expanded

refinery capacity is in the united states. recent economic analysis has shown that we could create 340,000 jobs in the united states by the year 2015. over the next three or four or five years, we have an opportunity to be a sycophant economic engine to help stimulate the recovery to read these our will pay highly sought-after jobs and again what leads to the political will provide the opportunities. >> why are gas prices in your opinion rising right now and what is your prediction in 2011? >> we have no prediction as it relates to gas prices we don't speculate on that. the gas price is a function of the price of crude oil. the pressures on crude oil are due to the demand around the

world. the prices it on a global basis. you look at the increased demand coming out of china and other parts of the emerging world and frankly hopefully the demand coming from the united states as a result of our own economic recovery. the reality comes back to the simple law of supply and demand. as i mentioned the experts are telling us on a global basis by 2035 we will need 50% more energy than we produce and consume today. that is a big number. in order to achieve that, we are going to have to get started today. these are long-term multimillion-dollar investments. we need certainty today and the political will to provide that opportunity. so what we can contribute longer-term to benefit consumers and hopefully keep those prices where we would pay for them to be ase to do our part to continue to bring supply to the equation.

>> you think this year is going to be a difficult year for consumers in america? >> i don't know how to predict, how to judge that. >> a call from the moderator or we will try to. moderator? >> this question comes from anthony. >> thank you, anthony. your question? >> alright, someone else from the audience. [laughter] >> what are the chances it will research this year? >> can you repeat the question? >> when will the new wells start drilling in deep water mexico this year and what are the chances that perhaps one of them will be started this year? >> anthony, it is our hope that the department would move more

quickly than they have in putting this back to work. we felt strongly that the moratorium was on necessary to improve safety in the outer continental shelf. and that it is the permitting process that has been delayed and there has been dragging on and there have been no new deep water permits issued in the gulf mexico falling on the lifting of the moratorium. so i cannot predict when it will happen. it rests with the regulators of the department of interior. i will tell you the industry is doing everything they can in doing everything they are asked to do to put the industry back to work to produce the oil and gas the country needs as quickly as possible and in particular to put those people back to work to have been put out of work as a result of the moratorium. ..

the d. impacts of the regulatory environment has been estimated to be huge, both in job loss and adverse economic impact to our economy. so, we believe it is something the legislator should look at. it should not be done. the clean air act was never designed to regulate greenhouse gases. we believe it's appropriate to put it back in the purview and make the congress make that

decision and we will work to that end. cannot jon rickman but the energy daily. [inaudible] >> yesterday's announcement about easing regulatory pathways was that a concessions by the administration likes to think they are starting to feel the heat? >> welcomed the announcement yesterday was a positive step forward, but only one piece of the puzzle. the announcement yesterday was clarity as to how much more additional environmental review would be required of those that authority be given permits and were operating prior to the moratorium. so while we are pleased with clarity, it only answers that one question. the thing to really keep your eye on is how many deepwater golf permits have been issued. in the answer is none today. it is critically important that we put people back to work in the gulf of mexico.

few realize that one third of the oil and gas produced in the united states comes out of the gulf of mexico. 80% of the oil coming out of the gulf of mexico comes from the deepwater. as i mentioned earlier, the alternative to putting our own people but work is to increase our reliance on other forms and sources of energy. and we believe the best solution is to develop american energy for all americans. >> hi, sheldon alberts. [inaudible] wondering if you have any concerns with the decision on the keystone maxell might be further delayed if it takes supplemental impacts on the importance of that project. >> welcomed the keystone pipeline issue goes back to the point mentioned earlier about potential for job creation in the united states and canada. we certainly hope it is not delayed. there's been ample and adequate study of the keystone pipeline.

we believe it should be approved. amongst those approvals are made, the industry will move very quickly. the companies will move quickly to provide those opportunities to create the 340,000 new jobs that are estimated as a result of the handed oil sales coming from canada. >> hi, jack mccarry chen field. next week the national oil spill commission is going to come out with their finding the recommendations on the muck on the oil spill. almost certainly come one of their recommendations is going to be the creation of some kind of an independent, separate safe upon the answer but the nuclear energy has its intel. and you know, during their hearing, they made it clear that they don't think the transport sugar could go back because of the lobbying act dignity. what do you think about that kind of recommendation? do you support it? >> well, let me tell you where

we've been. in the prepared text earlier, immediately following spill cover the industry put together the best known experts in the world and develop taskforces to develop these issues. what can we be doing and should we be doing to elevate the importance of broader industry across all segments, if you will, of the safety performance, be it equipment, personnel, whatever. we moved very quickly to develop as we address the fundamental safety issues. but met with commissioners and some of their staff and we've talked about these issues. i give you quick background. the american institute was established and started in 1924 to develop standards for the broader industry. we have been since that time accredited by an independent third party to make sure what we do is independent from and to make sure what we do is transparent and others are given opportunities to contribute. so i don't want to second-guess what do commission might

conclude. i will tell you is an industry, we are already working on moving about on the road on a pace that is faster than with the nuclear industry takes following three-mile island and ultimately resulting in the process to develop a safety programs. we've had conversations about it at the high levels of industry and were moving forward very quickly. let me make one other comment though. the inco model was a success for the nuclear industry in one regard. it dramatically improved safety. since its creation, we have not built in a nuclear power plants in this country since then and now we're talking about the need for it. so we need to look broadly at all the issues and how these proposals affect our ability to produce energy and continue to perform better in a safety area. we are committed to safety. their number one priority. we have a long, strong performance track record. as i mentioned earlier, that job

will never be done because it will always be a per diem the oil and gas industry. >> a lot of what you talk about is what we've seen in washington the last two years is kind of a return back to the future. i mean, we'll see a lot of debates about offshore issues. we'll probably see an antiwar hearing or two and the next four or five months. easily could breed spring of 2001, 1991. what is changed when it's not because in many ways this is the same debate the country has been having for the last two decades at least. >> i think you raise a great point. the fundamental issue is the political reality of the enclosed. the energy reality has not changed. fundamentally, this country will continue to consume and will need more oil and gas into the future. so we need to engage that debate to put aside the partisan issues and say, what do we do to

advance the best interest of this country, to restore our economy, create high-paying jobs and generate additional revenue for the federal government. the mckinsey report today is very significant in that it basically takes two approaches. what happens if you impose new taxes on the industry? what happens if the kids access to develop these resources. the clear winner has additional access, results in new high-paying jobs and increase revenues to the federal government. if you attempt to tax that and take that revenue from the industry, you discourage the very investment necessary to create the jobs and generate the revenue. so in some ways we are going back to the future. but what the underlying issue is, the energy reality of the united states, oil and gas today provides over 60% of the energy we consume. and there's going to be required to provide over 50% two decades

from now. so we've got to get focused on the energy realities and how we deal with those. [inaudible] >> other than what you talked about here, what should congress do, other than oversight? what should congress do to benefit the oil and natural gas industry? >> the direction that congress should take on the agenda we would encourage them to pursue what would largely come out of some of the oversight conversations. for example, what does it mean to delay the next five-year plan. we believe will have to live with the adverse consequences of that for many years to come. our hope would be that we'd be able to sit down on a bipartisan basis with the administration and work through this energy reality equation. the reality is the moratorium on the outer continental shelf was lifted after a very short intense debate in this country

comes around in the price of gasoline. we need to get back to what is going to take to create these high-paying jobs, to generate the revenue were capable of doing and focus that outside the realms of partisan victory. we hope when sitting down and working with the new congress and the administration we can harmonize those issues. we shouldn't have to go elsewhere in this country for our energy resources. we have vast amounts here. we will continue to use the oil and natural gas. the question is, where will we get it. >> the piece of legislation per se. >> later in the second phase of the conversation. we think initially we should stay focused on what do these decisions really mean. to have the open and candid dialogue between the congress and the administration and then from there decide what if necessary legislation might be required. >> tom doggett with rutgers. just a follow-up on that, so if the administration can't be

convinced to allow drilling in the eastern gulf and all the atlantic in its five-year drilling plans, the second phase you're talking about camus to support or urge lawmakers to include language in the interior department spending bill to hold in these areas? >> that would be an option that can be looked at. i know there's some already talking about that. as you know, one of the last sales in the gulf of mexico is legislated. that's an option that's always out there. our hope is we can look long-term, look at the five-year plan and work with the department of the interior and develop a long-term planning process that allows us to develop american resources. and fundamentally, that would be the best outcomes. others may resort to legislating solutions. because the fundamental issue of taking the pacific, the atlantic and the parts of eastern gulf off the table for the next five to seven years were clearly have adverse impacts on our economy and our ability to produce the

oil and gas were going to need. >> is a legislating in the plan if necessary? >> current option has been done before and that's one way ultimately you can resolve it. you can also resolve it that way in cooperation with the administration. [inaudible] [inaudible] >> -- particularly americans dependent on that oil, china is obviously taking a huge portion of. >> welcome we should be concerned and focus on this energy realities. it's part of that discussion that should contribute to informing us as to the energy policy in the united states. unfortunately, we haven't had a robust debate around that. if you look again at the global economy hasn't mentioned earlier my remarks, we will require 50%

more energy over the course of the next two decades. where is that going to come from? we have the ability and the united states to create vast amounts of energy. we just need the political will to do it. china should be part of that conversation veered the broader global discussion. other emerging nations that are big consumers. india and the list goes on. we have to date not a political will to think seriously about the energy reality. the one thing i believe has changed in this country is the public at. the public understands after 2008, when they rose up and said wait a minute, prices of our energy are beginning to increase significantly and we are sitting on vast amounts of rf energy? the public rose up and said develop our own domestic resources. so if we get to the point the pressure continues to rise, i believe the public league and engage the debate in a very

serious way and will remind those elected to represent them, we have the opportunity here to create jobs, to increase the revenue the federal government and we can do it on american soil with american workers, paying them increasing taxes and provide the additional revenues to the federal government. >> hi, i'm for mcclatchy newspapers. on congress, what does api think congress should be doing to address climate change? >> the climate change i believe will be a secondary issue in the new congress and with the administration. clearly in the election -- the november election, the public made very clear they want the elected officials focused on one thing: jobs, jobs, jobs. i believe you see the congressional agenda coming both from democrats and republicans, focused on job creation.

i believe the kind of discussion will likely be put off for another day. if it wants to be introduced as part of the energy conversation, we'll see as things begin to unfold. but i've heard announcements out of the administration and leadership in both houses senate that they expect that issue to be put on the sidelines for the time being as they center on and focus on job creation. >> dave michaels with delta community. you mention the marcela shale. and the last congress the industry was thinking the central federal regulation of hydraulic fracturing. with republicans in charge of the house, how much of that risk is extinguished? and if that's not with regard to the congress about what role will the pa play? >> as you know and as you've heard today through various technologies, the development and increased reserve of natural gas in the united states is a true american success story.

an opportunity to produces clean burning fuel and vast quantities for all of our benefits is really a remarkable story that's really occurred over the past decade. so there are those that would like to regulated differently than perhaps the industry would. today hydraulic fracturing is regulated at the state level. we support state regulation of hydraulic fracturing. we believe the differences in topography and geography around the various state is the appropriate state to regulated. as you know, the epa is currently doing a study to try to conclude if there's any scientific evidence to suggest adverse impacts from hydraulic fracturing. the previous report is done by epa concluded there is no scientific evidence to show contamination as a result of hydraulic fracturing. we hope epa concludes that study. we supported that study. we believe that's the first thing that should happen before

there's any further activity on where and how it should be regulated. epa should conclude their study and when working with individual states, particularly where hydraulic fracturing is occurring in texas, the marsalis shale, west virginia, the list goes on. again, it's appropriate to regulate at the local level and were working with local regulators to achieve that. >> any harder with national journal. you mention your initial consent of congress will be with oversight hearings. where d.c. extending drilling and that conversation? d.c. as part of the second part of the conversation? how do you see arriving to the conclusion? >> well, the other comment was shelf development issue. we have to have increased dialogue with the new congress and the administration to determine if there is ability to develop consensus moving forward. after that, i think decisions

can be made as to what else can be done. clearly it is something we should do, something that's in the best interest of the nation, something that's been in the best interest of our economic recovery. but i think first we have to try to set aside partisan differences that focus on what's the volkervoters said in november. focus on job creation and economic recovery. the oil and natural gas industry is a huge economic engine. we could do even more if given the right opportunities and certainty. as the various reports have shown end of the new report shows today, there is potential to create hundreds of thousands of new jobs if given the right access in the right circumstances and the united states. i did mention earlier today, some of you might be surprised between 2004 and 2007, the oil and natural gas industry created 2 million jobs here in the united states. we are a huge economic

powerhouse. we continue to be so and we can contribute to a fast economic recovery if given the right economic opportunities. [inaudible] you mentioned earlier the three-mile island and how it's a huge setback for the nuclear industry. just trying to get your sense of how much a setback to bp blog was to the oil industry and how much of that was sort of self-imposed. >> welcome the tragic incident that occurred was a great time to learn from lessons and experiences we have there in the cold. i will tell you as i mentioned earlier, the industry moved very quickly with self review, self scrutiny, to determine what else we can do better. and it has moved quickly with working with the boe and another's. a lot of what you see coming out in regulation we worked with them on to help educate and

understand what else we should be doing to improve safety in our performance. so history will eventually judge for the ultimate outcome of the impact of the bp oil spill was. i will tell you the general public today believes it was an isolated incident. and when you look at the experience of the industry, we are in the cold for over 65 years and we have drilled over 42,000 wells. this clearly was a rare incident. so we are yet to figure out how history decides the impact of the oil spill. industry is laser focused on safety and getting people back to work. >> in terms of the five-year plan the administration announced in december, there's restrictions that weren't there back in march. obviously the difference is the bp oil spill. how much of that -- how

realistic is it going to be for you, for others and supporters to turn not back? >> when you say restrictions, what are you talking about? [inaudible] >> now they want to restrict the. and obviously the bp spill is the reason for that. i just want to get you to expand on how to change that. >> well, if he does do the change from last year when they made the announcement they will contract and pull back on some of the earlier proposals. we believe the energy reality is going to require the united states to look for other forms of oil and natural gas upon our own soil and the outer continental shelf. i hope and expectation as i mentioned earlier is to continue to weaken as the administration to take a closer look at their decision. i've announced a programmatic eis where they will begin the discussion of the next five-year

plan. we believe in working with others that the energy reality needs to enter more into that conversation. and we need to look more closely at what we're going to need now and well into the future to sustain the vast economy we have in this country. so i guess we're still holding out hope that through conversation, deliberation and dialogue, that we might get parties to find a middle ground that will allow us to develop the energy we need for the nation. >> susan mcginnis with energy now. you mentioned were you believe the climate issue will go. but to you agree or do you think it should be secondary, but it should be put off? d.c. there's a danger in doing just that? >> i think the experience with waxman-markey was an unfortunate approach and that they overreached and clearly many have to step forward, including ourselves and oppose what they were doing on waxman-markey. would have devastating impact on

job creation, our very ability to increase energy and enter an economic dignity. so after that experience, i think right now the congress is focused on a jobs creation agenda. we as an industry or focus on a jobs creation agenda. there may be a time in the future when they come back to the climate dialogue climate liberation on the hill. but i figure the white house, as i your congressional leaders, that will not be in the near term. >> is there danger in putting it off in your opinion? do you believe there's anything a state with putting this kind of issue on hold? >> is the question of priority. i think right now the american people is made very clear they want the priority to be on job creation. something that's an industry we can make a significant contribution to. >> kitty howl with green modern daily. leaders in congress have said they wanted to tackle energy --

[inaudible] what you have described sort of paint or broader picture. are you going to be satisfied if, you know, they just tackle a few of these small pieces. and if so, what pieces do you think should come first? >> strategically speaking it is to come in a comprehensive way. tactically if they decide to do a piece at a time, obviously only to those on the hill were elected to make those decisions. i will tell you one of the areas they clearly need to address is the development of oil and natural gas resources here in the united states, particularly those controlled by the government, with the government can make decisions as to whether or not we have access to that. so whether that is handled in a piece or in a comprehensive way, we'll see how that unfolds. i think that will eventually come onto the agenda, not really that may be.

[inaudible] >> you mention the industry and job creation. what is this new congress? what tax issues do you think will be breiner which lists, which tax list do you wish were off the table. >> we say tax issues? >> the wood mackenzie had particular issues -- there were particular tax initiatives. >> fundamentally -- [inaudible] >> well, i think it's a more fundamental question. and i think what drives the discussion and what drives those who feel the need to impose additional taxes on the oil and gas industry. it generally is driven by the

need for additional revenue. so if revenue is the issue, that must go to a revenue can be found from the oil and gas industry and that's in the development of new resources, where we can also complement that with new job creation. and the revenue coming to the federal government, which the wood mackenzie concludes will be much more significant than if they change the tax code to impose direct taxes on the industry. we need to encourage development of our domestic energy resources, not discouraged to go elsewhere. these investment dollars will find their way to energy products. the question is, will they find their way to u.s. energy projects? we believe the way to do that is to provide access and then i'll love the economic activity to generate significant revenue to the federal government. in 2008 alone, the industry contributed over $20 billion as a simple result of bonus bids,

royalty payments and rental fees for access to the outer continental shelf. some of those leaf cells will generate hundreds of millions of dollars, even billions of dollars. that's the way to generate revenue if that's what is driving the dialogue around the tax code. a clear alternative to the approach that is being discussed. >> dean powers, "wall street journal." can you elaborate a little more in buy your organization or industry at large has been reluctant to embrace this concept that mr. riley has been talking about? you indicate in your comment perhaps it's a little redundant to verify your independent. >> i really don't want to speculate as to what the mission will conclude it will not conclude. at that conversations. there's a lot of different models for safety programs. one is that the american

chemical administration it was run quite differently than the input model. there's no point in coming out of the u.k. as an industry we have reviewed all the models so we could find that we believe were fact they've been creating a culture of safety. so we put the best approach for the oil and gas industry, which is very different than the nuclear industry i would add. it's very customized the way we do our work in the way we go about drilling wells. different times, different conditions different places. so we believe an approach improves safety the industry would come forward with these two have flexibility to manage those distinct differences in the management of risk that's associated with safety programs. some were not being critical of anybody else's program. what we're trying to do was find the best of all programs and adapt that to our industry to continue to promote safety is a top priority. >> last question over here.

>> you mentioned that time will be about burner issue for congress. but also the same time, stopping apa regulations. is there a preferred method by which congress would do that? and when does it look like they will actually take action on that front? >> on the epa front? we believe as i mentioned earlier should be the prerogative of elected officials to determine greenhouse gas regulation. there are a variety of approaches out there today. we will support the means necessary to make sure that congress ultimately makes that decision. the clean air act was never designed to regulate greenhouse gases. the epa in our view has overstepped its bounds in attempting to go much further than even the clean air act allows them to go in regulating the changing greenhouse gas regulations. so again, we believe we need to take it back to the congress. when each of have the conversation there and let the

congress, the elected body ultimately decide the impact of such a far-reaching policy. greenhouse gas regulation has the potential to be one of the most far-reaching impactful policies that were adopted by the united states congress. it impacts everything we do, all economic activity, all energy development and energy policy. surely something of that significance should be decided and determined by those select it to legislate. >> thank you all for joining us today. and if you'd like to follow up with us online you can go to www.energy tomorrow.com. you can find all the materials of american energy there. thank you again. [inaudible conversations]