our discussion today and working with you as we develop the 2013 budget. i appreciate everyone for commenting us into this hearing a. senator collins, thank you for accommodating us as well. as you know we have a vote in about an hour employment and a senator collins and i both need to be on the floor them. so with that limited him to my colleagues, senator collins. thank you for being here today. >> thank you very much, chairman murray. first, let me say how much i enjoyed working with you last year, as we crafted this important appropriations bill. we did so in a truly bipartisan fashion. we share a lot of the same priorities. and it was also a great pleasure to work with secretary donovan. and i appreciate his being here today, as we discussed how to meet housing and economic development needs of families and communities across our

nation. as we begin to construct the fiscal year 2013 budget, we are mindful that we are once again operating under very difficult fiscal constraints. that is even more challenging when one considers that more than 80 cents out of every dollar of the budget request is required just to continue serving those who currently rely on hud for just housing support. addressing the ongoing challenge of homelessness remains a top priority of mine. chairman murray and i continue to share this commitment, particularly for our nation's veterans. and we have worked very hard last year to preserve funding for the hud bash program. one out of every six men and women in homeless shelters our

veterans, and, unfortunately, veterans by 50% more likely to fall into homelessness, compared to other americans. so i am pleased that the budget request continues funding for the hud bash program at $75 million. this level of funding should help us serve an additional 10,000 veterans who would otherwise likely be homeless. veterans homelessness fell by nearly 12% in the year 2010, demonstrating that these programs work. i've also always supported funding for the homeless assistance grants programs to prevent and end homelessness. the budget proposes to put $2 billion for this program. that is an increase of approximately 330 million over the previous fiscal year.

it is, however, important that we focus on what works. and one of the models that i've seen work in the state of maine is the housing first model for aiding those who are homeless. we need better data to ensure that events of all housing programs, this particular model is proving its effectiveness in my home state of maine through the florence house, a comprehensive center for homeless women in portland. in addition to programs that effectively serve the homeless, hud of course provides support for affordable rental housing. the budget proposes more than 19 billion for the rental assistance program, of which 126 billion is available for administrative costs. that is an increase in direct response to the fact that some

public housing agencies are having a difficult time administering their voucher programs, and have actually turned back vouchers as a result. and that is very troubling. we don't want to overpay them for their administrative expenses, but they need to have sufficient expenses to efficiently and effectively run the program. another important issue that i would like to address is hud's oversight of the maine state housing authority section eight voucher program. a series of recent newspaper stories revealed troubling codes, cases of code violations and other poor conditions in oxford county main. in fact, the local fire chief was so upset that he wrote a letter to my office asking for my help. hud has an obligation to oversee the use of federal funds that public housing agencies

nationwide, and to ensure that these funds are not supporting substandard property. i just want to share briefly with my colleagues and the people of hud here and inspector general, one of the particular units, one of the departments that was cited in this newspaper series. hud was actually paying $600 a month in federal subsidies for an apartment that had separate backups in the kitchen sink, a damaged fire escape, and bat and rodent infestation. totally unacceptable. it is bad enough that taxpayers were charged for substandard units, but it is appalling that residents were forced to live in such horrible conditions. the welfare and safety of tenets must be safeguarded and federally subsidized properties

must represent fair value to both the tenant and the taxpayer alike. i have requested the inspector general to audit hud's oversight of the unit inspections, and the housing authority's administration of the program. it's clearly critical that federally subsidized properties comply with all health, safety and quality standards. and i want to commend the secretary for taking my concerns very seriously, and for asking the maine state housing authority for a corrective action plan. and i'm also very pleased that the ig has stepped in and is investigating this problem. i, too, want to act out senator murray's concerns about the federal housing authority -- administration, which played such a critical role in affordable homeownership. the decline in the housing

market over the past several years has had tremendous impact on families and communities throughout the nation, as well as our economy as a whole. while i understand that hud has taken a number of steps to increase capital reserves, it remains troubling that the capital reserve ratio remains below the congressionally mandated level of 2%. i'm optimistic that we'll hear some good news as a result of the settlement, but that still is of concern. i also want to discuss the question period with the secretary what can be done to ensure the greater use of wood pellet heating systems in the state of maine which have not qualified for assistance under the fha program, and those are increasingly popular. they are ardent alternative to fossil fuels, very heavily

depend on home heating oil, the price of which have spike. finally, a little funny for the community develop a block grant program proposed about $3 billion is disappointing. this popular program supports economic growth strategies in communities nationwide, and enables key investments in a long-term economic growth. it's programs like cdbg that helps to build a foundation for future prosperity. these are just some of the issues before our subcommittee. and again, madam chairman, i look forward to working very closely with you again this year. >> thank you very much, senator collins. with that will turn overdue, secretary donovan, for your opening statement. >> thank you, madam chair, ranking member come for the opportunity to be here today. today would like to discuss how hud fiscal year 2013 budget proposal is a such a degree housing in communities built to

last and will directly support 700,000 jobs. in developing this proposed budget we follow for principles. the first is to continue our support for the housing market while bringing private capital back. the critical support faq provide the last three years has helped no 2.8 million families via home and with 1.7 million homeowners refinance affordable products with average monthly savings of more than $125. at the same time, we have taken them a significant steps in fha history to reduce risk to the taxpayer and reform faqs mortgage insurance premium structure. with her premium increases of 10 basis points recently enacted by congress, coupled with additional print increases on jumbo loans reflected in the budget, fha predicts -- project to add an additional $811 billion in receipts for the capital reserve account in 2013. just this week we announced a series of additional premium changes that will increase receipts to fha above those

already in the budget by over $1 billion in fiscal years 2012, 2013. we've also taken significant steps in increase the can build for fha lenders and continue to seek expanded authority via legislation that will further enable us to protect the fund. as will the recent settlement with america's five largest servicers through which fha were receive approximately $900 million to compensate for losses associated with loans originated or service in violation of fha requirements. with fha's current market share declining, since 2009, these reforms will further help private capital return while ensuring that fha remains a vital source of financing for underserved borrowers in communities. just as importantly, while hud fiscal year 2013 request is 44.8 billion in gross budget authority, because of fha and ginnie mae receipts, the cost to the taxpayer for this budget is

only 35.35 billion. folie 7.3% below the fiscal year 2012 enacted level. more than beating our deficit reduction targets while still allowing us to improve oversight of our core program. the second principle we used to develop our budget was to protect current residence and approve the programs that serve them. the 5.4 many families who live in hud assisted housing earned a $1 million per year as a medium, and more than half are elderly or disabled. that's what 83% of our budget keeps these residents in their home and provides basic need for public housing while also continue to serve our most vulnerable population through our homeless programs. as you know, inflation and stagnant incomes put real pressure on the cost of these programs each year. this year we have redoubled our efforts to minimize and even reverse these increases, not just for this year but in the years to come. for instance, we're working with

your colleagues to enact section a reform legislation that would save $1 billion over the next five years, while also supporting the ability of public housing authorities in small towns and rural areas to better serve the working poor. the budget achieve savings in the project base rental assistance program by improving oversight of market mainstays, capping certain annual subsidy increases, and offsetting excess reserves. even still, protecting current families required us to make choices we would not have made in a different fiscal environment. requesting $8.7 billion for the pra program allows us to serve the same number of families but it requires us to provide less than 12 months of funding for the majority of contracts. in addition even though the budget maintains hardship exemptions, the budget raises minimum rents throughout our programs to a uniform $75 per month. these very difficult decisions are the kinds of steps we were required to take in this

difficult budget environment. that's why our third principle, continuing advancements that leverage private dollars and create jobs, is so important. through choice never programs are helping communities engage a broad range of public and private partners to transform our poorest neighborhoods and ensure our children are prepared for the 21st century economy. as the president said, if we're going to compete with china and india we can't leave anyone on the sidelines. likewise, are sustainable can of these grant challenge community to creatively use existing resources that help them insource and bring jobs back to our shores. in memphis which is using hud security grant to more effectively use federal and state resources, fedex has committed over 3000 jobs and compass like electrolux and nucor steel are poised to create another 1500 at a time when the fiscal and violent as required us to make tough choices about cdbg and home, dollar for dollar the most effective job creators

in our budget, these grants are essential because they leverage the limited resources in cork programs even more smartly and efficiently. reducing regulatory burden and increasing efficiency is the fourth and final principle we used to formulate this budget. for example, the budget provides flexibilities to better manage in this fiscal environ. and older partners accountable for the funding they receive it also continues our transformation initiative. with your help we're both continuing the next generation management system that will improve monitoring and oversight of our largest rental assistance programs and launching a cross cutting initiative targeted tha so have the capacity to manage their budget. research also allows us to propose increase investment in programs we know were, like permanent supportive housing and rapid rehousing that end homelessness and save money. that's why in this difficult time as both a jihad champion, we propose additional funding for homeless assistance grants

and the hud program for homeless veterans ensuring we can end chronic and homelessness i 2015. all told, despite tough choices, this proposed by the allows us to serve 20,000 more affordable families. it recognizes the recovery and a housing market is essential to our broader economic recovery and it expresses i believe that every american should get a fair shot, do their fair share and play by the same rules. thank you for having me here today. >> thank you very much mr. secretary. let me begin by asking you about the status of the fha mutual mortgage insurance fund. given us a sense of crisis, it's not surprising fha have sustained significant losses and capper reserve account has served its purpose by covering those unexpected losses. but i was concerned when the president's budget state at $608 million be needed to cover fha losses in fiscal year 2012,

both the recent settlement and the announce premium increases are expected to improve mmi position i want you to update us this morning on the financial condition of the mmi fund. >> as you correctly stated, the information that was in the budget was outdated on the date it was published. and, in fact, we were waiting to make final decisions about premium increases until we knew the outcome of the settlement. i wish that had been resolve before the budget was finalized, but it was a. and that's the reason for what was shown in the budget. having said that, with the $900 million i described, it is a result of her work to recover for bad loans in the fha program done in the settlement. and in addition, the premium increases that we have announced this week, we do expect that the fund will remain positive this

year. in addition, because of those steps we have taken, the fund will be in a stronger position when the next actuarial study is done in the fall. that's the most comprehensive look, as you know, looking forward. and we do expect that it will put us, these changes that we've made will pose a significantly better position, fall. but again, we have to be vigilant and we will take additional steps if necessary, the single most important step of the fund is where house prices go this year and beyond. and so we will continue to be vigilant and watch carefully to make sure if we have additional steps that we need to take that we can work with the committee to take the. >> so what are the risks and opportunities that we need to look at? the housing crisis this year, what other things be? specifically for the readmit this year, the only things that will affect that number are the

premium increases, and so implementing those very quickly is critical, and the levels of loan volume that we have this year. our estimates are that it would take loan volumes that are more than 20% below our expectations the threaten the fund through the re- estimate this year. more importantly, for next year as we go to do the new actuarial study, the single most important factor is house prices. our estimates last year showed that it would take greater than a 4% reduction in house prices this year. our basic? predicted a 1% increase but it would take more than 4% reduction in house prices this year to push the fund negative. that was before the premium increases that we've implemented. sole factor as to how is it would take a much larger decline in house prices, much larger than that 4% to put the fund in

a negative position for that we as to the next year. >> you decide to increase the up front and annual premium. can you tell me how that will affect borrowers were trying to access credit? >> as you know, congress made the decision to include a 10 basis point increase in our single-family programs as part of the bill that extended the payroll tax deduction. in addition, we include a 75 basis point increase in the up front premium. the 10 basis points equally for the average loan to about $9 a month for a borrower, and the up front premium increase is about $5 a month for the typical borrower. the only places where those increases are significantly larger is for jumbo loans. goes over $625,000 where we thought it was prudent to include a larger increase, and so for those borrowers because the average size of the loan is much larger and because the

increases, the increases would be significantly larger. >> thank you. the joint federal state servicing settlement and a settlement with bank of america represent not only a significant monetary a war but they also really send a message to fha program participants that there are serious consequences to not following the rules. just last week settlements with two additional lenders were announced, and since most of the losses to the mmi fund stems from loans injured prior to the reforms implemented in 2009, it's really important to pursue opportunities to present recovered losses from those books of business. whether additional measures that fha can take to improve the outlook for riskier loans that already have on the books because there are. first of all let me just complement david montoya, our inspector general, and his team for the remarkable work to remarkable work to lead to both the servicing settlement and these additional settlements. they have partnered very, very

closely with us and doj to allow us to make those recoveries, not just in the servicing settlement but from ebay, citibank and flagstar. those are very important steps and i just want to compliment him and his team. the additional steps that we get a, there are a number of them that require legislative change. i'm happy say we're working with your colleagues on the authorizing side, as well as members of the house, the authorizing committee. there is a bill in the house that includes a number of the steps that would allow us to step up our enforcement. those build on the recent regulation on identification that we put out which will allow us to further hold offenders accountable for those prior loans that didn't meet fha standards. >> we all think fha's current role in the market is unsustainable. if there's no, he doesn't think carefully. but its tournaments difficult for qualified americans to get a mortgage today, and the markets

recovered as all no is still very fragile. if fha steps to quickly it could have serious consequences, not only for overall economy, as we all know, but for the solvency of the mmi fund. i want to ask you how you balance the continued need for fha to provide access to credit, making for private capital to return to the market? >> you for the past the $64 trillion question. this is what keeps me up at night, and this is exactly the key question that we have to balance. and, frankly, it's not just helping the broader market recover, but if we were to take steps to increase our premiums too quickly, to take steps that would hurt the market recovery, we actually the fha fund and taxpayers because her old investment, that trillion dollar portfolio, will perform much worse. and so in the steps that we've taken, and you asked exactly the

right question, what's the effect to the average homeowner, we felt that $14 a month on average was acceptable, particularly given that we have record low interest rates today. we honestly feel the biggest barrier holding back lenny, and i agree with you, too many qualified borrowers are not able to get lending today, it isn't surprising that is the biggest barrier. it would be if we want to quickly on raising our premium. the biggest challenge is the uncertainty that is out there in terms of how we will enforce our rules. so we have to make clear what the rules will be. that's what our indemnification will clarifying is important. it's why we think fhfa needs to put out a clear policy on buybacks that will allow fannie and freddie lenders to know what to expect. and it's why the servicing settlement was important as well. it created a single, clear, strong set of servicing standards, and clarified foreclosure processes around the country so that the market can move forward with greater

certainty. again, it's always hard to get that balance perfectly. i've wouldn't say we're ever done. i sleep on this every night, but it is a critically important balanced and i just thank you and the ranking member for your understanding of that bounced. >> very good, i appreciate that. thank you. senator collins? >> thank you, madam chairman. i want to go back to an issue that senator murray touched on in her opening statement. i'm concerned by the administration's proposal to fund thousands of project-based rental assistance contracts for less than 12 months. and the reason i am concerned is that short funding these contracts may create a diverse incentive for landlords not to invest in maintenance, to cut expenses, to reserve because of the risk of whether or not the

full appropriation for the remainder of the year is ever going to come through. i'm also troubled that some owners may decide to leave the program altogether, rather than take that risk. i know this had to be a difficult decision, and it clearly was budget driven, but how is hud going to mitigate these risks to the program and to the residents? >> senator, first of all let me say thank you for recognizing this issue. this was one of the most difficult decisions we made in our budget. personally for me having run the multi-family programs my first time at hud, it was particularly difficult because i know the impact. what i would say is there are two real risks your. one is an operational risk that we will not be able to mechanically get the contracts

funded with a short funding. that happened in the past when these contracts were short funded, and i can assure you that i and my team have worked very hard to make sure that the operational processes are improved. and effect over the last four years we haven't had those same kind of issues that might spring up with a short funding. we also operationally have done, taken a lot of steps to make sure we have processes in place to monitor the physical condition of the unit. so you're concerned about will this lead to decreased maintenance, we have new risk ranking and reporting that we do on these units. we have quality control around our we out process we've stepped up. those are all things that are critical to make sure that the kind of effects you talk about don't happen. the other risk is an uncertainty around funding. you mentioned that as well. and that's one where frankly because there is private capital that supports these units, it is

critical that we not create to much uncertainty around these programs. and i do think that is one of the risks here. i think what is a very important is that we work together to make very clear, as congress has always done, that the funding is available for these units. we signed 20 year contracts, knowing that they're dependent on appropriations each year and the market has been confident that that funding will be there. we want to make clear, despite the short funding, that we will do everything on our site. i know you will as well, to continue this fund and make sure that it is available in subsequent years. >> let me now turn to the issue that i mentioned in my opening statement about the poor living conditions in some of the hud subsidized units in maine. i am troubled by this, not only because taxpayers shouldn't be

paying for poorly maintained units, but the health and safety of the people living there is clearly at risk. so something dramatically went wrong with the oversight and inspection process. i'm also troubled, flashy we learn of the outright fraud in some of the public housing agencies, i believe one in philadelphia in particular was found to have fraud. so what investments is hud making in this budget to ensure that you have quality controls, internal controls, effective audits, a very close relationship with the ig to ensure that we are not wasting taxpayer dollars on substandard

units that are unsafe for the tenants, or outright fraud where people are stealing money that belongs to the taxpayers that is not benefiting those who need it most? >> first, let me just thank you for your directness and your focus on these problems, both you and senator murray, where there are issues, where we have made mistakes, and this was clearly, there were mistakes made on these units. you have been direct and help us accountable to correct those. and i hope you will agree that when we discovered these problems that we worked very closely with you, with david montoya, and i want to read recognize him and his team, and we are taking steps specifically in maine that i think will lead to better management going forward. ..

we also made sure we're utilizing our enforcement center which previously didn't work as closely with public housing authorities. just in 2011 and so far in 2012, we used enforcement center to review 140 public housing agencies across the country. so that is a better use of existing resources.

the second, we have to do better in coordinating our inspection systems. to date we have one inspection system using react for our project-based units in public housing. we have a separate system for voucher units. what we've started now is a pilot to use our react inspections for quality control and oversight where they will go behind local inspectors and make sure that the results that they're getting are in fact accurate. and that is something we plan to expand and potentially in the future to american those two systems so we have a single set of strong standard for inspections across all our programs. the third thing is, with your help, the investments we're making in information technology. our next generation management system, for our voucher program will allow to us do things just to give you one example, right now, we don't have the ability to take, to look at the photographs that are taken on those inspections. there is nothing that

replaces actually seeing with your own eyes what happens. this system will allow us to download and view anywhere in the country the digital photographs that are taken on the inspections that local inspectors are doing. so, and that is just one example. but there is a whole series of things in that next generation management system. that is one of the two biggest priorities you've had. you held us accountable to invest in those through our information technology. we couldn't agree more. that's a critical step we have to take and invest in. jenna: thank you. i do want to salute you and the inspector general for your responsiveness to the problems in maine and across the country. it is amazing that you don't download the photographs. i could lend you my blackberry to do that. if i can do that, clearly a feasible step that could be taken. one very quick point. another thing that i think

that the department really needs to look at is if you have bad actors out there, you do have available to you suspension and debarment tools where you can prohibit an individual, or even an agency from being involved in your programs for a period of time. and, i would encourage you to make more use of those tools in egregious cases. thank you. >> thank you. >> what is the timeline on being able to download those pictures? do you have that? >> so we have, we'll follow up with a detailed information on all the difficult steps. those first pieces of the next generation management system are going into place this year. i think it is within a few months that we'll have the photographic capability that i talked about. >> sometimes some people know they're going to be accountable in bigger ways

it make as huge difference. i appreciate that. i echo senator collins concerns about short funding on the project-based contracts. we'll follow that very closely. you know, you mentioned in your opening remarks that the programs that directly support the mission of providing housing to low income americans, most of them who are elderly or disabled, is about 83% of the hud's budget. when we have continued difficult challenging constrained resources i know those programs place a lot of pressure on hud's budget. the largest is the tenant based rental system programs which funds section 8 vouchers used by residents to find housing in private market. in this year's budget the level of funding requested to renew those existing vouchers is essentially flat while the budget does assume savings associated with programmatic changes, doesn't appear to be sufficient to cover the cost of inflation and renewing

incremental vouchers for the first time. i wanted to ask you how you expect phas to maintain their existing voucher portfolios without those adjustments? >> so two thinks i would say about this, madam chair. first of all, i think you all have been very focused on this for a number of years, is how do we balance making sure we protect every family with, sort of bending the cost curve if you will of renewals on these programs. and, we, through the budget this year are proposing a whole series of steps that would allow us to serve the same number of people and keep the costs relatively flat. and, some of those are choices i think that we can all agree are ones that are common sense and easy. some of those are tougher decisions and will obviously need to discuss with the committee and get your views and input whether some of

those make sense. specifically in the tenant-based program there are over $200 million of saving that we're proposing to achieve. the single biggest is to change our income targeting in rural communities to make sure that more of the working poor can be eligible for vouchers. it is part of the old section 8 voucher reform act that we're hopeful will pass in the house, in the coming weeks. and that we would be able to implement. i think those are, there is broad support for but we also have made proposed changes in the medical expense deductions as well as the minimum rents that would allow us to serve the same number of people. so to be very clear we're maintaining our commitment to serving all families there but it did require taking a number of steps to try to lower costs next year to keep those flat and, to,

allow us to have lower renewal costs in the outyears. the other thing i would just say briefly is that an important piece here, as you both recognized, is what it takes to manage these programs. and we've been very concerned that we had two housing authorities milwaukee and akron that turned back vouchers. i have never seen that before. can you imagine the idea, housing authority saying we can't serve anymore homeless veterans. >> right. >> just in january alone we had 13 different housing authorities to decision to turn back the broader voucher programs? >> because of cost associated with it? >> because they were concerned about the inability to fund those. last year's budget made the very difficult decision to fund the admin fees at just over 70% in terms of the overall need. we're proposing a significant increase to get

above 80% but we still think even with the difficult choices that we're making that there is still some risk that housing authorities wouldn't have enough. so particularly that line item of admin fees is a critical piece i think we'll need to discuss and work on this year, in the budget. >> let me ask you about that because your request does prioritize funding for section 8 administrative fees which have been cut significantly in recent years. administrative fees are not a exciting part of the budget but they do fund the basic operations. i know you struggle with a lot of difficult choices as she put this is together but can you explain why you prioritized funding for administrative fees over other needs? >> well, clearly the concerns we had that i have just mentioned about the number of housing authorities that have made the decision not to serve additional veterans. the number of housing

authorities that just in january alone have determined that they did not want to continue with their voucher programs, were critical in terms of that decision. let me give you the precise numbers of what we're, has been happening to admin fees and what we're proposing. first of all, in 2012, it was a 74% proration that we estimated for the budget. for 2013 what we're proposing is an 81% proration. in 2011, just to give you or 2010, i'm sorry, just to give you an example of where those fees were previously, it was a 90% proration in 2010. so even our 81% represents a reduction if you go back a few years. and that leads to some of the concerns i mentioned. i mentioned that even at 81%

we're balancing difficult decisions. i do have concerns won't be enough for some, some housing authorities. but i would also point out that it represents a significant increase in absolute dollars from where we were last year. and i'm just looking here for the exact number of what that is to make sure. let me get that to you in a moment. but there is exact number in terms of increase we're proposing this year in the budget. jenna: i have. >> i have a couple more questions but let me turn it over to senator snowe. >> thank you, madam chairman, i will ask one more question because i have been called to the senate floor. and submit the rest for the record. but this one too i referred to in my opening name statement and extremely important to the state of maine. maine is the most heavily dependent of any state in the nation on home heating oil and when you see the

spikes in oil prices that we've seen this year, and the cutbacks in the low income heating assistance program, it is causing tremendous hardship for so many of our families in maine. it is also very difficult because, maine has the oldest housing stock in the nation and that there are a lot of homes that are poorly insulated and that would benefit from weatherization projects and that is something we ought to invest more in as well. the, the large swings in oil have caused many of our residents to look to alternatives and the wood pellet boiler industry is growing rapidly in maine and it has the potential to help out these families to allow them to convert from oil but also to create thousands of new jobs in our state.

wood pellet manufacturing, boiler technology, and pellet delivery systems have progressed dramatically since the days when you had to scoop pellets from small bags into a small stove every couple of hours. now the industry has developed boilers that doesn't even require any human intervention during the day. there are automatic feeds of pellets and hud has been slow to consider wood pellet boiler systems as an acceptable conventional, primary heating source. the reason this is important is for purposes of qualifying for fha programs. you have to have a conventional, primary heating source. i wondered if you could tell me if hud is looking at

including these new wood pellet boilers as a conventional heating source, which would help more families in maine have the confidence that they could convert to wood without losing their eligibility per fha and other federal housing programs? >> senator, first of all, let me thank you for raising this issue and putting it on our radar screen, so to speak at hud. and just as we talked about with your blackberry a moment ago, we recognize there are moments where the federal government and government in general can be a little bit behind the cutting-edge in terms of new technologies. and, i'm happy to report, not just that we're looking at this but just yesterday we updated our frequently asked questions on our website to tell all of our lenders that wood pellet stoves are an acceptable heating system for homes under our insurance programs

as long as they meet the qualifications that any heating civil has to meet. it is an acceptable technology. we're in the process of updating our handbooks to reflect exactly that. so not only are we considering it but we've actually considered it and made the decision that you are absolutely right. that we should include these in our programs. thank you for bringing it to our attention. >> that is absolutely great news and again i thank you so much for your willingness to look at that. if the technology has changed so dramatically and, that is going to be great news, to a lot of homeowners in maine. thank you very much. >> thank you. i will be coming to borrow your blackberry later. [laughter] >> anytime. >> thank you very much, senator collins. mr. secretary your budget assumes saving associated with programmatic changes to the hud rental assistance accounts including tennant based and project-based section 8. you talked about this a minute ago but many of those

cost-saving measurements called for legislative changes which involve rule makes. what would happen to the savings estimates if all the proposed reforms are not enacted or they are enacted late in the fiscal year and you still need to go through the rule making process? >> first of all, senator, just to get back on the specific number i was looking for, increase we're proposing on admin fees is $225 million this year. so it is a substantial increase and one we thought, even in a tough environment was absolutely critical. so, and we, as i said we think it is the minimum necessary to try to get more confidence that housing authorities will actually be able to administer the programs. specifically on your question about legislative authority, i'm happy to say with your urging we are working very closely with your colleagues in the house on the authorizing committee and in the senate here to, and i am optimistic about

getting that legislation passed. the large majority of those changes would not require extensive rule-making. there are a very few that would require rule making really around the old rents and wrap programs but a large majority of them we could implement through notice. so if we do get the legislation passed we could implement them quickly and be prepared for 2013, 2013 to be able to implement and them and get the savings we're projecting. obviously if the legislation doesn't pass that would stop us from being able to achieve some but not all of the savings. we do have a share that we could achieve without legislation and i would be happy to follow-up with a specific analysis that shows you precisely which we could do on a regulatory basis of the 900 million, 920 million that we're proposing over the major programs, a significant share of it we could do without any

legislative change. >> okay. if we can see that that would be extremely helpful. >> yeah. >> but even if hud was able to achieve these changes at the beginning of this fiscal year, we've heard concerns that some of these proposals may harm owners and tenants alike, specifically some are worried about your proposal for owners to spend down their property reserves that would jeopardize maintenance and rehabilitation projects. and i am also really concerned that raising minimum rents and increasing medical deduction for tenants could put a real burden on some of these tenants in these still tough economic times. can you please talk about a little bit about the impact you might see there? >> i would be happy to. and again, let me recognize at the outset, these were, these are not decisions we would make in anything but very difficult fiscal times, making very difficult choices. and alongwith the project-based rental assistance decision, the short funding we talked

about recaller, this minimum rent increase was i think the single-most difficult decision in the budget. i think what's critical is that we need to clarify and make sure there's a very strong exception policy for anyone where the hardship of that increased rent would result. we are expecting to do that. we're already working on clarifying and, that policy and strengthening that policy. but there's no question that the impact of this will have some real consequences for families that are struggling. we have analyzed fully, in which programs what percentage of families would be affected by this. the average rent increases that would come out of this. the impact of the minimum rent is about 1 a million.

-- $150 million itself across all the programs. we would be happy to share the specific impact it has for the various based, project based, all the various programs what impacts those would be. >> i would really appreciate that. finally let me talk about homeless funding. i want to acknowledge your leadership really developing a homelessness plan and fostering coordination across departments. it is so important and i think we're making progress there. i did i had want to ask you about homelessness and rapid rehousing program funded in recovery act and designed to really help families but funding for that program ends this year. the emergency solutions grant program allows communities to continue these efforts but on a much smaller scale. can you talk a little bit about what the outcomes have been for hprp? >> absolutely. i'm so glad you asked about it. let me say first of all, while you asked about the,

eprp program, without your leadership we would never have made the progress that we made on reducing veterans homelessness. in one year to have 12% fewer homeless veterans, 18% fewer sleeping on the streets, that is a huge accomplishment and your personal leadership around hud has made a huge difference. >> the coordination on that has been important. >> huge difference. so we are concerned about the ending of hprp and we're concerned because it has been so effective. we thought originally it would reach about 500,000 people. it has already reached more than 1.2 million and still counting. and one of the best things about it, 75% of the folks it has reached are homeless families. who have often been the hardest to reach. why have we been able to reach more families. what we realized through doing this, what data has shown, for far less money than we've expected we've been able to stablize or

rapidly rehouse families. it might be one month's rent. it might be security deposit. might be just a couple months of utility bills but that is allowed us to serve far more people. really most exciting thing about it, it started to reorient many local responses to homelessness where for the first time they see rapid rehousing in particular is a very beneficial step. it can be particularly effective with a small amount of money. our hope is that by continuing to invest in it through the emergency solutions grant, and i think one of the reasons that we proposed the $330 million increase this year for our homeless assistance grant, accounts, is that we have to continue to invest in esg. we have to grow the investment there. but it is never going to as much as we had in hprp the hope is, we're starting to see this in some areas and washington has been a leader in this, of shifting resources, taking them out

of, for example, shelters. shifting them from medicaid funding that is going to emergency rooms and putting them into rapid rehousing, is lowering costs overall. so what we're hoping we see with our continued increased investment in esg, alongwith local investments that compliment it, that we will continue to see a focused investment. we're nervous about that. we're pushing on it. i know you've been supporting it. but it is something that i saw locally in new york, our prevention efforts, rapid rehousing efforts. something we were willing to shift our own funding into and that is something we want to encourage at the local. >> i will follow very closely. so anything you can show us that helps paint that picture i really appreciate it. thanks so much for your accommodation today. we'll leave the hearing record open for anyone who would like to ask additional questions but again appreciate the tremendous work of you and your entire staff on an issue at the forefront of our nation

although sometimes nobody really pays attention to the programs. they are really essential getting us back on track. you've done a great job and i appreciate it. >> thank you for your leadership and partnership. >> this hear something adjourned until thundershowers march 8th, we'll hear from the current commissioner of the federal housing administration. [inaudible conversations] >> super tuesday primaries and caucuses are next week and tonight mitt romney will be in one of those super tuesday states, ohio. he will be joined by his wife and new jersey governor christie for the rally in

the cleveland area. c-span2 will have live coverage starting 7:00 p.m. eastern. at the same time on c-span rick santorum will be campaigning in another part of the state. he is the keynote speaker at the lake county, ohio, republican party lincoln day dinner. see live coverage from willoughby, ohio, beginning 7:00 p.m. eastern. voters go to the polls in 10 states on tuesday. 419 delegates are at stake. three states have caucuses, alaska, idaho and north dakota. seven states have primaries. oklahoma, tennessee, george, ohio, virginia, vermont and massachusetts. watch live coverage of the results on the c-span networks and online at c-span.org. >> with a firm confidence in justice, freedom and peace on earth that will raise the hearts and the hopes of mankind for that distant day when no one rattle as say per and no one doctoring

drag as chain. >> it is is further the cause of republicanism to restore a clear understanding of tyranny of man over man in the world at large. it is our cause to dispel the foggy thinking which aboortz hard decisions in the delusion that a world of conflict will somehow mysteriously resolve itself into a world of harmony. >> if you had said in 2006 that the world would be begging for the united states to use force again in the middle east within 3 1/2 years, everybody would have said you were crazy.

>> what i've been writing for years, actually, is that there's a lot of continuity in american foreign policy, more than we expect. a lot of broad consensus and i think what you're seeing here is the kind of consensus that exists in the foreign policy community and probably there is a lot of overlap between the two parties. >> survivors of the costa concordia shipwreck testified that the crew on board was telling passengers to go back to their cabins more than an hour after the ship ran aground off the italian coast. the death toll toll from the accident stands at 25. house transportation subcommittee on held a hearing on cruise ship safety. it included witnesses from the coast guard and the cruise ship industry.

this is about an hour. >> i want to thank witnesses for appearing today and we want to note on behalf of the subcommittee that we understand very clearly that there's an ongoing investigation and as such, we understand that the witnesses today may not be able to answer all of the questions we have about what happened and clearly due to the nation of investigation and legalities that are involved with this. we will continue to monitor the investigation and look forward to a full accounting what happened when the investigation is complete and that information becomes available. in the interrim we'll look for ways to improve passenger safety based on what we know so far. with that i would like to yield to mr. larsen. >> mr. chairman, thank you and as well, allow me to express my prayers and thoughts to the women and men of the u.s. coast guard and families of the coast guard's men who passed or are missing in the recent,

recent accident. i want to thank you for scheduling the morning's hearing to delve into safety of cruise vessels in light of the grounding of the costa concordia off the coast of italy. before i begin my remarks i would like to extend my condolences of the family and crewmembers that died because of extreme tragedy and for seven families where of the loved ones remain unaccounted. i want to welcome two passengers aboard the cost at that concordia who traveled from massachusetts on short notice to be with us today as well. mr. chairman, the sea is a beautiful and most often benign, nevertheless it remains relentless and ever present threat to those who travel over its depths at times. the coast at that concordia incident reminds us we can not be complacent while at sea. the ocean remains capable in a moment of disabling and sinking even our most modern and technologically advanced

ships. it will be at least a year before the italian government completes its marine casualtity investigation and determines the exact circumstances that costed the concordia to run aground. there is no reason for us to delay efforts to assess the present regulatory reg people for crews vessels in the united states and internationally. if anything reports of another cruise ship, allegra adrift in pirate infested waters in indian ocean to a onboard fire should focus our attention. i welcome it opportunity. we should make sure that all ships operating in u.s. warters meet or exceed all design and construction for manning an operation. the public demands no less a standard. after all all forms of transportation, train, plane, automobile or ship are successful only to the extent the public perceives them to be reliable and safe to use. the cruise industry is considered a safe and mode of trfl travel for

passengers. according to 2010 information, cruises arriving and departing from u.s. ports were $18 billion of direct good and services and provided $37.85 billion in total economic benefits in the u.s. more importantly 329,000 jobs were generated in u.s. by cruise industry expenditures. . .

or whether we have become complacent in our efforts to regulate the safety of the industry. for instance or the international standards established under the international contingent of the safety of life at sea and the international standards on training certification and sea bare sufficient to make sure they are man in the highest practical safety standards. our training certification requirements received under these conventions especially emergency evacuation and practice management adequate. in the like of a greatly increased complexity of newly constructed cruise vessels. and also come our passengers, boarding a cruise ships given adequate and the commission concerning emergency even division procedures such as drills and if not, how might this be improved? these are just some of the questions that immediately come to mind the interest in hearing from the coast guard and the industry from implementing new requirements established pursuant to the cruise vessel safety and security act. in closing, the best way to ensure long-term economic health of the cruise industry in the

u.s. is to ensure the remains appropriately regulated and that the american public justifiably considers a cruise vacation as a secure form of leisure travel. with that, mr. chairman, i will yield back, but have won additional unanimous consent request if i may. unanimous consent request to commit to the record the statement from the international longshore warehouse. >> without objection, so ordered. >> thank you, mr. larsen of would like to welcome the full committee of the infrastructure mr. micha. >> first of all, thank you for yielding to me, and also to you and mr. larsen for complying with the request to conduct this hearing this morning, and i felt as the chair of the full committee that it was incumbent upon our committee and the subcommittee to review both this

incident and where we are on the cruise ship safety in light of this and other incidents. but i must first also identify my remarks with others today who've expressed their sympathy and condolences to the united states coast guard. we've learned in the last 24 hours, again, the high price that has been paid by the men and women that served us every day, making certain that we are safe and secure in the seas and waterways. and again, incredibly saddened to hear the of your loss, and our prayers and thoughts are with the families. and as mr. come larsen said it holds true for the passengers

lost in the concordia tragedy. someday maybe we shouldn't hold this hearing and i said no, i think that it's very important that we examine what took place and where we are as far as cruise ship safety. that's sort of a warning signal that we have a fairly new mega liner hit rocks and suddenly sank. in light of that incident, again, there will be investigation as to the responsibility, but our responsibility in the united states and in the converse is to make certain that every passenger on the cruise ship, particularly from our shores and u.s. citizens who board internationally have the very

safest experience possible and that this congress has provided an updated laws, regulations and work with the agencies like the coast guard to make certain that those protections are in place. first of all, the cruise industry is i think one of the most incredible and japan real achievements by the private sector that i've seen in my lifetime, probably my great grandparents came by steerage and at the turn of the century for so many decades and passenger whose pleasure was limited to the rich and famous and here entrepreneurs have made

what was once a very limited experience for a very few. one of the most pleasurable experience of their lifetime, and i've been on cruises, and i've seen the joy that people have. they save their hard earned money all year to go on a cruisç and it's an incredible experience that makes some of their dreams come true.2[ by the same token, we are very dependent. now this is an industry. my state of florida is one of the premier cruise states, the departure and a rival of vacations. we have ports last week i believe i was touring they're looking at some of the what's going on, but the economic impact of this industry is huge not to mention the great

experience and pleasure and vacation that affords folks, but again we have a responsibility to make sure that the experience is safe. some of the responsibility is not just the united states, it's also to international organizations. i intend, and i would ask both the chairman to take from this hearing information coming and we need to make sure that our international organizations but also set standards are updating those standards and we can't do this just by ourselves or put in place laws that just protect americans from our ports, but we have a responsibility to work with the international organizations to make sure that they also update their standards. so, that being said, we also

have a new era of cruise ships. some of these have five or 6,000 people. this 1i believe had over 4,200 people on board. we also saw the cruise ship, and this was i think the like of the aircraft carrier. that cruise ship when it hit the rocks and tilted over, is certainly got everybody in the world's attention as to what can happen with a mega liner, and we are fortunate in a way that cruise ship landed on some land and rocks. if it had sunk it would have been incredible. the other thing that was astounding to me, having been on cruise ships, when you go over sideways, everyone thinks of the

titanic in the way it sank or a ship going down in the sea. but when a mega liner telco fer and turns over, immediately you have disabled -- in that case probably half of the safety evacuation vessels. so we may need to look at some different types of equipment for different types of mega liners and safety procedures including the practice and drills that there were questions raised about. so i think we can take from this hearing some positive improvements. unfortunately a great personal loss to some families, and hopefully we can make this experience, which we have relied on and we have grown to take for granted an even safer experience, so i salute the

coast guard for their fine work and look forward to their recommendations. the other witnesses that have been assembled and german? lobiondo and mr. larson think you and we will yield back.?wbwb >> thank you, mr. chairman.?wb? our first witness today is coasd guard vice admiral brian salerno. welcome. >> chairman mica, lobiondo, a ranking member larsen and distinguished members of the committee, thank you for the opportunity to appear before you and to discuss issues related to the cruise ship safety. thank you especially for your expression of sympathy for the coast guard lost last evening. we are a small service, and events like that touched us all very deeply, so we very much appreciate your acknowledgment of that this morning. every year over 170 large passenger ships operate from the

united states ports, and they embark approximately 11.5 million passengers. the safety of these passengers and the cruise to operate the vessels have been a longstanding focus of the coast guard. every year the federal examinations of these vessels comply with all united states and international safety, security and environmental standards and ensure that the cruise are well trained. in my role as the deputy of operations i'm responsible for setting the safety, security and environmental standards for the u.s. flag, commercial vessels and foreign flag vessels which visit our ports. i'm responsible for conducting investigations when accidents or violate some of our standards occur. responsible for the policy regarding the conduct of the search and rescue. for all of these reasons, the recent casualty involving costa concordia is of great interest

to us. we are certain that there will be much to learn from this casualties coming and we are open to the possibility that our regulations and the international regulations produced by the international maritime organization may need to be strengthened based on the outcome of the investigation being led by the italian government. accordingly, we have offered to assist as an interested party due to the significant number of american citizens who are on board including the two that remain missing. all of us in the coast guard extend our heartfelt condolences to the family and friends of the missing and the lost. this year marks the 100th anniversary of the loss of the titanic, and despite a century of technological improvements and maritime passenger safety, the costa concordia accident reminds us that all of our new technologies as beneficial as they are cannot be taken for granted, but the only as good as

the human systems that operate and maintain them and the regulatory regimes which enforce them. to improve passenger vessel safety, the coast guard leads the u.s. efforts at the international maritime organization, where the world's maritime safety standards are set. the focus on international standards is important because just as in the costa concordia case, american citizens are frequently passengers on vessels which otherwise have no u.s. connection. as the agency responsible for verifying the safety of foreign vessels which visit our ports, the coast guard has established the most rigorous foreign state control program in the world. all foreign cruise ships with passengers in the united states control verification exam before they are permitted to operate. this examination is comprehensive in nature. it includes p construction concept reviews, examinations of

the test of safety systems during construction followed by annual and periodic examinations for however long the vessel operates from u.s. ports. it is during these exams that we also verify compliance with environmental standards and security procedures, including those procedures required under the cruise vessel safety and security act. in 2009 the coast guard is published of the cruise ship national center of expertise. this center is the focal point for providing coast guard marine inspectors with the in-depth technical knowledge of cruise ship design and operations and serves as an indicator of how seriously we take our responsibilities. one of the greatest safety challenges we could potentially face is a massive rescue operation involving the cruise ship. while we do with the cruise lines to minimize the risk of such an event is occurring we have also developed and continually research rescue and bass rescue peery will overtake

this planning in conjunction with the cruise industry we hold copies of the cruise ship emergency plan and we have periodically test and to ensure seamless ordination in the event of an actual emergency. over the loss five years the coast guard has conducted 36 mass rescue exercises involving passenger vessels. each district has specific positions authorized by congress to focus on this responsibility. as mentioned we do not have the fact on the costa concordia accident. however, as an immediate measure i've directed the coast guard field inspectors to witness the passenger drills required by the international safety of life and see convention whenever they are on board for an annual or periodic examination. this contrasts with the requirement in place under the mustard draw within 24 hours of leaving the port. i'm also pleased that the industry itself has announced new emergency drill policies requiring mandatory mustered

drills for embarking passengers prior to departure from the port. again, exceeding the international requirement. in closing, i want to assure the committee that the coast guard use of safety of passengers as its highest maritime authority. we have the best port state control program in the world for verifying safety of vessels and embarking in the ports. and although and through the imo we worked diligently to regardless where the embark the vessel anywhere in the world. meanwhile, we've taken measures to implement the cruise ship safety and security of 2010 and engaged in additional regulatory efforts to give the full effect to that law and to enhance personal protection of passengers on cruise ships. i look forward to continued cooperation with this committee, with passenger victim groups and with the passenger industry itself to maximize cruise vessel safety, security and environmental protection. thank you again for the

opportunity to testify today, and i will be pleased to answer any questions. >> thank you, admiral. your statement actually covered a number of questions that i was going to pose. but a couple for you. does the coast guard have any plans to conduct an independent investigation of the loss of the two american lives? >> sir, we are conducting an investigation and in fact we are currently embarked and interviewing the process of interviewing all of the u.s. passengers on the costa concordia. we are about 30% complete in that process. there's a standard series of questions that we are asking each of the passengers. we've provided the national transportation safety board to participate with us in that, and from that, we expect to develop a picture of what took place on board and to truly understand some of the human factors that were i think critical in the unfolding of this casualty.

>> admiral, we would be very interested when that's concluded if you were able to share those results with us, there would be very helpful to the subcommittee. >> yes, sir, i would be happy to share that. >> you may have commented ondddd this, i just want to -- justdddd make sure your stand. has the coast guard reached outd to a telling authorities to offer your assistance with their investigation? >> yes, sir, we have. the i telling authorities have indicated that they will welcome our participation. there are a number of other countries that have also sought the same status as interested parties and the have indicated that they will do that and extended the same courtesy to them. incidentally with the more recent events on the costa we ask for the same status as andd interested party and we are granted that status as well. >> and do you have any reason to believe the italian authorities would not share their finaldd results of their investigation? or do you believe they will

share with us? >> we believe they will share with us.dd all the indications are thatdd there will be full disclosure. >> okay.nçñçñçñç thank you. that is all for me right now.ñçç mr. larsen?ñçnçñçnçnçñç >> thanks, mr. chairman.nçñçñçñç admiral, as you know from concordia and costa alegra here

is that process by invite only or in this case because they are u.s. citizens involved and so we can inject ourselves or is it by in a fight? >> it's based on a casualty code put forward by the international maritime organization, which has procedures for cooperation, and so we are using of the provisions of that code to make the approach to the italian government, and they've responded accordingly. >> so it's not driven by the italian government or by the u.s. coast guard, is driven by the standards that are in place? >> we have come as an interested party we did request and the ottilie and government has responded. >> okay. reminded me why we are interested party in the alegra? >> because there were eight u.s. passengers on board the vessel. >> can you talk a little bit about the center for excellence and how it operates?

does it operate as more of a school setting, a seminar? how is that focus? >> it actually has multiple functions. it is first and foremost designed to train the marine inspectors from around the country, so wherever we have the cruise ship activity including the pacific northwest inspectors would go to miami where the center is located and received with coast guard specialists and with industry partners, industry provides vessels for the examinations so that we can not only have some classroom inspection but hands on real-life go through the ship and understand in detail how all the systems work. so it's a cooperative effort that we undertake with the industry. and in fact, the industry members go through the center as well, so they can better understand coast guard expectations that informs the industry as to what we look for in a safety culture on board the ship, the kinds of systems that

we pay particular attention to so that they are always maintained and the our integrated into the ship's safety management. >> with regards to the mass rescue exercises, how many did you say you've conducted? in your oral testimony? >> let me get the number. it's 36. and they are conducted in every coast guard district. all passenger vessels -- not all of them are cruise ships. some of them are high-capacity passenger vessels that are smaller than what we typically think of as a cruise ship. >> like the victoria clipper? >> exactly. so we do mix it up. they operate differently but each of them poses unique risk so the exercise all different shapes all around the coast in every district. >> okay. i think for now that will do,ñçç mr. chairman. i know we have furtherñçmñç

questions. i will yield better.ñçñçñç >> thank you mr. larsen.oñç mr. micha.ñçñçñç >> thank you, admiral. that's interesting, your last name family it's good to have you here and thank you so much for your service. i just love they never come and lobbying me. they have a small portion of what some of the other federal folks earn. there's just -- the are wonderful folks to deal with, and they are just so -- they do such a great job. i can't say enough about what you'd do. the muster drill thing, right

now we are all dealing with the anecdotal accounts and we will hear from the actual passengers and i think that's great that we bring them in. but this is a pretty good shape, but they are even bigger ships out there. is the mustard drill -- muster turtle and save the ship drill current that's adequate i know many of the cruise ships have upped that to a much shorter time when folks board. should that be updated? >> we certainly made it a requirement as part of our examination of the drill, and i think that is almost a reasonable outcome from what we are seeing from this casualty. the cruise lines are a voluntary practice at least within the united states. i believe that may imply internationally as well. >> do you think it needs to be looked at? >> i do.

>> again, we would like to take your recommendation to the i don't know if it needs to be in the law but in the regulationnç and also to the internationalñçç organization. so, we have the best possibleñçç standard for that role because the safety drill is very important and people knowing what to do and maybe a little bit with the mega liner. these are massive ships and multistory. the other thing, too, and i saw them go the lifeboats and safety devices are geared toward 20-degree chills. that might be something else we want to look at is i think it went to 35. the ship is still on its side. if that had been in deep water that would have gone down pretty dramatically if there had been a greater loss of life, and what is beyond me again is probably half of your life boats and

safety devices are on that side, so they would have been wiped out, and they would have to account for maybe 2,000 or 1500 of the passengers who would have no way of medieval life vest but if we have problems with that. so we may want to look at that and in the past they put the life vest in the cabin or someplace like that, may be working with the industry to see, again, availability of both the life vessel that would take folks off and most of these, well, i guess the i talions sea at that time was in that cold to get in the frigid waters and people's survival rate drops pretty dramatically. i think we need to look at that in light of the size of again

these mega cruise liners; would you agree? >> yes, sir. i think there are two broad categories of inquiry. what are the technological standards you just mentioned. we need to take a hard look in light of this casualty. are the standards correct? did the equipment function in accordance with the standards and are they efficiently rigorous? i think that's one question. the other one is the human factors. the crew performance, training, availability to operate under pressure, all of that needs to be looked at as well. >> finally, let me say this. you know, these hearings are great coming and we do learn things from the hearings. we will learn things today, and i would ask the ranking member mr. larsen and also mr. lobiondo. but i would suggest what we do as a follow-up is let's convene, let's come been a round table with the coast guard and others and let's get their recommendations and what they can cover by regulation will work with them on if we need to

change the law, let's take the recommendation. then, if i could ask you also since the international standards are also imposed for americans outside our borders but that's very important that you lead an effort, and i think one of those bodies is in london. >> the international maritime organization. >> to take to them our recommendations so that we can protect americans from a u.s. port, but there are so many americans now that travel internationally on these liners. so we will set a date appropriate to the majority and minority for the roundtable follow-up, and then we would like to try to get your recommendations for the law changes and when you can do by regulation and what these gentlemen take to the international organizations to

recommend an update. >> cannot yield? >> mr. chairman, you can do whatever you like. >> mr. young asked because he is the more ranking as far as the chairman. >> thank you, mr. chairman, for yielding to the first of all let me say thank the german mr. lobiondo for the hearing. but, you know, i will tell you this. there was nothing wrong with the ship. this was a good ship. probably three errors. one, we had a cat in that forgot he was a captain. as a captain, i was very embarrassed. he to get off the plot, he was too close to the shore, and there's nothing wrong with the ships we have in the industry. one thing also in our area we have american pilots that pilot the ships in the waters, especially in the northwest.

crucially important. the pilot had been on the board and not ship as he should have been, this would not have happened. was the crew trained? maybe, maybe not. i'm not sure about that. and i want us to be careful about casting aspersions to the american cruise lines and american waters, because we are doing a very good job. we've had a good safety record. we have had one bad fighter over the last 35 years and had a great rescue by the coast guard, and that's something that's really important to me to recognize where the problem why is and this is a human activity that should have never occurred. we go through a very rigorous program in the waters about safety for the cruise ships. are we perfect? no. huge industry, pretty doggone good. i really want you to understand that, admiral, because to me

this is important that we don't have a black eye all around the world about the cruise industry. why am i saying this? we have an industry over a million passengers a year that have come to the state of alaska. i've never heard them complain about any activity of the crew or the captain, so that's important. and mr. chairman, if i could ask one question that's really nothing to do with this, but the longshoremen have asserted that neither the foreign crew or the american staff shall board the trips have required safety trading to load, and load and type vessels in the nation's pork how would you respond to the concern that unqualified personnel loading and unloading entitlement vessels in the port may endanger passengers' safety and do you believe legislation is required to protect passenger safety during the loading and unloading and talking of the vessels of the nation's port? this is a complete i've had from of course an interest group. but this also ties in to the safety factor.

how waits loaded, i used to be a loadmaster, too. where it's loaded, what is the passenger requirement, what is the cruce requirements about handling all these things and you can comment on that if you care. >> certainly, as loading equipment, trim and stability, very important on any ship, particularly important of course when you have passengers involved looking after their safety. i've not heard the particular concern raised by the longshoremen's union but i would be interested in looking into that. spec i've noticed how quick people forget and thank you mr. chairman. you were not on the timer, the ranking member wasn't, the next chairman and i was put on the timer and with that i will yield back my time. >> i reserve comment on that. but for those of you that may not be aware, mr. young i believe is the only member of congress who actually holds a captain's license. so, he does speak with some

personal experience. mr. brown or excuse me, mr. larsen. >> mr. chairman, i just noted to mr. young that in the future when he's saving the member i will be sure he is on the timer. [laughter] >> ms. brown, you are recognized. >> thank you. let me take just the opportunity to thank the u.s. coast guard for not just the work that you do in florida, but throughout the country. we have given you a tremendous amount of responsibility, and you all have come up to the challenge, and i can't -- every time i get a chance to think publicly how you are responding after mine all of them i have to because you all was the first branch that was there and protect our country right after that tragedy. so thank you. this is no doubt this accident incidentally was tragic and my thoughts and prayers go out to those that were killed and injured, and we must take every chance necessary to protect the

safety of the passengers, but we cannot realize the injury because of the reckless action of one rogue employee ki who failed to follow the policy and protocol of his own company. as a member from the state of florida and a representative to the port of jacksonville, i am particularly interested in the crew industry. the cruise industry is a critical economic engine for the state of florida. over 8 million passengers involved from floor but in 2010 and the industry can prove that more than 6.3 billion in direct spending in addition, the cruise industry is the second largest employer in florida, generating more than 123,000 jobs, $5.4 billion. but i do want to go back to the question that i want to ask you about. do you think that the italian

coast guard is everything that they could to assist passengers, and what recommendations would you make that we would add additional recommendations? >> thank you, a congresswoman. to the best of my awareness, the italian coast guard pursued the response in a very aggressive and very professional manner. nothing to suggest otherwise. we of course at the very beginning of the investigation i think we will learn more about, you know, not only the action of the crew, but the rescue organizations which will be beneficial to us as we refine our search and rescue operational plans. >> and i know the investigation is going on, but there is a great amount of concern as to how the captain handled the situation. and what procedures can we put in place to make sure that, i mean, you know, hours afterwards it was not -- from the press

account, and of course you can't always believe the press account -- but before, you know, it was an acknowledgment that it was an emergency. and in addition, my understanding that it's 24 hours before they have to have the muster drill and they have gone back and have now said that before you leave the port that you are going to have that training, and i think that's very important, and i'm glad that they have instituted that route. >> yes, i think that is a noteworthy improvement, and i am very pleased with the industry for taking the initiative even in advance of being required to do so. so i think that is a positive development. as far as the actions of the master, obviously the investigation will shed more light on it. i don't know of any professional meritor who is willing to stand up and defend what the apparent lack of leadership that clearly took place on the ship.

>> what about the training of the crew? because it seems like everything was kind of in this survey. every time i've gone on cruises and send my mom on cruises and family, the first thing we do is they have that training as to how in case of an accident, you know, you put on your gear and everything. >> that's correct. >> that hadn't happened. everybody was dressed, but they hadn't had that initial safety training. >> there are well defined requirements for training of crew members, and everybody but the safety position including, you know, hotel staff that may have a safety position, crowd management, assuring people to their stations and so all of that is required. and it's periodically refreshed. we enforce those regulations vigorously in the ports that control the program. we work very closely with the industry and convey our expectations of the safety culture, and i think that the

results are in the numbers. the cruise ship industry in the united states have a very good safety record. it is among the safest of all maritime activity, so that doesn't happen by accident. requires commitment by the industry itself, and the numbers i think bear that out. >> by understand all the equipment the votes on one side at a lot of weight to the other side. so is there any discussion to ensure is that a certain level because of a understand is that a certain underwater? >> there are very precise technological requirements for the lifeboats. the angle they must be lowered 20 degrees was mentioned earlier and that's correct. there's also the 10-degree, so operating against that, yes.

also at play is this the devotee condition of the ship. one of the questions we do not yet have an answer to is how much flooding occurred in the ship, and should it have listed over as far as it did? we don't know if the doors were closed for the ship which may have spread the flooding beyond the design limits. all questions that we need to know as part of the investigation to pursue with the italian government. >> once again i want to thank the men and women for their service. and i yield back the balance of my time. >> thank you. mr. coble. >> i appreciate that. >> this has nothing to do with my questioning but of the acoustics told it appears to be mustered. they are different today and i'm not sure whether that is controlled by the control room or just something a little bit different. >> good morning. as was indicated earlier we are deeply concerned about the tragic loss last night, admiral.

the coast guard conducted an independent investigation and the loss of the two american citizens aboard the costa concordia. >> as mentioned we are interviewing all of the u.s. passengers are on board to develop as complete as we possibly can and as to what took place on that vessel and as mentioned we will share that information with this committee. >> thank you. admiral, is it possible for the cruise vessels to fail an inspection and then not be permitted to operate a u.s. waters? >> yes, sir, that is possible, and there have been instances where the coast guard inspector hasn't been pleased and as deep and the ship. that doesn't happen very often. it hasn't happened in a number of years now because i think that we have developed a strong enough expectation with the industry and they've responded by instituting the city cultures within their companies to make

sure they meet all of our strenuous requirements. but yes, it is possible if we are not satisfied the ship would sail. >> when the coast guard does detect deficiencies, how do you follow to assure yourselves of the deficiencies corrected? >> we do follow-up depending on the severity of the deficiency, we may allow a certain amount of time for corrections if there is immediate danger we would require an immediate fix. >> let me ask you this. on the hotel and entertainment staff aboard the u.s. cruise vessels required to be credentialed mariners? >> yes, sir, they are to a u.s. flag vessels are required to be licensed by the coast guard. the crew credentials and the most of the training associated with the safety positions they

hold on those. >> and i would assume that that would probably lead to a more complicated crew. >> that's the goal, sir, the training is designed to achieve a level of competency as a baseline. when we witness fire drills, duals on board modeling u.s. flag ships but the foreign flag ships that is one of the ways that we verify that the training has taken hold, that people actually know how to use the equipment and how to communicate and can perform their functions in an efficient manner so that is one of the controls we have. >> good to have you with us. i yield back. >> mr. cummings. >> thank you mr. chairman. the -- first of all let me associate myself with the words of ms. brown with regard to the tremendous work in the coast guard every day. i call them the thin blue line at the sea, and also i express

my concern and prayers and condolences from the losses we suffer here recently and those families that are going through some difficult times. as the coast guard faces continuing budget challenges, perhaps some of the most important things we can do to ensure the safety of the industry and the united states and indeed the safety of our entire maritime transportation system is to ensure that hard-won gains in the coast guard marine safety program are not lost, and that this critical program continues to receive the resources that it needs to be able to engage fully qualified personnel to carry out thorough inspections and investigations, and i want to thank ms. matsui and so many of the cruise industry is in the victim's for helping us as we address many of these issues in the 2010 reauthorization.

at merrill, as you know, the coast guard organization act. for the prevention and response work forces. title v required that there would be in each sector a chief prevention who is at least a lieutenant commander with civilian gse 13 and who is a marine inspector of qualified casualty investigator or the marine safety engineer. it's a qualified chief prevention in place at each sector now. >> as i think we've brief to the past, which also included a number of civilian marine inspectors in the workforce. our goal is 30% so every sector has civilians who will be our longstanding experts in every port. the of the local knowledge, the awareness of the industry, and they also assist in the training of more junior people. so i think we've made considerable progress under

title v of the coast guard. >> very good. title fight is required the certificate inspection signed by the senior coast guard member civilian employees who inspected the dessel in addition to the officer in charge of the marine inspection. as the coast guard in compliance with this requirement? >> i will have to confirm that that has been put in effect. it is certainly our intention to comply with -- >> how soon can you get us the information? >> i can get that to you in the day or so. >> similarly title v requires any individual adjudicating an appeal or a waiver of a decision regarding the marine safety qualified specialists will have a senior staff member who is a qualified specialist and concurs in writing with the decision on appeal. >> yes, sir we are making sure they are qualified people throughout the review.

>> very good. what is being done to increase geographic civility among the marine inspector and investigative work force? >> the primary reason, the primary methodology for the greedy lead to stability is the civilian work force that gives us some rootedness in every port so that that is a hedge against the military work force which by its very nature does move around more frequently. the civilians provide that stability. >> let me ask how many inspectors do you have a large qualified to examine the cruise ships and as the inspector work force currently adequate to meet the current workload? >> for the qualified inspectors or the ships they are currently 326 and the current work force, yes is adequate. we've added a number of over the years, 400 plus i think until

2011 and in 2011 there are some additional, and we will have an annualized some that were thrown on board in 2012, so over 500 overall. new positions and we intend to hold on that even though we are running a very tight budget environment, so it's been growth in a no growth environment, so i think that speaks to the level of commitment the coast guard has to this mission. >> how many of the captains of the cruise vessels that call on the united states are americans operating on the u.s. coast guard licenses. >> the four men fled cruise ships are almost exclusively captained by masters but they do take international standards that helped develop. >> so i guess that's what leads to my next question and my last question the captains who are not licensed by the u.s. coast guard what review do you conduct of their licensing or fitness

for duty? >> we certainly check the credentials issued by their home governments, and then as we go through our inspections, and particularly with five-year and lifeboat drills that is our ability to assess their competence. and every inspection, we question the crew as to their knowledge as to safety requirements, security requirements and environmental, and we make some judgments based on that. we have held the ships in the u.s. when we have come to the conclusion that people in sensitive safety positions on board did not do their duties. >> thank you mr. chairman. >> thank you, mr. cummings. ms. matsui? >> thank you, mr. chairman and for allowing me to be a part of this important hearing. i'd like to think the witnesses for being here today and particularly the survivals from busbee seven. i would like to have unanimous consent that a letter from the international association be submitted for the record.

the costa concordia accident is an unfortunate tragedy that once again highlights the need to constantly evaluate the cruise ship safety as does the current situation with the costa alegra. we must know the value of the safety procedures in place to respond to an emergency, but also the security that are of the passengers on board. in july of 2010, president obama signed into law the cruise vessel security and safety act, legislation i sponsored after learning that one of my constituents suffered a rape while on a cruise vacation and that there was no process on board to properly handle the crime. this law is the first step towards providing greater security for passengers from requiring kevin was to the security laches to improving medical care and support to sexual assault. the law also gives the public

access to information about the number of crimes committed on the ships and puts much needed procedures in place to ensure the proper preservation of evidence necessary to prosecute criminal. all provisions of bill longwinded into effect by or on the january 27, 2012. i've raised concerns about whether it is being properly and timely implemented and look forward to getting answers to these questions today. as you know, admiral salerno, it requires each cruise ship integrate video surveillance and man overboard technology to the extent that such technology is available. it is my understanding that the coast guard has received several proposals to different companies and manufacturing man overboard detection devices. have the cruise lines integrated man overboard technology aboard the vessels as required by law?

>> i am, that aspect of the law was determined not to be self executing so we have embarked on a regulatory process. the first step in the process was to seek information from the industry to determine the availability of the technology that can be used for the man overboard detections a we have engaged in that process right now. our intention is to take that information and convert that into a notice of proposed rulemaking to fully implement that provision of the law. other aspects that are self executing we have through policy have already implemented. as the meckler are you in the rule making process now? >> in the process we are gathering information quite honestly from the effective policy. >> we would like to do that as quickly as possible. >> absolutely. >> the law also requires at least one member to be adequately trained and the crime scene preservation technique. understand the coast guard works with the fbi and maritime administration to come up with a

model eight hour training course. how do you know if a crew member has satisfactorily completed this training? >> the training would be certified by the company, and would be examined during the course of our normal inspections of the vessel. >> do they have to provide actual documentation that the training has been completed? >> they have to have the documentation on board, and i will confirm with you whether they have to affirmatively said that in. i don't have that detail but i will confirm that for you. >> who is conducting the training of the members? >> the training is conducted by the cruise lines themselves based on a model course that was developed in conjunction with the fbi and the maritime. >> how do you know that in the training follows the recommendations of the model course? >> kilby verified through the routine inspections of the vessels as part of the

inspection program. >> i still have concerns that eight hours might not be adequate time to properly train a member and crime scene preservation techniques and i do hope we can work together to ensure that the cruise ships have the expertise necessary. stack the pergamon place now is an interim one, and we are willing and open to suggest to improve that. >> i to understand how important it is to the victim's that all of these be done in a expeditious manner as possible. and i truly appreciate what the coast guard is doing along with the others i do appreciate your service, and i know that my time is moving now and i do have a few more questions, but i'm hoping i can have written -- thank you. thank you very much for that. appreciate that. have the cruise lines integrated video surveillance aboard the vessels as required by law? >> i will have to confirm that

with you. i don't have the details on that but i can get back to you on that. >> you have no idea the reasons behind that at all? >> i don't have the information on that, ma'am. i will get back to you. >> will there be able making process for that as well? >> that's part of the rulemaking process. >> admiral salerno as you know the law requires cruise ships to report crimes submitted on the ship and the coast guard is providing information to the public through an internet portal, and i've raised concerns about the low number of crimes actually being reported. there were 16 reported in the entire year of 2011. can you walk me through how crime will be reported and investigated? let's say sexual assault involves a u.s. citizen on a jamaican flag ship leaving an american port headed for cancun. i would like to know who would have jurisdiction over the crime, how would a jurisdiction be determined, who would be able

to make an arrest. >> for a crime of that nature, the process would be the cruise lines would report that i would go to the fbi. there would be investigations by the fbi. typically in conjunction with the coast guard investigators. the fbi would post the results once the case is final. we would put that on the portal but we are posting closed cases so what you see is low numbers that are the closed cases. there are more cases that still open and still under investigation, so that's not representative of the total. >> that's not on the portal at all. >> okay. so, you know, a key element was to provide the public with correct information regarding the crime - this gets and i do hope that the coast guard and the fbi are doing everything in the power to have complete information, and i would like to be following up with you and the fbi. thank you very much,

mr. chairman. >> thank you ms. matsui >> thank you. i apologize for arriving late with another hearing in another building i have been -- i assure you have probably covered this, but the reassurances for the american citizens on cruise ships coming out of american ports i realize under the foreign flags as much jurisdiction as on the flag vessels, but the economy in the crew industry resulted in the foreign flag vessels. would you feel comfortable with taking your family on the crew out of the u.s. port? >> i would come and i say that because we do have the most rigorous examination program in the world come and we have received cooperation from the industry and adopting the safety culture so that even when we are not watching, i have confidence they are doing the right thing. >> is their anything else we need to be doing to ensure the

cruise ship safety that obviously we have no jurisdiction outside of the ships that call on our ports? where are we short? >> i think that our interest in the costa concordia investigation is to explore that very question. we need to be open to the fact that some of our regulations may need to be strengthened. the international regime and d to be strengthened. those are questions without answers at this point and i think we need to be open to the fact we will have something to learn from this and we would like to stay connected with this committee as to what those might be. >> i look forward to working with you and i will yield back the remainder of my time. >> thank you. ms. brown? >> i want to thank you all for calling this meeting, and the purpose of this meeting is to see what we need to do as to strengthen the industry after

100 years since the titanic sank and what policies we need to implement to make sure that we can protect all of the passengers, the u.s. passengers are people come from all over the world to sail on our ships and i went to barcelona, and there is a cruise ship that leaves orlando florida that goes to barcelona, so it is an international business and i want to commend this is matsui for making sure that people are safe on the ships when they travel. but my understanding, the cruise industry is one of the safest in the world else for being attacked. you can be attacked. in my neighborhood as far as that goes. can you tell me a little about that because i wouldn't want to

leave here with the image that traveling on a cruise ship isn't safe. i send my mother on a cruise ship, so i know it's safe. >> our numbers speak for themselves. the ships consistently rank among the lowest in the category of ships that have marine casualties. so all the major types of casualties that we measure, collisions, groundings, fire, flooding, those types of things, the numbers are single digit numbers in all these different categories, so yes, comparatively safe, and i think overall objectively speaking it is a safe industry. as mentioned, that doesn't happen by accident. it takes a lot of effort and from the coast guard perspective we are relentless in applying that effort working with the lines to keep them safe. >> thank you very much and i also would have an opportunity to respond to this we will have accurate time to respond is that

correct? >> absolutely. >> thank you. mr. cummings? >> mr. chairman, i just have a question or to in what ms. brown just said. mr. chairman, last week, the oversight and government reform we had a hearing on the chevy volt and one of the things that can out of a hearing is we wanted to make it clear that the chevy volt was a safe car. ..

and so i don't want the word to go out that because of these incidents that really is not, it's not us. see, i want that clear. but i know what happens. just like with the chevy volt and when the president of gm said that he was concerned they would be collateral damage, and when we talk about collateral damage your, we are talking about an industry that hires a lot of people, and industry that provides families with, in difficult economic times, with one of the most cheapest and

most inclusive vacations that they can get. i don't want there to be collateral damage to that industry. so, i want to make it very clear, i want you to reiterate what you just said, that it is a safe industry. and that leads me to my question. are there things that you would like to see us do, what we are doing, to make it even safer? i mean, nothing is perfect. it's not -- it's a project ever evolving. we learn every day from our mistakes. so the question is, is there anything we should be doing that we, is there anything we should be doing that we are not doing? you know, i'm just curious because i don't want, i don't want the word to go out that we haven't fulfilled our

responsibility. i believe that the industry is doing the best we can, but i don't want them to be blindsided by, you know, i hearing that paints them in a light that is just not accurate. that's all. >> and thank you, congressman cummings. it's not my intention to paint the industry as -- >> no, i think you did a pretty good job. i just want to make sure we are real clear. you know how people are. they did although tidbit of information, particularly with these incidents that have nothing to do with those. the next thing you know, that industry then suffers when it shouldn't suffer. >> i think we look at our casualties very closely, and they do bear out the fact that this is a safe industry. so, they have a good record. we want to work with the industry to maintain that record, but it is objectively speaking, you know, a safe industry. >> how do we protect our

progress? >> we continue from a federal perspective, continue to stay engaged with the industry, we will watch this casualty, see what unfolds from it and would certainly like to stay connected with the committee as to the results of what we find on that investigation to see if there maybe other things we need to do. we don't have the answers to that yet, but again we need to be opened to what we learned from this investigation. >> thank you, mr. chairman. i yield to the lady. >> yes, turn to you said she, and i just want you to know that purpose comprehensive of affordable travel as having been a traveled agent before coming to congress. >> reclaiming my time. eyed take back the word cheap and i would substitute, mr. chairman, with affordable. i yield back. thank you for the record, ms. brown. i yield back.

>> mr. larson. >> mr. chairman, i ask unanimous consent to enter into the record the statement from jeffrey simoni. >> without objection, so order ordered. >> ms. brown, mr. cummings, anything else? mr. farenthold from anything else? admiral, thank you very much. this was i think extremely helpful, and as we proceed, i would just like to emphasize a couple things as we close off this first panel. mr. mica made the request that we have this hearing over the tragedy with the costa concordia, that we, we also used this opportunity as the apple has pointed out and i think we'll hear additionally, that the u.s. cruise industry has been very proactive with the coast guard, which we will look forward to following up on, and highlight the reality as

mr. cummings and ms. brown i think and play dead, but to make sure that we don't have collateral damage with u.s. citizens, with the cruise industry. because of our safety record is being so incredible. and that's do the proactive nature of the coast guard, and working with the industry. we will look forward to the results of the investigation, which as you said, admiral, i think give us more earbud at this point i feel comfortable in saying, not being a lawyer and all the qualifications or qualifiers that need to go with this, every indication is that this was incredibly poor judgment on behalf of one individual mariner, at best. at worst, it is much more damning and when you have somebody that exercise is extremely poor and lack of judgment, it's a very difficult

problem to deal with. so admiral, we thank you for being here. we'll have a very brief adjournment as we can set up for the next panel. >> thank you, mr. chairman. [inaudible conversations] >> super tuesday primaries and caucuses come up next week.

>> bobby jindal is scheduled to reveal his proposal for balancing the state budget. i budget $900 million in dollars in the red. it's mostly cloudy and 37 degrees at the airport. 38 degrees. you're listening to news and weather station. >> this weekend booktv and american history tv explore the history and literary culture of shreveport, louisiana. saturday starting at noon eastern on book tv on c-span2. author gary join on the union armies failure in louisiana from one damn blunder from beginning to end, the red river campaign of 1864. to look at the over 200,000 books the james smith no

collection housed at the lsu-shreveport archives. a walking tour with neil johnson. and on american history tv on c-span3, sunday at 5 p.m. eastern, a look at the base's role on 9/11, plus a history of b-52 bomber. also visit the founding fathers autograph collection at louisiana state exhibit museum and from the pioneer heritage center, medical treatment and medicine during the civil war. shreveport, louisiana, next weekend on c-span2 and three. >> this weekend a newsmaker, buck mckeon talks about upcoming defense department cuts and what he thinks about the administration's plan for dealing with iran. >> in our bill, you know, we tightened up sanctions in our bill last year, and i think those are bearing fruit. i wish it had been done a few years ago.

we probably wouldn't be quite in the situation where we are right now where we're getting very close to having the capability, the ability to have a weapon. my concern is that we are resolute about to make sure that when we say we are not going to allow them to have a weapon, that we are not, it's kind of like, i hope this isn't some link and i think because this is very important. but you're not clicking the administration's resolve on that? >> i said i hope that we are not, that this is really, we are really serious about it. >> you can see the full interview with house interview with house armed services committee chairman buck mckeon this coming sunday morning at 10 eastern and again sunday evening at six eastern on c-span.

interior secretary ken salazar defended his department's 2013 budget request before the senate energy and natural resources committee earlier this week. president obama's $3.8 trillion proposal includes $11.4 billion for that department. mr. salazar said it is a good budget but requires the agency to do more with less. several senators asked the secretary about high gas prices and tapping into the strategic petroleum reserve. this is about an hour and 50 minutes. >> okay, why don't we get started? this morning, the committee is reviewing the president's proposed budget for the department of interior for fiscal year 2013. we are very pleased to secretary salazar act with us in his old committee room. the department's proposed budget of 11.7 billion appropriate funds represents a slight increase over current funding levels. in my view it's a reasonable

proposal and reflects the difficult choices the president is required to make given the current fiscal environment. there are a number of programs such as land and water conservation fund that i wish were funded at higher levels, i understand the budgetary constraints the administration is facing. i want to take a minute to just express my support for the secretary's determination to adequately fund and carry out the interior department's responsibilities for safe and environmentally sound oil and gas production in federal lands, and particularly in the outer continental shelf. we were commenting in the hall before coming in here that at least it's not two years ago when we had the bp oil spill, as a very real issue before our committee. i believe, especially given the

challenges of the deepwater horizon disaster, the department has acted properly in continuing to focus on safety issues. obviously there's a lot of concern about gas prices, abroad and in the land. i do believe that domestic production is important, robust domestic production is important. it needs to be pursued in a responsible way. that clearly is happening. domestic production of both oil and natural gas is up. since 2008 their projected to continue increasing over the next 10 years, at nearly historic levels. our oil imports continue to decline. they were down to 49% of consumption in 2010, which is an impressive improvement over where we weren't even four, five years ago. i am pleased that the budget

includes increased funding for renewable energy development on public lands, as part of the department's new energy frontier initiative. i understand the department has approved 29 commercial scale renewable energy projects, it and associated transmission since 2009. i believe these efforts hold great promise and renewable projects can yield important energy for our economy in an environmentally responsible way. i'm also glad to see the budget proposes enactment of a hard rock abandoned mine land fund, the reclamation of mine sites that threaten human health and safety and cause environmental degradation. i'm particularly concerned with the legacy of reclaimed uranium mine sites on indian lands in states such as mine in new mexico. mr. secretary, i hope you can work with me and others here on the committee to seek funding to

address this very serious issue. finally, i'm pleased to see that the department's budget request demonstrates a strong commitment to implementing the indian water rights settlements around the country, including funding for a number of settlements in my state of new mexico. with that let me defer to senator murkowski for her opening statement. >> thank you, mr. chairman. mr. secretary, good morning, good to see you. mr. hayes, welcome to you as well. iq for the work that you've been doing on behalf of so many. while these are areas that are contentious most certainly and with the budget it even makes them more contentious. i was raised to recognize those that have tried to work with us to make good things happen even if it is not as much as i would like, and so i start my comments by thank you, mr. secretary, for your personal involvement in trying to advance some issues that are critically important to

my state. and i think to the country, when it comes to domestic oil and gas production. the last time we were all together, with when you came up to the state to visit to look at some of the issues that we had before us, specifically cd5 at the time stalled out because we couldn't get a bridge, permit for a bridge across the area. and also an opportunity to look at the ocs projects and what shall is pursuing. mr. hayes, i truly appreciate that you have committed as much of your time to help address not only these issues but some of the other alaska specific issues. we have made some progress, and i think it is important to recognize that, but i also appreciate, as you do, we have a ways waste ago. we will continue to work with you, but i appreciate you are working with us, and i thank you for that. i would like to address just a couple of very alaska specific

issues, and mr. secretary, you and i had a chance to discuss them. i more than a little bit disappointed about within the budget on the alaska conveyance program. there's an enormous reduction to that program, and as you know we've been working for well over 40 years to try to get the conveyance to a alaska natives to try to get the land conveyances that were made upon statehood, which is that 53 years ago. we are continuing with that but we can't make these conveyances and less we have that budget. i addressed our state legislature last week, and one of the early questions that came up was the issue of the federal government's role with regards to our legacy wells. the 137 wells that were drilled by the federal government decades ago, and sit without attention, literally falling into landscape. it's an environmental scar, and we in alaska can feel this is a

double standard. the private sector is held to the highest environmental standards and yet the government is saying well, we can maybe get to one or two of them a year. and i understand that these are budget priority issues, but i think we need to figure out how we make them a priority. one of your priorities is full funding for the land and water conservation fund. the chairman has indicated his support of that but it's difficult for me to say, well, we need to work to expand and bring even more federal lands under the federal purview when we are not taking care of the commitments and responsibilities of the promises that have been made with other lands. so we need to resolve that. i also want to bring up the very strange relationship that many alaskans the with the federal land management agencies and the perceived overreach of the federal government into their lives, whether it's the ranch

activity on the yukon river or the lack of cooperation and coordination by refuge managers. i think these are legitimate grievances. we need to work with you on this. so i hope that you will make it a priority to improve that relationship. next is an issue that affects not only alaska but many others, and these are the new and higher fees and royalties from into your within this budget. i know that the philosophy is the federal royalty rate is lower than many state royalty rates, but you've got to make that this isn't exactly a one-sided bargain. those states easily trump the federal government in terms of stability. so when we ask them to pay more, while providing less, it really doesn't work. i note that the chairman has mentioned the statistics that the president also has repeated, that oil and gas production is up, that is true, but when you look to the oil and gas production on federal lands we have seen 11% decrease on the federal site.

so i think it's important to put that into context. i am hoping that we will get a little clarity about the disclosure requirements that the department is working on for hydraulic fracking. the question that i would have is, is whether it is just that, whether it is a disclosure requirement as many of the states are actually a new set of regulations. i think all of us are looking very critically at this. we want to make sure that this boom that we're seeing across the country when it relates to our opportunities for hydraulic fracking, combined with horizontal drilling, we recognize that it is vastly increase our national gas supply. and it's reviving communities, bringing about jobs, but those could all be lost if the federal government decides to place redundant requirements on the technology. again, i appreciate your efforts in a very difficult area. folks back home in alaska are talking about nothing but energy right now.

it's not just the price at the pump, but it is all energy. so you here at a particularly opportune time for us. i thank you and look forward to questions. >> mr. secretary, why don't you take whatever time you need to describe the administration's proposed budget, and then we will have questions. thank you for being here. >> thank you very much, chairman bingaman, and ranking member murkowski. thank you, senator wyden and senator barrasso, senator leahy and senator shaheen and senator franken, for all the issues that we work on. many we agree on, sometimes we disagree, but i do think we're making progress on a whole host of fronts on the energy agenda for the united states. let me also say at the table with me today is deputy secretary david hayes, and a senator murkowski pointed out, he has done a herculean effort in terms of what we have done,

including the coordination of permitting issues in alaska. and sam hayes has been the budget director for the department of interior for many years now, and also just want to say thank you to the staff on both sides, both democrat and republican on this committee that worked with us on some issues. let me start off by just characterizing the way that i see this budget. senator bingaman and distinguished senators, i see it as he squeezed budget with some tough choices and some very painful cuts. it's a budget that cuts government and requires government to do more with less. it supports job creation. job creation i know is a focus of this committee and a focus of the president. it's job creation and energy both in conventional energy as well as renewable energy. it supports job creation through conservation and tourism. it supports job creation through the water supplies that we

manage only half of the people of this country. and lastly it honors our important response goes to the 566 tribes of alaska natives in america. overall, this budget is 3% below the budget which was enacted by this congress in 2011. that's 3% below 2011, and it's about even with a budget that was enacted in 2012. let me review each of these pieces in a little more detail. first, in terms of cuts and efficiencies in government, which i know many of you have been focused on wanting to make sure that the government is run more efficiently. it's a high priority for the president, a high party for us at the department of the interior. this budget foresees that there'll be a downsizing of an additional 591 fte within the department of interior. so we are asking our employees to do a lot more. this is, in fact, even in the

climate where we have asked them to take, but we are continue to figure out a way of doing more with less. we also have a number of program terminations that are set forth in this budget in downsizing, $517 million of downsizing and reorganization that is included in this budget. some of these are painful cuts. the national heritage area programs, which many of you on this committee have supported, those are cuts, that is a painful cut. some of the central utah project, which we have supported and continue to work on. we have a cat in their of $18 million. cuts that i would like to see frankly given the tough budget times, these are things we've had to do. administrative efficiencies which include revisions to how we take a look at the procurement and information

technology and a host of other administrative options with the department. this budget for 2013 forecasts that we will be able to save $207 million just from administrative efficiencies. so we're doing everything we can, given the fiscal times that we face here in this country. want to spend a few minutes speaking about jobs and energy and other complements of the budget that i made some comments at the beginning about. first with respect to energy, you will note in the budget there's $662 million for conventional energy. there is $86 million for renewable energy. this is all part of the president's program, all of the above energy strategy. and so when we look out $662 million for conventional oil and gas, it foresees our robust move them moving forward with development of oil and gas resources in the gulf of mexico, and all of you, including

senator landrieu, it was the point of the spirit eating with the deepwater horizon macondo oil spill, knows how important it is, we do the job and that we do it right. so we appreciate the appropriations from this committee. from the congress last year, relative to helping us do our job in the oceans of america. we have a lot more work to do, but we are moving forward, not only in the gulf of mexico, and decision still have to be made on how we move forward in the arctic, but some decisions have been made their on additional opportunities. on the renewable energy front, which i have senator shaheen and others have been so strongly supportive of a long with the chairman, we are doing a lot of different things, but 29 projects with chairman mentioned at the beginning, that really has created a renewable energy revolution on -- not just in california and arizona and new

mexico, but also places senator lee in utah, where we see wind energy and senator barrasso, where we are now contemplating and renewing the potential for 3000-megawatt project on the eastern part of wyoming. there are huge things are happening in renewable energy. that's something we're very proud of in the department, and we couldn't have done it without you. there are differences in each one of the states. so for example, if senator murkowski, small renewable energy projects that would serve some of the alaska native villages is something we're very focused on. and again, here deputy secretary hayes has been leading an effort to try to bring down the cost of energy for native villages by looking at opportunities with renewable energy, and actually working with some members of industry to see how we can get that done. so jobs and energy are a big part of this budget. secondly, jobs and outdoor recreation and conservation of

preservation. i think without a doubt in each one of your states there is a huge cornerstone of your economy that is dependent on our outdoor recreation activities. it's the boaters, the hikers, the hunters, the anglers that brings a much to the economy of these states from utah to new hampshire, minnesota to virginia, everywhere around this country, outdoor recreation is a huge addition to our economy. we look at job prospects for the next 10 years. we believe that tourism is one of the top two areas where we can create additional jobs in the united states of america. i'm proud to say the president has asked me and secretary bryson to implement a new tourism strategy that will also focus in on some of the outdoor recreational activities, and opportunity we have as a nation. independent sources, independent reports outside groups contemplate that there is a

possibly 8 million jobs a year that are great for outdoor recreation. so much of what you see in this budget is in support of the job creation that comes to our conservation efforts. in addition, the department is moving forward with supporting water supply issues which are so important to all of you who share the colorado river basin, for example. and area where 31 million people will depend on the projects, including the production of much of the food of the united states and agriculture communities in southwest. we continue to push on that agenda, so there's a $20 million increase for 2012. it will result in an increase of water supply of 730,000 acre-feet. that's a very significant amount of water.

it's a watersmart program that is included in this budget, and working with local communities. we expect we will achieve that goal. finally let me just say that the budget honors the commitment that the united states of american does have to the tribal nations, the united states. president obama from day one mean he became the present of the united states we would change the relationship with native americans in this country. as we've implemented that agenda the last three years with much to be proud of from major indian right water settlement that this committee has helped lead and helped define, the settlement, and so many other efforts, law enforcement. we have a number of high-performing priority areas where we've been able to reduce violent crime on reservations i as high as 36%. we intend to continue those law enforcement efforts, and their set forth in this budget as well. in conclusion, mr. chairman, and

all of you because i consider you to be friends of this committee, let me just say this is a good budget but it is a squeeze budget and they're tough and painful decisions that are included in this budget. it invest in job creation through energy conservation, water, science, and in the honoring of our commitment to the tribes of america. and with that, mr. chairman, i would be happy to take questions. >> well thank you very much. let me start with a few questions related to the oil and gas industry. i think senator murkowski said that it's her information that there's been a reduction in oil and gas production on federal lands, although the oil and gas production in the country over all has increased. that's not my understanding, but i wanted to ask you, mr.

secretary, if you are, if you have those figures available, and if you could and foremost the what has happened with regard to production of oil and natural gas on federal lands, both onshore and offshore? >> chairman bingaman, i appreciate the question. i think bottom line that we should all be very proud of is the fact that we've been able to develop our domestic resources in a very robust way. and when you look at the crude oil production in the united states and 2011, it's the highest level it's been since 2003. when you look at oil imports to this country, they have dropped below 50%. i remember being on that side of the table when we're speaking about import levels that were about 60%, not so long ago at 70%. so we are moving in the right direction and is coming as a result of multiple approaches, including what's happened with

the development of private land and the domestic gas industry, which is so abundant and so important to the future of this country. but it's also happening with respect your efforts in the offshore as well as onshore. so let me say something about the public lands offshore. public lands, we have had natural gas production just on the public lands alone, senator murkowski was the second highest since 2004. and oil produced on public lands, highest in 2010 cents 1997. so the amount that is being produced, it's very huge. i would also say that contrary to some of the reports that you see from some of the trade associations and the press, we have continued to provide permits to lease out vast amounts of acreage. right now, 7000 permits are out there, that companies hold in their hands, and they out to be

moving forward on those, on the 7000 permits. offshore, this committee knows very well, the number of hearing shift held with respect to the deepwater horizon and the gulf oil spill, we have stood up the industry again. we have more rigs working out their in the gulf of mexico than they were right before, right before the oil spill. we continue to do leases in the outer continental shelf, including the first lease in the gulf which we held back in december. i attended the hearing into new orleans, and it was one which attracted more than $338 million in bids in the gulf of mexico. we expect to have a combined lease sale from two areas in june or july of this year. in addition to that, secretary clinton, at the direction of president obama, and i just

signed a major transboundary agreement in the gulf of mexico that will allow the development to move forward with both our resources on the mexican side. so if we continue to be very bullish about the opportunity to develop our oil and gas resources on public lands, i'm sure as was offshore. >> let me ask on a different issue, the parks service has been working for some time to put in place a final rule with regard to overflights in the grand canyon. the reason i'm asking about this is we have a transportation bill on the senate floor, and one of the amendments that has been offered we have seen before, which would essentially override what the park service would propose in that regard. can you tell me when the parks

service would expect to have a final rule in place on this issue? do we have a date certain that we could say that this will be established by a certain date? >> chairman bingaman, i do not know. i know it's been a tough issue to work through and i will be happy to speak with the director and get that information to you. >> okay. that will be helpful. let me ask about another somewhat parochial issue. in 2006, we passed the united states mexico transboundary aquifer assessment act. and this was directing the geological survey to work with states and universities both in the u.s. and in mexico to do an assessment of underground water aquifers. on two sides of the border.

it's my understanding that we don't have any funds being allocated to continue with this work at the current time. i don't know if this is something you focused on, but to me it's important we have large population centers in el paso that you're very familiar with. that is great disagreement between officials in the two countries as to what the groundwater situation is. and the thought behind this legislation was to try to correct the. is this an issue you could give us any information on today, or maybe you need to get back to me on the record for this? >> let me get back to you on the record. let me just say that i have been to el paso and have worked on issues regarding both the rio grande and the colorado river systems.

and under the great leadership of the bureau of reclamation commissioner, mike connor, we have made huge progress on the surface water issues between the united states and mexico. we have developed a series of agreements with the states on the colorado river. they're working on some on the rio grande as well. the underground issue with respect to the transboundary aquifer's, i believe were not able to fund those studies because the money just was not in the budget. but i recognize the importance of the issue. and let me get back to you, chairman bingaman, with more specific information on what, if anything with the money we have or have not has been requested. >> thank you. senator murkowski. >> thank you, mr. chairman. on the discussion you had with senator bingaman, it sounds like there'll be some debate back and forth in terms of what the real numbers are, where the activity

is. but i'm looking at a map here of the lower 48 states that indicate that 93% of shale oil and gas wells are on private and state land and that's what we're seeing this uptick. you know, i think it is important for us to understand where we are seeing increased activity, and i would like to see more on the federal side, not only in the lower 48 but, of course, up north. i think this is a pretty telling that so we will share that with you. i wanted to ask you about this royalty study that came out, apparently lastly, the department of the interior had commissioned it last you to compare the royalty rates, the federal royalty rates with other regimes. and the report says when comparing jurisdictions based on average government take among the case of generate for the study, all three federal jurisdictions are living a higher government take in other jurisdictions relative to the

remaining recoverable reserves ranking but it also found the bonus, which is closer per significant, can top $3 billion in a lease sale, are not being counted when the government assesses whether taxpayers are getting a fair return on the resources which is a pretty large factor to leave out. so as it relates to the onshore peace, the question that i would ask is, whether we are really ready to call for increase in royalties on the federal onshore areas. the report said, this is one piece pulled out of the, any of the suggested alternative rates for wyoming federal lands will deteriorate their competitive position in the market which is rather weak as it is. now, that's coming from your report indicates that onshore it really questioned whether or not we should be increasing those royalty rates because it will make, make the lands less

competitive. and then as it relates to offshore royalty, the study says any increase of the already high royalty rate levied in the gulf of mexico will increase the risk of system instability. any potential gains from high royalty rate are likely to be offset by reduced revenue from signature bonuses and the lower pace of leasing. so what i'm going to understand is, given what your own report has said, why are we proposing within that budget to raise the royalty rates, both onshore and offshore? >> senator murkowski, i'm going to have david a country and respond to the pacific ocean but let me say that the principal we followed him we'll fall and looking at these royalty rates including the onshore royalty rates is the principle of fair return to the taxpayers. and i think as i've not read the whole of the study, but what i remember from the pieces that i did read is that we look at the onshore royalty rates, texas,

alabama, and many other states, have a royalty rate that is significantly higher than what the united states has. and so the question is whether the united states citizen and the taxpayer is getting a fair return on these lands. so that's a we will look at, and i need to take a look at the whole of the report. but let me have david, because i think -- >> and mr. hayes, if you can also address the issue of whether or not the bonus bids are being counted when the government assesses whether the taxpayers are getting a fair deal, because it's my understanding that they are not. and i would further add that the different that you might have in north dakota or texas is, you've got a level of stability and predictability there that we are not seeing, certainly with the federal leases. so, mr. a? >> senator, there are a variety of studies that are underway to

help address the question of whether the taxpayer is getting an appropriate royalty rate or not. of course, they started with the gao study which very strong suggested that the federal leases were not getting an equivalent rate to many state leases with texas being a prime example. this study, as you know, primarily looks at the global question, and there are very few u.s. jurisdiction in this particular study. we are looking at that analysis and we will address it to i don't know the answer to your specific questions about the bonus issue or not. it's a very important study and as part of it we have another significant study underway as well. the cumulative impact of all of the studies that we utilized to determine if and what an appropriate proposal would be for a royalty rate. >> it was my understanding that the gao study was the one that left out the bonus bids.

and again, extraordinarily significant when you factor in what the federal government received, $3 billion is pretty significant. i guess i would -- well, my time is up, but i will come back for a second round. what i would leave you with is, this is the department of the interior's study. this is what you had requested in terms of the comparative royalty study. so the fact that you are saying we didn't really come as more of a global study as opposed to one domestically, i odyssey need to understand a little bit more about what was requested, but what came out i think is pretty telling in saying that efforts to increase the royalty rates on shore or offshore will make us less competitive and i don't think that's a position that you would like to be an. thank you, mr. chairman. >> if i may, senator murkowski. i think a steady has to be read as a whole, and we will do that. but it was the gao's funny back

in 2008 that said that the american taxpayer was making its the return. for the states have been put together to do that. my understanding is that it has a very different conclusion and the one you articulated, but we'll take a look at it and work with you, at the end of the day we ought to be getting a fair return to the taxpayer. >> senator wyden. >> thank you, mr. secretary. i want to welcome secretary salazar as well. today as a former member of this committee he always reaches out to us, and it again with me last night, and it is very much appreciated. on the other colleagues feel the same way. let me ask you a question about gasoline prices, if i might, to start with. the argument is being made that the reason gasoline prices are so high is that you have not opened up in of public land. you have heard that argument, and it's been made by a variety

of groups and individuals. your testimony, of course, today counters that. describes how that you disagree with that position. so i think it would be helpful if you could lay out on the record, particularly because twins are so important, what areas in the last year, offshore and onshore, have you opened up for energy development? >> thank you, senator wyden, for the question. we have moved aggressively in opening up and putting on the market new areas in the gulf of mexico. the conclusion of the tree that secretary clinton and i signed last week with the agreement, still has to be ratified by the congress. as part of that agreement in the gulf of mexico. we look at the potential for oil

and gas exploration in the arctic seas, onshore alaska, senator murkowski well knows, the 22 million-acre natural petroleum reserve area, construction with the cd5, it may open that up in a very significant way. and onshore, i believe the numbers are close to 40 million acres has been leased to oil and gas companies. as indicated in my earlier tests were, there'd 7000 permits after that have been given on shore and way for companies to drill. the gulf is back the gulf is working. and so i think we're doing everything we can. in terms of the gas price question, i think the reality of it is that it is easy to way politics with gas prices. everybody has their bumper sticker solution to what we can do with it. the reality of it is gas prices are set on the global market.

the stability -- instability in the middle east has created the most recent gas price hike that we have seen. these kind of spikes over long period of time. dating back according to a report that i have any interior, to 1857. so these kinds of issues are issues we have confronted in the past. >> there's no question that there is a variety of factors with respect to gasoline prices. you didn't mention iran, for example. i sit on the intelligence community. we can't get into classified matters that there's a whole host of issues but i think the only point i gasoline price is i think be very helpful for the record, and i think you this information, mr. hayes, if you could get us specifically. the secretary went through three major areas with respect to development offshore that he felt would constitute significant additions in supply, a couple of comments with

respect to onshore. i think for the record, if you because your projections of what that would mean in terms of additional, i think of the helpful. let me move on to one other quick question that involves a matter you and i talked about often, secretary salazar, and that the forestry situation in my home state. as you know, particularly concern because the cup level doesn't seem to be going up at the rate we need to particularly in southern oregon and in medford. to your credit your all proposing five new pilots, you know, projects. you are dealing with a host of protests, you know, previous years. so the question is going to be, how are you going to bounce all these multiple paths, get out the timber sales and get the volume up? which means that you've got essentially perform on a number of fronts in order to try to

strike the kind of balance multiple use approach we want for forestry in our part of the world. how are you going to juggle those things so we can get more timber to the mills, particularly in southern oregon, mr. secretary? >> senator wyden, thank you for your leadership on the issue, a difficult issue, and i will say that what we've done in developing the ecological forestry principles is follow the lead of doctor franklin and doctor dunstan. they're the ones who are probably most respected in terms of how you can do ecological forestry. i was in medford at the pilot project and saw timbering that was going on in that place. timber is being cut, and not just coming out of the force but also timber that is substantial to provide timber to the mills. there's some 200 timber sales data forecast by the blm to go on the market in the year ahead. we hope that we are able to have

a sustainable forest principles, to be able to provide timber to the mills at the same time be able to move forward with the healthy forests initiative that will restore the habitat. and also address other issues that are been very difficult, such as the issues relating to the barn owl and the species which is creating significant problems. >> thank you, mr. chairman. thank you. >> senator lee. >> thank you, mr. chairman, and thank you very much, mr. secretary, for joining us today. i appreciate your willingness to discuss her budget proposals and other matters of importance and concerns to americans. blm is going operating under an interim plan that outlines certain procedures for maintaining the habitat of the stage grouse -- sage grouse. i would ask just off the bat if

there's any possibility that a state plan could be approved as a substitute to that interim habitat management? >> senator lee, i think you have your finger on what is one of the most important issues for us in 11 states in the west. and in that vein, governor need from wyoming and governor from colorado are working with bob abby, the driver of the blm to see how we can move forward with a template that was developed in wyoming so that we can allow the development to move forward and at the same time have a western state strategy that is protective of the habitat, that is protective of the sage grouse. it seems to me that indeed with all of these issues, that being pro-active as were now doing in southern new mexico and in texas with the dems lizard, working with oil and gas industry to set up conversation programs that will allow oil and gas, that will dash the we will be able to

do that with respect to the sage grouse. >> okay spent and utah, and your governor are very involved in it speaks you could potentially be supportive of that, such a plan in utah, especially given the state, you know, primary burden of the regulations in enforcing and implementing and so forth? >> that's a possibility. it is. >> great. next, i want to talk you about about the central project which you mention in your opening remarks. as you know of course in your proposed budget, you propose authorizing language that would place management supervision, the oversight of this project back within the bureau of reclamation. and, of course, it came out of the supervisory jurisdiction, the bureau of reclamation, after congress passed the central utah

water project completion act of 1992. there were reasons for that. while this project was under the jurisdiction of the bureau of reclamation, prior to the 1992 acts passage, there are often significant cost overruns. sometimes the overhead costs exceeded 50% of the total project cost. but since 1992, since the act took effect and since the central utah water project was placed under the jurisdiction of the conservancy district, the overhead costs have been reduced rather substantial. in fact, i believe the department of the interior not too long ago recognized this good management by giving it a secretarial award. so i just wanted to ask, given how well it's been managed under the central utah water conservancy district, and given the problems that we had when it was previously under the

jurisdiction of the burea bureaf reclamation and why is it a good idea to change that, to offset the balance that congress struck, or the congress impose this fix for back in 1992? >> senator lee, first let me say that the central utah project has been a priority for president obama and me. in interior we have invested literally hundreds of names of dollars during my time, including significant allocations from the stimulus program american recovery act, yet that project will be on a timeline that is a good timeline. we are not abandoning the project. the consolidation issue of the agency and to the bureau of reclamation, it seems to me that it makes no sense to have another government agency out there doing one of our bureau of reclamation projects with other

bureau of reclamation projects within the bureau of reclamation. so by having the central utah project come within the bureau of reclamation, i believe it will allow us to do a better job so it's an efficiency measure on our part. >> but given the data prior to 1992 act taking suggest, suggesting just the opposite was true. how do you respond to that point? is there something that is different now about the way the bureau of reclamation is run? >> i think, senator lee, if you look at the leadership that we been able to bring into the department at the highest levels, secretary for water and science and capital, mike connor, the commission of the bureau of reclamation, we are doing tremendous things on the water supplies for the bureau of reclamation. and i've no doubt that the same commitment and the same level of support for the central utah project and to our staff will absolutely continue with the configuration. >> okay.

i see my. i.c. my time has expired. thank you. >> senator franken? >> thank you, mr. chairman. thank you, mr. secretary. as you well know, oil and gas companies are making record profits. in fact, the big five oil companies combine make a record $137 billion in profits in 2011. so i am pleased you have proposed a $4 per acre fee on leases that are not being used. there's a lot of leases that the oil companies have been granted by the federal government that they are not using. and it creates incentive for them to drill on these least. i'm also pleased that some of the expenses have been transferred to the companies. in light of that i would like to ask you whether the $45 million usgs fund that you intend to use to study shell gas a moment for

hydrofracking, will that also will be paid by companies engaged in this activity? we have testament from the commission i think was a study this, and i wonder whether the companies that benefit from this would pay for that steady? >> the answer to that, senator franken, is the president has strongly supported research and development in developing the science. in fact, much of the great boom and promised that we now have respect to shale gas in the united states is a direct result of investments that this congress has made, both in the united states geological survey and the department of energy. an example of where one of the usgs has been very involved in developing the numbers there and helping industry developed technology. so this money, in response to question from is part of our

investment in understanding shale gas within the department of interior. i believe the number is $18 million would be appropriated in the 2013 budget, for usgs to continue to do these studies. we will work closely with the department of energy, as well as epa to make sure that there is a coordinated effort, study in this area to support. >> the testament is 459. i would suggest that it -- >> you are correct, it is 45 million when you combine -- 45 million over all. >> my point here is that this just seems like, in the time when we have these type type, tight budgets, here's something where they're making, top of five oil and gas countries are making $135 billion profit. $45 million, seems like it could be funded by the oil and gas companies themselves, or the gas

companies that benefit from that. >> i have a project where i could see that $45 million going. and you may know what i'm talking about. the lewis and clark water project, which we have talked about, a regional water system in minnesota, iowa, south dakota. your budget request includes $4.5 million for this project, which is much more than a $493,000 that you requested for it last year. we talked about it in a hearing last year. and i thank you for that increase. unfortunately, the numbers still barely dent the remaining federal cost share of more than $190 million. we have discussed before that the local partners have prepaid 99.7% of their sheer. so they're just waiting for the federal portion, and delay is holding up economic development in the region. so my question really is, what

is your plan to make sure this project gets completed in a timely way, or that it even ever gets completed? >> senator franken, let me first of all say thank you for being such a great advocate for the great project that is very deserving of additional money. and, frankly, because the fact that your water users, local community has stepped up to the plate, put up their share, we are able to prioritize this project and to put in as much money as we possibly can in these very tough budget times. as i said at the outset, it is a squeeze budget with some painful decisions. if we didn't have the constraints we are facing, frankly we would put in a lot more money. the lewis and clark project done because it is a top party project. but i will say as well, this committee knows probably better than any of the committee in this congress that the needs that we have with respect to water supply, especially rural water supplies, are huge. and, frankly, given the request

in this budget in 2013 barely makes a dent on the needs we have. >> i really appreciate that, and i appreciate your response. and i would just, my time is done, but i would just note that he is $45 million to study fracking, where the industry that benefits from it is doing really well. they are not hurting. they could pay for the, and there's $45 million that could go to a water project, or several water projects. and i just, give some thought to that. thank you. thank you, mr. secretary,. >> thank you, mr. chairman. thank you, mr. secretary, for being here. lastly president obama went to miami to give another speech on energy. he stated that quote i will do whatever we can to develop every source of american energy to our future is in control of by

events on the other side of the world. nice words. the president to office is one thing and then does in my opinion something very different. to me that's been nowhere more evident than what we're seeing in the interior department because the president says he supports an all out all of the above energy strategy. at the department has repeatedly taken steps to limit american energy production. a couple of examples. in november the department proposed a five year plan for offshore oil and gas development which excludes both pacific and atlantic oceans. the plan excludes them off the coast of virginia, even though both senators come both democrat centers and the governor of virginia, republican supported such development. in january the department with the approximate 1 million acres in northern arizona from uranium production. the department with to this land is the both senators and the governor of arizona opposed the withdrawal. and the department continues to

pursue new stream protection regulations which will limit american coal production. the department is taking the step even though members of congress and officials from coal producing states oppose the new regulations. now we get to the specific pain at the pub. on friday the front page of the "usa today" read most ever could get hit by $5 gasoline. the president said he is focused on production. but the department policy seems to speak otherwise, as does the fiscal 2013 budget which includes tens of names of dollars in new taxes and fees on american energy. the president can't have it both ways. it can't pursue a quote all out all of the above energy strategy, and at the same time block or tax new energy production. a couple of questions. following up specifically with the release the president did last year from the strategic petroleum reserve.

as this administration begin any planning to tap the reserve again this year in? >> all options are on the table. >> so that is something that then you are considering tapping. so could you explain what happened to gas prices last year following the president's decision to tap the strategic reserve? >> i would say, you know, all options are on the table. i would disagree as you expect i would with you in terms of your characterization of the presidents agenda from day one to the department of interior. we have worked to develop our oil and gas resources in a safe and responsible way. and we have done so both on the onshore as was the offshore but we also moved forward to develop other energy resources including renewable energy. and for the first time since three-mile island we have opened up the door to the possibility of nuclear energy as well. so when the president says and all of the above energy strategy for the united states, he is

serious about getting as moving beyond the gridlock that has kept this energy program and the united states in a failing paradigm for the last 30 years pics of the "washington post" said lash of the release of the 30 million barrels from the strategic reserve, call, whatever the rationale, it is a bad idea am you continue with bad idea on the table this year is what i just heard. so can you explain to me than what your assessment is, the purpose of the strategic petroleum reserve? >> first, strategic petroleum reserve is under the jurisdiction of my collie, secretary chu, and the president of the united states. i would just say that president is very cognizant of the pain at the pub people are feeling. we have a strategy and policy we've been working on from day one and we believe it continues to show good results but we will hold america to a new energy

future. in terms of deal with immediate issue of high gas prices, all options are on the table. >> are you for my with senator schumer's insistence that the state department press the saudis to increase oil production, yet senator schumer opposes the keystone xl pipeline as you know as president has refused to move forward in granting the pipeline from canada? and my question is, do you agree with senator schumer that we should be pressing for more middle east capacity rather than north american production such as can be brought in from canada via the keystone pipeline? >> first on the international effort. it is obvious he something that is a focus of the administration along with dealing with what we can produce their domestic and the united states. that's part all the options on the table. on the keystone issue, which is remarkable pipeline that was proposed by transcanada

yesterday that will take the segment from cushing to the old is a step up to the in the right direction. that has to be processed. frankly, no judgment was ever reached, senator barrasso, on the keystone pipeline xo project because, frankly, there was not, because actions that were taken by congress, sufficient time to move forward with the processing of the alternative that is required. >> thank you my time is passionate it's arisen because of keystone pipeline was proposed seven years ago. it's still not enough time. >> i was governor passionate with the governor of nebraska yesterday. there were serious concerns raised by both republican gun as most republican colleagues here in the senate with respect to that proposed pipeline. so the alternative to the pipeline is still from transcanada and then it will be evaluated. we played by the facts, a process and a judgment will be reached just as a judgment will be reached on this segment.

>> thank you, mr. chairman. >> senator shaheen. >> thank you, mr. chairman. mr. secretary, deputy secretary hayes and ms. hayes, we are pleased that you were here today. mr. secretary, you talked about your new role to help develop a tourism strategy for the country. and the importance of protecting our outdoors and a bit of a garment and special places as being critical to that tourism strategy. and as you know the land and water conservation fund has been one of the federal programs, that has been no successful at protecting our special places and wildlife habitats and public recreation. in new hampshire we have all kinds of examples, from the lw see us, the national wildlife refuge, parts of the appalachian trail's that are in new hampshire have all been

protected through the land and water conservation fund. i was pleased with the additional funding into proposed budget for the program. and i know that you said you are committed to getting full funding for lw cs by 2014. i wonder if you could talk about your plan for how we should get to full funding, and whether you think there is a dedicated funding stream, an additional dedicated funding stream we can add to what has been proposed by congress but is never really been come as old and fully fund i believe twice since the program started. >> senator shaheen, let me first say thank you for your leadership on this issue, and i thank the chairman of the committee, senator bingaman, and others who have worked hard on trying to get full funding for the land and water conservation fund. i do agree with you that it is part of our tourism and job creation strategy comes to conservation as we see through l.l. bean and so many other

wonderful stores that have a presence in your state, the hunting committee, the angling community, voters. it's a big part of the future of these united states. as i said often in front of this committee, both when i was on that side of the diets and decide, the reality is it's been a broken promise to americans. 1960 was authorize a portion of the offshore oil and gas production, and yet if you look at the books of the treasure, it is now north of $17 billion that go to the conversation programs of this country. so even in these tough fiscal times, i think it's important for us to continue to look for the possibility of that funding. it pains me frankly when i look at the list of latin water conservation projects, which we are not able to fund. senator barrasso just left, but we are putting a significant amount of money into buying some of the holdings in the grand

teton national park. you know, and everyone other states that are huge needs, and these are probably in the $5 billion a year range for the foreseeable future. and so from my point of view, the 465 or 450 million for the 2013 budget is a fraction of what is needed. but it is as i said at the outset, this is a very tough question and it's a very painful budget for me personally but if i could find ways of doing more with out the lwcf, i think we should be open to that. and although senator alexander and senator landrieu, in the passage of the act action were able to set aside a permanent conservation royalty. maybe there is more that they can be done. >> thank you. i was pleased to work with some members of your staff after the oil spill in the gulf to try and

address the outer continental act of 27. deputy secretary hayes, we worked on the. and i was pleased to get a model for ocean energy safety institute, that was modeled on partnership that noah had had with the coastal, the university of the magical but the coastal research response center. and was very disappointed when that legislation, when that legislation has not gone forward. but as we think about the research that we still needed to to address cleanup the oil spill's, are there opportunities, additional opportunities for partnerships like the one we have at the university of new hampshire with know what to do some of that research that is not going to be done, at least right now as a

result of the legislation that has not gone forward? >> deputy secretary? spent first of all, thank you so much for your assistance. we continue to believe it's very important that we have in the law the authority for the beer of ocean energy management to have an institute that will come as a primary mission have the ability to partner with universities and industry and others to be on the cutting edge of research. we do have ongoing research through the beer of ocean energy management to its budget has pretty robust investment and continuing to raise the bar of safety. but i think until we have a dedicated institute we're not taking full advantage. >> thank you. and my time is up, but i think it's important to point out that

it's not just safety we need to protect. we need to figure out how to deal with the problems after they occur, because as much as we want to protect safety and prevent spills, the reality is we will probably see some in the future. and so having the best technology to address those, and research to do that come is very important. thank you. >> if i may, mr. chairman, i think it's a useful conversation with all members of this committee, you know, april 20 of 2010 was really not that long ago. this committee, like the rest of the nation, what is laser focused on what was happening with a 50,000 barrels of oil spilling out into the gulf of mexico every day, was a national crisis, and something that we all have lived through. we ought not to ever have amnesia as a nation. neither the president nor i have amnesia about what happened in the gulf of mexico, nor the

mayors of congress should have amnesia either. but to your point, senator shaheen, there is a lot of work that has been done and a lot more work that has to be done. today, tom hunter, well known in the state of new mexico, leads up a committee for us on offshore safety. .. with respect to your question here, this goes way beyond the united states of america. when we talk to any of the oil

and gas companies, which i do on a regular basis, we know that they are a global industry so what is happening off the coast of nigeria and algeria or off the coast of brazil or off the coast of norway and russia, those are all important matters and so how we elevate dealing with all aspects of ocean drilling is a really important opportunity for the united states and we have to do it from the safety side, the prevention side and the response side, all aspects of energy involvement. >> senator heller. >> thank you mr. chairman and mr. secretary thank you for being here. 110,000 square miles so you have got a lot of work to do. 85% of it as you know some by the federal government, so that i think in itself presents a lot of big challenges. the economic activity on public

lands in nevada is important and obviously comes in a lot of forms, mining, renewable energy, development, ranching and ration and some of those things so i'm concerned about the business and concerns are office. obviously there are concerns that include smaller budgets for hazards fuel reduction. i believe misguided prioritization of land acquisitions, the 74% fee increase on public land grazers and in my opinion an ill-conceived proposal attacks mining out of competitiveness. unfortunately all those take a backseat to rising gas prices in my state today, and i have seen a bumper sticker that you talk about that in 2006. both sides i think have issues and concerns and certainly like

the bumper sticker politics but i want to talk a little bit about verbiage versus reality. i think ms. murkowski made a comment to the production of natural gas on public lands that waters in fiscal year 2011 have actually dropped 11%. in the previous year, from the previous year. according to the interior data water production on public lands is nearly 14%, and so as it ministries and talks about all this new production, none of it is being done on public lands. it's all being done on private land. in 2008, when you're a senator he refused to vote for any new offshore drilling. in fact you had a conversation with leader mitch mcconnell at that time where you objected to about any new drilling on

america's outer continental shelf even if gas prices reach reached $10 a gallon. we are halfway there, halfway there. the question we need to ask ourselves is, is this the department -- directionless departments going and are we at some point believing that your leadership the gas prices will go to $10 a gallon? >> senator heller, let me first say that i think that exchange on the floor of the u.s. senate, they exchanged you were engaged in was part of the debate with bumper stickers solutions and was one of the most fundamental issues. let me finish. so when you speak to the statistics of what happened in 2011 in terms of production, you have to look at what was happening in the gulf of mexico. about 30% roughly of all our domestic energy comes from the gulf of mexico which senator landrieu knows full well. we went through a crisis in 2010

and we are back. they're more there are more rigs working offshore and onshore in the united states of america than at any time in recent history, maybe in all of history. so whatever it dipped there was in production is because of the depth that happened in the gulf of mexico in the wake of the 2011 macondo oil well blowout. >> i guess the question, just to follow up, did that conversation, on the senate floor, was it accurate? >> senator heller i know you will appreciate this. there are lots of conversations that they take place on the floor of the senate for a political statement and at that point in time there was a political statement. the facts are that -- >> it's a bumper sticker. >> it's a dump -- umber sticker.

we move forward senator heller with a robust outer part in the shell production. there were many people that thought that after the deepwater horizon there would not be any more deep water production in the united states of america. i think we are going to continue to lead the world in terms of technology, as well as the production we are doing fairthere, the 300 million-dollar sales that occur just in december in new orleans i think it's telling that we were moving forward in that direction so in terms of my credentials and in the president's credentials support for offshore drilling i have absolute confidence that we have moved in the right direction and moving forward in making sure that we have safety and we are we are protecting the environment as well. >> thank you. >> senator landrieu. >> mr. chairman thank you so much in mr. secretary, thank you for your focus and interest in the gulf coast and her many

visits down and your commitment to the restoration of our region and the investments in our national parks and state parks. i know that you have a passion for conservation and we appreciate that. but i want to add my voice to try to clarify that in fact, be it oil and gas production in our country, as you just try to explain, is lower than it has ever been on federal lands, both offshore and onshore and the increase has come from production on private land. now, those are the facts. i'm not arguing about the price of gas and i would say to my republican colleagues that they should know that you can't drill our way out of this problem. we cannot drill our way back to two-dollar or 3-dollar gasoline. and i don't want to engage in

bumper sticker politics but i do want to engage in good policy for this country and speaking from louisiana's perspective, we need to get a more aggressive drilling policy in this country. we can't drill our way out, but we most certainly can create jobs. we most certainly can strengthen the u.s. independence. we most certainly can reduce our reliance on foreign oil. and the facts are that drilling on public lands are down and they need to be increased. the other fact is, contrary to the inference that we are drilling every player we can in the outer continental shelf, you know mr. secretary, we are drilling on less than 2% of the ocs, 2%. now only a small portion is leasable and the fat leasable

portion, weird trilling 2%. the ocs is 200 miles wide and it goes from oregon to maine and we are drilling on less than 2%. so i just think that it's important for us to be clear about what our situation is. in addition, i want to say that despite the administration arguments that are laid out that you are all guns blaring and green lights for drilling, if you disagree tell me, but only 21 permits for offshore drilling have been issued by the state in 2010 there were 32 permits. i just left the annual conference of local, which is louisiana oil and gas yesterday. they are beside themselves with not being able to get their permits processed and to answer you mr. franken, let me just say

that exxon and shell may be making record profits but according to a study recently done by a greater new orleans in, 41% of our oil and gas independent operators and service companies -- i'm not talking about exxon and shell that have operations all over the world. i'm talking about companies in the gulf coast, in texas, mississippi, louisiana and alabama. let me tell you what the study show about their profits. 41% are not making a profit at all. 70% have lost significant cash reserves. 46 have moved operations away from the gulf and 82% of business owners have lost personal savings as a result of the slowdown. part of it is the accident and part of it is the -- i have to continue to express this to you privately and publicly. i know what you are trying to do and you are making statements about increasing production, but i can tell you the reality on the gulf coast is not there.

so that is one point that i wanted to make. secondly, and i will get to a question in a minute. bis 4% of an ache or being proposed for nonproducing leases, can you explain how much money that would raise, where would be going, because we are already experiencing an increase, a decrease in permits. we got off that money is coming from us and going elsewhere to promote what we don't know, but we need more inspectors to get our permits and their drilling underway in places that the people support drilling and the countries need the jobs. where is the 4 cents going to go and how much is it going to raise? >> senator landrieu let me first say i disagree with your conclusions. the fact is, when you have lived through a national crisis i think it's very responsible that we move forward now and just last year over 100 permits and 60 deep water permits and the

rigs are back and working is very much public knowledge and i have answered, we feel very comfortable in terms of the production that is coming out of public lands for onshore and offshore and if i could make just a quick comment on that as well. >> thank you bicester secretary. very quickly on the onshore, we have 38 million acres available for leasing right now and only 60 million are in fact being leased. last year we have 30 to onshore lease shales -- sales. >> turn derived mr. chamberlain but it's not what percentage you have in the production that are leased. if you set a much land he had in the united states on public lands and then take your percentage of what is leasable and then took your percentage of what is drilled, it gives the people of this country a better picture. again, and i'm not an expert on onshore but i am on offshore. 2% of the ocs is being drilled. do you agree with that or not?

decodes those are the facts. 2% of the entire -- yes or no? >> we have made available 75% of the reserves. >> that is not what i'm asking. >> we are not leasing areas where there is no oil offshore. >> what percent of the entire ocs of this country is being drilled on right now? >> senator landrieu, the fact of the matter is that there are i think it's maybe, it is over 30, 40 million acres that we just did under one lease sale. there is more than what we leased. the lease sale that i did in new orleans in december i think was 38 million acres, but about 2 million acres of it was leased so anemic available one lease sale, tens of millions of acres you have some of it. the companies are going where they know the oil and gas is. the fact is we are moving forward with a robust program. >> in my view mr. chairman we are never going to get clear as

long as we continue to talk around specifics to try to make those sites look good. i'm not trying to make you look any worse. i'm just trying to get the facts out to the public. when you speak, you get people thinking that we are drilling everywhere, onshore and offshore and the facts are, don't justify that. you know that 98% of our offshore is limited to drilling. we can't even explore there. we are talking about what we are drilling within that 2% in my final point and i will say this mr. chairman, you have been very good to me. i as a senator from louisiana have to come to this meeting every year and and i am now finding out that wyoming last year got $1.7 billion in royalties. the senator is not here but i want my colleagues to know. the state of wyoming has 500,000 people. they got $1.7 billion that they

kept. i don't know what they are doing with that money. i don't know if they are preserving land or conservation. louisiana which produces more oil and gas than they have off of our shore, has more of a structure, got $160 million we have 4.5 million people. mr. chairman this is the greatest injustice to the gulf coast of this united states and i hope nobody puts a revenue-sharing bill anywhere around this committee because the senator will fight to the end. no state is going to be treated like our state and we have been treated like this since 1920. >> do we have senators that have not have the first round? i don't think so we'll select me start with the second round. mr. secretary let me pass out, give to you a few charts that are from previous hearings we have had. and some that we have developed ourselves. and, i will go through the three charts and then ask for any

comment. is someone passing those out? >> okay the first of these charts is the one that mr. burkhart from cambridge energy research associates provided to us at our hearing about a month ago. and he entitled it, the great revival of u.s. oil production. it says the great revival of u.s. or production has made the united states a leader in global oil production growth and pointed out that they are substantially more growth and oil production in this country and that is both private and

public lands obviously, but it is a useful document. another chart that i have passed out relates to weekly retail price for premium unleaded gasoline from 96 to 20 -- october of 2011. it's not this chart but it's a different one that has been passed out, showing the price of gasoline in the united states at retail is, tracks pretty closely to the price worldwide for gasoline with the exception of course that we don't have the taxes that the rest of the world has and that is the big difference. then the third is the chart that we put up here on the board that shows u.s. oil production and gasoline crisis, prices, the

percentage change year-over-year for the last two decades, and i think it's clear from this chart, at least it's clear to me, that there is no relationship between the amount of oil we are producing in any particular year in the united states and the price of gasoline. the price of gasoline is determined by the price of oil on the world market. and what we are producing here in the u.s. has been relatively constant. it has gone up a little bit in the last, somewhat in the last several years. but the price of gasoline has fluctuated dramatically during that period of of time and it has done so as shown on the previous chart. it has done so because of the changes in the world price of oil. so i guess, i bring these charts

out and distribute them here in order to make a point, that there is an underlying argument on this gas price issue that the high price of gas at the pump is a result of some failure to allow production to occur in this country. the truth is production in the u.s. is up, it's up substantially. production on federal lands is up. but in spite of that, the price of oil on the world market is also up, and it's up because of iran. it's a because of all kinds of factors come increased demand from china and all sorts of factors that are causing the world price of oil to rise. unfortunately it is impacting consumers in this country. i wish it weren't. i wish we had some way of, in

the near term, both disassociate disassociate -- disassociating ourselves to the world price of oil but we don't have that is what is hurting us. anyway mr. secretary i give you those charts for what they're worth and ask for any comments you have in the last few moments of my time. >> thank you very much chairman bingaman. i would say two things with respect to the presentation that you just made. first, oil and gas production in the united states is higher than it has been in a very long time and as your chart indicates, it's moving in the right direction and i think there probably is no figure in my mind that says it better than the fact that we are importing less oil today than we have for a very very long time so we are producing more here in the united states. i think the second you make is one that economists have recognized for a long time, that we don't control the price of

gasoline in the united states based on the amount of production here in this country. is a global marketplace that sets the price of the oil and it is the global factors that we see both in terms of iran as well as what we see from countries such as india and china, which are part of we are seeing in terms of the global economics which we face today. >> thank you very much. senator murkowski. >> thank you mr. chairman and i think we would all agree and senator landrieu has mentioned, the answer is not just drilling. coming from an oil-producing state the answer is not just drilling but it is part of the solution, so i think it is something that we would agree we are subject to the vagaries of

the market. we are certainly subject to the volatility on the global scene, but i think that the fundamental problem that we have here is that we are too dependent on our oil imports from the opec countries and we are too vulnerable to the price instability in the global market, so i am not sure how we can argue that producing more oil here at home and lessening our dependence on opec oil would make a difference. it just seems to me to make sense to have this much cushion as we can because i think we recognize that the cushion that is available within the world market is one that we are not entirely sure. senator schumer has asked that saudi arabia crank it up a bit so that we can get more from saudi arabia. how much spare capacity do they have? i think this is one of those things that causes the volatility, as we see.

i want to move off that subject for a moment and bring up the issue that i read my opening comments in this relates to the legacy wells that were drilled again from 1944 to 1981, when the government drilled more than 100 wells. they have only plugged in properly abandoned about 10 out of 137 wells. when i was in the legislature giving my address, a representative from the house asked me well, senator, what can we do? what is her action plan on this? i said we need to raise a little help. we need to point out that there cannot be a double standard here. there is a resolution that was passed by the statehouse of representatives and i would ask that it be included as part of the record. but -- >> we will include that of course. >> thank you mr. chairman. points out that the federal government has received over $9 billion from lease sales

within the petroleum reserve where the exploratory wells were drilled. the state can't impose fines on the federal government but if they could the fines would exceed $8 billion if the statute of limitations were disregarded the statutes would exceed over $40 billion. again, what i would like to do mr. secretary is work within the department to figure out how we can do a better job of this. right now, doi has suggested to the state of alaska that we can do one well a year. if that is the rate we are going, we are sitting here with over 100 years to remediate and repair. i need to have an action plan for the people of the state of alaska on this, and i need you all to be working with me a little more aggressively. in that same vein, i will also

bring up the alaska land conveyance act and again, asking you to assign to me -- though i know that secretary hayes has been tasked with a double duty of taking on so many of alaska's issues. we appreciate that, but we need to have a better path forward as to how we are going to complete these conveyances again if we keep on the track that we have then on. it's going to be an additional 70, 80 years for alaska to get our lands conveyed. those lands that were promised on statehood, the "lancet" were promised to alaska natives under the alaska native claims settlement act. that's too long for the federal government to keep its farm and i need to be able to go back and report that in fact we are making progress and better than

just a couple of conveyances a year or a couple of legacy wells a year so i would ask for your commitment to be working with me with your folks and the people and alaska. >> senator murkowski, we knows the priorities for both of these issues and we know the both of them need to get done and they said at the outset on the budget, it's a painful budget because i wish we could do more including the legacy wells in the conveyance issues for alaska. the priorities placed on the legacy wells i think you can see evidence in terms of the investments we have made from the american recovery act, which helped us move forward with the plugging and abandonment of some of these wells. >> we have got three. >> no, we did then in the recovery act and we proposed an additional fee in the 2013 budget. but i recognize there is more to go. there is more that we have to get done and hope we can find a way of getting it done.

the same thing is true with the alaska conveyance. we can get it done a lot faster we will be happy to do that. we will be happy to work with you to tell you what the plans are and the fiscal constraints that we face and if there are other ways and which we can get to the same end, which we both agree, we both agree we need to get both of these things done. we would be happy to work with you on that. >> we need an action plan that works and so far, and is not just this administration. i will tell you i had to push the previous administration on this as well. i don't think that any other state would sit and wait for 50 years to get the lands that we were promised understated. thank you mr. chairman. >> thank you. senator lee. >> thank you mr. chairman. mr. secretary i want to make sure i understood what you said a moment ago in response to the chairman's questions. surely you're not suggesting there was no relationship, the verbiage of this chart there is

no relationship between u.s. oil production and u.s. gasoline prices. would you agree with that statement that there is no relationship between u.s. oil production in u.s. gas prices? >> what i said senator lee is that gas prices are set as a matter of the global marketplace in terms of oil. >> as a result of a complex interaction between supply and demand in all the factors domestically and internationally that affects supply and demand? >> yes. >> okay and u.s. oil production is one of those factors? >> yes. >> okay. mr. secretary your office recently issued a programmatic environmental impact statement dealing with oil shale production, basically use of federal land for oil shale production. this pei's proposes to replace a previous one issued by your department in 2008 i believe.

the 2008 identified 2 million acres of federal public land that put the potentially suitable for leasing for the development of oil shale and tar sands. your new pei's proposes to limit that bringing it down to about 450,000 acres. meanwhile, in 2007, the bureau of land management issued several r&d leases for purposes of oil shale development. one of those r&d leases was in utah. can you are sure me that your recent peis won't affect those previous leases that were issued in 2007? in other words, will those be taken off the map now as a result of this reduction? >> with respect to your specific

question, let me get back to you with respect to the specific release but with respect to your more general question on the oil shale potential in your state of utah and wyoming in my state of colorado, the fact is there is still a lot of research and development that needs to take place. senator domenici and died when i was chairman of this committee is it a couple of those places. they're cute -- huge unanswered questions as to the water supply unanswered in terms of the technology. the companies themselves admit that they need answers to those questions so my approach would be to the dis is a conclusion that i've reached that we ought not to engage in a wholesale giveaway of public domain until we have questions that are answered but at the same time moving forward in full support of the research and development programs that are underway both in my state as well as your stay. >> but you are aware of course mr. secretary that this

technology or variations of it has been in place and use in europe for about 100 years and it has been used to produce oil and in some circumstances to produce oil to produce electricity. and it's still in use to some extent in europe. i believe they produce about 1 million barrels a year. from oil shale in europe currently, and they do all this meeting european environmental standards. so, i mean it has not been used extensively in this country on a commercial scale but it has been in europe. so, is that really what we need? is it another 100 years of research? what is it that we are waiting for? what is the magic wallet? >> senator lee we are waiting for the tech allergy to be developed to be able to honestly assess the potential here. the fact is i think you were born by then, but you might remember the 1980s and what happened in colorado and other places with oil shale bust after

the investment of billions and billions of dollars because the policy was not there. so the research and development taking place now with respect to the development of carriage and from these rocks which is very different from shale gas in very different from shale oil is something that is very important and we are very supportive moving forward with research and development to get the right answers. >> there was a bust in 1980s and of course we both know there were a lot of reasons for that and a lot of those reasons have to do with the kinks in the technology that have been worked out. kinks in the technology that have been worked out in terms of the amount of processed water and the amount of input energy that is worked out, the carbon footprint and the physical footprint that is required for the systems. a lot of that has been worked out, but i do think it's important to remember, i don't think it's your job to mitigate amp attacks against all risks from the oil companies. in other words if they want to

make that investment, they are placing their own investment at risk, but the should not be given the opportunity to make the investment into to lease these federal public lands for that purpose knowing that they could develop oil they are? that is made 1.2 trillion barrels of oil locked up in oil shale in just a small segment of free rocky mountain states. utah, colorado and wyoming alone, 1.2 trillion barrels more than the refined petroleum reserves of the top producing countries of the world combined. >> senator lee it is my job to protect the public lands and public resources of the united states in the custodian of america's natural resources and when i look at the oil potential in your state of wyoming and colorado i think there's potential there but we need to move forward with answers to some very tough questions including one of the key questions. it's going to take upwards of 1 million acres of water to

develop oil shale on the western slope of colorado,, where is the water supply going to come from? what's it going to do to agriculture and what's it going to do to municipalities? those answers have not been answered -- not those questions have not been answered and we will get answers to those questions as part of what we are undertaking now. >> let me close with one of the reasons why hope you allow this research and development leases to move forward. this is one way i think you really can get some of the answers you're looking for. allow those r&d leases to move forward, don't cancel them. let them do their thing because they will prove their ability to make this, to make it happen and in an environmentally and commercially feasible way. >> senator manchin. >> thank you secretary for being here. two points at want to talk about. the abandoned mine land fund office surface mining, i see

where you all have made some recommendations there and change in the process of the grant funds, which i applaud. i think it's the right direction and that most -- the worst environmental sites sites a benefactor. the money is spent distributed differently as you know by tonnage. how much mining was done how much per ton and then it was coming back where it was kind of not really addressing the environmental means. i think you're taking that step in the right direction from what i can see here. you estimated there would be great savings on that and i would like to hear the savings i guess that would calm and mr. secretary it might be, if you will mr. hayes, whatever you would think about that, the savings are calculated? >> let me just say i appreciate the comment senator manchin and what we are trying to do is focus on the high-risk areas and

especially -- >> kentucky has a lot of old mining in pennsylvania has a lot of old old mining that really helped build the country and i think it's a step in the right direction, claiming that up and putting it back into production so we can do something with the land. >> i think i was part of the intention that we go after those old minds and get them cleaned up and that is happening. i'm going to have either david or pamela, don't know if you know the process and how does change. >> you can get back to me on that. >> i think the saving senator is a gain from focusing on the intent which are the coal mine issues themselves as opposed to other needs that. >> i interpreted by looking at the return on the ml money, the abandoned mine planned money even though it was the tonnage reduced its going to where the need is. >> that is the primary intent. the savings would be basically we are able to clean up and i

would assume that is true. does everyone agree to that? that is not where i disagree. >> i am not afraid of that. >> concerning the osm in the bureau of land mines, the merger, can't find anybody there seems to be in favor and i think this would be a good thing. i don't see a generation of savings to the disruption of how the operation and osm you know has been kind of a long-term relationship learning how to work as a partnership, working and making sure there is a balance between the environment and the economy. going into the dom are recommending, and i know you were doing it on trying to, from cost effectiveness, and can understand that but i don't see the savings from what could be the downturn of having more regulations to the point we can't do anything. we are having a hard time now. maybe someone can talk to that.

are you serious about the blm merger? >> senator let me first say that i think it's important for us in government to always take a look at our agencies and see how we can do a better job and it's in that vein that we move forward with my effort, which i authorized support them and then and support to how we could do a better job between blm and osm. based on a review we have got in a report which is currently on my desk i think the robe efficiencies we can find between blm and -- i've not yet read the final report and the deputy secretary has been leaving it at my sense is that the guidance from this committee and your staff, especially sam fowler who knows a lot about this, means there's not going to be the wholesale consolidation for osm and blm but there will be changes and there will be more efficient ways of doing so. >> i understand that and that is not the problem.

the bottom line is they think we are expecting a report the report by february 15. >> we actually received that last night. >> okay, you will be sharing that with us? it is not in the direction that we thought it was going before. >> i think we should have a separate conversation this before we release it but i think it will improve most of the functions of osm and blm and i think we will find some efficiencies there and i think it will be, you think, i hope you will be positive in your response. >> i know it's been talked about briefly and i think it has been brought up by the senator and my counsel in short. i'm concerned about the definition. i want people to know west virginia, our water sources are very valuable but are topography is what it is and a stream that carries water solvents or a string that provides recreation, provides life-giving water, sources of that have not been

touched or ever are intended to be touch. i think that's a misnomer. we are talking about what some people is identified as extreme which is basically a drainage ditch or drainage area where you have a piece of property and you are putting property that you want to make more useful and you change the ditch from ear to hear so when they have a heavy rain it runs off and it goes into an area that keeps your property more useful and that is a discussion i would love to have with whoever in your office we could have that with. i know my time is up it if you would accommodate that i would really appreciate it. >> senator lee i would say we know the importance of the stream protection rule in your state and as we move forward in addressing how we can support full development and making sure we are protecting the streams that we will make sure we are including you in our conversation. >> once again there is a balance between the environment and the economy and we are more than glad to leave the way if you will but we want that partnership. >> thank you. senator heller. >> thank you mr. chairman.

talking about another issue that is important for nevadan something that you touched on mr. secretary a little bit and that is a listing of the state grounds. i have a letter here that you responded to a request for some information and first of all i want to tell you thank you. the administration responding for their quest of information so to have this here means a lot and in fact i share the concern we have for that listing was an important part of that. is the -- were to be lifted you would have at devastating impact on the economic activities on public lands including renewable energy. and i have many concerns with the land management controls proposed by blm and for that reason i'm putting together a stage grouse working group. you have an interim plan without the listing, and interim plan for, and it was i believe called

an instructional memorandum. that was to maintain and enhance stage grouse habitat which i think is appropriate, inappropriate goal. the concern i have is that medication is not part of the restrictions. and, so this is my question. i am concerned that if they were opposed access would not be more restrictive perhaps more harmful than eight -- can you respond to that? >> senator heller, you are focused on that very important issue for all the western states including nevada. we see a lot of the western states where we know there is stage grouse habitat. director abby is moving forward with you -- new resource management plans to deal with stage out -- grouse and 62 areas that and that after we are working closely with the states

including your governor, governor sandoval, governor made, and trying to move forward with the program. hopefully we will be able to develop a western states habitat conservation program that will protect the species and at the same time allow the development to move forward and based on the successes we have had with other species in other parts of the country. i am very hopeful and i to believe that we will get it done. >> here is the concern, here is a concern with this new memorandum that is the just mentioned was medication. do you have an application for a new mining site without mitigation? do you think you could maintain or enhance stage grouse habitat if you had an application for a solar farm, do you think you could put up a solar farm without mitigation that would maintain it against the stage grouse habitat? the same thing with agriculture. can you do the same thing with

agriculture if you have some kind of an application to push agriculture? can you do that without, without mitigation? that is the concern that i'm hearing from my constituents back home. they have no problems with moving forward to your goal, healthy goal of maintaining the stage grouse but the question is, can you meet those goals without some possibility or ability to mitigate mining issues, agricultural issues in renewable energy issues? .. abby and director ash

with the involvement of the governors of the state we'll get to that point. >> thank you. you answered my question. >> mr. chairman, i do have a whole bunch of questions but in the interest of time and recognizing that the secretary has given us is great deal of time this morning i will submit them in writing. i will ask, though -- it's my understanding last year after a similar budget hearing, it took almost six months to get some responses to our questions and by the time, of course, they're stale. i understand you have an awful lot on your plate but if i could ask if we have more prompt replies. i'm going to have the pleasure of having you before the appropriations committee so we'll be able to spare you some

of the written responses in those questions tomorrow. but if we could have a little more expedientcy i would appreciate it >> mr. secretary, you've been very generous of your time as senator murkowskmurkowski, we ae it. >> thank you. >> thank you. that will end our hearing. [inaudible conversations] [inaudible conversations]

>> congress is gone for the week. among the issues next week, small hydroelectric facilities on bureau of reclamation canals and light properties and for companies that go public. and here on c-span in the senate, more debate on the transportation bill setting highway and transit programs for the next two years. senators will vote tuesday at noon on limiting amendments to that bill. senate majority leader harry reid says the bill has been stalled due to unrelated amendments. >> mr. president, it's the new year. and thankfully it's brought new signs of economic recovery. not as vibrant as we'd like but some recovery. but it will never be good enough while we have millions of americans unemployed in this country. as we say in the senate, those

on this side of the aisle, democrats, are not going to take our eye off the target. that is a healthy economy. and the bipartisan transportation bill is an important step in that direction. this bill would save and create almost 3 million jobs. yet, my republican colleagues have caused the waste of about a month of precious time on the senate floor in obstructing this important piece of legislation. so it's with some disappointment. i'm going to file cloture on this transportation bill. it seems 85 votes to begin a debate on a measure no longer indicate a smooth legislative path forward. we would think with 85 votes that we would have kindly approval of the bill but that has not taken place. that's because my republican colleagues want to waste time on

unrelated, ideological, nongermane, nonrelevant amendments instead of talking about a nation's failing infrastructure. mr. president, there is no one -- no one who thinks, and i say that, no one believes that our roads, our highways, our bridges are up to snuff. they're not. we need significant work to bring them up to a better condition. tens of thousands of bridges are in a state of disrepair. so republicans, instead of on working on this valuable infrastructure bill, have been causing us to waste time on issues not related to this. we spent the last several weeks on a woman's access to health care. and, of course, the amendments

they talked about doing that would weaken our environmental protection, would make our water less pure, our air dirtier. this instead of rebuilding as i indicated our roads, our bridges. even against our better judgment. one republican leader said yesterday we'd spent enough time on trying to repeal the health care bill. but we've had to retract that because the tea party rose up and said, oh, we got to have more votes. they're meaningless votes, mr. president. everyone knows there's not going to be a repeal of the health care bill. and so the republican leader who talked about this yesterday was talking about what maybe what senator alexander and senator pryor think we should do, spend our time on things that are constructive like getting our appropriations bills done. no, the tea party stepped in and

now there's going to be efforts made to repeal the health care bill. in fact, i read in the paper today, the complete flip-flop from yesterday, instead of not trying to rebill a health care bill the rest of this legislative year. now the year the entire rest of the march will be dealing with health care. so, mr. president, it's time to move forward on this bill. hopefully, seven, that's all we need -- there's 47 republicans. we need seven of them to invoke cloture on this bill. that vote will occur tuesday morning. all the nongermane, nonrelevant amendments -- let them do it on a piece of legislation, mr. president, that is not so vital to the economy of this country. so we will move forward on this bill and i certainly hope we can

get seven republicans to join with us -- there's 53 of us, 7 of them. now -- mr. president, of course, i've always said i would be happy to come up with an agreement. they want to offer members that are related to what we're doing, that's fine. but that hasn't been forthcoming. i hope the weekend will give my republican colleagues a chance to reflect on whether they're willing to put ideology ahead of the economy. mr. president, 3 million jobs. and what do we spend our time on? an ideological issue to take health care away from women and before the end of the day i'm going to impose cloture. it's a bill that has the

approval of barbara boxer, a progressive senator from california, jim inhofe, a conservative senator from oklahoma. we have now added to that something that came out of the finance committee, something that came out of the banking committee, something that came out of the commerce committee. all these measures have been relatively without any challenge. i can't understand why people wouldn't approve this and what we added to this is 37 approved amendments. the staffs with the respected centers have been working for days to come up with amendments and these amendments have been chaired by the respective chair and respective committees so what we will be voting -- i'm sorry, we'll be voting on

tuesday. it will be that product. all of it, mr. president, bipartisan, all of it noncontroversial so we can complete work on this bill. if we did nothing else, nothing else on this highway bill so what we're going to vote cloture on tuesday, it would be a good strong, good -- a good strong legislative day for this body. and then we can have conference to the house, the house has already announced that they can't do their senseless piece of legislation even the tea party-driven republicans in the house recognize that was something that was a figment of someone's imagination if they can get it down. now they're going to do a two-year bill like us. it will be easy for something like that. they may have some differences, some of the policy efforts but

that's why we have conferences. this legislation is critical. at the end of this month, end of march, the highway bill is no more. projects that are being worked on in hawaii and nevada will come to a stop. there will be no money. new projects won't be able to go forward. this is a really important bill involving billions of dollars of construction for our country which is badly needed. >> and we'll have live coverage of continued senate debate over the transportation bill as well as tuesday's bill to limit amendments to that bill here on c-span2. the house is live on c-span. >> super tuesday primaries and caucuses are next week. and tonight mitt romney will be in one of those super tuesday states, ohio where he will be joined by his wife and a rally in the cleveland area. we'll have live coverage starting at 7:00 eastern here on

c-span2. at the same time, over on c-span, rick santorum will be campaigning in another part of ohio. he's the keynote speaker at the lincoln day dinner. you can see live coverage from east lake ohio at 7:45 eastern, again on c-span. and voters go to the polls in 10 states on tuesday. 419 delegates are at stake. 3 states have caucuses, alaska, idaho and north dakota and 7 states have primaries, oklahoma, tennessee, georgia, ohio, virginia, vermont and massachusetts. watch live coverage of the results on the c-span networks and online at c-span.org. >> even a person who's a senator even a person now who's president of the united states face as predicament when thoik about race. they face all sorts of predicaments. they face the fact that there are an appreciable number of americans who are racially

prejudice. they face the fact that a much larger portion of the american populace wants to deny deny the realities of race even now. >> sunday, harvard law professor and former law clerk to justice thurgood marshall, randall kennedy. the rhode scholar is the author of five books. he'll take your calls, emails and tweets for three hours live on in-depth on booktv on c-span2. >> u.s. navy secretary ray mabus talked about the role of the military and the coalition partners. he talked about the shared values between candidate and the u.s. and later answered questions from the audience. his remarks are about 40 minutes. they're courtesy of canada's public affairs channel cpac. >> the honorable ray mabus, u.s.

secretary of the navy. ray mabus is the 75th u.s. secretary of the navy, as secretary he leads american's navy and marine corps and is responsible for a -- you have copies of his curriculum vitae, his biography in your packages, allow me simply to make a few remarks about his background. prior to joining the administration of president barack obama, mr. mabus served in a variety of top posts and government and the private sector. in 1987, he was elected as the youngest governor of mississippi at the age of 39. in more than 100 years at the time of his election, and previously as state auditor, 1984 to 1988 and was instrumental in rooting out huge corruption and misappropriation of public funds in county

government in 25 counties. he was appointed ambassador to the kingdom of saudi arabia for the clinton administration in 1984. let me end the introduction of our spendid speaker this morning by suggesting, too, that he has served two years, '70 to '72 as a warfare officer in little rock. and he was offered a fulbright scholarship and held a woodrow wilson fellowship. ladies and gentlemen, please join me in welcoming to our podium, the honorable ray mabus. [applause] >> mr. chairman, thank you so much for that wonderful introduction. i appreciate the hospitality here in ottawa. you're far more hospitable to me

than your senators were last night to the capitals. l[laughter] >> i don't know how many you saw the game or went to the game but they perfected the puck off the face into the net. [laughter] >>. it's really hard to plan that play. [laughter] >> i'm very honored to be here with you. i'd like to speak for a few minutes and take whatever questions you have. united states and canada are allies, friends, neighbors. our trade and military partnerships are as strong and enduring as our border is long. and the connection between our two countries are far more than geographical. it encompasses our shared

principles, values and security. our formal defense ties were established in a pretty informal setting, august 18th, 1940, 60 miles south of here when prime minister king and president roosevelt sad in roosevelt's car, in the village in new york and agreed in principle to what became known as the ogsdenberg agreement. it was a five-sentence agreement to join the permanent joint board of defense, centered on the defense of the north half of the western hemisphere. it was so informal that the agreement said that the first meeting of the board would happen and i quote shortly. [laughter] >> i don't think government has gotten much more precise since

then. [laughter] they took shortly to heart because the first meeting of the board wasle following monday here in ottawa. and since then our countries and our militaries have shared a lot of things from fighting side-by-side on the front lines of normandy to the battle of afghanistan where there are no front lines. our successful operations together in places like libya emerge from fully training exercises including the bold alligator 2012 the largest amphibious exercise in the past decade which took place off our southern coast and canadian leadership is readily apparent. in the last two frontiers of the globe is an artic. it's a frontier we share and a frontier where the maritime

component is becoming increasingly important. i grew up in the american south. i was governor of mississippi. but last spring i went, and you couldn't find a much more different than mississippi but you also couldn't find a much more important place and one that's becoming more and more important as time passes. today we have to rely on our shared history and our shared values to meet the new things that we face. some people separate the challenges that we face as economic and military. but it's the bottom the challenge we face is the broad challenge of making the globe we inhabit more security. for the united states, after a decade of two ground wars and a changing and dynamic security

environment, it was time for us to take a significant review of our national strategy and defense priorities. at the direction of the president of the united states, the countries that meet the complicated threads of the military that is somewhat smaller. but more flexible more agile can answer any call and can provide our national leadership with our fullest range of options possible. president obama for the first time in the memory of anybody at the pentagon was personally involved in the formulation of this new strategy. because he knew that in reshaping our defense

priorities, we cannot and should not choose between fiscal responsibility and a strong national defense. we have to have both. as he and others have said, economic security is national security. we have faced some pretty tough budgetary issues passed by our congress, well, one of the things i want to emphasize is that the defense budget unveiled by the president 10 days ago was driven by strategy and not by dollars. we navigated by some key guiding principles for this new defense strategy. one was to maintain the world's finest military and avoid at all costs hollowing out that force. a smaller military that is capable of a full spectrum of missions is superior to a larger

force ill-equipped because resources are not made available for places like training, maintenance or modernization. another key principle was to preserve the quality of the all-volunteer force. our fleet's access of vehicles, marines don't sale, fly, drive without the men and women who wear the uniform of the united states. our new strategy has an understandable focus on the western pacific and the arabian gulf. but it does maintain our worldwide partnerships and our global presence using more innovative, low cost, light

footprint engagements. america and its military will remain globally engaged and forward deployed. for my department, the department of the navy, this new strategy requires a navy and marine corps team that is built and ready for any eventuality, in land, air, under the world's oceans, on the world's oceans or in the vast cyberseas. we see our maritime team playing a critical role in areas of growing demand. things like detouring and defeating aggression from state and nonstate actors, conventional or irregular threats, projecting power, maintaining presence to assure open sea lanes and providing disaster relief and humanitarian assistance whenever and wherever they are needed.

my favorite navy recruiting poster says, sometimes we follow the storm to the shore. sometimes we are the storm. we do it with the same people. we do the with the same platforms. and we do it without taking up an inch of anybody else's sovereign soil. while the security environment that we all face is complex and changing, our shared interests are simple and enduring. interest of security, prosperity, respect for universal values, and international order. those common goals form the basis of our grand strategy reaching back to roosevelt and king and if anything, are even more vital today in a globally connected era. future crises and future threats

may and probably will take a lot of different shapes. we can't prepare simultaneously and fairly for every possible contingency. so we need to focus on flexibility, on agility, on creating a force that is ready for the most likely threats but ones that can adapt quickly and effectively to the unpredictable. our navy has experienced that to a remarkable degree in just the past year. early last may, a group of sailors as a part of a joint force finally brought osama bin laden to justice. and just last month we rescued two hostages from pirates in somalia. at the same time we were doing those two things, we had 20,000 marines in combat in afghanistan

and forced thousands of sailors on the ground in afghanistan doing a variety of missions. one of my first trips to afghanistan, i went to patika province down to the pakistan border, very are youral province and we had a reconstruction team which was commanded by an american submariner. his top two enlisted was two submarine chiefs. now, i bet you that when he joined the navy and opted for submarines, he did not expect to find himself in the mountains of afghanistan. [laughter] >> but he did a superb job as did that entire team. that's the flexibility, the agility to take on any sort of job or task or and do it well.

last spring, on the first day of the libyan operations, two of our submarines and one surface ship shot 122 tomahawk missiles into libya, that same day we had five ships off the horn of africa fighting piracy and another ship circumnavigating africa in the african partner station. that same day the ronald reagan strike group, which had been on its way across the pacific to do combat air support over afghanistan learned of the tsunami that had hit japan and in under two hours, turned and went to help the people of japan. that strike group used exactly the same techniques, exactly the

same things that they were going to use in providing combat air to make sure the right things got to the right places on the right africa going to the right parts of japan to help with humanitarian assistance in the wake of that terrible disaster. that same day we had ships in the caribbean, in the eastern pacific interdicting drugs and other ships going around south america and in the southern pacific doing medical and dental and veterinary work. when our captains leave or the commander of our strike groups or amphibious groups get ready to leave for deployment, one thing that i always tell them before they head out is that the one certainty is uncertainty. they will face something almost

surely that they did not anticipate but for which they will be prepared by their training and their ability. our sailors and our marines repeatedly have proven that they can meet anything that comes over the horizon and canada has been there with us, providing combat help and assistance and helping with afghanistan diplomacy, operation mobile -- i'm sorry, i'm from the south, mobile, alabama. [laughter] >> mobile -- [laughter] >> in libya, fighting piracy off the coast of somalia, and providing assistance in haiti and around the world.

your commitment to these operations and so many more underscore a fundamental point. we best meet the issues of confronting threat to threats and prosperity should not be the task of any one nation. building and sustaining strong security partnerships is a central and enduring element of our national security strategy and it remains a key element of the new security strategy we announced recently. and our two nations have demonstrated from building strong security institutions in europe and asia following world war ii to assisting former soviet states in the aftermath of the cold war to our work around the globe today that partnerships are actually -- are incredibly vital. nowhere are those partnerships more important than in the

global maritime commons, assuring the free passage of our sea lanes is critical to our security, our commerce, to the free exchange of goods and ideas. we see that exchange every single day in our militaries where we operate together, train together and are educated together. partnerships like the one between the united states and canada. on one way we can maximize our resources and expand our reach in a time of fiscal constraint. another means is to focus on improving our cost-effectiveness and reducing our vulnerabilities. and for our navy that means we have to maintain our aggressive efforts to reduce our dependence on overseas oil, from potentially -- or actually volatile areas of world to use our resources of energy more efficiently. our energy efforts have already

made us better war fighters. by deploying with afghanistan with solar blankets to charge radios and other electronic items one marine patrol drops 100 pounds from their backs and they don't need to be resupplied as often. using less fuel in theater can have less convoys that can save lives. for every 50 fuels in afghanistan that's too high of a price and being efficient is who the. everything for new hull coatings in our ships to replacing light bulbs with leds to using smart

grids and smart meters. but we've got to get -- we've got to do more, than just be more efficient. now, thankfully canada provides more than a quarter of the oil the united states uses. but that still leaves us buying too much from those who may not be our friends and who may not have our best interests at heart. all you have to do is turn on the television the last year and watch the news on emerging threats and multiple threats to energy security. we are too vulnerable in this area. we would never allow some of these countries to build our ships or our aircraft or our ground units but we give them a say in whether those ships sail, those aircraft fly or those

ground vehicles operate. and even greater vulnerability is to the price spikes and shocks that come from oil. oil is a global commodity and the price is set globally. sometimes on speculation and no more than rumor. but every time the price of oil goes up a dollar a barrel, it cost the united states navy $31 million in additional fuel costs. when libya started last spring, the price of oil went up $38 a barrel. almost overnight. now, libya is an oil producer but in the global scheme, it's not huge but that one operation, that one upprizing caused the price of oil to shoot up almost $40 a barrel and for us that was

a $1.1 billion bill that we had to pay. and the only place that i or any secretary has to go to get that money is out of operations. so it meant that we flew less, we trained less because of that. even iran's near threat to close the straight of hormuz boosts the price of oil. as the people in this room know so well, when you run a military organization, you look at vulnerabilities. you look at vulnerabilities in potential adversaries but you also look at vulnerabilities of your own force. when i was nominated for this job, and began to be briefed on

the department of the navy, energy dependence jumped out as one of the biggest vulnerabilities that we have today. and the reason that we are doing what we're doing in energy, the reason that we're moving to alternative energy is it's a matter of security. it's a matter of national security. it makes us is better military force. and with canada providing leadership on alternative fuels as well as fossil fuels we'll be better partners with each other and with the world. to improve our defense and to create a more secure world. king and roosevelt started us on this course and it remains for the right course for us today.

i think president obama said it best with prime minister harper. he had perhaps no two nations match up more closely together or are woven together more deeply, economically, culturally than the united states and canada. i believe that as long as our course together is guided by our shared values and principles, we will prevail as two partners, two neighbors, two friends in the words of your national anthem, strong and free. god bless canada, god bless the united states. thank you all very much. [applause] [applause] >> questions?

>> ask your questions in the usual manner. go to the microphones, identify yourselves, please and try to keep your questions fairly short. thank you. >> good morning, mr. secretary, i'm david from national defense. could you talk a little bit more about the partnership's angle. your strategic guidance mandated a shift to the asian pacific region but it also mandated with more cooperation with countries that have frontages on the pacific ocean. so tell me what are the administration's and he gottations of its allies. if you could wave your magic wand over the pacific basin what would you like to see your allies acquire and maintain in the years to come? thank you. well, one thing while our new strategy calls for a western pacific and the arabian gulf regions, this is not new for

either of us. this is not a new focus for the united states or canada to be in the pacific. in fact, our fleet right now is 55% in the pacific, 45% elsewhere. and we're gradually going to move that to where it's 60% in the pacific. in terms of our allies, we want to keep doing what we're doing in things like surface and antisubmarine capabilities. and i saw the myriad of ways to overcome the tyranny of distance in the pacific. canada participates in rempac -- with a pacific exercise that that has been -- that's the

largest maritime exercise in the world. canada is one of only two countries that has been there ever single time that rempac has happened. to be interoperable with us, to cross-deck with our partners in terms of training, in terms of doctrine in terms of operations in how we do it, if i could wave my magic wand i think i would be pretty much where we are today, which is closely cooperative, which is making sure that we do exercise together, making sure that our platforms are compatible. making sure that our -- both leadership officers but also our total force knows how each other's operates by common education, common training and that we -- we approach the pacific together as partners and

not as two separate nations going into that region alone. yes, sir. >> thank you, my name is matthews. i'm a journalist with the executive intelligence review. and i was going to pose my question with regards to some of the military buildups that we've been seeing right now across the pacific basin, obviously, and a various number of leading military officials across china -- the most recent was a leader for the pla have been warning that they've been seeing things like the military basins being built in the north of australia as well the air and naval while being applied in the united states in that region as an offensive or containment against china. and i would say if you had a chance to speak to these leading military officials like mr. so,

what would you say their response to their concerns? >> well, for one thing, what we would like is we would like engagement with china. we would like to approach these issues together. we'd like some more transparency on what they're doing. on their military buildup. the things they're buying, the capabilities that they are -- they are acquiring. we'd like some more transparency why they're doing that. we've been very transparent about the fact we've been in the pacific and we've been in the western pacific now for decades, at least since world war ii we have been a continuing and persistent presence there. we're going to insist on freedom of navigation. we're going to insist on making sure that goods and ideas can move freely and openly. not only there but around the world. and we can do that better together.

the fact that we are in the western pacific is not new. it is not it is something that is a part of what we have done for decades and we'll continue to do for decades to come. we're moving our marines from a concentration in okinawa to guam, to -- as a rotational force into australia because we have trained with the australians again for decades and we will continue to do that. we also are going to continue to be very active in the region in doing things like partnership-building and humanitarian assistance. our marines get a request for humanitarian assistance or disaster relief on an average of once every three weeks. and many of those are in the pacific and we will have our forces where they need to be in

order to get those things done. >> good morning, sir. >> good morning. >> there you go. >> thank you for your comments this morning. continuing with the asia pacific theme, could you identify key american interests in the asia pacific as it is today and how american naval power might be given to address those issues. and in the south china sea. i think i just mentioned some of the key american interests not only in the western pacific the south china sea but everywhere which is free movement of ships and good. freedom of navigation. the straits of malacca, 40% of the world's trade goes through those straits annually.

we -- for the good of the economy not only of north america but for the world need to make sure those sea lanes remain open, that they remain free from piracy or any other sort of things that might that might block them. we are going to -- as i said, we have had a print presence. we have a carrier in japan. we have a amphibious ready group in japan. we have marines and air assets in okinawa. i think you'll see in the future -- i know you'll see in the future, combat ships, our newest ships being deployed to singapore. you'll see other assets being deployed for lift for our marines, which are going to be

rotational in australia. they'll be a mix of rotational in guam and anything else specific. i don't think you'll see a big -- big change in where our assets are, but there will be some -- some movement. but the important thing is that we will continue to be a very persistent presence in the western pacific. one of the reasons i think that is important is that when we routinely send carrier strike groups or amphibious ready groups or other kinds of ships through whatever bodies of water there are in the world, if there's an incident, if there's a misunderstanding, we don't escalate it by sending in a carrier strike group or an amphibious ready group. it's already there.

it's a part of our normal presence. it's a part of what we do on a day-to-day basis and i think it's important that we have that particularly in the western pacific. yes, sir. >> yes, my name is bob, a retired commander of the army and association. one of the questions i have is regarding the term comprehensive approach. in the last decade approach to these international security problems has been this comprehensive approach involving all the instruments of nation and of government academic industrial and song. and yet that wasn't mentioned anywhere in what you were saying. so i wonder if i could tell us where that concept actually is going. would you say that the united states is backing away from the idea of comprehensive approach as an idea that seemed to have legs but based upon our current experience has proven perhaps not effective but is that idea still within the u.s. concept of operations?

>> yes, sir, it is. and it's my fault if i didn't -- if i didn't articulate well enough. we have to have partnerships not only with other countries but also inside our own government in terms of how we approach issues, whether it's military or economic or diplomatic issues. and i think this comprehensive approach is certainly one of the kestones of what we will do in the future. what -- the thing that our strategy has said we are de-emphasizing is long-term stability operations, long-term large numbers of ground troops anywhere. and moving more toward a more mobile flexible agile force to be quicker, to respond to

things. that is the only -- lesson focus on long-term security and stability operations on the ground is one of the big changes that occurred in this security -- in this new defense strategy, new security strategy but certainly not the comprehensive approach that we need to take. and the last thing i'll say is that one of the things that our sailors have to learn to be is not only good war fighters and good sailors. they have to learn to be diplomats because one of the -- most -- for a lot of people on earth, the only americans they will ever see are sailors. and we have to represent the united states very well when we go into -- into some of these

countries. so thank you. >> mr. secretary, good morning. thank you very much for your presence and your participation. my name is alec morrison and i represent roy rhodes university. in your presentation you indicated the amount of oil that goes to the united states from canada. and we regard that as a very significant part of our export program. however, recent events have indicated that perhaps we might not be able in the future to sell as much oil to the united states as we would like and we are now going offshore to look for other customers. would it disturb you, the government and the navy if the united states did not continue to purchase that amount of oil from canada? and how would it be if you had to go to other offshore perhaps more unreliable countries to assure that your ships can sail

and your planes can fly? >> well, number 1, as i said, i think i used the word thankfully we get more than a quarter of our oil from canada. and it does disturb me that we are today dependent and could be more dependent on either actually or potentially volatile places on earth for the fossil fuels that we need to run our fleet and that's the main reason that i've embarked on a very aggressive plan to try to move the navy both afloat and ashore off fossil fuels to the maximum extent we can. now, i'll mention the unspoken things that you had in your

question. [laughter] >> and i think the president made it very clear that his decision on keystone was because of process and timing. he simply did not think that the state department had enough time to gather the relevant information. it was presented to him in a 60-day requirement by the extension of the tax cuts in december. and and he made it very clear in the statement that it was only process and only timing and that it was -- it did not and should not have any greater meaning than that. all right. again, thank you so much for having me. [applause]

>> mr. secretary, we are extremely grateful for you having come to lead off our two-day conference here today, allow me to print a small token the oxford companion or canadian military history thank you so much. [applause] >> thank you so much. >> super tuesday primaries and caucuses are next week and tonight mitt romney will be in one of the super tuesday states, ho. he'll be joined by his wife for a rally in the cleveland area. and at 745 pm on c-span, rick santorum will be campaigning in another part of ohio. he'll be the keynote speaker

tonight at the lake county ohio republican party lincoln day dinner and we'll have that for you live from willaby, ohio. >> republicans go to states on tuesday with 247 delegates at stake, 419 of those delegates will be allotted based on the super tuesday results. three states have caucuses, alaska, idaho, and north dakota and the others have primaries. oklahoma, tennessee, georgia, ohio, virginia, vermont and massachusetts. and you can watch live coverage of the results on the c-span networks and also at c-span.org. >> bobby jindal a budget $900 million in the red. in shreveport, it's 38 at barks daily and 38 in men din you're listening to the news and weather station, news weather

710. >> this weekend, booktv and american history tv explore the history and literary culture of shreveport, louisiana, saturday starting noon eastern on booktv on c-span2. author gary joiner on louisiana's failure in louisiana from one damn blunder from beginning to end, the red river campaign of 1864. then a look at the over 200,000 books of the james smith nol convention. then a walking tour of shreveport and boshier. from barks daily air force base a look at the base's role on i like plus the history of the b-52 bomber. also visit the founding fathers autographed collection at the louisiana state museum. and from the pioneer heritage center, medical treatment and medicine during the civil war shreveport, louisiana, next weekend on c-span2 and 3.

>> continuing with the security conference now from ottawa, we'll hear from general james mattis the commander of the u.s. central command as he discussed the role of allied forces. his remarks are about an hour and 15 minutes and they come to us courtesy of canada's public affairs channel, cpac. >> ladies and gentlemen, let me briefly refresh your memory concerning our next speaker's biography, a copy of which you have in your programs. [speaking in native tongue] >> translator: while visiting our conference for the second time since 2009 when he was a supreme commander for transformation, general james mattis is now commander of the u.s. central command in the u.s. >> our next speaker is a u.s. marine corps general officer who served as supreme commander

transformation from 2007 to 2009, in which capacity he graced our speaker's platform at our 2009 annual general meeting. we are delighted to welcome him back in his capacity as commander u.s. central command. ladies and gentlemen, please join me in welcoming general mattis to our podium. [applause] >> thank you, ladies and gentlemen, merci, general rick and for all of you, it's great -- it's great to be back here once again. general wall, general sir david and all of you, dr. cohen, thank you for inviting me in light of some of my publicized remarks i seldom get invited back in polite company so it's a pleasure. i have to recognize the general, my old friend. i think and admiral anderson is also here.

admiral and ambassador anderson, two stalwart friends who are great advisors in what it seemed like a 17-year summit to nato but it was only 2 years but it's an honor to fall minister mckay. i think anyone who ever sat in brussels is very much aware of just how fortunate canada is to have an articulate, unapologetic minister of defense who can express what many of us have difficulty putting across and turn to the civilian military gap that we all have to work to close. i'm not quite sure -- [applause] >> thank you. i'm not quite sure what is in the water up north here, but i will just tell you that i come often to get very frank and candid advice which is what you get from true friends. they don't tell you all the time

what you want to hear. it's what you need to hear and that tradition really continues, ladies and gentlemen, with commodore giles courtier and the brilliant command officers that you've assigned to my staff. it's interesting that his predecessor when i was called by a head of state in the middle east to bring in an american planning team had a canadian brigadier general walk into the king's audience there and say i'm here to commit the u.s. government to your protection. [laughter] >> and he did so by the way with our full authority. [laughter] >> it shows -- it shows the level of trust that we have between us and due to our service together, some of you might be aware of my very proud connections to canada and the canadian forces. i spent many of my boyhood summers, most of them on a farm south of winnipeg and