commissioner until recently. i share the information with the folks. it is a new role. it was the role of the director of health care initiative was recommended by the task force. they said they needed somebody to work externally and cord nature and internally as wel

wellcoordina wellcoordina mentd well coordinate we are well and we are having the first symposim and we will think about it for all of the programs, like the most obvious on medicare, but the united states department of agriculture and veteran's administration and other folks to talk about this coordinate and have beneficiaries as well coordinate >> joining us at the m-health conference is kent dicks: what is is this? >> this used to be known as med-xs coordinate we are a remo

>> this is the technology you would find in your car and sent data to the cloud >> walk us through a demonstration. >> this is the mobile link device. at alere we have point of care devices for lipoids and a1c. this is able to do readings and a patient that is on a concern drug would have to go to the doctor once a week to make sure blood thinners are working.

this device is produced and called the in ratio 2. this data goes to the device and to the nursing center where they can help monitor the patient and they will alert the patient's doctor if there is a problem. what we are doing is we are connecting to the mobile link that has cellular technology. it connects the wire to the device. and once you take a reading in sends it to the cloud where it can be monitored. >> like an i-pad or other device? >> we have a system also where you can set thresholds for a patient. there are multiple systems you can put it into. this system brings in it, sets alert to go through and say i want the reading to be between 1-3 and outside of that range i

want to act upon it. so from an efficiency standpoint a nurse looking at this can go through and if i am doing well there is nothing she has to do with me. but if i am outside of range, an intervention needs to occur so i don't go into the hospital. >> and you have another hospital that talks to each other. what is that device? >> this is home link and it isn't fda approved yet so we are not selling it yet. but this talks to multiple devices. scale, blood pressure, pulse, gluicose and the type a patient has in their house. >> how does it work? >> if we send this home with a copd patient and i have a pulse that will take the oxygen saturation and don't look at my stats because they are poor today. but if you look at it, it will

go through and do a little calculation and say what my heart rate and oxygen saturation is. it will send it to this device when it stops. >> saturation is 94% and your pulse is 107. >> so if you left it alone it will announce 94 over 107. it will ask questions and depending on program the patient is in -- this is in a diabetes program -- it will ask if you took medication, exercised today, and blood glucose levels. >> what do you look for from the fcc or other governments to make this available?

>> we have worked with them for the last four years. we were here when they handed off between julius genachowski and margaret hamburg. to make it easier to get through fda so we have the right patient safety with these devices and also from the fcc side to be able to bring the most amount of spectrum to rural and areas out there to get the devices in the patient's hand. that is what the fcc is doing. allowing us to gett things to market quicker. we are concerned about the underserved population. any person living in the united states or rural area and 3-5

hours from your positihysician, next time you precent -- present -- with your illness it will be in the hospital. so we are trying to monitor this and populate this group of people and keep them from out of the hospital. >> the communicators at the set of this expo and joining us by jay here. the consumer of e-health. what is that title and what do you do? >> we focus on helping the health system to transform using

information technology. within that, my specific office is focused on consumers, patients and caregivers into this process wherever possible. we believe in empowering people through technology. we believe that consumers are an under utilized resource. your health is very much dependent on what happens every day when you are mild away from the health care system. what you eat, whether you exercise, take your medication, and when and where to seek care. those things shape your health as much as critical reactions. >> we are talking about the world of mobile apps, what is the consumer sentiment towards

that? worried? trusting of that? >> there has been an uptake in mobile apps and many people are interested in using them. some folks are having a hard time navigating what apps are right for them. people have problems with ethicacy and knowing the app promises to do what as it says and sometimes questions about private and security. so one thing we are working on is providing a model notice for health apps. for example, when you go buy a can of feed, there is that consistent fda label that lets you look for the things you are interested. some care about sodium, others sugar and fat. so we are developing a tool, and we have done this for personal health records, but now

expanding it to address mobile and non-mobile apps, this helps you say these folks don't resell information. or this is how they use it. so a consumer can help navigate this growing and exploding field. >> so if you are developing a standard is this a requirement that mobile app makers have to follow? >> it is not a standard per se right now. it is more of a consumer tool. we will promote its use. we have several personal health record vendors using it. but we are working with folks in the private sector to adopt it because we think it is to their advantage to help explain what they should do with information. one of the things we are doing in the years ahead is launching a website which is going to help people find where they can get

access to health information. this ties into the something called the blue button in initiative and that is consumers getting direct electronic access information. you click the blue button and you can download your health data. it could be from your doctors or health system or medical records. but you could get it from your health plan as well. might include information about what episodes of care you have had. but also what that cost. similarly, you could go to your pharmacy and pull down the medications you took. what we are doing is going to be launching a website that is helping you as an individual say cool, i want to get my data, how do know where it is available. point me toward the potential forces. and point me toward apps and tools where i can use it. this is where that tool that i

mentioned comes in. we will have that on the site so people can look at the apps and tools and say from a privacy angle how are the companies using data. >> if i am the end user i am concerned about who has access and who can look at it. >> once you have it in your hands, it is outside of the realm of hipa protection and occupy to you to determine what you do. there is going to be opportunities to plug into apps and tools in addition to doing simple things like reading over your health record and making sure it is correct. so simple things. and plugging it into apps and tools so you can remember to make medications or maybe enter into a competition with friend or family members about, you know, exercising more or

manageing a certain health indicator. keeping blood sugar under control or not eating too many cookies during the holiday. we want to give folks guidance on which apps and tools are useful to them. >> because you are concerned about the consumer, do you have to convince those in the federal government on better and clearer ways to communicate about what they are doing and health information? >> i think a lot of folks are increasingly within the federal government and private sector is realizing the consumer is on underutilized resource. we are trying to imprub health care and the only way we will get there is if we engage consumers more. efforts to reform payments are working. but the point of m-health is most people have this tool in

our pockets that can help us make decisions that support the end goals of better care. so mhealth is an amazing opportunity to make advantage of. >> does the blue button initiative get direct consumer input? >> we bring them in at many points to thing about technology and process. they are open and transparent. one thing we do is run challenges for the developer communities to encourage them to build consumer tools that use blue button data in a structured way. there is one we're showcasing at the mhealth meeting.

genie m.d. was a big one that is here today. so we want to make sure the voice is represented. part of what is interesting is challenging is that part of what we are dealing with in this consumer engagement arena is a cultural shift. in the traditional model it was the doctor who made the diagnosis is and called the shots. we are are advocating for the model that shares what the goals and information are. we feel that particularly enabled by technology consumers can share information that is radically helpful to health care providers in make diagnoses or

troubleshooting and figure out why something isn't working. i am talking about fitbit or wireless scales and devices that help you collect information and share it with providers. and that is something we are on the cusp of figure out. >> are they receptive or concerned about the power leaving their hand? >> some are receptive and others are not so sure. it is this process of cultural change. it is getting consumers who embrace it and others say i prefer my doctor take care of this. but the reality of the health care center is you cannot assume your doctor is accordinating coordinating with others, doesn't happen.

so you need to get involved and you can use technology to make it easier for you. >> do you have personal health technology you like using on the health side? >> a couple things i mentioned already. i do like trackers like fitbit. i have one of those scales that automatically updates your weight on a graph and you can chose to tweet it out. it is nice to be there so i can see if things are going into the direction they should not. in terms of making sens of the information and sharing it, i have a personal health records that i keep updated for myself and my kids. i have kids with allergies to medications and other comp likates things and i am not going to remember so and so had

step throat in february and the medication given didn't work. i have to write it down, have it available on the phone, so when i go in to a different doctor, i have the information there. that is important and the social networks about health that i enjoy experimenting it. challenges like i am going to flock more and you vi against friends >> where do you see this in three to five years? >> i hope where this is going is there is going to be a greater flow of information from the traditional health care system to consumers and back and forth. i think you have two separate worlds where like you have the

traditional doctors and hospitals and they don't share the information that folks are collecting through these apps and tools. i think through policies that are increasing and we are requiring consumers being able to download data will help to knit together the world. >> the director of the national coordinat coordinator. thank you. >> you have been watching the communicators, if you want to watch this or others go to our c-span website.

>> we will look at trade agreements with russia. and then federal rulemaking and the cost and benefits associated with federal regulations. we will talk with a former senator who is the chair of small business for sensible regulation. washington journal airs live every morning at 7 eastern on c-span. >> the shooting at the washington navvy yard in october

revealed holes in the security issues. live coverage at 10:30 a.m. eastern on c-span. >> i wish you both a happy christmas and bright new year. >> it is a pleasure to greet you mr. santa clause and have you open the sail of seals that starts on thanksgiving. >> would you might auto graphing the christmas seals? >> i should be delighted. it is one hof the things i do best. you must have performed like this before. >> my father santa clause gave

it to me. >> it has the dog's hair in it. >> first lady's influence and images. edeth roosevelt is this week. -- edith -- >> according to the energy information administration, we are closing in on 9.6 barrels of oil a day. this was released on monday. this is an hour and 15 minutes. good morning, i am wilfrid kohl and i am the senior advisor. it is great to welcome adam

sieminski to our session which we have done for the last 2-3 years. adam sieminski has been in his current job for a year and a half. before that he had a career with another company for 14 years as chief econmist and energy stratagist. adam is a former president of the united states association of energy economics and also former president of the national ass association of petroleum analyst. he has been on a number of advisory committees. the energy and national security program and also at least two advisory committees in the past

here to the energy program. and he has been an occasional lecturer several times here. we are pleased to have him back. he is going to talk about the reference case of the 2014 annual energy outlook. and we will weproceed with discussion and q&a after that. welcome, adam. >> will, thank you for the in o introduction. it is great to see you back at john hopkins.

i heard you say we were old friends and i am now saying friends of long acquaintance. i want to go through our energy outlook report. first thing is i want to thank john and paul. john is right here. and here comes paul. so when we get to q&a the hard kw question will be answered by them. you want them.

they provide a good way of moving toward side cases that can aluminate what you are doing. what is going to change and regulations and law and c consumpti consumptico preferen preferences. we have seen changes in technology in horizontal drilling and multi stage

fracking that have improved the efficiency of drilling and well production. keep that in mind as we go through the conclusions. one of the main conclusions is that natural gas production and oil will continue to grow. natural gas throughout the entire frame and oil until later this decade or early in the next decade. we now see united states oil production reaching 9.6 million barrels a day. that was the prior high back in 1970 and keep in mind that is in our reference case. light duty vehicle energy use is declining as vehicle miles travelled show slows is vehicle

fuel efficiency improves. the growth in shale production will allow for considerable increases in consumption in the industrial sector and electric utility sector. in the decade of the 2030s we expect natural gas to pass coal. we see the growth in natural gas production not just sufficient to enable industrial and electric utility use but

that 3% number is in 2034, you know, by 2040 it's essentially in the same ballpark that means improvement in the u.s. trade deficit, and in fact, we're going to be some today in energy articles looking at energy and u.s. trade over the course of the next few weeks.

keep your eye out for that. i mentioned that oil production is projected to reach the prior peak back in 1970. u.s. crude oil production reach 9.6 million barrels a day. we're going to touch that level or come very close to it by the end of this decade. i think it will plat too. our current forecast show it coming down. that has a lot to do with the agreology of shale oil resources and production this is a significant increase actually from the 2013aeo forecast which had numbers well below this level. let me explain something that i'm really actually very excited

about. when we publish the 2013, that was december a year ago. we had oil production data coming from our survey and so on, that at best in december, actually have to to backup. the models to be able to publish in december really got locked down around september. that meant we were working with numbers from june. in some cases those numbers are really not complete until you're working with data that is -- we were starting with data that was already relatively old and incomplete as a starting point. what we did to fix that problem was to create a drilling productivity report that is coming out monthly now from eia. it allows --

actually gives us a forecast for this months and next month's production. so when we are locking in the aeo2014 numbers. we a good idea back in september of october what current production was going to be and what it was going to look like toward the end of this year. so we're starting with numbers that are six month it to a year were the in a sense for long-term forecast than what we were able to do in 2013. i think that is going go a long way toward improving the near-term accuracy of the aeo2014. i'm very happy about that. this shows one of the other conclusions i mentioned up front that motor gasoline consumption, in fact transportation use of fuels in general added up is going drift down over time.

those numbers are shown in queued rielon bto, thermal units but 25 million ptu is roughly 12.5 billion barrels a day. you think of transportation being roughly two-thirds of u.s. oil consumption, and, you know, break it down in those percentages. but we see jet fuel picking up a little bit. diesel fuel picking up significantly. growth from a low base and things like compressed natural gas and lick fied natural gas being used in transportation, and a little bit of an increase in ethanol as part of the motor gasoline con sog number -- consumption numbers. that peak back near 2005 was about 14 billion barrels a day 2012 base that we're starting

with is 13.4 million barrels a day transportation fuels. we see that low point roughly around 2030, and that is about 12.3 million barrels a day. again, this is a reference case. the current auto fuel efficiency roles going tamper off around 2025. if policy makers decide to extend fuel efficiency rules we would see even lower numbers than this. we will wrote a side case on that this year. we did last year. it showed a more of a decline rather than a plateau you see here. i mentioned that shale gas -- we still see expanding. we don't see any peaking at in the ability of industry in the united states to produce shale gas. we're seeing expansion as well

as shale gas production by 2040. we'll be over 100 billion cubic feet per day of natural gas production in these projections. shale gas alone just look at the numbers roughly running from 50 to 100 will be half of u.s. natural gas production. this is remarkable development. is now producing it's estimated actually in our drilling productivity report. this month hit 13 billion cubic feet per day. in 2010, it was barely two a day. what is going on in terms of shale gas and shale oil

production in the u.s. is a very, very remarkable development. i mentioned that we saw natural gas actually exceeding goal in terms of electricity generation by fuel. that happens in that period out past 2030. so that's a long ways away. but this is, again, based on current regulation. it's very possible that we might see less coal and more natural gas replacingplacing that coal as we move over time. one of the other interesting things that is happening in natural gas is the increase and shale gas production is allowing for in our models and forecast considerable growth in natural gas in manufacturing. so if you just look at that

middle column 2025, let's concentrate on that as, you know, near-term projection. these are stacked up in order of the growth coming so the biggest growth is at the top moving down toward the bottom. we see a huge increase actually in natural gas use in refining. in chemicals, and food processing. iron and steel production and other primary metals. this is industrial production and our model is growing about 2.6% per year between 2010 and 2025. the number of industries are clearly taking advantage of this

-- there is growth at 3% or better per year in industries like fry mare metals. so higher level of manufacturing shipments leads to greater manufacturing natural gas demand, and all of that is resulting in positive impacts on u.s. industrial production and gross domestic production or gdp. on natch really a gas, this chart shows our protections for natural gas exports. so if you start -- you can see the numbers that are now a part of the aeo2014.

we also export gas to canada. if you look below the number -- it's an interesting fact of north america and the north american free trade agreement and our long standing very positive relationships with canada as far as trade are concerned that there is a lot of two way movement in gas across the u.s.-canadian border.

natural export in the numbers. keep in mind our forecast basically come out of our national energy modeling system. they're not particularly based on permits. for example, there is no current permit for gas to be exported from alaska. we just think that the economics of that has shown in our model makes some sense. and so we portray that. since we were talking about lng exports. i'm sure somebody is going to ask a question about it. i thought i would have a slide on it. that's -- what about product exports.

the product exports, and a similar number but a little bit smaller now product imports. so we're a net exporter of 100 or 200,000 barrels a day where we were in 2012. the black line shows cross over point from being a net import to being a net exporter. we plateau at the level and moving up more as u.s. production continues to grow in u.s. demand plateaus off. just in the exports one of the interesting things about the ability of a refiners to export

things like this, which are getting a very good price in international markets right now is resulting in high refining utilizationization rates are running now in the upper 90s, and products are being produced in surplus. in fact, gasoline there's enough gasoline around in the u.s. now that prices have actually been relatively moderate and are below last year's levels. i wanted to this brief run through of our major conclusions with a thought on energy-related co2 emissions. we think they'll remain below that 2005 peak that you see when

we hit then plateaued briefly at 6 billion metric tons. the decline between 2007 and 2012 came from a combination of several different things. first of all, per capita gdp came down. we all know there was an economic downturn in the u.s. at the end of 2008, early 2009. that had an impact on energy consumption, and therefore output. more importantly, in thinking about this going forward, because going forward we're assuming that economic growth in the u.s. will run at about 2.4% year growth. natural gas continuing to

substitute for coal. and efficiency on the consumption side and things like how many miles per gallon cars get and what that does to consumption of petroleum fuels. with that, i'm going to -- well,let see. i have -- let me just go through a couple of these things briefly, and then we'll difference between

consumption and domestic supply. when we're adding this up, keep in mind it's not just crude oil production, which forward the end of this decade is above 9 million barrels a day. you have to add the liquids ngl, propane, butane, a little over 1 billion barrels a day. that's what you get in refinery when you put crude oil through and get products like gasoline and about a million barrels a day biofuel. so if you add natural gas, liquids, refinery gain and bio fuel to the number. we push up total liquids production in the u.s. close to -- not quite but close to 15 million barrel dais of fuel

supply, and demand will be running somewhere below 20 million barrels a day. maybe 18 and a half or so. it's going shrink the imported force -- portion of our liquid fuel supply to a number closer around 25% around 2016, 2017 from numbers as recently 2005 were close to 60%. this shows kind of a break down of the total oil production numbers. and you see the big impact of the yellow line.

continuing use of compressed natural gas and light duty vehicles and buses. on the left-hand side is trillion btu. on the right-hand side we put in some numbers on -- a day. so breaching something like 2.5 billion cubic feet a day from use from numbers that are currently literally an order of

magnitude less than that. we are seeing an increase from the natural gas -- near $4 a day reaching $5 roughly a little bit under by 2018 and continuing to move up over time. but we see crude oil pricing moving up faster, and the net result of that is the oil, the gas price ratio done in btu continues to favor natural gas. you end up with a number that is over 3 in the out-year forecast. what that says is natural gas per million btu is only a third

of the value of oil on a btu basis. that's what is leading to the whole idea substitution of natural gas in to the markets that would have typically been liquid fuels. mainly where the cross over point is much sooner. and we're expecting the u.s. to become a net exporter of natural gas this decade.

allowing for the ability to have net exports. we are looking at fairly significant level of lng exports. let's take a look where this gas is going. as cro -- across the u.s. economy, again, growth in natural gas being used in electric power in the industrial sector and particularly manufacturing. altogether it looks in the mold there's a fairly spread of natural gas consumption in the sector across the entire group in industrial consumption.

growth and transportation as i indicated and growth in the commercial sector. the only sector where we see flat to slightly down outlook is in residential use of natural gas. one of the reasons for that is electric pops are becoming more efficient in taking market share. let talk a little bit about electricity. the main point to be made here is the growth in electricity demand that we see looking out toward 2040 is still relatively low. a little bit less than 1%. you can see in the left-hand of that table 2013 to 2040 it's.9% a year. one of the things we have done here is shown electricity use. that's the blue line and the sort of dark blue trend line

along with gdp or u.s. gross domestic product and the trend in that. so we see three distinct periods in this chart. the period from 1950 in to the roughly the mid '80s when electricity demand was typically outpacing growth in gdp period from the mid '80s in to, you know, 2005 or 2001 roughly they were kind of going close to each other. and then the period since 2005 in our forecast where we see gdp growing faster than electricity demand. there are kind of a number of interesting point to be made in this. the despite new nuclear capacity

and the share of nuclear power in this declines slightly and we'll see that on the next slide. but that 1% growth in consumption does not allow a huge increase in renewable or other fuels unless you push something out of the something like nuclear or coal or natural gas. let look at that split. here is the split. natural gas growing from about 30% of electricity generation currently to 35 by the end of the forecast period. renewables continuing to grow in percentage terms as -- as cro the entire period. coal in the near term, but coming down in percentage terms over the period out in 2040, and

nuclear essentially doing the same thing. right, okay. so what about nonhydrorenewables? continue to see strong growth in wind. and in solar. keep the numbers looking relatively low in comparison to some of the other growth here is that tax credits keep going in and out, for example, the

renewable production tax credit for wind and solar, and changes that get made there. and the treatment of solar at the regional and local level by electric utilities. that's another important factor to be looking at. okay. we'll now i'm going stop and you want to come up and join me, will, and we'll see what kind of questions you all have? and how we might be of further help to all of you here, if possible.

>> we have microphones coming around. down here in the front. >> charles with brookings. [inaudible] >> hold on one second. here comes the microphone. everybody can hear you. >> charlie from brookings. with the dramatic -- and the industrial renaissance we see in some of your charts, why do you think it is gdp may not be able to grow faster than the 2.4% i think you used on average over your time. it depend on what asongs --

assumptions you make about the spillover of the benefits associated with the increased oil production in to the rest of the economy. there are i think sort of two different camps in this area. charlie, one says that oil and gas as percentage of the u.s. economy is still relatively small and; therefore, increases in oil and gas production don't completely change the nature of the u.s. economy. the economy is continuing to move structurally away from thing like manufacturing toward services, and so that lower percentage, i think, is part of the reason. i'm very reluck about -- reluctant to say it's small; therefore it doesn't matter

because, you know, the phrase journey of 1,000 miles starts with the first step. it ultimately has to show up in gdp numbers. and i think that the modeling of this is just beginning to get underway. [inaudible] [inaudible] >> congratulations. i can't hear you. let's wait until the screen goes up. i can't hear anything but the screen going on. [laughter]

[inaudible] and the other one if the issue between oil isn't the amount a little bit too mess mystic based on that assumption? >> well,let start with crude

prices are selling below. we are still getting the growth in output a number of companies and analysts have tried to look at this on an individual company basis there are analysts who believe that shale oil production in general is probably continues to be profitable below 90 dollars a barrel.

drilling rig efficiency gets better. and as well productivity gets better the overall cost structure for shale looks like it could continue to come down. that could make a difference. there are also geopolitical issue, herman, as you know, that might set a lower limit on oil prices. life could get very difficult from a revenue substantiate point among some of the bill oil producers around the world as oil prices drop. so it's -- for some countries, the total social cost of producing crude oil is important, and those numbers are probably higher than

what the cost of shale production is in the u.s. the other question that you had was doesn't that gap that three ratio in the btu cost of oil in that case, versus natural gas production in the us. i think we are using a close to henry hub number now. doesn't that lead to the incentive for further penetration of natural gas and historically have been held by oil. i think the answer to that is yes. keep in mind since it's mostly in the transportation sector, certainly in the u.s. that we're seeing the substitution staking place over time. getting the infrastructure in

place to be able to use lng and compressed gas in the u.s. takes time. created a forecast for marine and rail use of natural gas likely to be in the form of lng. >> good morning. [inaudible] thank you for coming this morning.

i had a question on your ethanol i wonder if you could clarify that for me. >> sure. we'll have more to say about that once epa comes out with the 2014 figures. we are assuming that ethanol will grow a little bit in the pool, mostly gasoline. and we are basing it on a view that says that in the it's not easy. the growth has to come in cars

capable using thing like e is15e or 85. i think the answer to that is similar to the discussion we just had with previous question. getting the infrastructure in place to allow consumption of fuels higher than 10% ethanol and gasoline is going take some time. there are economic issues associated with that as well. so we will have more to say about that in side cases that will be running in the aeo. 2014 when that gets published next year. thank you. last year 2040 net liquids import that 37%, i think the numbers were gross imports were 7 something and imports were 5

something. the new projection of 32%. you know the gross on that imports figures are? rather than me trying to dot math in my head. i'll let paul look through the table and figure out what those numbers are. we can get back to you. yeah. it's clearly coming down. i mean, if we -- if we have, you know, overt next three years or four years of production, you know, we're already -- excuse me, crude oil production in the u.s. in december as just gone over 8 million barrels a day. so we can look at the total level of consumption. it's running at currently 18.5.

[inaudible] just under 5 billion barrels a day. seven and a half today. replacing other -- increase the share in the electricity generation. which is relative price of natural gas versus coal. we have anteevidence that the

current price of natural gas is not sustainable or rather profitable for the producers of mr. tillerson, the ceo of exxonmobil noting they are losing their shirt in shale gas. and you yourself predict that the price of natural gas will go up. only slightly. so why is this not the trend of the future? at least with regard to electricity generation where we return to increase use of coal. >> well, take the first stab at that. ic alan too. alan is here. and maybe we'll have alan comment on that. we can z pa microphone that way. i don't -- you correctly stated that relative prices changed between 2012 and 2013. we had very low natural prices

in 2012 and 2011. that lead to a big pickup in natural gas consumption by electric utilities that founded to be in their interest to burn natural gas rather than coal. as natural gas prices came up, coal burning at electric utilities recovered as well, and, you know, it's kind of interesting to think about it this way. it's the market itself, which seems to be making a lot of decisions about what fuels get burned at electric utilities. so the longer term even with our increases in natural gas prices out over the long-term, we don't see a great deal of increase in coal to tell you more about that. there just aren't a lot more coal plant likely to be built. and some of the coal plants we already have could retire on an

economic basis as the utilities what kind of capital investments they do or don't want to make at existing coal plants. so we see that cross cover taking place. where natural gas begins to exceed coal as far as electric generation is concerned. is there a little bit more color you want to put on this? >> a little more color. he's absolutely right. in 2013, coal generation relative to last year so far is up about 6 percent. gas is down about 12 or 13%. you have to remember that 2012 was an odd year. we'll was a relatively warm year. so residential and commercial use of natural gas was done. it was a low electricity growth year. so electricity was down. the net result of that was production of natural gas soaring for the natural gas

collapsed to under $3 and so a lot of coal of the displaced by natural gas. we see that sort of rebounding back. if you look at the projection we see coal coming back a little bit in the near term. we don't see the price of gas getting hired up to make new coal plants attractive. once you utilize the ones so you and you keep, you decide to retire. you sort of -- your coal use and most new capacity will be natural gas and some renewables by other programs. and so gas just keep growing. and coal hits a plateau. it doesn't grow anymore. >> one last thing i would add to alan's comments, answer to a point you made. i think the jury is still out on exactly how strong natural gas production can be at current prices. i know there's been a lot of

talk suggesting that higher natural gas prices are going to be required to maintain output of shale gas. and our models suggest that too. but we do know from things like the drilling productivity report and other comments from industry that well efficiency and drilling efficiency continue to improve, which means that natural gas at current prices might be more profitable than you would have thought a year or two ago. and in fact, the longer term natural gas price forecast in the 2013aeo is higher than the 2014aeo which we're publishing today. so that our natural gas price

track is somewhat lower this year than it was last year, and i think it's essential, from what we're seeing, happening on the productivity side that trend might continue for a little while. >> okay. steve? >> hi, steve. pardon me. icf international. thank you, again for the comprehensive and excellent presentation. i wanted to ask you about the electric power sector and your view on nuclear power contained within the forecast. it looks like you have the share of nuclear power more or less holding steady through 2040. when we look the at this it looks like a large number of the nuclear fleet. ..

it was just wondering what your views are on nuclear power going forward because that obviously, when you are talking about 45 gigawatts it has a big impact on overall guest generation in the power sector and co2 emissions going forward as well. >> right, so i think you're absolutely correct that one of the key assumptions that you have to look at and project

nuclear powers specially for the last 15 or so years of that forecast the period from 2025 to 2040 is what happens with plant retirements. we are assuming that a number of companies will file for extensions, life extensions and that allows those numbers to stay relatively flat as you go out. if the aeo went out to 2050 i think you would see more of a decline. though a lot is going to depend on what happens with that. the other thing that is important to have to know but of course you can't is what the situation will be in terms of operation and maintenance expenses at these nuclear facilities. there has been a relatively steep increase in o&m costs over

the past few years. whether that continues could make a big difference to the forecast or assuming somewhat of a slowdown in o&m costs as we move out into 2025, 2030 timeframe so the combinaticombinati on of knowing what operation maintenance expenses going to be in knowing what that life extension answer is going to be ultimately gives you the answer. in our site cases where we look at low nuclear, what we find is that the bulk of the difference would show up in greater consumption of natural gas. alan, is there anything that we want -- you want to add to that? >> i think you are exactly right.

natural gas prices and slow demand growth is challenging everything. that is true for gas and that's true for coal and nuclear. in our reference case we look at natural gas prices rising to the point where it makes it attractive to maintain and keep these plants around but that is very uncertain future and many things that adam pointed out about owen and cost growth and demand growth in all of those things could affect that and we will be running in half for the last several years because of the uncertainties surrounding this area to look at alternatives. it just doesn't make sense to keep these plants running another year -- 20 years down the 60 year life and that's a big issue. again as adam points out if it's replaced it will the replaced by efficient natural gas in the emissions impacts while they will be positive are not as

large as one might expect because of that. >> let me add a question to nuclear if i may. based on what you said, is it correct been to surmise that your forecasts for nuclear includes no additional new construction beyond the four or five currently? >> there are a couple of plans that are already and her construction. i think there have been four. >> right, and there are one or two more. >> right. >> but i think it's probably fair to say that you are not going to see a huge increase in the overall capacity numbers for nuclear bat the new growth is going to be just about enough to offset the retirements. it adds a little bit over i

think those numbers. it's like last year we had nuclear expanding by a little bit and i think this year we have nuclear contracting by a little bit. >> the ryan berry washington correspondent. the question on the carbon dioxide emissions figure. i think you said it was down 9% now from the 2005 teague and i'm just curious why 2005 was the peak year considering it's two or three years before the economic downturn? what caused emissions to already decline around 2006 onwards and also in your projecting forward it seems like it's almost like a zero growth, net growth in co2 emissions. when you were forecastiforecasti ng that what assumptions did you make on the registry site in terms of what the epa might come

out with power points? >> right, in terms of what epa might do, we don't have a projection for that in a reference case because the reference case is based on existing law and regulation. so he do look at side cases and those won't be published until early next year. on the question of what was so special about the year 2005, i would have to actually go back and look to see if there were any weather effects that caused, like was it a cold winter, i can't remember what was going on in 2005 at i would say generally speaking that was in the run-up to fairly, we had a fairly decent period of economic growth from 2001 to 2005 and there was a lot of consumption of fuels in

general including oil and coal that would have added to the growth and energy-related carbon emissions. howard? [inaudible] >> two since seven and 2005 were virtually identical in terms of carbon emissions. it's just that the 2005 is a reference point that is often used in the united states. i think some of the government statements and i mention 2005 so we think it's a useful reference point lets 2007 you get the same kind of results and that is immediately before the economic downturn. i wouldn't read too much into that. >> thanks, howard. >> all the way in the back.

>> steve with hbm. i want to follow up on the question raised regarding ethanol and earlier clarifications because the 5% figure doesn't seem to align very well with the volumetric requirements which you know are 36 billion gallons after 2022 which is more than double what we are now but a large part of that rope is supposed to come under current law through the increase of cellulosic biofuel production and i was wondering if you could speak to the aei's or cast it and the role of cellulosic? >> the epa has been saying i think for, since 2007 or 2008 that it was going to be difficult if not impossible to reach the 36 billion gallon number. i testified that up on the hill and i think at least two aei

administrators prior to me have done the same thing. so, what we are looking at in our reference case forecast is what we think can practically be achieved through a combination of what can go into the gasoline pool and what can be produced in terms of cellulosic fuels. there will be more on that coming up. john maples who does a lot of transportation work for us is here and howard has looked at these issues in detail. i think either one of those would be happy to speak with you after the session here. but, basically what we are saying is that here is what we think is doable in our reference case and we are as eager as everybody else to see what epa

will do in the 2014 ruling coming up. >> back in the back on the far right. >> thank you. berkeley research group, prg. i wanted to summarize some of the things that you did today that were different what i remember from epa last year and ask you about some of those trends. if i have the numbers right you have about 20 to 22 bcfd of demand growth when you factor in about 10 lng exports, seven or so of industrial growth, three or four of industrial and about the same and maybe a little less of power so when you add it all up it's about 10 to 12, maybe 12 to 13 or something like that for domestic and 10 for export so on top of the 65-67 bcfd markets

about one third growth quite substantial and as you know more than in the past. you have one shale oil declining sort of a plateau and then declining production profile but the shale gas just keeps going and going. i feel like we and many consultants in the business see this sort of constant ability of shale gas to keep needing -- meeting demand and serving the growth but as an area of growth analysis and maybe it is jumping ahead with your scenarios but what are the risks that story doesn't play out the way we are forecasting and that production does reach a plateau or constrained that either -- more than expected or starts to restrain the demand growth that is possible? >> so, let me see if i can summarize the question and then

provide some thoughts. is it possible that the growth we see in shale gas and type gas production will not be as strong as we are suggesting? sure, that is a possibility. it is also a possibility that we might see more oil production than the rise and plateau and then gradual decline we are seeing on the oil side. one of the things we do know is the resource base for shale gas in the u.s. is very strong and in fact the resource base in terms of the level of production that it would support for gas looks better, at least at this point to us than it does on the oil side.

john and michael shah who are here today worked very closely with advanced resources international ari and looking at shale resources both in the u.s. and globally and of course we also look at the u.s. geologic service does for the u.s. and other countries. >> we do know physically that natural gas molecules are smaller than crude oil and condensate molecules so when you hydraulically fracture one of these continuous resources, shale or other, it's not always shale. there are cases where hydraulic fracturing is being applied to geology that differs from shale.

the low. ability formations and very high water pressure's open up? typically sand is part of the hydraulic injections and that sand keeps the? from closing back up again. it turns out that it's easier for natural gas molecules to squeeze their way through the? that you get from hydraulic fracturing then it is for oil molecules to do the same thing. that is one of the geologic region -- reasons that we see arise, plateau and then fall for oil but we don't see the same kind of constraint associated with natural gas. one of the things -- i can think of at least three things that could make a difference in the forecast that our knowledge of

the geology changes that give shoot either higher or lower numbers. rules on hydraulic fracturing change that could add to the cost structure associated with producing oil or gas from these continuous formations and that could make a difference. and then finally, there are timing issues associated with things like infrastructure. one of the reasons we are beginning to see this big pickup in marcellus production is not that there is a whole lot of rigs drilling right there. in fact a lot of their rigs left the marcellus to go to eagle fort but what is happening is there are wells that have already been drilled that weren't producing finally being hooked up to pipeline infrastructure that is being built so infrastructure issues could lead to higher or lower numbers depending on how all of

that works out. one thing i'm pretty sure of is that the technology and prices really really matter when you look at what the likely production numbers for oil and gas are going to be and that it's not just trying to estimate what the resource level is in the ground but rather what is the price signal giving you and allowing in terms of capital investment and what kind of progress is being made on the technology side that might lower the cost structure? >> we can take one or two more questions. yes, in the back. >> adam with platts. i'm wondering if you could talk a little bit about crude exports

not from a policies perspective because i know that's not your department that the report shows an increase in exports of refined products which is one way of reaching the global market. does the report as it stands now see that is the only way or do you see an increase in crude exports to canada or swaths -- swaps for one type of oil to another? thank you. the one thing to think about on the or expert ciphers above the aei is not a policy organization. i don't have a recommendation associated with whether there should be more or less of products or crude oil. aei's job is trying to assess what we think the economics dry things towards and to show that

within the framework of existing and regulation. on the product export side there really is not a whole lot in existing law that would prevent further increase of product exports. there is kind of a natural limit in the sense that refinery in the capacity, call it 17 million barrels a day, would have to be further increased if you are going to see product exports continuing to rise at the kind of level or rate that we have seen over the past couple of years. so there is kind of natural limit that would come from capacity in the refining industry itself. on the crude oil x. or decide you are correct that sports to canada are permitted fairly easily as long as the oil is

being refined or otherwise used in canada so oil can't go to canada for export, reexport from canada. it's got to be use their. that number has picked up recently. it had been running at something like 50,000 barrels a day and it's now up towards 100 may be 150,000 barrels a day depending on the month. there have been some reports of crude from texas going to eastern canadian refineries for example. the very first public talk as they gave -- that they gave is aei public administrator last summer, what i said was the growth in light sweet crude oil production in the u.s. looked like it was going to continue to rise, that

the refinery configurations in the gulf of mexico especially so the gulf coast area were really set to more easily and economically process higher sulfur crude's and at some point policymakers might want to look at the possibility of something like swaps with a country like mexico or others. typically you do it with someone that is nearby on transportation issues and mexico comes him in that regard. you might want to look at the possibility of whether it would make some sense to allow the light sweet crude to go to refineries in mexico that need that and more heavy sour crude from mexico coming into the refiners of the gulf of mexico. that does require a policy

decision but you can see that the trends are pushing things in that direction. that is not the only thing. one of the things that i think analysts in general, the public and policymakers need to realize is that there are lots of things that can happen short of that. refinery configurations could change. it could build refining facilities that would allow a topping or removal of the lighter ends and exporter of resulting products. we are already seeing a huge change in how oil is being transported. there is white sweet crude's making their way to the east coast to be refined in the refineries they are that like

the light sweet crude's and similarly there are light sweet crude snaking its way into california. there are also light sweet crude's coming down into the gulf of mexico and feeding into refining systems there. a lot of that has happened by rail. there is crude that is moving around by barge. so whether you export crude or products or reconfigure refineries or change the way that oil is being transported to get these lighter, sweeter crudes to areas that are capable of using that are all fairly complicated infrastructure issues that require capital investment and lead times and i think the system is adjusting. ultimately if you think about the timeframe during which the

rules are on many of the policy rules on crude oil were set was in the 1970s and early 1980s when the general thinking was that u.s. demand for petroleum would only go up if the u.s. supply of petroleum would only go down. so policymakers are struggling with the fact that the whole races for a number of the rules that were put in place were turned upside down and they are trying to figure out the best way to deal with that. and with the following. policymakers have it really really hard job trying to think about these things. they have got to look at what the economic impacts aren't they have to look at what the national security impacts are and what the environmental impacts are in changing any of

the energy policies that they review. that is a lot of issues to keep up in the air and to handle you know if actively. i think it's just terrific that aei doesn't have to get into those policy issues. >> i've think our time is running out. i think we will close at this point. adam you have shown great dexterity taking a range of questions. >> thank you very much and thank you to johns hopkins school. [applause] [inaudible conversations] [inaudible conversations]

[inaudible conversations]

>> he earlier this month christian militias attacked the central african republic leading to clashes with the government of the muslim president. >> if you are middle or high school student c-span studentcam video wants to know what's the most important issue congress should address next year?

>> i'm standing in front of the 1905 wright flyer three the world's first practical airplane. this was the third and final experimental airplane that the wright brothers built and today survives is the second oldest of the airplanes today. this year wayne which orville wright back considered the world's first practical airplane was constructed and flown in less than six years time between the time that they built their kite and the success of this particular airplane. this is also a plane built less than two years after their first flight at kitty hawk on december 17, 1903. what's interesting to think about is that the wright flyer and kitty hawk flew four times on one very historic day and for very him gordon flights and they were very much the proof of concept of power air flight. the airplane behind me, the 1905

wright flyer three was capable of repeated takeoffs and landings repeated flights of not just for a few seconds at a time but upwards of 40 minutes by october of 1905. this airplane could fly circles and figure eights. it could bank and turn and fly very much like a modern airplane flies. this is very much a modern air line capable of being controlled by three independent axis of flight, picture role and yeah. general motors chairman and chief executive officer daniel akerson announced last week that he would retire next month.

monday he spoke about his successor mary barra who will be the first female leader of any automaker. you can see this and other events from the national press club anytime at c-span.org. here is a look. >> you looking to your successor someone downplayed the significance of mary barra being the first female ceo of of a large automaker. it's a big deal. would you see is the significance of having a woman in that job? >> i don't think it was downplayed personally nor do i think it should me. i think it is noteworthy and i think it's historic. i think mary barra was picked purely on her talent, hard work and her success, nothing else. not because of her gender and i'm proud of the history that general motors has in terms of promoting qualified minority and

female employees. we do that because of stem, science technology engineering and math graduates coming out of colleges. about 20 to 25% apart plans in this country are owned by women. the young woman, i don't know how exactly old she is but runs the engineering and the folks in the plant -- when you get into plant it's a woman who runs our supply chain purchasing, global supply chain management, a woman. our quality initiatives and customer experience, woman. these are all ladies to serve on the executive committee. we are proud of that so i'm not surprised that mary rose to the top. she has been with the company for i believe 30 plus years graduated from gmi. think of gmi like you would west point or nap was.

general motors does not run it anymore. they had their own service academy fewell and shoe-in to stanford to get her mba and has performed exemplary. i think it's noteworthy. i think it should be and i think she was well deserving of the appointment. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> good afternoon. i am jeff slacker present of

banker richman and service the chair of the system sponsoring committee. i'm honored to serve as your master of ceremonies for this a torri givan. on behalf of various several reserve system centennial coordinating committees i would like to be made to the commemoration of the 100th anniversary of the federal reserve act and the founding of the federal reserve system. the signing of this act by president woodrow wilson wilson was the culmination of decades of discussion and debate on myriad proposals from banking and currency reform. upon enactment our nation began the process of organizing and opening the board in the reserve banks across the country. on november 16, 1914 the federal reserve system began full-fledged operations. i want to specifically welcome our ward chairman both current and past, current and former board members and reserve tank presidents and distinguished members of our centennial of eyes or a council i welcome as

well the board and reserve bank employees watching the ceremony throughout the federal reserve system today. with approximately 80 of us assembled in the boardroom this is the largest single gathering of current and former federal reserve senior officials in a history. we will begin our centennial commemoration by providing each of our chairman opportunity to share with us their thoughts and reflections on the history and perhaps also some noteworthy moments from the terms as chairman as the board of governors. first is my privilege to introduce paul volcker. he served as chairman of the board of governors from august august 79 to august 1987. prior to that he served as the president of the federal reserve bank of new york from august 1975 to august 1979. his leadership was noted for an aggressive and courageous fight to bring inflation under control trade please join me in welcoming former chairman paul volcker. [applause]

>> thank you very much jeff. friends of the federal reserve, this is indeed a historic celebration. it's a wonderful opportunity for people like me to consult with old friends, old literally. [laughter] in many cases but and too leadoff this program is a special honor, special privilege. i have been around the federal reserve for some 75 years. it happened that i wrote my senior thesis in college on how the federal reserve should restore its independence loss during world war ii and too many years thereafter and having completed this thesis i guess they didn't read the thesis. i got a job at the federal reserve bank of new york.

so it all goes back 75 years and i thought i could claim primacy of anybody here today until i heard that do we gain was here. my old friend and colleague. his residence in his 96 years symbolizes the respect and loyalties of the fed has commanded among its staff and officials generally. i can only claim the distinction of being an earlier living chairman of my two colleagues here and it's okay for your life expectancy to be the chairman of the federal reserve. [laughter] but a lot has happened since i became chairman. a lot has happened to the country, the economy the financial markets and the

federal reserve itself over the 35 years that the three of us have been chairman. one reflection of what happened is to look at interest rates over that time. it started out with me at interest rates that 20%. we were preoccupied with inflation. chairman bernanke is ready to leave office with interest rates at 0% and on occasion he worries about deflation. alan greenspan in between those two. [laughter] he got it just right with the grand moderation. people don't quite realize, i think it was the greatest rise in stock races in all of american history or anybody's history. at the same time we had up record bull market in bonds. wall street and the economy flourished.

the interesting fact is that no one including no economist equipped with the most powerful computers could or did protect to the extremes of market behavior. more troublesome than the recurrent tanking prices and economic locations is the fact that we have -- they have regularly caught us by surprise. predicted not those economic and financials services to minded a response and the point that i think in part today is a response, demanded a response only an institution equipped with the authority and judgment could timely act upon. in any country that role falls importantly to the central bank. in the united states of course that means the federal reserve and as all of you know it's a 100th anniversary but the

federal reserve of the congress was something of a ladder in creating a central bank in 1913 and 1914 when it became operative. broadly speaking i do think of the long delays of woodrow wilson and all the founders did get it broadly right. later there was the david coss correction when aaron ruggles was chairman who conducted and arranged with congress unnecessary reform. and of course we have the dodd-frank act and that's new responsibilities for the 21st century. we pass that acted me much concern and unhappiness airing the depths of the crisis and the recession and what was interesting is the federal reserve had more power and influence than i had before. i think no one can claim that every year and every

circumstance and every crisis affects policies exactly right but what is beyond debate is that this institution has served the country well. in doing so it is then able to draw upon professional competence and that is one basic essential but much more than that is required strong action, sometimes testing the limits of its legal authority rested on the sense of integrity, integrity achieved and maintained over the years. in this sense it was able to act free of targets and political passions. i mentioned do we gain at the start not just because he is older than i am. in fact he is almost as old as the federal reserve itself. [laughter] nor because he happens to be a good friend. he has had another life. his presence here reflects the

simple fact that for him he is proudest his most satisfying years have been right here in this building. he could play a part in an organization that has maintained respect over the years respect to the point where it don't -- the fed has become close to an axiom in the financial marketplace. this single fact is the confidence in the ability of our century-old central bank to cut through intellectual and political debate to act in the public interest, to remain a point of trust is essential. it's essential not only to the strength of our banking system and their financial markets that are likely to the effective governance of this country and all its diversity and responsibilities and i appreciate the invitation to be with you on this great occasion. thank you.

[applause] >> it is also a privilege to introduce alan greenspan. he succeeded chairman of ocher serving as chairman from august 1987 to january 2006. as our second longest-serving chairman after william mcchesney junior he had the distinction of being appointed by four different u.s. presidents during his tenure as chairman we completed the conquest of inflation and experienced the longest peacetime expansion in the history of the u.s. economy. please join me in welcoming chairman alan greenspan. [applause] >> thank you very much, jeff. looking at all the gray hair here, it's very impressive that

you all showed up especially dewey. it's hard to realize that dewey dane was appointed by john f. kennedy as a member of the federal reserve board and that tells you something about the continuity and longevity of this institution. i think we are all proud of our experiences with it and i particularly want to thank dewe. like paul and ben i have been given five minutes to reflect on my career at the fed. the dates get more calculated at 16.2 seconds for each year of my tenure. thank you david. i chose to focus on one incident that while today is scarcely remembered was particularly riveting, a particularly

riveting challenge that i and the federal market base within two months of my being sworn into office. the unprecedented 23% decline in the dow jones industrial average that occurred on black monday, october 19, 1987, the largest one-day drop ever. today, that market collapse is a distant memory of no ongoing interest because it had no visible lasting effect on the economy overall. but we did not know that at the time. in fact, the days that followed the crash were truly frightenind i suspect for much of the federal reserve board, presidents and staff. history suggested that the market crash could be a harbinger of much worse to come.

the immediate policy response was a no-brainer, supply the money market with a massive dose of liquidity but what would we do as a follow-up should the initial response proved if or insufficient to address the collapse of the capital values of such magnitude? in the end, much to my surprise, the effect of the crisis was minimal. real gross domestic product and fruit -- in fact grew at a robust 4.5% annual rate during the next five months but what was clear in retrospect was scarcely evident in the hours and days that followed the crash. many of you who were around in those days cannot forget the fear the crisis provoked. not unexpectedly, the market opening on a silver the 20th,

the day after the crash, was unstable. late in the morning the new york stock exchange had communicated to us that unless bids were forthcoming the exchange would have to shut down within an hour i know all too well that shutting down is easy to do but once done, trying to reopen would be a real challenge. the closing of the united states states -- closing in the united states could have probably broken the back of the financial contributions. fortunately just prior to the scheduled shutdown, bids did reemerge and the exchange was able to remain open. in the days that followed, despite our best efforts, there were half a dozen near disasters

mostly involving the payment system. on wednesday morning, october 21 goldman sachs was scheduled to make a 700 million-dollar payment to the continental bank in chicago but initially withheld payment pending receipt of expected funds from other sources. goldman thought better of it and the payment was made. had they withheld so large a payment it would have reasonably set off a disastrous cascade of defaults. in another cliffhanger days after the crash chicago options market nearly collapsed when it's against trading firm was short of cash. the chicago fed help engineer a solution to that one. gradually though prices in

various markets stabilized and by the started november the members of the crisis management team headed by miley johnson batted in hastily organized returned to the original work. the near crisis of 1987 was in my judgment the federal reserve operating at its best. at its height, new york federal reserve president jerry kari and communicated our strong belief that bank should keep funding not because the federal government was asking them to but because it would be in their long-term self-interest. i'm sure that some of the phonecalls were tough indeed. for all of you who know jerry he probably bit off a few earlobes in the process. [laughter] there were of course many keep

players among the governor's presidents and staff whose counsel was indispensable, including that of my good friend and mentor donald kohn then secretary of the federal open market committee who as you all know went on to an extraordinary career that is ongoing as we speak. in closing i wish to express my appreciation to the organizers of this extraordinary event and i have been around the federal reserve before i was national chairman and i've never seen anything like this grouping of people of expertise in virtually every subject matter you can conceive of. i have enjoyed it immensely. i can only hope to be invited back for our institutions 200 members. thank you. [applause]

>> it is also very much a privilege to introduce their current chairman ben bernanke. he succeeded alan greenspan becoming chairman unfair worry first, 2006 and will conclude his service on january 31, 2014. as you all know chairman bernanke himself a leading scholar of the great depression led the federal reserve during the most challenging in severe financial crisis our nation has faced since that time. please join me in welcoming chairman ben bernanke. [applause] >> thank you. paul and alan had me at a distant and age. we were asked to reflect on our term in office that they have more perspective than i do at this point. i have had a few more weeks to go and a number of tasks such as achieving a full recovery from the u.s. economy still ongoing. i will offer a few thoughts about the last eight years.

the federal reserve's extraordinary response to the financial crisis and the great recession that followed was in some ways nothing new. we did with central banks have done for many years and what they were created to do. we served as a source of liquidity stability in the financial markets and in the rotter economy and the work to foster economic recovery and price stability. however in another sense what we did was very new. it was unprecedented in scale and scope and made use of a number of tools that were part of the central bank toolkit. we found these new tools were necessary if we were to fulfill the classic functions of the central bank in the context of the 21st century economic and financial market. when financial systems teetered near collapse in 2008 in 2009 we responded as 19th century

walter bagehot advised by serving as a last resort to financial markets. we did so in institutional garment that was very different and in many ways much more complex than the ones that walter bagehot row. for example the recent crisis as occurred in classic panics but in 2008 the run occurred in various forms of short-term uninsured wholesale funding such as commercial paper and repurchase agreements. moreover although commercial banks suffered large losses and some came under significant pressure the crisis hit particularly hard those non-bank institutiinstituti on most dependent on wholesale funding such as investment banks and securitization vehicles. thus the fed led to not only commercial to banks but non-bank institutions and key financial institutions in the markets like the commercial paper market.

to minimize the risk of drains in u.s. u.s. funding got a marked with the corny with foreign central banks to create a network of currency swap lines beyond the provision of liquidity the fed worked with other agencies here and abroad to help restore public confidence in the financial system. notably we lead the development of stress testing of large banking organizations capital adequacy. the first just test in 2009 in the public disclosure of the results made it possible for large u.s. banks to once again attract private capital. since 2009 the stress test and disclosures together with other regulatory and supervisory actions have contributed to a doubling in capital held by the largest u.s. financial institutions and the resumption of more normal flows of credit. the fed has also worked to draw upon the lessons of the crisis and taking steps necessary to avoid a similar event in the future.

as those assembled here while no the deliberations that led to the founding of the federal reserve were precipitated by a financial panic, the panic of 1907. the preservation of financial stability was consequently a principle goal is the creators of the new central bank. in response to the panic of 2008, the federal reserve has returned to its roots by restoring financial stability as a central objective alongside the traditional goals of monetary policy. we have refocused our supervisory financial institutions to take a more macroprudential approach that fosters systemic stability as well as stability of individual institutions. we also more extensively moderated the financial system as a whole in cooperation with other agencies have put in place stronger oversight to important firms including higher capital and recruiting requirements tougher supervision and processes for early resolution.

we have also had to be innovative in finding ways to use monetary policy to help the economy recover from the deep recession that followed the crisis. providing adequate monetary accommodation has not been a straightforward task because their principle monetary policy tool the target for the federal funds rate has been stuck near zero since the end of 2008. consequently we have had to find other ways to bring monetary policy to their notably techniques designed to influence longer-term interest rates. for instance the fed like several other central banks has purchased long-term securities to put downward pressure along with interest rates to ease the financial position and promote a stronger recovery. a significant aspect of finding innovative ways to execute their duties as a central bank and a new more complex environment has been the ongoing revolution of an indication of transparency. part of that effort has involved

defining our goals under the mandate or maximum employment and price stability given to us by the congress. two years ago we established 2% as our inflation goal and we regularly communicate policymakers views of the level of unemployment expected to correspond to maximum sustainable employment over time. additionally our monetary policy has come to rely more heavily on forward guidance. with their short-term policy rate as low as it can go we have sought to ease financial conditions further and provide additional impetus by communicating both quantitatively policy and qualitatively about the likely evolution of our balance sheet. other central banks around the world have met the challenge of current conditions with similar innovations. i would be remiss if i did not point out especially with paul and alan here that the fed's recent communication innovations owe great deal to developments

like the monetary targeting framework devised under chairman volcker and the qualitative forward guidance introduced under chairman greenspan. in summary the financial crisis that the fed confronted five years ago was in many ways analogous to the panic central banks face for centuries but at the same time the crisis and the deep recession that followed occurred in an economic and financial environment that was certainly different and in many ways more complex than in the past. the federal reserve found ways to carry out the traditional central bank functions in that environment and we are working with other policymakers domestically and internationally to put in place a strengthened framework that will help preserve stability in the face of the complexity interconnectedness and innovation of the modern financial system. one of my personal objectives as i became chairman has been to

increase the transparency of the fed to more clearly explain our policies are intended to work in the thinking behind their decisions. as already noted improved medication can help policies were better with it to the disclosure of bank stress test results by helping the public in the market better understand how monetary policies are likely to evolve. ultimately however the most important reason for transparency and clear communication is to help ensure the help ensure they can't build it for independent institution which the american people and their elected representatives. clarity transparency and accountability help build public confidence in the federal reserve which is essential if it's to be successful in fostering stability and prosperity. thanks for inviting me to this wonderful event. thank you. [applause] >> this occasion marking the centennial of the signing of the federal reserve bank calls for a

statement formally recording our collective thoughts. certificates recording the statement will be signed by current and former chairman, current board members and preserve bank presidents. we will sign one certificate for each board. one certificate each for the board in the reserve banks plus one extra for safekeeping. this is the federal reserve after all. these will be framed in a manner shown by the copy on display. each framing will include facsimiles of the first page and the final signature page of the federal reserve acts. a medallion featuring the eccles building where we are gathered here today as well as a certificate and the signing page. the certificate reads as follows. and commemoracommemora tion of the 100th anniversary of the federal reserve act introduced into congress by senator robert owen and represented carter glass and signed into law by

president woodrow wilson on december 23, 1913 through the federal reserve act established the federal reserve as the nation's central bank for gathering on the 16th day of december 2013 at the board of governors of the federal reserve system in the city of washington and the district of columbia is in the district of columbia denied states of america we the undersigned commemorate the founding of the federal reserve by the u.s. congress. we acknowledge the service of the federal reserve system employees over the 100 year history and we express our gratitude for their efforts to support the founders intent to provide her nation with a safer more flexible and more stable monetary and financial system. in support of our centennial mission we encourage staff to build on our legacy by reflecting on the lessons of our past to deepen understanding of the central bank's role in promoting economic growth and stability in a global economy and in doing so to inspire trust and confidence for the benefit of future generations of americans.

this signing will begin on my right with their current chairman, continue with their former chairman, our vice chairwoman, board members in order tenure and then reserve bank presidents beginning with austin and concluding with san francisco. when the signing commences i will turn the podium over to vice chairman don cohen who while we are doing our signing will share reflections on our history. in addition we will be showing two videos. the first will explore the story behind the oil pan located outside of the interests of the boardroom. this famous painting depicts a signing the federal reserve act on december 23, 1913. the second will be the world premiere of the commemorative video created this past year that features federal reserve employees and the long signed some outside commentators speaking in their own words about the critical role the federal reserve has played over the past 100 years and will

continue to play in coming years. it's a great pleasure to introduce -- don served as vice chairman of the board of governors from june 23, 2006 to june 23, 2010. that was just the capstone of a long career of devoted service to the federal reserve. beginning as a financial economist at the federal reserve bank of kansas city and ninth -- followed by much of the board in 1975 where he became director of monetary affairs in 1987 and governor in 2002. please join me in welcoming don cohen. [applause] >> thank you very much jeff and it's a great honor and privilege to be part of this ceremony and to provide a little entertainment while the signing is going on. as we gather today to commemorate the 100th anniversary of the federal reserve act and the founding of

the federal reserve system lets recall the history of central banking in the united states and key events and issues leading to the establishment of the federal reserve and some of the changes, legislative changes that have occurred since that time. before the federal reserve was created in 1913 the swedish bank was founded in 1668 the bank of england in 1694. i guess only dewey was around for those. [laughter] these early national banks evolved over many years and the institutions that we would recognize today as central banks working in the public interest. in the united states the first attempted at establishing such a national bank came in 1791 when present shins and signed legislation chartering the bank of the united states headquartered in philadelphia and under the direction of our first secretary of the treasury alexander hamilton.

hamilton believed that a national bank was essential to stabilize and improve our young nation's credit standing improved handling of the financial business of the federal government under the newly enacted constitution. after hamilton left office in 1795 the secretary of the treasury oliver walcott junior informed congress of the poor state finances to provide funding need for the government walcott advised selling the government shares of stock in the bank which would end up banks limited role as the central bank for the united states. subsequently in 1811 america's first national bank does not receive congressional support needed to continue operating. five years later in 1816 the u.s. congress again established a national bank creating the second bank of the united states also located in philadelphia with over 25 ranches.

the primary function of the bank was to extend credit to government and private interests for the purpose of bank raising public works and economic development as well as to establish a sound and stable national currency. the second bank of the united states like its predecessor acting as lender as last resort. subsequently there is a financial crisis in 1819 and during the presidential election of 1832 efforts to renew the bank's charter put the institution at the center of the national debate. the second bank of united states failed to secure adequate supporting congress to renew its federal charter over the veto of president jackson. it was liquidated in 1891. after two congressionally chartered national banks fail to survive their initial charters the united states lack a stable currency system and financial

panics occurred frequently, typically every decade beginning in the late 1830s and mid-1940s and again in the 18 50's. in the midst of a civil war under the national currency act of 1863, revised as the national bank act national bank act of 1860 were signed into law by the reznor lincoln. legislation provided a mechanism for circulating sound currency with uniform value required tanks to hold cash reserves against both deposits and notes and established the office of comptroller currency to grant charters to banks without formal congressional action thereby creating the tool banking system of national and state chartered banks. following the civil war a financial boom associated with rapid expansion of railroads, fat juries was followed by a financial panic and economic depression in the 1870.

another recession occurred from 1882 to 1985 followed by multiple panics in the 1890s. in 1901 the stock market crash briefly following speculative attempts to corner the market. in 1907 the new york stock exchange stock values declined dramatically in march following an unsuccessful attempt to corner the market on united copper company stock. as a result many depositors withdrew funds from banks associated with the unsuccessful corner spreading to withdrawals from other banks leading to public panic and large-scale liquidation of car loans, short-term loans used to finance stock market purchases. thousands of banks and businesses closed. jpmorgan and other tankers ultimately step into supply

wavering banks with funds to alleviate the panic. given the weaknesses exposed in america's financial system from the panic of 1907 congress passed the aldrich bill in may 1908 to create a national monetary commission and to authorize and fund its use. the commission is led by rhode island senator nelson aldrich with an object of studying the banking system, the nation's banking system to identify ways to bolster financial stability. in november 1910 senator aldrich invited several prominent tankers to attend the conference in jordan -- georgia while meeting under the roofs of the duck shooting excursion that financial experts and reality are hunting for a way to restructure america's banking system and to eliminate the possibility of future panics. the party includes senator aldrich assistant secretary of the treasure jpmorgan and company partner henry davis and

national citi bank president frank bender lip paul worrell berg and bankers trust executive benjamin strong junior. on january 9, 1912 the national monetary report of the congress along with a proposed bill for a national reserve association which becomes known as the aldrich bill. reporting proposed bill job heavily from discussions started on janco island but the congress took no action on the bill. following president woodrow wilson's election legislative efforts began in earnest to fulfill his campaign promise to reform banking law. to press forward with his legislative initiative initiative present wasn't addressed a joint session of congress on the need for banking and currency reform on june 23, 1913. meanwhile virginia representative carter glass oklahoma senator robert 01 works closely with wilson to introduce

the proposed federal reserve act as house and senate bills on june 26, 1913. following passage of the house and senate versions of the bill in september and november prospectively compromise legislation known as the lasso and bill a march following multiple amendments and resulting conference report. the conference report was approved by the house on december 22nd and the senate on december 23 and on the 23rd resident wilson signed the federal reserve act into law to provide the nation with a safe sound stable banking and financial system given the timing gap is quickly referred to as the christmas president by the president for the press pre-with that background that will give you a brief video clip that depicts the signing of the federal reserve act and features one of the by president wilson to sign the act in that pen is on display today.

♪ >> yes part of the centennial commemoration casilla work of art inspired by the creation of the federal reserve system. this piece is normally and display in the wards research library. the painting entitled the signing of the federal reserve act by president woodrow wilson december 23, 1913 depicts preston wilson signed the federal reserve act at the white house. original painting was created by wilbur kurtz in 1923 for the federal reserve bank of atlanta. while many attended the signing of the act mr. kurtz chose to feature only secretary of war lindley garrison sector the navy

chosin -- josephus daniels postmaster general aas or olson chairman of the senate's banking and currency committee senator robert owen speaker of the house chad clarke secretary of the treasury william maca do president woodrow wilson chairman of the house committee on banking and currency representative carter glass congressman oscar oscar w. underwood and secretary of labor william wilson. two of these men carter glass and robert 01 were the chief architects of the federal reserve act. oana senator from oklahoma and classic congressman from virginia for motor legislation that would provide for regional banking system with a government controlled central wards. after months of intense negotiations compromised legislation was finally -- this bill authorized establishment of the federal reserve system to provide the nation with a safer more flexible and more stable

monetary and financial system. on december 23, 1913 the bill was signed into law by the resident wilson is the federal reserve act. surrounded by glass and 01 members of wilson's family cabinet officers and democratic leaders of congress the president signed the act. he used this pen along with three others to sign the act. president wilson gave it to carter glass. in commemorating the 100th anniversary of the signing of the federal reserve act we are grateful to the woodrow wilson library in stanton virginia for lending the pan and use for this momentous occasion and to be on display at today's centennial ceremony. ♪ >> the signing of the federal reserve act established the federal reserve does her nation's first true central bank holding a large share of the nation's banking reserves and the power to act as lender of last resort.

the act established the federal reserve order in washington guided a seven board members and provided for up to 12 reserve banks and there was a 20 year sunset provision on those banks to represent the regional economic interest and to courtney policy with the board. the federal reserve tank organization committee was formed in january of 1914 to select reserve bank locations and composed of the secretary treasury secretary maca do john scopes and william secretary of agriculture david houston. on april 2, 1914 after receiving proposals from 37 cities for visiting the 18 candidate cities the committee officially named locations of 12 federal reserve banks to serve in respective districts, the same ones we have

today boston, new york philadelphia cleveland richmond atlanta chicago st. louis minneapolis kansas city dallas and san francisco. .. >> the closure of the