developed the application perceiving. applicants and interveners are for free to raise issues of public interest that may not have been addressed in the prior cases. today the department has granted seven off organizations for long-term applications to produce equivalent to 9.3 billion standards per day. as of today, 24,000 applications are pending to support the countries. they will purchase a non- fta applications on a case-by-case basis following the order established in set forth on the department website.

the department will monitor any market development and assess their impact and subsequent public interest as information becomes available. i would also like to note as i mentioned earlier the department considers factors as a part of the public interest determination. of course we are monitoring the situation very closely and certainly take energy security seriously and we make decisions in recent applications. commitment to free trade is another factor and efficient transparent natural gas with diverse supply to both economic and strategic benefits to the united states and allies. production on the domestic natural gas or a significantly reduced and global trade would have been destined to gear up and asia in improving the security for many of the key

partners. they ca can diversify the suppls and energy security for the u.s. allies and trading partners and in conclusion mr. chairman and i would like to emphasize the department of energy is committed to the applications as expeditiously as possible. we understand this issue into getting it right and they would bi would behappy to answer any s that you may have. >> ranking member and members of the subcommittee it's always good to be back here as someone that served on the house foreign affairs committee staff it's good to be back in the house so i appreciate the opportunity on this topic. the hearing comes at a critical time. the relationship between the access to energy is drawn with the illegal sensation by russia and its role in the underestimate eastern ukraine we are witnessing the unacceptable

and frankly shocking violation. the department is not the agency responsible for the process of improving the licenses and we've just addressed that issue. the crisis led many to argue accelerated approval to improve energy security to the european allies and partners. while critically important to the u.s. energy resources including the lng export art one tool among many that we can and are utilizing to address the energy security challenges in europe and elsewhere. we've been working in many ways around the world to contribute tto that security and we will continue to do so in the weeks, months and years to come. russia will use energy as a political tool as they did in january, 2009 when russia cut off gas supplies to ukraine all russian gas goes through ukraine was halted cutting off supplies

for 13 days. the routes by which the energy is delivered. they begin to implement regulations and to build infrastructure towards a common integrated transparent energy market. the u.s. has been working closely to prevent a repeat of the 2009 crisis. we established that the council the annual meeting cochaired by the secretaries of state and energy to address the strategic energy issues and forms of collaboration was held a few years ago. we have to take into consideration as we look at these issues is a global context in which we are living. and the supply demand changes that have occurred around the world. first of the supply mechanisms changed from the number of small number of countries supplying the world to a much larger number of countries around the world of supplying energy to oil

and gas and in the man while the oecd countries were driving the demand until now for the decades to come that will be driven by principally china, india and asia. as we work to address energy security in europe as a downstream country we are looking as the ranking member said in her opening testimony not just the issue of the experts that the issues that would require europe to be able to address their own needs and that means the shortfalls that europe suffers from a pipeline could go from russia down south into europe to make sure that those are able to reverse the flow so that they can supply ukraine. the fact that poland and hungary have already been able to reverse their flow to announce the two days ago major neal they

shouldn't have happened from 2009 and have spent the last four to five years working with our partners to make those changes available and capable. for example, th they passed as a result of the 2009 the third energy package which changed the regulatory framework without that today the reverse flows into ukraine wouldn't have been possible but it's not enough to look at this from russia to ukraine. they have to go north west and east to the gas can flow into the lng terminal done in a way that is bankable and finance this isn't just about the united states and experts to come. this is as i talked about before the supply change and i'm going to get to at the ranking member said in her opening testimony. we are looking at australia

coming online with enormous amounts of natural gas over the next several years, mozambique and tanzania made discoveries and they will come online in the decade. offshore israel is already delivering gas to its domestic market and is poised to become an exporter in 2017 or 18. potentially lebanon, egypt and the western mediterranean. soutwestern mediterranean. south africa, south america and other areas are all looking to become new producers. so as we look at this we are doing so with the department of energy and the rest of the administration to ensure we can be there to allow and make sure not only europe is supplied by the energy is used as an energy resource for cooperation and not resource for conflict. in conclusion mr. chairman, the lng exports may become an important factor in assisting our allies and and that we have

to look at other areas to make sure the commitment to energy security as we did with the pipeline and 1990s and as we are doing now in the corridor with azerbaijan and other projects to make sure that it's achieved. we are committed to the energy security and will continue the joint efforts of the eu to make that a reality. thank you for allowing me to testify today. >> thank you. to begin with a five-minute questioning and then we will do a second round of the moment. i would like to first enter without objection the ambassador for energy security from the ministry of foreign affairs and a statement she's written about in the same. she testified on the hill march 25 and said i used $400 as an example of how

unrealistically high russia may rise to the price of a thousand cubic meters of gas delivered to ukraine in the use gas as an economic weapon and this is before they deleted crimea. they went above that number was $480 the current race is around 268. given that ukraine had difficulty setting its invoices when it was 268 the new price seems well beyond what would be able to cover. they would have to buy gas from the west were taken politically. one of the statement is pertinent. april 11 of the russian president vladimir putin warned him about potential supply of obstructions in the winter. this is hardball. this is one of the situations we have to be able to respond to 30

in the process. let me read one final statement. the export stabilization is nothing in the short-term. it shouldn't be delivered in large volumes to ukraine immediately. it will not save other parts of central eastern europe excuse me, other parts of central eastern europe from a very cold winter in 2014. yet if makes the medium-term solution very clear and this prospect would have an immediate impact on the pricing and maybe even availability. her request is interesting. her request is it will begin to act in effect a marker out there that shows russia that we are serious and they know that we are moving when they started the process of the conversations they came to visit my office immediately. two years ago. the question was the same.

how quickly can we get american natural gas? i've heard multiple other countries have the same question. how quickly could we get american natural gas? is as one of those conversations we need to be able to determine. i understand we are the first responsibility to take care of america and americans. that is in our national interest and that is our first responsibility. but when there's economic benefits and there's also a diplomatic strength that comes from the export of energy this is one of those issues i continue to ask why is it taking so long in the process. it was a long statement as well. mr. smith, let me start this conversation depending on the different permit sometimes it's taken 11 weeks or eight weeks, sometimes different times to bee able to actually get a permit one after another. so the initial one obviously this is being passed in the

approval it took a proxy that we -- approximately 8,000 that we've had 23 months after the application. as the department gettin a depae efficient in the approval process? >> thanks for the question mr. chairman, first of all, as you know, we are working through the queue on a case-by-case basis. the first application took more time because we had to do the full study to look at the accumulated impact. since then, and a lot of scrutiny has been made on the time between the applications. one might be nine weeks in whate might be 11 weeks or seven weeks. you know, what i can say to that is, you know, we have a great team of people working to write these orders. our focus is making sure we get the public interest appropriate and right and we get an order

that's going to withstand the scrutiny that is sure to receive. so it's to make sure that we keep moving forward as expeditiously as possible. is not a time when we are on or a clock that we follow. essentially it is a team to get the issues so they are going to take different amounts of time because they will have different analyses. but once each order is done is released by the team and we move onto the next order so that is the process we have been on and we are moving through the queue >> i want to be able to transition for the folks to speak. you don't have a requirement on the team whether they take two weeks it's just whatever speed they get done tax >> is to move forward as expeditiously and professionally as possible to make sure they get the analysis right. >> it may take two weeks or two years. spinning it takes the time that is required, mr. chairman, so it

isn't a time requirement it is a requirement in the necessity to make sure we make the determination. >> you are aware there is not a time bound but the issue is the clock is ticking internationally. it's not only domestic -- let me move on. i want to be able to honor everyone's time. >> thank you mr. chairman. let's address the likelihood that liquefied natural gas will go to europe with its manufacturers here in the united states. most of these companies are domestic company shareholders; correct? do they not have a responsibility to acquire the highest price for their gas in order to maintain a profit that is appropriate? >> so, i think for the question certainly i think you raised the point that once approved, the

department of energy doesn't determine where it is than to be determined by the companies that received the authorizations and indeed those companies will certainly move to send the gas that has the best return. >> what is the differential between europe and asia. it is a balanced price around the world that gives a difference. apple talk about it as the american price. europe is 60 or so and europe is anywhere between ten and $13 asia is 16 to 18 and then you have different regions. but you can't simply take one price in one area and make the transport of that equal to if you take a price on the united states and the exports that are approved here tonight and have to add the cost of the action, the transport insurance, the

acidification. the increase puts it in the range of what they are today in europe. so it wouldn't be much i love its but it wouldn't be much below it either. >> so the likelihood is not nearly as going to asia at any case? >> as a government we don't tell the companies who to sell i sels two that you are right they will make a decision where to sell it to. but if i may, i think the issue here isn't where we send them. it is about a global market and wherever they gas will go, and it's likely to go wherever the traders feel the need to put this based on a variety of factors it'll make a difference in other regions, so it will make a difference as mr. smith said in his opening testimony we have already made an enormous impact on the market by removing if you look at the expectation of what we would be importing in 2014 just a few years ago, that

is the enormous. >> i want t went to try to get e more questions and. one of the points that i think has not been made well enough yet is that the infrastructure in europe to receive the lng is not yet robust enough and the import terminals need to be dealt. do we know how many need to be built, do we know how much they would cost? is that something that the united states could invest in? >> there is quite a bit that is full. there is more that is being built. the eu has regular great challenges in getting some of these through. there's one in lithuania that is going to be built and some in italy but there's also a sharp decrease in demand for the lng in europe over the last couple of years partly because the price of coal has come down quite a bit in the united states

and made it cheaper in europe so there's been the transition from gas to coal. there's also been a very warm winter that have affected the demand. so you're right i don't know that we would be as investors that is for the private sector to do but we are working to figure out how to make these finance double so they are more likely to be built. >> thieving ukraine from the gas is both political reform. they say the only way to extract ukraine from the payments crisis is to provide money for ukraine to pay down the steps. however that does not address the fundamental problem that resulted in ukraine's indebtedness. massive corruption, the markets and the poor pricing. do you agree with that view and what do you think we should be doing about that?

>> i do largely agree with that. we have to look at this in a number of ways. the package will hopefully be approved fairly soon and that will release american money that the congress has authorized as well as european money. the need to pay it down immediately is urgent to the additional suppliethatadditionad we don't have a cutoff we have to reform the industry. this is an opportunity for ukraine to open a new page and to address the reform of the secretary desperately needs that we don't end up in the same place that we are a few years after paying off the debt. >> mr. smith as i understand it the companies that are seeking export lng today are required to go to the department of energy

seeking the determination on public interest. can you tell us the criteria used on last term public interest? >> for the natural gas act creates a presumption that experts in the public interest unless the department determines that approving such application would be deleterious to the public interest. however it doesn't give a specific definition. that has been left for the department to interpret. we look at the impact on the economy, we look at job creation, energy security, the prices and impacts on consumers, foreign issues and issues of international affairs so there is a very broad range of factors. >> are any of them weed out differently? >> one thing that we do not have is a formula or a matrix that we

plug the numbers into and get an answer. essentially what we allow for is a comment period in which they can opine on these and we think that is a very & the process. we then have to make a qualitative decision on all of the arguments that are made for and against the exports. and in fact when you see the orders that we have written there in the extensive documents, they are required to make very clear and transparent reasoning that we make for each one of these patients. so, we have to talk about the arguments made in either accepting or about the individual organs. >> are they more or less significant and that you work with the department of energy became the international determinations within the department of state -- >> yes, congressman we work with the department of state on all

issues but in terms of international considerations you'll see in the most recent order that we put out is a very specific reference to the importance of the security for the united states allies and trading partners and that is something we do take into consideration at that something important to us. >> that's not heavier than any other factors were -- spinet ideologies are important. we care about impacts on american consumers and prices and international impacts. >> is the process working as well as you woul we would like n your determination? >> i think the team is doing an excellent job of making very important long-term decisions in looking at the public interest, so i think the team is doing a great job. speskycam any are awaiting approval? >> is far we have approved seven projects. i think that we have got more than 20 that are waiting.

so today we have approved 9.27 per day and we are working through it on a case-by-case basis. >> if you could tell us about the technical program and the energy governance capacity initiative, give a little bit of background. >> we have worked with other agencies with friends and allies around the world who have sought to look into the possibility of addressing their unconventional resources. what we have done is we do not encourage any country to do or not to pursue that if they are going to do so, to offer them the support of understanding the mechanisms that it's done in a safe and environmentally

sustainable way and for that we have a program that supports a number of countries and we work very closely with poland. we started working with ukraine before the crisis about a year ago and we are looking at expanding the program now to be able to bring about more resources there. the program that you mentioned, congressman, looks after the governance of toyota and gas sector. when we see the new countries coming online as new producers that they are not suffering from the same trap that some others have done before them and to make sure that those resources are made available to all of the people in that region and in that country and that it's done in a governance structure. >> are you achieving that with your estimation right now? >> yes, i think on the unconventional, yes i do. i think it's important that the countries make the decisions based on science and not on

emotions and if they are going to do so that we support them and being able to develop from conventional and unconventional resources. >> thank you. >> in order to expedite the lng exports in the environmental concerns, and what is in the public interest it's my understanding or involved in the process, section three requires companies seeking to export natural gas to maintain approvals from the department of energy, office of the fossil energy and the regulatory commission. no export of natural gas will be permitted unless it is consistent with the public interest. so, mr. smith, can you describe the approvals and what the role of each agency are? >> there are two primary agencies involved in the process. there's the department of energy which is actually grants authorization to export the

molecule and then there's a federal energy rigatoni commission that grants permission to build the plant. so they are both critical and important to get the project up and running and importing the natural gas. >> mr. smith, what are the specific criteria making the public interest determinations? there's a number of criteria is used on the case-by-case basis. we have to look at a wide range of factors important for american consumers and industry and the national security. we look at international affects and prices on impacts and consumers on industrial customers, so those are things we have to consider for each of these applications. >> people call me but i just

want to make sure that i respect how your name is pronounced. are you aware of any provision and under the public interest information for benefiting the u.s. foreign-policy? >> we are not involved directly in the approval process, but as mr. smith said, the department of energy and state work closely together and i think we share information and make the determination they have our views in mind. >> what is the office make doese determining the public interest? >> is granted on a case-by-case basis. we are compelled to look at a wide range of issues and how it might impact local communities. those are things that are considered. >> the federal trade commission also has to do with an environmental analysis impact.

we are a process that looks at the impact of the terminal itself for the facility itself. we are a coordinating agency in that process and we worked together in that way. >> mr. smith, would you describe the involvement of these processes is very simplistic or complicated? >> i would say it's an important and complicated decision and we have processes that match the gravity of the decision that we have to make. >> for example if somebody were to put in an application in january of 2010 and then all of a sudden somebody puts in what looks to be on the face similar application and in january of 2014 would you say there are some variables that may have changed between those two?

>> there certainly would be variables that would change. in eacand each of the individual obligations would have factors that might be different. so we would have to consider the comments made by the public in this transparent process and we would have to consider each of those on a case-by-case basis. >> in a hearing like this do you imagine that in 2010 somebody would have mentioned ukraine whereas now they may be mentioning it quite often, is that a variable is perhaps complicated a little bit more? >> that is something that certainly has changed dramatically. >> one of the things i find fascinating is that a lot of times when we have public hearings like this, people like to try to force the issue to be simplified more than it possibly can be. i got my degree in engineering and the one class that i remember the most end up liking almost everything i've done since i left college is something called feedback

systems and simply put is a class that every engineer of every kind takes as a freshman and basically explains what goes in and what comes out is very different based on what happens in between and no feedback system is identical to another and it seems like that is the kind of thing the department has to deal with on a daily basis and i want to thank you very much for doing a very good job of simplifying as much as possible so that we in the public can understand how complicated it is and how important do you think you and i yield back my time. his back when we had to be: cat when can we expect a decision on the pipeline? >> i can't answer that question. >> do you know when the application is filed? >> i don't have the date in front of me. >> six years ago, septembe september 2008. when do you think we can expect

the decision? >> the process in the department of state as you know is ongoing. i'm personally not involved in the process. >> is th the deputy assistant secretary for energy diplomacy the tidal? diplomacy in the title and you're not directly involved? >> i think we have different people working on a variety of different issues. obviously part of the leadership of the bureau. >> are you aware the final report was released three years ago and stated there are no impacts on the environmental side? >> folks that are going to make that decision are aware of that? are they aware two and a half years ago they sent a bill saying make a decision the president said we are waiting for the issue to be resolved and/or aware that has been resolve to? and people are making the decision on whether it has been resolve? >> i believe people are aware. >> the governor of the state was

against it and now he's for it. >> if i make him a congressman as the process continues and we look at these variety of these different issues that are affecting -- and we get a decision before this year is over? community at the six-year timeframe if you get it done before september you get it done in six years. >> in one sentence i think i can give you what i think is happening at the moment and that is that as we have new data coming in we are not stopping the process or suspending the process. >> you know the "washington post" said that waiting any longer to not make a decision is absurd and laughable, not the members of th on the republican, the "washington post" and it kind of is six years. you're telling me you don't know if you can get it done before

september this year x. >> as we are trying to make the process move as expeditiously as possible. >> that cannot be true. you are trying to move as expeditiously as possible into the post sayandthe post says th. it's been almost six years. you can use any adjective that you want to use bu that expedits is the wrong one to use. >> we have an overwhelming volume of comments that we are going through. we have a court decision in nebraska that just was announced a few weeks ago that has to be addressed. >> so my point is wan or better yet will you ever make a decision you will make a decision at some point? okay that is a step in the right direction. there are some people that are starting to think there's never going to be a decision. do you think it will happen -- let's take this date do you think it will happen before the

november election? is it likely to happen before the november action this fall? because i was trying to say -- spinnaker do you want it to happen before the november election? into the last one first if you could. he wanted to happen before the november election? >> i would like to go to the process in the way that we do addressing all of the issues that have come before us" in the recent data. have you asked me this before the court decision of nebraska that we would have been in a different situation, i think what we are trying to do -- spinnaker "washington post" used the terms of absurd and laughable. you are aware of that, correct? >> i'm aware of what the post said. they don't speak for me and i don't always agree with them. >> will there be a decision before the election of this year? >> i can't give a specific timeline --

>> yes or no do you have the deputy assistant secretary for the diplomacy wants there to be a decision before the november election flex >> i would like to be in the position we have done all the work to be in the position in the time that i know we can do. if that is before the election and i hope that is done. i cannot say whether we would be able to make the timeline. there are a number of factors that we are looking at including the enormous volume. >> we want you to try harder. it's been six years. frankly we wanted a decision yesterday but we know that isn't going to happen, so at a minimum to make sense the american people can know about this before the important midterm election and with that i would yield back. >> it is becoming increasingly apparent. co. parent -- apparent that you flood the office and everything

stops. at some point of the leaders have to make decisions. >> return back to the topic of the hearing it is yet another reminder of how the energy dependence and national security interests are closely tied. countries like russia have shown there are more than willing to use energy as a weapon. natural gas exports have the potential to not only provide the economic benefits to the country's national security interest that can also advance the national security interest and increase energy security on the picture of energy security i want to focus a little bit on the domestic side and what the effect can be for the domestic consumers. the study is that the doe has commissioned is that the export of natural gas would have a net benefit on our economy and that

there is a significant potential here for bringing more wealth to the country and creating more american jobs, something i think we all agree with. the gas technology institute and not-for-profit research lab that i'm proud to have in my district has been at the forefront of developing the technologies that make natural gas development safer, more efficient, more environmentally sustainable and have really helped to make the natural gas success stories one of the whims of the domestic industry. do you see that effort in the capital investment is exporting more natural gas to help to develop greater use of domestic natural gas domestically for disabled the use of the transportation bill or to meet its domestic demand to use to generate electricity? in the department has a long relationship with the gas technology institute and that's

been -- that relationship has been instrumental in the technologies are led to this increase in our domestic production natural gas. in the interaction between the lng exports into the domestic use if the united states moves forward export additional quantities by the private sector is going to be greater demand on the domestic supply and that is going to come and you know, have an impact on a variety of things and that is what we look at in the public determination. in terms of the exporting lng and increasing the use of liquefied natural gas returns petition, i don't see a strong correlation between the two issues. i think they are driven by different factors. but indeed windeed we are seeinr use of natural gas in the transportation sector particularly in the vehicles we are seeing picked up right now. we think that is important.

it creates greater opportunity for american consumers and american businesses. it helps produce greenhouse gas emissions, so we see that as very positive. >> also a lot of small manufacturers i have the largest concentration in the nation in my district and many folks i talked to in the manufacturing express real concerns that increased exports would lead to price increases at home and harm our businesses and consumers. what effect do you expect natural gas imports to have on the domestic manufacturing sector into the prices that we must pay domestically for natural gas? >> thank you for the question. we are certainly concerned about consumers that we are also very concerned that the families in illinois and ohio and oklahoma, so we have to take those into consideration which is why the

determinations are indeed complicated. the department of energy is commissioned a number of studies that have looked at the price impact significantly the study that was done before this and so it showed in most cases a modest impact on consumers but the one we do have to take into consideration and balance against the benefits of the exports and the trade and job creation and producing the states with greater production and other things so it has a balancing act that we have to show that we certainly are interested and concerned about the impact on consumers and all those businesses that use natural gas to create jobs so that an important factor in our considerations. >> i have concerns that our foreign manufacturing competitors don't take advantage of our chief natural gas prices at the expense of the mistake many factors you think you and i yield back.

>> thank you mr. chairman for holding the hearing. i would like to focus more on the domestic side. i represent the state of georgia where i'm told depending on the day of the week its number one, number two or number three consumer of natural gas in the nation, and yet the companies come out in support of exports as part of that national mix. but all the lights are full in that part of the world. we cannot get anymore in our infrastructure. i look at the map on the website is where the natural gas is coming from and i think how in the world did they get out of that and i listen to the conversation between mr. jordan and and it just had here and i think what is the impact they have on the domestic manufacturers that are going to be dramatically different if

they can get every cliff went natural gas out of the box and down into the great state of georgia if we don't have that infrastructure. talk to me about what kind of infrastructure needs to be created which i suspect will be dominantly pipelined infrastructure in order for the american consumer and exporters to be a vote to maximize the use of the natural resources. >> thanks for the question and a lot of big issues there. first of the department has a very important collaboration with the southern company. one of the most important demonstrations of the sequestration is being done in the county in collaboration with southern so that will make a really important initiative that has the build to benefit the company here and international. in terms of the infrastructure question that is a really big topic. when we look at the growth and

the success that we have had a versus the challenges that we have in europe and in china, one of the big factors that was in our favor in the united states was the fact that there was already a very robust infrastructure in place such as you had to wait to get the guest of the market and that indeed is built and expanded by the private sector as new gas developed. it is a potential for the infrastructure with the resource when you have a very rapid growth into north dakota we have seen that and in south texas. but overall, there is a very direct motive to build these infrastructures facilities are necessary to make sure that we get this energy to the consumers are going to be using it and we believe that it's generally happening. >> and doesn't motive exist irrespective of the export question? >> certainly, i mean i do not

see the lng exports as being the single factor that determines whether or not they build the infrastructure that we need to get the gas to the markets. >> when i see natural gas around the country due to the lack of infrastructure, clearly either the motivatio motivation isn't o date because of the low gas prices or the cooperation isn't there today to go through that permitting process to get that infrastructure installed. >> there is a challenge when you have places where the only lose valuable and so if you're in a situation where the infrastructure would be expensive to build, it's sometimes difficult for companies to justify the expense of building when they have the option instead of building the infrastructure to get to the market so there's a market inefficiency somewhere but

certainly the state regulators are working together to try to make that work better. >> about from the doe perspective, they are willing to let those market forces beatify if they require we fire off the natural resources to no benefit of the consumers, fair enough, and if those market forces require that we need to build a pipeline to get those resources to the consumers that they would be supportive of that as well? >> i wouldn't characterize it as a matter of willingness. where the technology organizations i oversee the technology laboratory that does much of the r&d was the industry and academia that leads to solutions for environmental sustainability and safety. we are working together in some cases but it's a question of oversight on some of these questions and a lot of them are complex and involve multiple market actors in the private sector. >> speaking on behalf of the state that gave america the president that createpresident e

department of energy, we support your mission of creating a safe and sustainable structure here in the country that hopefully will only lead to the manufacturing but a really change the balance of trade with the world. thank you again for holding the hearing and i yield back. >> thank you mr. chairman. you are holding this hearing at an interesting time when there is a lot of talk internationally about natural gas and perhaps the new opportunities, new marketing opportunities here where we see very low prices even given the technology and environmental challenges. so, my question -- and i promise i will give you time to answer my question -- you hear much talk about our natural gas

supplies being of aid to europe and ukraine during the crisis that ukraine is now experiencing according to the figures i have a get a quarter of the gas from russia and half of that was really news to me. half of that passes through ukraine. remember that in 2009, early in 2009 pipelines were shut down. what was the reason for that again? >> there was a dispute between -- ukraine the russians and shut down the gas to ukraine first and then to the rest of south eastern europe through ukraine a few days later. >> so that didn't have much of an effect on europe at this time? >> it had actually a tremendous effect on both 13 days of no gas in the dead of winter.

and europe uses gasping early for heating so the timing wasn't accidental. >> what did it do to increase the price? i mean, was there a scarcity? >> it lasted 20 days in total, 14 days for most of europe. and as a result what it really did is drove home the realization of the vulnerability that europe has in its reliance on russian gas and its need for diversification because it only lasted for 13 the pain was short-lived. >> does that mean that europe is less dependent on russia today, did it diversify? >> we worked very closely the last five years to do that. they are less reliant on russia while still extremely reliant and they will be for a long time to come. but because they passed at the third energthethird energy packh required that the destination

clauses would be gone if meant when russia exports gas into the eu to first country of transit, let's say germany were ukraine or other countries, they couldn't say -- they couldn't dictate you may not pass this on without my permission to another country so what it allowed it to do is is now eu gas and can be transferred further. so when we talk about reversing the flow from poland and hungary and slovakia, that wouldn't have been possible in 2009 because of the regulatory structure that was in place. so by working with europe to get the regulatory structure their making some investments and getting them to make investments in infrastructure they are less reliant today. but as russia will continue to be a supplier into europe there is more that we can do together to make sure that that reliance has diminished.

is there anything like the near future providing natural gas to europe and would that have any effect on the domestic market or do we have so much that it would simply mean a new market and a new perhaps reduction in the trade investment? >> i think the united states has a role to play in this and the exports are an important factor you to >> we don't have any facilities to export. >> that's what i mean. when people talk about becoming a supplier, that would mean a large and immense effort to construct the infrastructure to do so. >> yes, that's true but some of that is already in training. the first one will come online in about 18 months now. and i just would mention that

the gas that's already been approved by the department of energy is about half the amount of gas that europe reports annually today. so it's an enormous amount of gas already approved, but the market forces have to be there to build the facilities that have been approved. >> i'm going to open this up for an open conversation so anybody can jump in. would you include canada, mexico in the peninsula of alaska in that we are not exporting natural gas? >> i would say lng of the ones that we have equipped in this process and the pipelines to canada and the region. >> we are an exporter already and we do offer at the peninsula at this point, we are exporting, not importing. >> we are not an exporter yet but we are poised to become one

big >> what is the timeframe on that? >> i think as the exports -- it's hard to predict that. 2018 is the prediction they have for becoming the next exporter, and i would like my colleague address that. i think it's important to say as we get permits for the department of energy they have to be built in the decision to be able to sell it. >> we mentioned the amount that we've already permitted. how many exports on those do you anticipate will actually be constructive? >> i can't really say mr. chairman. >> gives us your best guess. what is your best guess on how you think it would be built. >> i would say a couple things mr. chairman. first of all, certainly it is being built right now. in terms of making predictions about what would happen subsequently, i spent 11 years

before i came to the government and actually when it was an import terminal. so if you had asked me at that point the question you ask me is how many terminals to import would have been dealt i probably would have made you -- because i was working the field, i'm going to give a numeric total because the collective face and the crystal ball should be diminished. >> we have seven permits out there already that are still pending. do you think we would build 31 terminals? >> i do not think. >> do you think we will build 15? >> i don't know. >> let's play this out a little bit. mr. smith said what has already been permitted to generate about

half the lng that europe already uses. now these companies are big boys so they can make the decisions whether to build or not to build. they built the facilities and they got burned and i would bet you to say they will be reluctant to move through it swiftly because it appears that this particular market i it vars frois verystrong ackley from tie in short periods of time. so if in fact, half of the natural gas that is being used by europe today has already been permitted in the united states and we have got the countries of australia, mozambique, israel, cyprus and lebanon coming online what are we saying here? they are not going to come online and not try to provide about energy to europe in many respects, which is actually my exact point on this and we had

this conversation somewhat. if we already know all of the terminals are not going to be built, we are giving a competitive advantage to people that filed a permit request a couple of days before into couple of weeks or months before someone else where they may have filed -- some of them vital there it it it could request on the same day. but they actually won't find out for two or three years later than other people. so we are giving a competitive advantage to some companies and other companies just have to wait two or three years until the dod make the decision and then start with ferc. all of these facilities are going to be built. there will be competition worldwide but we will lose if we continue to delay so basically we are saying to australia and other countries you compete worldwide and we are going to discuss it. >> well, that's the other flip side of that coin is part of our resurgence, part of our economic

integration is the fact companies are bringing manufacturing back to the united states because the cost of the fuel is so expensive in china and elsewhere and they see the net benefit and so creating the jobs in that regard we don't want to cut off our noses either. >> we are about four and a quarter for the natural gas in the united states for the same piece, so even at that point the companies are going to relocate. some of my conversation is how do we balance that and how do we use the economic engine? when you look at job growth over the last several years, the largest area of job growth has been in energy. how do we continue to use that in a very difficult economy to say the least? you continue to provide new markets to go to so we have an economic benefit here in the united states and we have the geopolitical benefits worldwide, which i want to expand as i could quickly. there is a conversation between

india and iran right now dealing with natural gas theater so we can continue to talk about ukraine but this isn't just a ukraine issue this is a worldwide issue is the state department comfortable with india's natural gas supplier being iran and if not what are we going to do about that? >> we have been implementing and buy office has been leading the efforts teffort to the sanctionn energy for the last two years specially since congress passed in late 2011. first, let me say this greed we do not be leave that there is any truth or likelihood to the gas supplies at this time which pakistan. iran is a net importer of gas at the moment. the exports to turkey on one side of the country and import some other from turkmenistan and we have had very close and open conversations about the oil purchases from iran as well as how we would view iran expert of gas but currently they don't have the gas supplies or the

infrastructure and base it on the largest reserve as a result of the sanction they haven't been able to build out there is no infrastructure to be able to deliver that. >> if they do i ensure you that the views are very well-known to our friends and allies about how we feel about that as long as the sanctions are in place. >> are we in the position to say we will supply the natural gas needs? to say go on the market and find it? >> it will be one of the first that already has been attracted for the natural gas. >> we will keep the conversation going. >> do you have questions? >> i do and i apologize. there is a judiciary mark upon the human trafficking but i do have some questions and i would like to ask the state department representative there've been some discussions they told me

about here today and a lot of what we focus on is exporting the u.s. lng to ukraine. the exports are an important foreign-policy tool for assisting the allies especially when dealing with russia and certainly benefit the economy at home, but i would like to talk to you a minute about the benefits and potentially existing ukraine was not u.s. lng that worlds worst lng. the department has repeatedly asserted that the exports are not a viable option because u.s. lng exports are such a long way away. i'm going to have a conversation with mr. smith about that when i'm finished talking to you. but i do want to know while this is unfortunately true it is my understanding that ukraine has been in discussions with the least one u.s. company about constructing the terminal in the ukraine and bringing the world

source in until the supplies are available. it's my understanding this could be done in as little as six to eight months. .. for more immediate gas.

as far as ukraine, we've had this conversation for a while about the interest in ukraine to build an lng facility. not really to build a terminal. that's why it's too shorter. it is to bring an exploding lng facility, a boat that would come online. so it's a little bit different. the concern is what is proxy net as you said in the black sea is exactly what you said. turkey does not allow lng tankers to cost through. they maintained that it's a national security issues. this is a long-standing position that came up several years ago. >> are you guys working on a quick >> are you working to educate the fact two things probably aren't in a blowup the way they think they are? >> we are very frank, open and honest conversation about lng trade it in general what it means to have open access trade. the positions are theirs to

have. >> certainly. we don't control turkey. turkey has been a good friend and ally to this country and hopefully we can bring them along. mr. smith, in a previous hearing we have heard from the department of energy on the process for getting lng export facilities permitted. one of the things i have heard do you reconsider is we don't want to get too many of these because we want them all to be profitable. it seems to me that the government role to decide how many to have said they can be profitable? or is that something that should be left up to the market? if the market has a demand for that say 20 lng export terminals and 25 r. bill, what that is not the governments money that loss. that is those investors money that is going to be lost for

making a bad investment. can you talk a little bit about how big of a consideration that is in the process? >> thank you very much for that question, caller span. that indeed is not a point of disagreement. the department does not take into consideration whether or not a company is going to be profitable or not. >> so why is it taking so long to get these permits out? >> well, i think it is instructive to hear the dialogue between the ranking member in the chairman in terms of the issues we are dealing with. there are very strong views on both sides of the equation about the need to balance the increased production and trade and job creation in place for the terminal is being built with the impact on consumers and prices in the manufacturing sector environmental factors. >> i will concede to the environmental factors, but it

seems like when the government dirts regulating based on marketplace factors. i think we are getting offline. we can have the debate about that i'm not time on this. the potential is so much they are. i'm out of time. a quick preaching. >> missed one question. >> thank you, mr. chairman. thank you for being here and thank you, mr. chairman for the hearing. we are all looking for this investment imbalances, wanting to move forward quickly enough with the results from this investment. in my state, i am from new mexico. the energy industry is certainly critical to our economic

success. it is a significant composing of our current economic base. i think it is responsible for 30% of our state's general fund revenue. in a state like new mexico, that is the only way we pay for education. it's also clear to me that the natural gas revolution have national security implications. according to the international energy agency, the u.s. has enough natural gas to meet all of its energy resources by 2035 and that allows us to be less reliant on the middle east and other countries for energy. with that said, i know this has been discussed already. we have a responsibility to ensure we manage the resources in a safe and responsible manner and protect public health, wildlife, the environment and our water resources. i think it is important to explore ways to ensure the ukrainian allies have access to

reliable supplies of energy for their own national security reasons. and it is certainly all of our understanding that the ukraine faces numerous energy security vulnerabilities, including energy infrastructure, which i heard you talk about, which i heard several times. but i would love it if you would elaborate. i know there're starting a conversation with representative homes. i do want to only talk about specifically on what those strategies are and give me a little more depth, please. >> in securing the energy security, we are working on a number of factors simultaneously. number one is to make sure to separate ukraine and the rest of europe and primarily baltics ursa into eastern europe. and ukraine it is about making sure if there is a shutoff of

gas in the near term that we have reverse capability in hungary, poland and slovakia and to expand that to the degree possible that it takes care of the portion of gas. number two, we help them become a more efficient and more capable producer of their gas. they are quite an impressive producer of gas, but a lot of that technology is can be using and producing more natural gas on their own. we are also working on their interest in exploring their unconventional gas areas. we are working with them to reform that they will not end up in the same situation they are in today and efficiency rates are they are to do more with less. in europe, we have to make sure the regulatory form i started to continue. we are working very closely on

that to look and make sure there is no energy islands in europe, which is a stated goal of the e.u. so the baltics are a good example of that. lng and lithuania has gone a long way. the chairman mentioned anita orbach for hungry who was a good friend of my work closely together as they represent and share the v4 countries plus romania, bulgaria to make sure the corridor europe. there is not one answer for these and it's unfortunate you can't fit into headline. >> given you have to have a broad approach over the long haul, i certainly can appreciate that and recognize given we have burrowed natural gas in new mexico because we can't recapture the cost until a lot of biscuits bound in a very

supportive of moving so we've got more export opportunities because that is going to create an environment in a state to further the exploration and do exactly what he said, which is looking at tertiary recovery that's cost effective and without the infrastructure to do. one of those strategies and 15 seconds are quick. i'm looking at the stability issues and ukraine. can you pick one or two that have an immediate relief click >> to reverse flow capability and making sure ukraine is able so gas can continue to flow. the reverse was make a lot of progress and we need to make more. if i had 15 seconds on one thing, that's what it would be. >> there some additional responses. >> as we discussed before in all finished and they are.

it is critical. if we look at the numbers, look at the production rate in the import rate and what is in the system is made available by the regulatory change in europe, we can expand this reverse flows quite considerably so maybe not fully for this winter, but in the years to come come ukraine can choose whether or not to import gas from europe from russia were to do it through other mechanisms. so it is very important. the ukraine is very inefficient and we have the department of energy together with us is working on proposals to work with ukraine to see what we can do to increase efficiency rates. that means that many have address the subsidy issue where gas is so cheap that people don't have an incentive to conserve, but to put in place the mechanisms and structures that allow for more conservation so they can do far more with

less or at the same amount. so that is a programmer done in other countries. d.o.e. and department of state worked together on these issues. we have a number of proposals for ukraine. >> can we talk about curt in the process there, which my understanding is more cumbersome and it takes longer. how does that interrelate with the process you have going? >> thank you matt -- thank you, ranking member speier. on ferc, i'm afraid i would not go to characterize appropriately. in all terms, ferc has an important job of the environmental process of evaluating the valuable impact and make it the authorization that you built the terminals. they have a very detailed and

important role to play in this process. ours is kind of a larger, bigger picture looking at the impact of export molecule to go through the very detailed process looking at specific impacts. we work closely with them. we share information in terms of making sure we know where the different projects are. but the process is separate from ours. >> i understand that, but the processes cumbersome them on and they have a huge backlog. is that true? >> i wouldn't characterize our process as necessarily cumbersome. i think today's the key process. >> are some of the applicants in the ferc process now even before they have a d.o.e. per minute? >> yes, we do see applicants

going forward which is a signature of funds. you have to do a lot of work in terms of your engineering and environmental studies. we do see companies looking ahead. >> what happens quickly permit in the d.o.e. they've gone through the whole process and have completed that. but they don't have a d.o.e. program. what happens? >> there's two types of authorizations. conditional authorization which is a precedent by step forward with confidence to individual investors. we've given one final approval. if there was an entire ferc without conditional approval.

>> is to wait in line. the sale just make up a number. they are still waiting on this. 12, 13, 14 is complete before they get it? >> it hasn't occurred. i don't have a definitive answer to that yet. they were a with the ferc process for dealing with the applicant who went for all that work without having done. >> it does become a challenge as they walked through the process they are holding a permit process in place. they are ready to go. it shows the seriousness others may not have. you've mention i don't know how many total that authority started through the process. denote the member is in the permit process click

>> i could probably play that. i don't know if the top of my head. they're a number of projects even though they have not gotten up in the? in terms of d.o.e., they asserted with the ferc process. in my preliminary port they have about seven companies of the fermenting process but they don't have d.o.e. approval yet. so the concern is if they end up with one. what mr. jordan had this wonderful conversation about keystone. that is the difficulty of all of this from a business side and also foreign partners and allies around the country. when i talked to make another one statement is when will we get an answer? the difficulty is i can't tell. as a member of congress i can't look and say there's no predictable answer.

it could be two weeks before the next permit comes or could be two years. in maybe 20 years. still discussing that. that is terrible for allies to it at some point we have to get some sort of predictability in the process to know we are working in process. it is not a red flag for people to say if you write more letters to us and will slow down the process even more, which is what it seems to be now. >> they have established a track record of getting things out of authorization. these are all complicated valuations we have to do we have to balance conflict in interest. the department has established a very credible and reliable track record. again, we don't have a clockwork doll that says time for the next

application. to availability of natural gas to the united state does not collect it from the state department regardie authorized 9.3 billion cubic feet per day of exports, which is equal to all the allergy that goes into europe from russia. there started than a tremendous amount that we have authorized. we've been going through this very important determination and they will be a question that you posed earlier about how many will be built to build the terminals regardie authorized. there is certainly some demonstrating progress we've made. a tremendous honor gas would authorize. the fact that we are no longer

importing large quantities and 30 import and impact the market dramatically. >> when you talk about tremendous remark, is there someone that you say we look at this sort cumulative total and we are not going to prevent any more beyond that? >> know, there's not. we have not determined the level beyond which we are going to permit. that is not something the department of energy has identified. >> said best interest to needs to be a fib jack did letters that come in and responses for that area. did you fill out the application correctly type thing and try to evaluate that and the department of state to see that the partners are and how much is demanded from around the country. they gave a war object look at the economic benefits of this. while i understand if outsiders coming in the say we don't want the server to want this, you've

also got an economic study commission. it's in the best interest economically. >> a study commission received by the department was considered as part of all our applications today. i will point out that as we go forward in time, conditions to change. as was pointed out earlier, couple months ago we would not have foreseen sitting in this room talking about issues in the ukraine. >> i'm not sure that is 100% true. almost two years ago, members of the ukraine were saying dealing with russia randomly shutting off their image. this is a predictable crisis in central europe. it may not be ukraine, but is coming somewhere. which you agree or disagree? >> i would agree we have been working on the vulnerability europe has with its reliance on

a single source and many cases. i would agree this is a crisis that is a surprise to some, but not to others. >> i don't know if we ever got clarification of how much natural gas is generated by these other countries you mentioned earlier. >> the other producers online quick >> a lot of this were early in the process. israel has 30 taking care of the first big one has addressed their entire domestic needs. they have come up with an export policies. it's not about how much you produce but how much you put on the market that the israeli production will go into exports. we don't know the amount yet. we have one field that has been proven, but there's going to be drilling throughout the summer and fall by three companies. most of the kids about double

the size of the israeli fine, but they need to get their act together as well. a lot of the caster in eastern africa is going to admit going to a show to think about makes sense from a transportation. this is not just about ukraine in europe. this is about a global demand and as we put more product on the market, there's demand that is rising as well in asia and that has to be addressed. so what happens to europe is not their own decision-making. there's a lot of market forces would have to come into play. as we see what the prices are around a show that will determine for europe. the pressure is there is the result of our production and not important. you're up for the first time when not every negotiated divorce the russians in two renegotiation of price.

these dynamics are having real impacts. it's very difficult to make some predictions on this is if you read anybody's predictions in 2009 to global supplies and trade of natural gas, they would have been very, very mistaken today in hindsight. >> you mentioned before the state department is helping some folks in europe with nonconventional explorations of oil and gas. he made the comment to your helping focus on client. can you clarify that? >> i didn't than helping them. they said we recommended decision when you go to make a decision on whether or not to explore unconventional and shale, it is important to look at what the sciences of what is and isn't true. we've had a great experience here in the united case of the regulatory system of those federal and state of looking at

that. and what we would like to do is to brief them an educated show what we've been able to learn from experience here. we brought a variety of delegations to the united states together with epa, department of interior, department of energy to learn through the process. it is not a monolithic here is how to do it. look at what colorado is doing versus new york or pennsylvania et cetera and not there are some countries that have announced moratoriums on shale development and exploration. if it is their decision to do it and they don't want to export,@. we continue these conversations, but don't have programs to support the process if they have a moratorium. >> i would add one thing.

a couple years ago i traveled to worse with the deputy assistant secretary for natural resources. we participated in what was called the session help via the iaea called the golden rules. it is a collection of experts around the world convening to discuss shale gas and development. there's other sovereign nations what to do with the resources. the best interest of the united states and share the best practices to help build a scientific basis so we see that as being positive. something we are affirmatively support interactions. >> just for clarification on

this can state department circulates other countries that have shale to deal to bring to the united states and to look at some of the science database. to fraction, horizontal drilling to go to take this on because obviously their country, whether they own their own come in the assemblies pursuant to doubt, basically exposing them saying this is a good idea to take this on to you can provide your own energy resources. >> or would agree with everything except the last sentence. it's not to encourage. if they decide they want to move ahead and go ahead and exploit it, we will exploit them to show all the other things you just said. >> i force them to be independent. they will not be dependent on

someone else for energy bill was that we take that. >> mr. chairman, this external factors and forces the comment to countries to encourage them not to explore this resources. >> oklahoma voters see folks to run north to show them how we do natural gas exploration and do extremely well and clean and a regulatory scheme in the state of oklahoma and how to regulate things as far as exploration is exemplary. anchorage who drink our water and breathe our air is here wonderful land and see how you can do this clean. we've got 100,000 tracks in oklahoma and it's a beautiful state with clean water and clean air. as you mentioned before trying to deal the science, when you finish with the rest of what they appreciate if you come back to the united states. one other comment with another question on this, i promise i

won't say along. i want to bring it the issue of crude oil exports. what we are hearing from international partners on that, we export products around the world. we are currently not exporting crude. with her quite a bit for people that are very interested. what are we hearing about crude request from allies? >> this is the conversation around the world and we are following that discussion of what it means. we are in the very early stages of this conversation. i followed what has been done here in commerce in the house and senate side on what does this mean to have crude oil exports. this is a much bigger discussion. we've been so focused. we are in the early stages of understanding what it means and

listening to the views being expressed. i think there's less of a drumbeat as far as our partners in natural gas. there's definitely an interest with the united states is going to do. best of independence for countries like the discussion and how does this impact the long-term oil markets and prices and structures. we've talked a lot about gas. we have the same radical changes in the world today that are happening in gas. they are slightly different, big changes were dominated that market, new players than with most opec countries today producing at maximum capacity for a variety of reasons. some for sanctions, some for technical reasons. the question of how the united states and exporting will follow

the energy markets. >> let me just complete that thought. >> if we start exporting, correct or not correct? >> there's been a lot i've learned the business of any prediction in oil prices to make those predictions are usually -- >> all it takes is a little cross-border war in gas prices all the time. i do understand that. is there a chinese and the opec countries that the united states could become an export? >> i think they make in the process very careful. >> i can probably second the comment. there's more of a statutory process for dealing with natural gas and monster chicory process

for dealing with oil, but this is certainly a topic we think his adventures. we don't have a direct role in the capability of exporting if there is a weight risk granted. ..

based on what you're saying, your team is working on it but there are no deadlines and there are no demands on certain time periods. we will get it done when we get it done and my concern is for the international partners. they need some certainty. folks that come to visit my office have said the same thing. >> let me interject. if this is one of >> speed and still doing the job, then the question becomes the fees being charged to provide this evaluation adequate to do the job and the office needs more staff. maybe you can address that as well. >> i will make two points in first i think that if you look at -- when i talk about lng at various venues followed by the

market expert who has a chart on the graph that shows the time between the various doe actions in the juxtaposed against the prices and other things and there's all of this analysis about why it's longer between these two and these other two did those are always interesting as there is all of this theorizing about what is the next worry about the extra four days here there's not a back story. all of these are slightly different. but what we cannot see as we have established i think a fairly reliable track record of getting these out in a reasonable amount of time. that has been complacency over the past year or so, so it varies within a reasonable amount of time. so it's our intention to make sure that we are moving forward in that manner. we have already authorized 9.3

which is a considerable amount and the biggest uncertainty now is what is going to be the reaction in the private sector is already received these authorizations and at what rate are they going to be built because they are both a billion-dollar investments that are complex and again if the market determines that this could be a demand for u.s. gas. a cynic but if they have the permitted on the arnold's moving where they are moving in-line? >> again, we have a number but they have not yet received the authorizations from the department of energy that are working in the process. we haven't come to the position where someone has finished that process in advance of having received a conditional authorization so i don't know how to answer that question because it is hypothetical at this point. >> but that will be a big issue.

obviously it's become very significant and i would hope that you are addressing this and if someone is holding the permit in their hand it is two and a half years of still waiting on the peace or it's unpredictable and they just don't know. you said we have established a process that has predictability but just because it has been done in the past doesn't mean it is going to be done in the future. you're not saying that it's going to be six to ten weeks between each one you're just saying this is what we have done in the past. >> this is an unprecedented activity. the department when the market changed and you refer to this energy production revolution in your opening statement that has taken the regulators within my organization and they've gone from looking at the terminals to the export terminals. everything has changed. so, i think there are a number of hypothetical situations that one could come up with in this

situation. we are busy and hard at work making sure we are doing the work before us and we are meeting our commitment to get these out in a timely manner as possible. and as we run into the new situations those are things we have to consider and make the best decisions. the specs if they are holding a permit and they may be able to come out and step out of the line. >> i will certainly say at all times we are looking at ways to make the process more efficient taste on the signals being sent in the markets and the signals that are different from the signals that were sent that we established a certain process that we are not at the principle to do anything that is appropriate based on the market signals and the assessment. >> we will have more conversations about this. i understand you are saying look at our history but there's no predictability on what happens in the future, and that is a much needed thing in our nation

development of infrastructure if the facility is good to be built we have to get pipelines that appears in the process and years of construction with lots of capital that is going on pursuing contracts worldwide. it's our international partners saying okay we are going to get it and making the decision people knowing what is going to happen. so, not to say that you have the whole world in your hands, but there are a lot of folks around the world that are waiting on the decisions that if we cannot get picked ability when it's going to happen there are a lot of folks around the world that are just waiting, and if of economic development here in the united states that's waiting to be released and pending the decision from your office. so if we can get a level of picked ability it would certainly help our economy and geopolitical situation as well. >> i would like to close by thanking the two witnesses who have i think presented some very

persuasive arguments for why this is global in nature and not something that the united states in and of itself is going to fix. but certainly that there should be some perfect ability worthy of us were reviewing that i would urge us to look at ferc as being part of that and they are absent from the discussion today. but thank you for your good work and your service to the country. >> thank you. the hearing is adjourned.

>> yesterday the house of representatives voted to create a committee to investigate the obama administration handling of the 2,012th attack on the u.s. consulate. the fact is this is a political stunt, and the fact that issa is damaged goods and

they have to move to another chairman. we have been there and done this over and over again. and so, the question is is there at least a level of decency in terms of respect, even in the regular order of the standing committee where the minority has the right. we don't have to call the witness when we are having this discussion on this subject with our witnesses. you can call yours anytime you want if we ever do. they try to use the climate and energy committee which is a completely different thing and only established so that we could get a couple of bills done, the energy bill which we did and president bush signed into the climate bill that we passed hi come up with the senae did not. the record is there was only one subpoena issued and it was

unanimous, and it was unanimous so this is a completely different set of. i think the chairman has already called it an investigation. i don't think it's supposed to be an investigation. what he called a trial. he called it a trial. does that tell you everything you need to know? then the objective chairman of the speaker says i don't -- i want is to be a circus. i said i think the chairman is saying some things that are looking circus like, for example. while i have evidence, he said, i have evidence that not only are they hiding it is an intent to hide it. i have evidence that there was a systemic and intentional decision to withhold certain documents from the conflict. is that the statement of a fair trial? by the chairman of the committee if he's calling a trial?

i have great respect for the speaker. to the extent that he is able i think that he would try to have -- because frankly it serves them better than for them to let them be themselves. that's why a lot of people said just let them show who they are with all of this. any of our witnesses can hold their own in that venue. they don't need us there to protect them and then there's another school of thought that says we've seen how they operate and we think that we should be there.

>> china has become the factory to the world and it sends products around the planet in a way that makes or lifestyle possible. we couldn't have the kind of quality of life that we enjoy if we didn't have low-cost goods and low-cost labor and now increasingly elsewhere. yet in china today the standard of living remains only about one sixth of what it is in the united states in terms of per capita income. and that is a source of frustration because people realize we work hard participating in the global economy we play by the rules in some cases and yet we are not enjoying the quality of life that they have in the west. but i think is interesting about this is that for most of chinese history after all people have no idea about what life was like.

this gets back to the tour of europe. the chinese people now consider on a computer in a village in the middle of nowhere and have a pretty accurate understanding of what it feels like to live in washington, d.c. where we think we can get an image of it and so that heightens the conflict. this was built upon people that have integrated to this country, some of them legally and some of them illegally. in my case, i came here documentation command with no ability to get a job or an education. so when i first came into the united states in the late '80s and i crossed the border between mexico and the united states, and then coming into the valley to work as a migrant farm worker it was no challenge to find a

job grade there were people trying to get the job of pulling weeds with their very same hands that are now doing brain surgery. i was pulling the weeds. >> the national labor relations board decided to allow college football players at northwestern university to unionize. the house education and the workforce committee held a hearing on the issue yesterday with university officials, labor lawyers and a former nfl player. minnesota congressman john heinz chairs the committee.

>> good morning. i would like to begin by welcoming the guests into thinking the witnesses for joining us. we appreciate the time that you have taken to share your expertise with the committee. the college supports have become a favorite pastime for millions of americans. whether filling out a tournament bracket, that never works for me by the way, tailgating or simply cheering on and all modern. college sports as a way to spend time with loved ones and to stay connected. fans for their loyalty and student athletes are renowned for their passion and talent and to leverage their pursuit of different dreams. for some, competing at the level is a step towards a career in professional sports. for others, in fact for most student athletes, playing a college sport is the ticket to an education they simply couldn't access without an

athletic scholarship. regardless of why student athletes play, the dreams can be turned upside down by a sports related injury. when that happens, institutions must step up and provide the healthcare and academic support the students needs. most institutions are doing just that and are standing by their athletes with the long haul. but some are not. no student athlete injured while representing their school in the field should be left behind because of a misplaced priority of the college or university. can the ncaa and institutions do more to protect students? absolutely. they can start by giving a greater role in shaping policies in the athletics that can work to help ensure a sports industry doesn't end his academic career and find a solution that will deliver the healthcare players they may need. while promoting change is often difficult student athletes deserve a determined effort to address the concerns. does that mean unionizing student athletes is the answer? absolutely not.

when he signed the national labor relations act, to bring the roosevelt cleared a better relationship between labor and management is the high purpose of this act. it's hard to imagine president roosevelt fought the law when they apply to the relationship between student athletes and institutions. yet that is precisely where we are. the regional director of the national labor relations board recently red ftball players at northwestern university on employees of the school for the purpose of collective bargaini bargaining. the ballots cast at the election have been inbounded by the board. given the track record of this i suspect the board will rubberstamp the director's decision setting dangerous precedent for colleges and universities nationwide. in the meantime, schools, athletic organizations, students and the public are searching for answers to questions stemming from this unprecedented ruling. for example, what issues with the union representing college athletes raise at the table? with the union negotiator for the number and length of

practices? perhaps they would seek to bargain over the number of the games. the management and the union are at an impasse, the players go on strike with student athletes on strike attend class and have access to financial aid? how would student athletes provide financial support to the union? would it be deducted from scholarships before being dispersed to students? or are they expected to pay out-of-pocket? we know many athletes grow up financially. how do they show that the cost of the union? speaking of the square with a small colleges and universities find the resources to manage the unions with athletes? a lot of institutions operate on thin margins and college costs are soaring. or the schools ready to make some difficult decisions such as cutting support to other athletic programs like lacrosse, field hockey were raising tuition? and finally, how would other policies affect the higher education system fax the college campus is prepared for the micro unions and ambush elections? are the administrators equipped to bargain with competing unions representing different athletic

programs? will students be able to make informed decisions about joining the union in as few as ten days while attending class and going to practice? these are tough questions that should be discussed before the administrators are forced to confront a different or from the long-standing policies. we share the concerns of the players progress as too slow but forming the union is not the answer. treating student-athletes as something they are not is not the answer. the challenges facing student athletes should be addressed in the way that protects the athletic and academic integrity of higher education. the recent decision takes a fundamentally different approach that could make it harder for some students to access quality education. i strongly urge the board to change could change the course and the steak orders to get to work today i look forward to today's discussion and will now recognize the senior democrat member of the committee mr. george miller for his opening remarks. >> thank you mr. chairman. i'm glad we are having a hearing to better understand what is happening in the college athletics. to air out the very legitimate

grievances that have been raised by the northwestern university and around the country would start by setting the stage. the days when student-athletes really were students first ever college courses were just about running self discipline sportsmanship getting exercise and competition. those days are pretty much over in the high-level athletic programs. during the last four decades colleges and universities through the ncaa has perfected the art of monetizing the athletic play of the best football teams while studying the academic opportunities and the big sports empire. the empires consume and driven by the multibillion dollar television radio multimillion deals branding agreements, prime time sports shows and celebrity coaches with seven figure salaries. they've become commodities in this empire. in this empire. they are units of production that are overscheduled and

overworked. overworked. left a guard for the health and safety and encouraged to put their education on the back burner in favor of the success on the field. some athletes figured this out and now they are starting to ask really smart questions about this whole arrangement. they want to know what happens if they suffer catastrophic injury on the field that leaves them without -- with a lifetime disability. and while they lose their scholarship and with it the chance of an education and a career? how much of their health care will they and their families need to pay out-of-pocket? they are reading about new studies and long-term effects of injuries and they want to know if the schools and coaches are doing all they can to prevent become cushion brain injury on the field. field. will their health comes first with the decisions being made about whether or not they are fit to play or will the team's desire to trump the health concerns of the individual player? they are raising questions about the adequacy of the scholarships and the restrictions that leaves them with little or no support or out-of-pocket incidental expenses they face. why are some of them finding

themselves unable to afford enough food to eat or books for their classes while the university makes millions from their effort. they want to know why so many players didn't finish the academic programs and to discuss a fair transfer policy how can they change the success in academics not just athletics. re: northwestern university football players documents and all consuming sometimes eye-popping demand of a college football player in today's profit driven world. at northwestern the daily life of a football player revolves around practice and preparation. commonly affording a 50 hour commitment during the fall season with any classes or homework squeezed on top. you can see the sample displayed here i believe on the screen of the northwestern players. they are expected to be in the training room on monday morning for their medical checks by 7 a.m. in the various position

meetings with pads and helmet until noon. at night they meet to review the films and there's always the agility drills on a conditioning, weight lifting, workouts, playbooks to study in between. from the beginning of the month-long august training camp through the 12 week season the postseason play and intimate of january once it warms up to february to the mandatory spring workouts cut the high-stakes football preparation, not academic obligations to become the focus of the players lives and the obsession of their coaches. meanwhile they worry about their health and safety at their financial future and prospects for jobs after graduation. the big business empire of college sports is doing very well. revenues are up 32% of the last six years. many universities are hiking tuition and fees turning to underpaid overstretched adjunct faculty services. so in the superstar football programs they are making more and more money into the athletes

they depend on are getting less and less. less. in the end, this is a classic labor dispute. the empire is holding all of the cards making all of the rules and capturing all of the profits. the hardest working most valuable componen components ofe system they are left with little to say, no leverage and no blocking or toppling the themselves. by banding together i together d bargaining these athletes can win the kind of thing is the union workers demanded and have won across the country. about avoiding serious injury on the job of the medical benefits and securities if something goes wrong. meaningful input into how they will balance the work and in this case football is the work. with their academic needs into their other responsibilities are the respectful treatment and care that they so richly deserve. i look forward to today's hearing and hearing from today's witnesses about how we can do more to help protect and support these hard-working student employees. >> all committee members will be permitted to submit written statements included in the hearing record.

without objection the hearing record will remain open for 14 days to allow statements. question for the records and other material references during the hearing during the record economic pleasure to introduce the panel. with a very long resume of the witnesses i'm going to be extraordinarily brief. starting to my left we have the honorable kenneth starr, president of chancellor of baylor university in waco texas. mr. bradford livingstone is a partner in chicago illinois. mr. andy schwartz is a partner at oskrlsc and every california. mr. bernard is the director of athletics for stanford university in stanford california, and mr. patrick eilers with the former minnesota vikings area couldn't stop. >> before i recognize you to provide your testimony, with me

briefly remind everyone that the five minute flight system. the system is pretty straightforward. when recognized, you have five minutes to get your opening testimony. the light will be green and a further four minutes it will turn yellow. i would hope you would look at propping up the testimony and when it turns red, wrapup as expeditiously as you can. we are here to give the benefit of the expertise. when we get into our five minutes questioning session please, try to be respectful of the other witnesses and wrap up your testimony. all right. let's start with the honorable ken starr. you're recognized for. >> thank you mr. chairman. it's an honor to be here and to discuss this very important

issue in the private higher education. i serve as the president and chancellor of baylor university and i served as the president and ceo of the university since june of 2010. i've been at the university located in waco texas. it is a private christian university. it is ranked as a high research comprehensive university, and it is a vibrant community home to over 15,000 students including over 600 student athletes. baylor is a founding member of the big 12 conference and established in 1984 we sponsor 19 of the city teams. we are very blessed to have student athletes who succeed both in the classroom and on the playing field. over the past three years the university has been most successful division i program with men's and women's

basketball. but these publishers do not count ultimately in terms of what we emphasize. as commencement of purchase next weekend on our campus, we are celebrating our academic publishers. we gathered together on monday evening at baylor to honor the performance in classrooms. during the prior academic year, 86% of the senior student athletes received their undergraduate degrees and many have gone on to pursue advanced degrees. this past fall semester grades were not entered in the spring. the student-athlete achieved a cumulative gpa of 3.27. that is an all-time high. and 347 of our student athletes were named in the big 12 commissioner's on a roll --

honor roll. so in the athletic progra the ae reality is that even in these times, college athletics including at baylor is not a profit generating activity. it is not generating profits for baylor or for the vast majority of institutions of higher education. the director's recent decision in the western university case has characterized the student-athlete as employees. this is an unprecedented ruling as the chairman noted and in the view is misguided. ..

these services and programs contribute significantly to their ultimate academic success. they include academic advising, career counseling including baylor provide very high quality