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chinherkple. atou b tpa if the export ban was lifted? 22,000 barrel as day. >> in your area? probably very little. >> because? >> those refiners out in the mid-continent where they have access to discounted wti bench mark crude would see their cost go up. >> i think they are starting to tap into the utica shell gas and then the utica is providing the petroleum they will be able to cap into. so you are thinking it would not be effective? >> in your state, sir.

>> well they ship all over. >> right. but the question is the cost of feed stock into the refinery in west virginia be and i would suspect it would not change very much. >> thank you very much. i yield back the balance of my time. >> i recognize the gentlemen from texas, mr. green, for five minutes. >> thank you, mr. chairman. let me get back -- well, first, mr. chairman, i would ask consent to place the statement into the record. i think it is no doubt that in fact the cbo report that was just released talked about the policy shift in exporting crude with profit margins and harm for foreign oil producers. let me go down the list about -- we are exporting oil now.

there is actually a mechanisms where you get that lighter sweet from the ground, run it through what i would call a limited refining process, but it fits the definition we can export right now. how does eia classify least condensate in that exporting? >> mr. green, there are at least four big ways of trying to define such. the eia has historically done this literally based on the location. if is produced on an oil lease and it is mixed back into the crude oil stream we counted it as least condensate and measured it in barrels. >> is that the same as department of commerce? >> they are looking at it from a different standpoint. and reportedly, the commerce

department is now through letters to the individuals who ask for ruling on it, is allowing processed condensate. so taking the light crude oil, process it through a distillation tower, it would qualify as a product and products under united states law right now can be exported. >> okay. >> would it help to have a uniform definition for the government agencies particularly if lawmakers wanted to craft better legislation to have one definition for condensate? >> we have been trying to at eia -- we have been trying to understand the different definitions and i suspect a one-size-fits-all might not work

perfectly. we would have still, at eia for example, we would want to make sure we were able to count this processed condensate so we don't double count how much of the material is in our system and that is a complication of the existing rules >> does eia track the production and exports? >> the export data is provided by the customs people. and so we do not have that. we do our own survey of imports interestingly you thing about all of the history that has been brought up here today. we wanted to do our own sour way of imports because that was what was really big and what was supposed to grow and we don't have a survey of exports. >> how available is that

information? >> that information is available from the customs people and we have been working with them on speeding up eia's ability to get that data. >> okay. dr. evanger, i know your testimony in your briefing book, and in early 2014, you state that the exports would increase infestment and infrastructure will generate income and jobs. do you think domestic transportation of oil is a major factor facing our energy sector? limititations on pipelines as an example? would you turn on your mike. >> i think the fact we have not

built major pipelines, keystone one of them, is lead to a more dangerous system by rail particularly and also by truck and barge. a more expensive transportation line that is needed than if woo built pipelines. so i think that we will except unconventional oil and gas drilling we need to build the infrastructure to get it to market. >> i recognize the gentlemen from kansas for five minutes. >> thank you, mr. chairman. i did work in the run up to this hearing to see which of you predicted $66 oil and none of you did. i could not find anyone who did. i saw a few traders who made the claim they were on the market and got to the right spot. i mention that because i hear

you talking about more data and information in the hands of government. i think if we unleashed the markets glorious things will happen. i heard people talk about export bans lifting and that seems like a good direction. folks talk about the jones act and we have imposed enormous cost on refiners and we have seen a government agency that is dealing with what happened in the marketplace and can't get a set of rules out to tell folks what to built. based on levels congress sets, we as policymakers shouldn't be certain that $63 is here tomorrow let alone for two months or three months. no one mentioned the greenhouse gas rules that will hit cafe

standards. and you mentioned natural gas transportation and you said if we could get there -- i don't know what is standing between us and them. natural gas prices at prices folks want to invest but marks are operating in a state of uncertainty and we should not think we have any possibility of getting in front of that place. i think it is important we don't lift the export ban because today we have certain oil prices in the low $60 range. i think this is the kibed kind of thing policymakers should consider. you did a report a month ago on what affects gasoline prices. the saudi arabians changed the world in the last quarter. does that change the study you

put out in any material way? >> no, i believe the study would be valuable still in trying to understand what it is that relates the price of gasoline into the united states to the global market for crude oil or gasoline. i think that your comment about did eia predict $65 a barrel? no. we have hit the bottom of the 95% confidence range and for the

$2.80 here today -- west texas interimmediate the 95% confidence range and if it will fall in there for april of the coming here and $50 to the low side and $90 to the high side and that is telling you that the people in those markets are not sure either. >> i want to ask anyone who wants to answer this. i read an article that is pop news more than anything else about whether opec still exist and whether it is still the same force and could impact markets in material ways. anybody care to say today opec is dead?

>> i think market power waxes and wanes. but if you have enough production outside of these other, you know, low cost high volume producers their market power is reduced and that is what you are seeing now. the distribution of crude oil outside of these few players, which north america is a big force today, is undermining the capacity of other folks to con train strain output and that is the reality of it. that is a huge benefit of this north america platform.

>> last week i moved my office after ten years and we were throwing out all kind of things and there was this huge chart that said the world according to oil. and it shrank or increased the map of different countries based on the power house of oil. it is interesting because that was probably about 15-20 years old. the united states is tiny and saudi arabia and venezuela were very big and i could not help think if we did that map today how different it would be and that is a good thing, i think. it was asked about the political aspect of that and as the ranking member i care very much about the political aspects of it. i like the idea of countering

mr. putin. european countries were not standing up to him because they needed oil. but if they could buy our oil they might develop a backbone. i looked at this in a different approach than i did before. but everything of course is still a balancing act. i care about the environment. we want to make sure that we can continue to export and increase the export. and i think it is a balance. so i want to say, i read the findings of the report that found lifting the ban on crude oil would boost economic growth and larry summers called for lifting the ban also. let me ask a few questions and anyone can answer. it department of commerce granted licenses to export

relatively small amounts of ultra light crude as condensate. i believe condensate comes from shell plates. please correct me if i am wrong. and increase the production would mean more fracking, would it not? it would? >> yes. >> okay. among the companies exporting condensate which ones are they getting their condensate from? >> eagle ford in texas. >> okay. and where did it go? are the existing refineries in friendly parts of the world that take the additional crude? >> i think most went into the far east probably korea or maybe singapore.

the public commerce has a different policy toward handling data than eia and this is considered proprietary information. so i don't think it is public yet. >> petro chemical feed stock is growing so it isn't going to refining it is going to petro chemicals so the far east makes sense. >> i am asking these questions because obviously in addition to economic and environmental and political factors, and i think the whole thing is a balance, but i do think that this is something we should look at very seriously. it makes sense to me. again, because i think the united states obviously being a world power has to be concerned with the politics of it. and i know when we are trying to get some of our allies in europe, germany and other

countries, to stand up to putin and his aggression to ukraine, there was some backing off because they rely on russia for their energy resources. and i cannot help think if they relied on us, or we were available, we could exert more pressure and that would be an important policy goal for the united states. but i think it has to be balanced with environmental concerns and other concerns as well. but thank you all. >> at this time we recognize the gentlemen from nebraska, mr. terry, for five minutes. >> thank you. one of the reasons i ran for congress 16 years ago was the high level of reliance on foreign fuel to fuel our economy and wanted to changing change

that. i am pleased to see we are down to 33% of our fuel needs so why do we have 33% import of oil in the country still? >> within a year and a half the united states is likely to be a net exporter of natural gas and are already there with coal. we don't import much electricity. a little from canada. on the oil side, we import crude oil only and those numbers will come down if you say do you want that to go to zero and the

answer is not necessarily. >> and particularly venezuelan oil bothers me. but do we have a political responsibility to allow some importation of venezuelan oil? >> i will stay away from the policy decision of what we would want to do with venezuela or not. but i would say venezuela is at the top of eia's list of what could go wrong in the global market. you have iranian sanctions issues, isis in iraq and maybe opec will decide to reduce production and you would have difficulties in russia. there are lots of things that could make prices go up. and prices could go down, too. what triggered the prices coming down over the course of the last

months was the unrespected recover in libia and china slowing down and receding. and in that background of increasing oil production the combination was the tipping point and changed everybody's mind. >> we want this to be productive for the united states >> and mexico. >> let's say north america. >> and there maybe solution for the platform that allows imports and exports.

refining configerations are all different kind. that heavy crude ought to come from canada and get processed where it is most valuable. >> that makes sense to me. i will follow-up on our -- your comments. do we need to expand refining capabilities in the united states if we are going to have a mix of more sweet and then the heavier crude from canada? who wants to go with that one? >> well it is difficult to convince refiners to expand capacity when the demand in the united states is going down. typically refineries are built closer to where consumers are but we have an advantage in

technology and natural gas being used as refinery fuel that make our refineries the best in the world. and taking advantage of those situations is what the refiners are doing. exporting products into the global market. >> ms. gordon? >> the global production isn't type-specific anymore. it is happening all over and this is going to happen in refinery. the country that added more refining was saudi arabia. we are seeing china adding as well. so demand is in the developing world really. so to move that demand closer, refined products closer to people that will consume --

latin america, middle east, africa -- that is where future demand growth is -- throughout asia -- so the whole market is shifting somewhat. i don't think you can draw a circle around north america easily in this market. >> although, i want to. >> i know. thank you. >> and at this time i recognize the gentlemen from new york for five minutes. >> thank you, mr. chair. >> in a number of hearings i attended, i noticed the subject is an environmental issue and there are issues about the estimate of the cost and the benefits. and that is fine. they explore the assumptions made in the roads of uncertainty or certainty or the estimates and how sensitive that is. this is a major focus about the projections on climate change with much emphasis on the

uncertainty and what we don't know. and what we have learned from the forecast models. and they often miss changes that are significant. we spill blood and treasure over this fuel. we need to understand the implications before making the change. noted when providing the results of the latest short-term energy outlook that he includes the disclaimer of the declines in crude prices and how they might affect your outlook in the coming months. i would like to better understand how robust the benefit estimates provided in the study referred to are likely to be. dr. evanger points a positive picture from lifting the ban

reporting a gain in gdp to 1.8 billion or trillion. that is dependented upon the scenario is used. eia's model results is based on this. what are the assumptions i would ask the panel about the world price of oil in the underlying eia scenario and how would changes in the world price impact the given estimates?

>> it could slow demand and the other affect it could have is make it less profitable to export gas from the united states and the reason for that is exports of lng from the united states are predicated on selling into a market where gas is priced at a lower equivalent and the spread or profitability of exporting the lng into the global market would be reduced and might change those dynamics a little bit. so there are going to be a lot of places, you know, in our forecast, i think, where building in and a possibility that lower prices could stay were a while and would have an impact and we will have plenty

to say about that in the coming months. >> ms. gordon, do you have anything to add to that? >> if i could add, sir. if we look at past situations where there were price declines, i think you can look international and say the price declines become the engines of renewed growth because the china and india and brazils of the world, if they see $50 oil they will say let's rev up projects that didn't make sense at $100 oil. and remember in '98 the price fell done to $37 dollars in a few months but it came up into the $70s and worked up to before

the current price dropped. so low oil price for those countries that are huge importers and fast growing populations their oil prices a booming and it will rejuvenate the chinese and indian economies and hopefully bring the rest of the world along with it as demand for good and services once again intensify. >> i yield back. >> time is up. i recognize the gentlemen from virginia, mr. griffith, for five minutes. >> patretroleum coke. you said earlier in the testimony with was worst than coal and i am guessing you mean from an environmental standa standpoint. can you explain that? >> with heavy oils you have the high carbon bottom of the barrel

so when you put in this capacity that takes the molecules you get more liquid which is good but more solid. it is a solid fuel. if is very high quality, which doesn't come from refineries, it goes into the steel and glass and ceramic manufacture. high end sulfur and heavy metals coming from the oil production process, that goes into power were production and team. it has ten percent higher green glass than coal and higher sulfur than some of the worst coals. it runs counter to coal. so when coal is priced high, as it had been recently, and before exporting the coal, china wanted the petroleum coke was it was economically benefits to burn

that. if you remember the news stories last year in detroit there was a pile of petroleum coke that got a lot of attention in the press. if is spreading in alberta because it is landlocked and they cannot export it. so they will want to send it to us so we can export it because we are close to the ports of call. >> you said it is now cheaper or more expensive than the coal products? >> coal prices came down but pet coke is -- it is really priced to sell. it is very hard to get data. it isn't traded or it is and it is person-to-person or company. it is as a by-product of refining and no one wants to

make it, it builds up and you have to get rid of it. so refiners want to get a lot for it but if they can't they have to put it into the market so the price is volitile. >> so we would be better exporting to central appalachian than china? >> that goes first. >> pipelines were brought up and building them and the safety of bringing the oil and i think i understood from the comments that the general understanding was that the oil is going to find a way to the united states coming from canada whether it is pipeline, truck, or train? is that a fair assessment?

>> the question is cost. the reason the pipeline. there is a value in rail but when capital is deployed it is interesting. you want a major trail loading facility and you just need a permit. if you want to build a pipeline, you will cross federal land or do an action that is going to trigger a need for review. so the regulatory field is unbalanced. want to build a pipeline? you have a mount of paperwork and interveners before you. >> one question that deals with the united states winning a trade case against china over their export ban.

how does that case then appear from a public standpoint when we are banning the export of oil products and does it weaken the president's hand in the conversation about exporting and the united states' position on the oil? >> it has been raised in the think tank community as an issue and i know a number of international trade lawyers that think it is possible that someone might bring an action against the united states for the continued ban on crude oil export on the same premise: it is an unfair barrier to trade. >> i would add because china tends to be heavier, they are not well-suited and because we can export product -- >> china bringing action but

think tank world there is concern someone else might bring action. >> i appreciate that. my time is up. i yield back. >> that concludes the questions. would you like to ask additional questions, mr. green? >> i would like to follow up. >> i would recognize you for five minutes. >> the energy conversation act of 1975 you discussed importantly addressed vehicle standards, energy efficiency, conversation and created the petroleum reserve. if the next congress addresses the export issue, should there be an issue to address the other sections like the petroleum reserve? >> i think we are in a transition when it comes to oil and that is obvious. so oil and energy policy is

going to be an important new chapter that follows that. >> well, most of that is east of where i live in southeast texas. and it is important but again if we are producing what we are -- although we are not producing enough oil for our own com consumption mainly because of the types of oil we had. and like i said, the refineries i represented over the years, have been retooled to do the heavier crude. and it would take, millions of dollars to go back to do the lighter sweep. and just like you said, it is an investment decision if that happens. jow talked about the environmental risk in your testimony and you are seeing conflicting articles on the export. is the united states refined product better or worse than the product currently consumed in

parts of the world? do we produce gasoline or diesel better than india or china, for example? >> from a climate perspective it is carbon and similar. from an air quality perspective it is dependented on the refining specifications and they are lower in europe and asia. >> i know if there is a ton of carbon going up in chai sonia that is the same as a ton going up in east harris county and that is why we would like to see a national agreement so we don't compete with one hand behind our back. as the united states produces more light sweet crude and exports condensate the ultra low sulfur diesel and that is benefiting some of our trading partners in latin america particularly and i assume europe

because we have low sulfur diesel and the refining industry went through problems and they are doing well in exporting it. does that help the climate reduce the pollution issues in other country? >> not climate but air pollution. so better in the air and much more respitory issues. >> that is more immediate than the rise in sea level. but it does have a benefit. let's talk about petroleum coke. the highest points in my district is the land fill or the parts with petroleum coke. it is shipped out. in the 2005 energy bill where we set-up loan guarantees for a number of things, including wind and solar, and my colleague isn't here, but we put in for research and what we could

utilize it for other than ship to china and india to burn which puts carbon in the air but the local -- is there any support for trying to use this? i got involved with coal ash because it was used in road beds. anything else we can use the coke for because we cannot burn it here because it is so bad >> it is a matter of taking the bottom of the barrel when there is no economic left and putting more money into it. there are things you could do with the coke and take out the heavy metals and sulfur and make it a beneficial by-product but it will take money for that. >> so it is cheaper to put on a ship and send it to someone else

to burn it. >> i think it is important to remember this is strategic efforts. we are still connected to the world oil market. we might have to change the way we distribute the spr because of the huge flow of crude oil in the gulf coast but i think we should -- and we will study this carefully -- but things can change in the world. we are not getting rid of the 82nd airborne and the world could change and we may need that. a price spike in the world oil market from a catastophry could do a lot of damage. >> and the goal where i come from was to buy the oil when it was low and release it when oil is up. >> mr. chairman, you have been more than kind. thank you.

>> a member from texas is here and he was elected chairman of the republican study group and he is a member of the energy commerce and subcommittee and since you sat there for all of these hours do you want to ask a few questions before we get out? >> i think i heard the voting buzzer go off thank you for recognizing me and allowing me to have the time. i will keep my comments short. one of you, well more than one of you on the panel, talked about the cumbersomeness of having federal policy trying to interfere with free markets and i think it is something we on this side of the room need to always remember. that any time we try to violate the laws of economics it is like violating the laws of physics. and gravity is an example. the more you violate the impacts

of gravity the harder the impact at the end. and that was one of the things my economic instructor taught me in college. so i think we on our side need to be reminded that the free market works best when it is let's the -- when the federal government doesn't have too heavy a hand. there was some conversation about the transparency related to the oil markets and i would disagree with them because of this. if you say there is no transparency that means the buyers and sellers out there taking this oil and refining, know-nothing about it. and that is not the case. that oil is being moved around, bought and sold and refined and put into finished products and being sold to an end user and being consumed.

so saying there is no transparency in the market is just false. buyers and sellers are out there and happy with the level of information they have. if they were not, there would be no trading or commerce in those products. so i would not like the panel to get too fixed to those comments because they are just not true. with that i field back and thank you and i hope everybody has a good holiday and merry christmas. >> mr. chairman, i really ask for consent -- >> without objection go ahead. >> there is some transparency in the market. it is working but the best example of why there is not enough information is the explosiveness of the rail taking the bulk of the oil. the market didn't know the competition of the oil and the

equipment isn't designed to deal with the oil so we are seeing physical manifestations of not enough transparency in the market. >> i want to ask for unanimous consent that this paper from the united steel workers be included in the record and i have an article on the rules of inland and talking about fracking. >> these will be included intimate record and i will put in the record letters from the petroleum institute, and petroleum manufactures and diesel forum. that concludes today's hear. i want to thank you for your

testimony and patience in responding to our questions. we will have more hearings on this once we reconvene for the 114th congress and the record is open for ten days for additional record >> i want to join with you in wishing everybody happy holidays. >> you think we should >> merry christmas, happy holidays, and enjoy the break. that concludes today's hearing. ...

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