>> what does the epa proposed or how does the epa proposed that you respond to those stranded costs? what is their expectation? >> this is an issue that we have raised with the epa before the proposal was put out to notice in hopes that would be taken into consideration and in our view that hasn't been taken into consideration and we don't see at least at this point the offramp and we have expressed this concern to epa in our comments so we are waiting to see how they might respond in june when they come out with the final proposal. >> so you have not had a comment back or there is not a process in place to get a response back for the cost that you have indicated your state would have to pass on to other states but also expect the places where

your organizations have contracts with ongoing electrical power? those costs you don't know how those will be handled? >> at this point the epa has not conveyed how they would address that particular comment. the conversations we have had with epa have been primarily to get clarification on some of the corrections we pointed out within the proposal itself. >> bpa claims of the rules give states flexibility to create their own plans but it appears that overlooks the fact that electricity transmission does not stop at the state borders. many states including south dakota plant -- rely on neighboring states to ensure the reliability of the grid. epa's modeling suggest under the 111 d. proposal wyoming could cut his generation by 7.5 million megawatts or a million megawatt hours.

how will wyoming continue to -- how will you continue to power the regional economy with cuts like this and is that an accurate statement? >> as far as how we would continue if we are looking at closing down existing power plants that would create a reliability issue however this is getting a little bit out of my expertise within the expertise of the public service commission in terms of how to maintain the brea -- reliability of service to all of its customers. >> thank you. appreciate your time. mr. chairman i yield back. >> thank you senator rounds. senator carper. >> thanks mr. chairman. each of you welcome. thanks for the work you do and thanks for sharing your thoughts with us in responding to our questions. i come not as a sitting senator but as a recovering governor

wants to share the perspective from the state of delaware. from a guy born in west virginia so i was -- so i come from a lot of different perspectives. i know you are trying to be in compliance with clean air standards and we would have been out of compliance and the reason why is because the folks creating cheap electricity to the west of us came our way. we are at the end of america's tailpipe so is maryland and so is pennsylvania and so is new jersey and new york. i am a firm believer in the golden golden rule treating people the way you want to be treated. i think they're important concerns and we have to be mindful of them. epa needs to be mindful of them as well but i as well for violation of their note their other folks that are personally affected by your ability and some people in our country to develop cheap electricity dirty electricity and we suffer the consequences. i don't like it.

we have not liked it. we have tried to gone to court and we have finally succeeded in doing that. get in your car with me and use your imagination. going to southern delaware and we were driving down pine brook road to the east to dover bay. we get to the delaware bay and is to be a parking lot there, big parking lot there. it's not there anymore. actually it's underwater. you look off to the right you will see a booger sticking up out of the water about 500 feet out. there used to be 500 feet on land. now it's 500 feet out into the water. something is going on here. we don't just make this stuff up. the key is for us how can we have cleaner air how can we address the issues of rising waters? delaware is the lowest lying state in the country. in order for us to address this we need to work on it together.

i'm not interested in jamming anything down your throats but i'm interested in working on this together. my understanding of the rules that are being contemplated here you don't get a lot of credit for that and a credit i guess goes to california and those other states. we have to be able to figure out how to deal with that. we ought to be able to figure out how to deal with that, pay? the lady from california sounds to me like the economy is doing well and a cleaner environment is stronger economy think you have answered that. we think the answer is yes you can. i think most of you at this table would agree with that. a couple of things and folks in california you are a situation where he acted early. you have been a good citizen, good steward and my sense is you are going to be punished for it. we are in the same situation.

we don't like that. what do you think we should do about it? >> i think your comment earlier about states needing to work together is exactly correct. to my friend from wyoming my local utility the los angeles water and power concluded a large agreement with a new wyoming wind company to import wind generated electricity from wyoming to help replace some of the coal-fired energy that they have been relying on. they are actually taking responsibility for being the largest in our state even though the electricity we were using was coming from utah as it happens and there will be costs associated with transitioning away from the cold and into the wind but overall the net of it is that los angeles ratepayers will still be doing okay because

the utility is taking steps to help their customers become more efficient in their use of energy and that i think is kind of the critical ingredient here that if our rates go up because of new investments that we are making that has to be offset in some way in order to shield the ratepayers from rate shocks and things that would just make it untenable for them to go forward on this cleaner electricity plan that we are on. given some time for the transition we can do it. i do think it was right to come up with a crediting mechanism. i think epa needs to do this they want to encourage regional kwok ration as they say they do. they are going to have to allow states to work together either bilateral or regional basis to come up with programs where they can effectively share the cost

and the benefits. that is what we are doing right now there are agreement with the canadian province of québec where we now run literally a bistate by national trading program with emissions allowances. it obviously not everybody is going to want to go that far afield but the concept is one that has been proven to work. >> three briefly can you give me what you think is a fair compromise. the issue of wyoming generating this clean energy and shipping it off to california and other places and not getting the credit for it. what's a fair way to deal with this? what is a fair compromise ms. nowak really quickly? >> i didn't fully understand your question. >> mr. parfitt can you answer this as it pertains to you? >> as it pertains to the claim power plant i think the tuition their three issues here play in

the first is the attribution of fossil fuel emissions co2 emissions being attributed to the energy producing states and the other issue that is at play here is the renewable energy generated in wyoming which 85% is shipped out of state. applying an escalator to that 100% of that to the producing state it's unfair. >> mr. chairman i will say this. we have a significant compromise here and you will have to help us. >> senator capito. >> i would like to thank the panel and ranking member. let me say a few words about my home state of west virginia what we have had to say about the clean power plan. our own epa has called it patently illegal invading the province that has been put

forward with the finesse of the ball in a china shop. we have joined, i would note in the comments at 32 states have submitted negative comments or the comments of great concern to this rule while the numbers that have submitted comments are much smaller in terms of states. i want to talk about the reliability issue. west virginia has joined with other states, probably several of yours to block this plan and we will be hearing this suit in the next several months. the epa in west virginia or the db in west virginia said the schools are unattainable and we have heard some testimony to that. with that in mind i would like to talk to mr. easterly because we have a lot in common in terms of your production of electricity predominately with coal. we have 95% of our electricity generated by coal for obvious reasons. we have a lot of coal although not as much as wyoming.

epa has indicated it does not have significant concerns about reliability. last week pjm interconnection released analysis that found clean power can trigger 49 gigawatts of generating capacity. let me quantify 9 gigawatts is the equivalent of electricity used to power 50 million homes. this is one of the studies recently released that i think i'll tend to question the reliability issue. are you concerned about reliability and indiana? i would note that ms. nichols did note the reliability as an important month but i would like to hear your comments on that. see i guess we are. we have another group that deals with reliability but here's a fundamental problem. even apa's best that process has more fossil fuel fired productions the new generation of renewables and lands and other things.

the plan necessarily forward is the flexibility of our electric supply in the united states. add this to the fact that we have had record pjm demand days. they are a little better handle this year than they were with the polar vortex and so we have increasing demand decreasing supply and the renewables a pro i is valuable but it's not reliable. so sometimes the wind is blowing and sometimes it's not and sometimes the solar panels don't have clouds or snow on them and sometimes they don't say you can't count on them for everything. their capacities higher than a generation and they are not always available when you need them. i am very concerned as are a lot of people in the industry that we will see some catastrophic results sometime during implementation of this plan. we just don't know where or when.

>> ms. nowak deal to comment on the reliability issue? >> we have significant concerns from the perspective of system reliability. the modeling program used by the epa to evaluate the building blocks and whether the goals are achievable it uses less robust data been possessed and used by her own rtl. they are responsible for maintaining our grid. unfortunately the epa never asked to do any studies of the grid prior to releasing this proposal. examples of the work we think needs to be done gathering information on deliverability for gas-fired units plans for a placement in its impact on the increase of an event renewable resources on reliability and considering the electrical grid location deliverability of units to be expected to be retired. again the modeling used by the epa doesn't appear to consider any of these fundamentally

necessary factors. >> in my state we are heavily reliant on coal. to transition these plants to natural gas is not a realistic endeavor. it's an exceedingly expensive to build new ones takes a lot of time and a lot of energy. you will expect energy to move forward on this as well. you have also recently closed one of your nuclear plants in wisconsin and your plan that was put forward for you under this clean power plant does not take into consideration your loss of nuclear power. that has to be a problem in terms of meeting the challenge. >> eventually that will be replaced with a carbon-neutral source. that will increase costs of the

proposal for wisconsin to comply. >> but me ask you a quick question. we have a hearing last week on ozone and the new regulations that will be put into effect. does every county in california compliance with current ozone regulations that we have presently? >> nau senator we are not. we have remaining challenges in southern california and the central valley. and the new ozone standard will add an extra challenge as well as extra time to that effort. >> you put that on top of what we are doing with clean power. >> we care about the health of virus citizen senator. >> i care about that. >> we rely on the science. >> in terms of how we are going to meet this challenge and in terms of our timeline's extension of timelines extension of measures what is going to be

the best and i will ask mr. parfitt from wyoming what's going to be the easy thing to knock down on this clean power plan is going to make the biggest impact to meet the challenges? deadlines, timelines lower standards, less reductions? c certainly timelines are a big component of this when you consider developing a plan in and the time involved with that in the complexities and the amount of agencies in states that would have to be involved in that discussion let alone the legislation and the rules we have mentioned here and the time that would take seem to be problematic. >> thank you senator capito. senator murphy. c thank you very much mr. chair and underlying business discussion is a challenge we have a carbon methane pollution and the impact it's having

across the world. we don't have to look across the world. we look to my home state of oregon and indeed we are seeing that the fire season has grown by 60 days over the lateral decades and a number of acres of forest that has been burned has increased dramatically. we have an oyster industry that's having great trouble because baby oysters have trouble forming shells because the ocean is 30% more acidic than it was before the industrial revolution. we have a farming community that is suffering significant repeated worst ever droughts because the soil pack in the cascades is steadily declining in this year's one of the lowest ever. while rain earlier in the year can fill a reservoir if you don't have the snowpack, august you are in trouble. as spc this impact on farming and fishing and forced rewrite now we are not talking 50 years, 100 years into the future.

just like delaware senator carper was talking about land that is now underwater. should the entities that are being damaged by carbon pollution be able to sue those who are generating the carper proportional to their contribution mr. easterly? >> i'm not a lawyer so remember the environment of our earth has been changing for all of recorded history. indiana used to be under huge ig. there are natural variations in the things you talked about some scientists would say or do to the oscillation and they are likely to continue. >> mr. parfitt would you like to answer? >> i would echo those comments. this is a legal question that i'm not an attorney that can address that.

spin attack okay legal question but the principle you understand when you do damage to your neighbor shouldn't you bear some responsibility as a basic fundamental principle? >> i think this is a complicated question. >> okay thank you. >> users may have some responsibility so from a legal standpoint -- >> if you don't want to answer the question that's fine. ms. nowak. >> if they are following existing law and regulation i would think it would be a chilling effect and an it objected to legal claims. >> everyone in the first year of economics learns about externalities things that are not reflected in the market. certainly our libertarian friends would say when he do damage to your neighbor you should compensate for that damage. the fact is carbon and methane is produced in a million giveaways and there is no state that doesn't produce a lot of both but we are seeing a

differential in all states are taking us on. oregon is now 70% of its electricity is produced in fossil format and ms. nichols uber referring to a 2020 goal of wonder but that didn't include hydropower. what is it with hydropower included? >> if we included the hydro that we received we would be above are 30%, 33% goals. so we chose not to add it or the legislature chose not to edit or nuclear because they were trying to push forward solar wind geothermal biomass. >> if that percentage was included with other non-fossil? if you include the other non-fossil? >> we would be about 40%. >> you have got to aim for oregon. we are at 70%.

we often respect greatly the examples you are setting particularly you have set up a marketplace. if we turn back in time there was a proposal that came really from a right-wing think tank about using markets to regulate sulfur dioxide to take on acid rain. the concept was not to regulate every smokestack but to proceed to set up a marketplace and verify the most cost-effective solutions would be adopted. how did that work out or do you have memory of that? >> senator that was the assistant administrator at epa when we implemented the program and i'm very proud of the success of that program. it did reach its goals in terms of the amount of sulfur dioxide that was reduced and it did so less expensively. we relied on that plan into signing our cap-and-trade program in california. the marketplace works well and lower costs and faster results

than anyone anticipated. it was an off the charts success success, congratulations. why would the same strategy worked well of carbon dioxide? >> we believe it would. it was as you know defeated here but within california it was actually put on the ballot and voters chose to keep that system and the effect because they i think they became convinced that it would lead us to cleaner energy future. >> they want to see carbon dioxide reduced in the most cost-effective manner to receive positive results. isn't the clean power plan based on the states developing their own plan through a range of different choices? that's a possibility. >> it's clearly allowable. it's not required. i know epa was very familiar with their program when they designed the rule but i also

understand they tried really hard doesn't seem like they have quite succeeded just yet anyway to indicate to states that they would have the ability to design a plan that fit their own unique situation. >> thank you. >> thank you senator merkley. senator barrasso would be next but he is graciously conceded to senator boozman. >> thank you very much. i appreciate it. following up on senator merkley's question you are out of compliance for ozone and the epa's regulatory impact analysis says the annual in costa california would be 2.2 billion dollars per year. if you like individuals should be able to sue for noncompliance? >> under the clean air act citizens have the ability to sue epa and directly the state for

noncompliance with any element. california has submitted a state implementation plan and we are in compliance with their plan. we are moving forward steadily every year bringing down our levels of ozone and we have come into compliance and many counties. >> your argument is if you are doing things as required by law then you shouldn't be sued? >> one of the reasons why we are here to defend the carbon plan the epa plan is that it helps us with their ozone standard as well. we need all the help we can get. >> with regard to the question do you agree with ms. nowak in the sense that if you are in compliance with the regulation requires you shouldn't be sued. >> mr. boozman i went to law

school too and we were taught that anybody can file a lawsuit. >> i didn't go to law school. >> anybody can file a lawsuit. >> i guess what i'm saying what she is saying is that would wreak havoc. when do you feel like you were going to be ozone compliant? >> at this point we are protecting off into the future. we are working as hard as we can but it will probably be as challenging if not more challenging to meet the ozone standard as it is to meet the greenhouse gas standard and that is exactly why we are supporting the epa rule. it will help us with both. >> do you agree it will cost you 800 million to 2 billion -- to 2.2 billion a year? >> i can't verify that number but the economic analysis that epa did in advance was using all

the tools that we would have used in the same way. >> okay. thank you mr. chair. >> thank you senator. >> thank you chairman and thank you to the panel for being here. let me ask first commissioner nowak and 2013 commissioner nowak the "milwaukee journal sentinel" published an editorial in your home state that said and i will quote climate change is happening. human activity plays a huge role in that. the consequences of doing nothing could be dire and expensive. do you agree with the milwaukee journal sentinel on that? >> thank you for the question. my role as a regulator we ensure reliability of the grid. i did not or do not endeavor to

take on the policy behind what is before us. my role has been analyzing it and the rules that come before us. i look for three things. the environment a to rule this coming does it compromise the affordability, the safety and reliability of our great? that's the lens that i looked through this rule. >> no amount of our mental costs would figure into your analysis then. >> no, that's not what i said. see that that's exactly what you said. >> the environmental rules cannot unduly compromised their reliability. >> no matter how great the environmental cost? >> there is a balance that needs to be struck. >> how do you strike that balance if you don't know whether climate change is happening and whether human activity plays a huge role whether the consequences of doing nothing could be dire and expensive which i assume expensive is a word they would fit into that calculus.

>> we look at what the impact on our ratepayers would be in the benefits to the environment under the proposed rule. >> but the impact on your ratepayers could be felt through climate change as well as through the rates that they pay could they not? >> and that's not part of what you looked at them part of your analysis? >> the benefits have been put forth by the epa in their plan and we are weighing the costs against the benefits that the epa has proposed. >> for what it's worth the executive director of the wisconsin business alliance has called energy and economic opportunity that will quote results in job creation and cleaner and a quicker path to independence. she said we should look for opportunities to promote jobs and the environment and big clean power plan is a good way to do that. mr. parfitt rocky mountain power power's owner is a spokesperson

for rocky mountains owner says multi-approaches are less costly way to make that clean power plan's targets. the "star tribune" is said and i will quote the montana officials have held earlier discussions with other states about the prospect of corporate in to meet the epa's targets consistent with what the rocky mountains -- they have thus far rejected regional advances. montana which is also a rural state that generates a significant portion of electricity from coal has come up with five draft options for complying with the proposed standards including options that would not require montana to shutter its coal plants. if montana can do this why can't wyoming and montana will work with other states why won't wyoming?

>> well, first i will address montana's five different alternatives. in their alternatives they assume that they will get credit for 100% of the wind energy and that's not what we have been or has been conveyed by epa. we were told that we would get no credit for wind energy consumed outside of the state so that's one difference. as far as the multistate discussions, i will say that we have been involved with the same group the center for new energy environment and participating in those conversations along with montana and 13 other states. there are challenges with the multistate plan particularly when we don't put no with ankle is going to be. all we have right now is what has been proposed. we don't know how epa is going to change the proposal based on the comments at them and receive so we don't know what the

targets are going to be. >> do you agree that climate change is happening that human activity plays a huge role in it and the consequences of doing nothing could be dire and expensive? >> i'm here to talk about the clean power plan and whether or not we are going to do something to address the co2 emissions whether or not this is a good plan and is a workable for wyoming and the answers is not workable for coming. >> the respective of the amount of damage the co2 might do there is no harm that could cause you to change her your point of view on that? >> not on the proposed plan and what that does two plans. >> very well. finally mr. easterly halev you built the costs of climate change for indiana into your analysis of the value of the clean power plan?

>> i don't think you can quantify any cost to future climate change on the state of california. >> why do you not think you can quantify? is that not part of your job? >> there's nothing concrete to quantify. >> have you read that a 223% likely energy costs could come? >> this is from the clean power plan. >> this is in increase pulling load. you are not familiar with that report obviously. >> not that one. >> when you are talking about the cost of electricity are you talking about per kilowatt hour? >> yes. >> let me say if i could and i'm sorry to go over but can i make a point of? it's very brief. >> how long is the rhode island point? >> less than a minute. average monthly ills of

residential customers in wisconsin or $95.21 and indiana $110.44 and wyoming $90.84. in rhode island they are lower than two of the states. even though her kilowatt hours costs are higher because we invested in energy efficiency and status figure that bought matters in the pocketbook. >> thank you very much mr. chairman. first to ms. nowak is affordability reliability and safety the three that you consider? >> correct. >> mr. parfitt just to review when it comes to have the epa credits renewable energy wyoming which produces a significant amount of renewable energy still stands to be severely disadvantaged. you talked about how much wyoming could produce in terms

of wind energy and he said 85% of wyoming's wind energy is exported to a number of other states and i heard chairman nichols say california wants to buy even more wyoming wind energy but the epa has said no renewable energy is going to only be credited to the state words consumed not where the energy is creating the hosting state which means wyoming gets no credit for the wind energy at develop so i appreciate senator carper saying that needs to be addressed. my question is how will this impact wyoming's ability to obtain our emission target and how much additional renewable generation would we have to develop just to meet the epa's proposed target? >> this makes it difficult for wyoming to achieve its target. he has met over new rules would be somewhere around 9 million megawatts of wind energy that would have to be developed for us to meet our

target. right now wyoming consumes 600,000 megawatts 600,000 megawatts of wind energy. that equates to about a 14 or 1500% increase over nobles that wyoming uses right now. >> and you mentioned a lack of flexibility from the epa. in giving wyoming what we would need in terms of continuing to produce a lot of the renewable so you mention more than half of the land in wyoming is federally owned and this has a significant impact on the mandates coming out of the epa. your reference to permits to the esa requirements for which wyoming has absolutely no control and it doesn't seem the epa is proposing any sort of relief and plans to address these and you specifically said only one sixth of the total area of the epa has identified for

wind energy development is actually available for wind energy development. sage grouse and permitting requirements for it seems the epa is telling people in wyoming to move faster and renewable energy while refusing to acknowledge washington's foot is still on the regulatory breaks. can you go into more detail about how federal landowners and the red tape that goes with developing energy resources on that land is a washington roadblock that the epa ought to address if they want wyoming to develop cleaner energy faster? >> guess on what we have seen for wind energy projects we have to go to the nepa process. they have taken anywhere from four to eight years to be approved to the nepa process and then there's an additional fish and wildlife service process for eagle permits. those only those will add to

the time involved in the other piece of his transmission. you have to have transmission to move the energy out of the state and those right now we have two projects that are taken up to eight years to get through the permitting process and they are still in that process now. >> we had previous discussions and debate and votes in the energy committee under democrat controlled senate in the past and democrats specifically voted to block transmission lines on the public lands which half of the wyoming land is public land so i think that is played into exactly what you are talking about as well. >> that is correct. >> also talked about the potential closure of four coal-fired prior -- plants and according to the wyoming public service commission. that is lost investment and who knows how much it will cost to replace the lost power. that will be past time i would

assume to citizens within the six state territory of pacific core and a senator whitehouse asked a specific question about pacific core. would that mean that folks not just wyoming to california washington state oregon idaho and utah are all going to get a big new energy tax increase because of what the epa is trying to do in closing those for power plants in wyoming having to build new plants and am i correct in characterizing characterizing what you are saying? >> that is correct. those costs would be distributed amongst the states involved with that system. >> california would have higher electric bills as a result of the epa mandates here? >> there's a portion of northern california that's part of that system. >> a growing number states are raising concerns of a new type of implementation worked out with epa is immediately going to become federally enforceable

making the state vulnerable to sue in civil lawsuits between environmental groups in the epa but unlike most subtle arrangements which do deal with the single plan under epa's powerplant rule a states entire electricity system could become subject to environmental lawsuits. epa agrees with this concern. during question and answering at an event in february the acting chief jana mccabe being subject to third-party lawsuits if they submit state implementation plans. we have heard of the texas public utilities commission are as well. i guess mr. chairman if there is time to ask a couple of folks on the panel if so deeply the epa can promise some sort of protection against these lawsuits and what are you saying? >> we think the very foundation of this proposal intrudes upon states rights and to have any state plans subject to federal

authority is a great concern of ours. i think studying energy policy should be left up to the states in conjunction with the department of energy and not set by the environmental protection agency. we have great concerns about losing state authority over any of our testing testing laws. >> mr. easterly? >> we do not believe the epa can protect us from lawsuits under the clean air act. they can happen and they do. >> we don't believe we can be protected from the lawsuits from third parties with a state plan as a proposal has been written. >> mr. chairman i'm out of time. thank you very much. >> thank you. senator fischer. >> thank you mr. chairman and thank you all for being here today. commissioner easterly when we have the acting administrator ms. mccabe here earlier in the year i asked her some questions

about the heat rate efficiency assumption for building block one. we no epa relied on the one the analysis for that 6% heat rate. in their own terms they said the epa has supplied the data and accumulative manner inconsistent with how the study was conducted. do you have any other concerns with how the epa developed that 6% heat rate assumption that is out there? >> part of epa's thought process for building block one assume you would operate the plants in a way that gained efficiency which really means you have to operate at a steady state output but then we have building block to which says your coal plants are the last resort. you must operate your combined gas plants first and use the coal plants to make up for swings in renewables and gas and

that which is make it much worse. there's also mission controls that you have to add on to the coal plants which are good reasons to be there but they all decreased the efficiency of the plant because this rule is based on megawatt outputs and there's a huge specific load for controlling emissions. they're a bunch of reasons that the plants are going to a less efficient on a one-hour basis than more efficient. >> do you think improvement is achievable in your state? >> i think we are hoping and hoping is a strong word that we might be able to get 2% if everything was done that could be done but it is a serious challenge. anything that is cost-effective you have a reason to do it anyway if you are the utility because you make more money so the things that are left will only be cost-effective because the cost of not doing them under this plan is more expensive than

the incremental thing you will get. >> that's exactly right and would compliance with other environmental regulations would that have any impact on your state's ability to meet that 6%? >> it will because we still have some utilities that are going to have to add more energy per as the two reductions that aren't there now so that will decrease their efficiency as is calculated under this rule? >> you know i support and all of the above energy policy and many of my colleagues on this panel also support and all of the above that we need to have the balance in her energy portfolios. i think that's extremely important for a number of reasons, security reasons, cost reasons, it's the wise thing to do. do you think that this clean power plan encourages diversity

within our energy sector? >> not in the long run. in the long run it basically is the plan to continue to shut down coal-fired power plants and as natural gas and renewables and those are fine sources of energy but if you've ever been in business once you get close to a monopoly you have pricing power and that gas suddenly won't look like it does now in price. when i worked in the utility industry foreshore period of time we had a natural gas price spikes and it was very disruptive to all of our customers. i'm worried that those are going to happen in the future. >> let me go to another panelists first and then i will ask another question. mr. parfitt do you think we are encouraging the states to look at a balanced portfolio when it comes to their energy needs with

this plan that is before us now? >> from our view the answer would be no. it seems like the purpose is to go to read dispatch of other types of energy sources to replace coal and so it's not looking at a mix. it's really aimed at reducing coal. >> you know i'm from the only public power state in the country. nebraska we rely on our public power. it's a strength for our state. it's a definite strength for our ratepayers. we are very concerned the impact it's going to have on families across our state when and if this plan is implemented. we rely on our coal-fired electric plants. we have diversified portfolios. we continue to develop those but to have a requirement, a mandate

to have those implemented i think in an unreasonably short period of time will affect families and it will affect our most needy families. mr. parfitt how do you view that in wyoming? you are our neighbors to the west. how are your families going to see what's coming to them? >> we share the same concerns in terms of what the proposal will do to utility rates. particularly with our compliance pathway as we see it. we would see an increase to the premature closure of coal plants and the stranded assets associated with that. >> and ms. nowak in wisconsin i don't know what you're energy portfolio looks like in your state but i would assume that some of your ratepayers won't be pleased when they get their bills.

>> not at all you are correct senator. our ratepayers have invested over $11 billion to clean up our air. that is continuing to be paid for and are free of reduced emissions by 20% if you look at 2005 as a baseline. they have done that. we are not getting credit for it. we are a predominantly coal state like indiana a heavy manufacturing state. this will have a very large impact between our modelers between three and $13 billion just for generation alone. that doesn't include any natural gas infrastructure transmission infrastructure that needs to be done so that will hit every ratepayer from the low income to our large manufactures. >> it will hit every family in wisconsin and across this country. >> thank you mr. chair. >> senator sessions you were the first one here in the last to speak so you are recognized. >> kind of like a budget hearing committee.

it makes us all nervous. well mr. easterly i came here and i remember thinking i don't like this idea that there needs to be a mix of sources of power. we should have more nuclear power. that was my simple was my supply the evidence i have seen the arguments i am of the believe that if you become too dependent on one source of power you are not able to have a competition that keeps costs down do you believe that's still a valid concern? >> yes and ironically we don't have any nuclear. i would love to have some but it's hard to build it as you know. it's not likely to be coming in my lifetime. >> it's disappointing i've got to tell you. natural gas rates have fallen and the cost of plants are up and the nrc is more regulatory than ever.

it's almost killing it off which would be a disaster. i think the unifying issue that we can all agree on republicans and democrats is more healthy environments. let's particularly less mercury and things that make people sick or kill trees in that kind of thing. i think we can do better about that and in the course of that i think we will have the benefit of co2 emissions probably the same time. i am not -- to press down on my constituents billions of dollars in costs over the co2 issue frankly. we just need to balance this out and be reasonable about it in my opinion. i believe you said ms. nowak that you believe that these regulations passed the cost of electricity will go up. mr. parfitt in your state do you think it would go up also?

>> yes, that is correct. >> and mr. easterly? >> yes, we just aren't sure how much but more than double. >> ms. nichols do you believe it these past and i'm not sure what you said. >> there has been a trend over decades for the cost per unit of electricity to go up but what we think is important is the bill, what the customer actually sees sees them in that event we are holding steady. we are able to hold that steady. >> even if these new rules are passed? >> i believe so. >> mr. myers? >> i concur they can reduce current emissions and keep electricity prices down. >> now ms. nowak you indicated

that we spend a lot of money, if you spend a lot of money to make coal cleaner than it's ever been before and of those plants are closed are you saying those are the stranded costs and lost investments that are damaging to the ratepayers in your state? >> correct. the cost for new generation only. it doesn't take into account paying for units that have been recently built and our power plants are paid for over many years so ratepayers will be paying for plants that are run much less while at the same time paying for new electricity so yes. >> and mr. easterly i would ask you to see if you can say yes or no on that too but let me ask a simple question. it seems to me that mandates,

regulations on the drive up costs and an economic sense are the same as raising taxes and having the government doing it. in other words the government can raise taxes on everybody in and pay for cleaning up power plants or whatever they want to do to achieve a certain goal. so i just want to translate this into reality for the people who are buying electricity businesses and homeowners and people like that so these mandates require greater expenditures to produce electricity are the equivalent of a tax on their lifestyle. isn't that correct? >> yes it is the different people benefit and don't benefit so if you are regulated utility that makes a profit if the price goes up your% of profits is the same. if you are an rem seed co-op

your customers are your owners and they really see it and there is no net benefit there. >> while i think that is the question, is the tax on the economy were to benefit that is achieved. [inaudible question] dr. longboard from the copenhagen institute said that increasing co2 over the next 60 years is not going to be a detriment to the world. in fact it will be a net benefit benefit. he will agree that if this continues out into the next 150 years you begin to have a cost of the questions some of the expenditures we were talking about today. i just believe that the fundamental thing you talked about how many lives could be saved with a fraction of these costs that will affect people in a lot of different ways. thank you mr. chairman.

i appreciate this hearing and the good witnesses we have had. >> thank you senator sessions. senator boxer wanted to have a moment to enter something into the record so we'll recognize you for 30 seconds to do that and me for 30 seconds or and then it's over. >> it's never over. okay mr. chairman i ask unanimous consent to be placed into the record a very important chart that shows californians are paying $20 less per month for electricity than the national average as we reduce carbon pollution isn't such a great way and i'm so grateful to ms. nichols were playing a role in this. >> without objection so ordered. in my 30 seconds, two documents one from the census bureau this is california has the highest u.s. poverty rate comparing income to the cost of living across the state and secondly from the manhattan institute

migration from california to oklahoma increased by 274% in the 2000's. >> you are lucky to get us. >> with that we are adjourned. [inaudible conversations]

order. welcome the public to this foreign affairs committee and what i strongly suspect will be

the last opportunity to question the former secretary and his team on world events. foreign secretary welcome. good to see you here today. >> thank you. >> foreign secretary, this committee published a report a couple weeks ago on the finance performance and administration of the foreign office. we rather felt the foreign office was at a bit of a crossroads. in our judgment, it had done a good job over the last five years but it is spread rather thinly. the choice now is whether or not we maintain that spread or deepen it which requires extra resources, or we narrow the band width of the foreign office and tailor our aspirations accordingly. which direction do you think we ought to be going? >> it is certainly the key decision, threat versus debt

and this is not a new discussion in the foreign office. i asked the league nonexecutive to conduct a review of the network shift policy that was introduced and changing the allocation of resources and opening some new posts. and i, in the course of doing that piece of work, i discovered that actually this debate has been going on in the foreign office not just during the course of this parliament but for many years about the tension between breadth coverage and depth intensity of resources. clearly -- and by the way, that review suggested that the network shift decisions that have been taken had been broadly the right decisions and it had broadly satisfactory outcomes. i think when we know what our resource envelope for the next

parliament is after the next spending review i think this is a discussion that the foreign office needs to hold once again. between breadth of coverage footprint and depth of coverage and also around the balance between the resource that's devoted to the core bilateral and multilateral relationships and what i call the thematic resource that is focused around the, if you like, diplomatic themes within the foreign office in london. when i came to this debate, it started with a slight prejudice that perhaps we were thinning ourselves too thinly and we needed to put a little more depth in some places. i think the evidence suggests that actually we've been quite

successful in most places managing to maintain a high proportion of output even where we have taken out resources in the interest of broadening the footprint. i think the jury is out. i think it's the right question to ask. i don't think from my perspective i've got a definitive answer yet. i don't know whether either of my colleagues has any more to add to that. >> as you say, a lot will depend on the resources that we have to deploy in the next par element. i don't know if you can say more than that. >> clearly if there were a substantial reduction in resources i think the option of just thinning out the current footprint of overseas posts would be challenging. i think if we were talking about a substantial reduction in resources we would have to look

to footprint. >> given the foreign offices had quite a pounding here in the last five years, i hope we won't come to a reduction in resources. have any preliminary conversations taken place with the treasury on any of these aspects? >> no. the discussion on the next spending review clearly will be a discussion for the next parliament and there's been no discussion about that as yet. >> if you had to pick a reform that you'd like to -- if you -- you know, commence in the foreign office, what's the area you'd most like to pick on? >> well, as i said and you'll appreciate that i've been there a relatively short time and we have had quite a lot of other things going on but if i were looking to start a big new piece of sort of inward facing work it would be around the balance between the resource that's invested in bilateral relationships and the resource that's invested in subject

matter expertise. that sort of crosscutting versus vertical agendas. and i slightly have the perception that the department in the past has had too much of its resource in the crosscutting thematic areas. that balance has been redressed somewhat over the course of the last five years. but i'm not sure that we've got that exactly right yet. we may need to put more of our resource into what i regard as the jewel in the crown which is the bilateral and multilateral relationships which the foreign office manages. >> as far as the present membership is concerned we'd probably agree with you. can i bring the subject to defense spending. you said on the andrew marl program on the weekend that you remain committed to the 2% figure. is that the government's

position? >> well, as you know, what i said i think on the andrew marl show, to get him in the record, the prime minister led the charge at the nato summit in newport along with president obama urging our nato partners to sign up to the commitment, the target of 2% of gdp. we are one of the very few nato countries, certainly one of only two large nato countries that are currently spending 2% of our gdp on defense. now, i can't second guess the outcome of either the strategic defense and security review or of the next spending review. but clearly we have -- we have signed up to that target at newport and not only passively signed up to it, we actively

sought the adherence to the target of all our other nato partners. >> so it would be pretty inconsistent if a future government had a figure below 2%. >> well we're clearly committed to maintaining strong defense maintaining britain's armed forces, and as again i said on the andrew marl show on sunday during my nearly three years as defense secretary, the prime minister was absolutely consistent in making clear to me that he had no appetite for any further cuts in the size of our regular armed forces. the cuts that we had to decide upon in 2010 because of the black hole in the defense budget that we inherited were extremely painful, and we've been very clear and consistently clear that he wasn't prepared to see any further cuts. >> thank you very much. >> thank you, mr. chairman, foreign secretary. i want to move you on to the ukraine crisis.

general sir richard scherr reef command of europe on the record saying we're going to be absent in the -- why has not the uk been more directly in negotiation with resoling that crisis? >> first of all, i don't accept the arguments that are being made. general sir richard scherr reef said several things starting the day he retired from office. i never heard him say anything in office. he's been quite vocal since he left office. i'm not sure he's approved to

comment on this. this is a diplomatic discussion that's been going on. we agreed amongst ourselves last summer the best way of trying to explore the opportunities for a peaceful solution to the ukraine crisis was an approach thread by chancellor merkel simply because she is of all the european leaders the one who has the closest thing to a working relationship with vladimir putin. the discussion took place at the normandy celebrations and for no other reason became known as the normandy event. we were not included. the americans were not included. our view always was that the russians wouldn't have agreed to have the conversation if we and

all the americans had been included. and we think our german and french colleagues have done a good job in very difficult circumstances in trying to take forward a negotiated diplomatic solution. meanwhile, we have played a very significant role in, if you like playing the bad cop role. we've focused on stiffening the resolve of the european union on sanctions, using the resources of our own intelligence agencies to identify targets for sanctions, and we've played a very large role in that process within the european union, using our diplomacy to encourage our partners in europe to maintain robust on sanctions and to make the argument for sanctions, and using our relationship with the united states to make sure that the european union and the u.s. sanctions regime remain well alone nape ear not exactly

synchronized but they are wail lined and the u.s. is looking now, i believe at making some adjustments regime so that we are more clearly in lock step. and that requirement will continue making sure that while the minsk forces is taken forward and we all wish it well, the resolve of the eu to maintain the pressure on russia is strong and unbroken over the coming months. and that's the role we've assigned to ourselves. >> and just on the good cop bad cop, did you as bad cop have any relevant conversations with both france and germany about the second minsk agreement before a deal was reached, or did you find out about the deal after it was agreed? >> well, we had continuous conversations with french and german colleagues including meetings, but i have regular telephone conversations with both my french and my german

colleagues at official level, particularly political director level, in close and regular contacts, on this and a range of other issues. talking to them about the iran negotiations the minsk process, and many other -- you know, the isil challenges, many other things besides. so we have very close working relationships. i met all european union colleagues in riga on friday and saturday then we had a quad meeting in paris on saturday afternoon, which we discussed again all of these issues. by the way, i was in kiev on thursday discussing with president poroshenko, and the prime minister, where we are at in the minsk process and how we can be helpful to ukraine in discharging its obligations over the next weeks and months. >> channels of communications were open all the way through. >> channels of communication were open at my level, at the

prime minister's level and at the senior official levels. >> you mentioned the sanctions regime and our role in that. do you think you have enough support within the eu to secure an early extension of the existing tier three sanctions, and, b, commitment to immediate expansion if sanctions -- if violence reignites? >> on the latter point, i think there is a very clear acceptance across the european union ranging from enthusiastic in the case of the hawks to reluctant but understanding in the case of the dots if there is a significant breach of cease-fire or major assault, for example the european union would have to respond and respond immediately with a significantly increased regime of sanctions. beyond that if we look at the

scenario where the mincing process rumbles on more or less, albeit there have already been significant breaches of it from the russian separatist side, but if it more or less rambles on there is i think a broad acceptance that the logic of minsk is that the sanctions regime would need to be extended to the end of the year because it is only at the end of the year that we'll reach the point where russia has to comply with the most onerous requirements on it, handing back to ukraine of control of the border between ukraine and russia. the timing of extension of the existing sanctions for that period is going to be a subject of discussion within the european union, and there is certainly some appetite for waiting to see what the level of compliance with the obligations the

minsk agreement is. i'm sure it will be discussed a at the european conference march 19th and 20th opportunities then and at subsequent european councils. a decision doesn't need to be made on extension of sanctions until the end of june, early july. >> and you mentioned a moment ago the alignment between the united states and europe on the existing sanctions. what discussions have you had with the government the united states, about coordinating a potential expansion of sanctions? you say if things ramble on. >> we have had such discussions. if we decide to extend -- to expand the range of sanctions, we would be -- the eu would expect to agree broad shape of the package with the united states. there might still for various specific reasons be differences

at the margin between the two packages, but we would expect them to be broadly aligned. we would certainly expect to act in tandem to make maximum impact. >> my final question, on the supply of equipment the prime minister has said that the uk is not at the stage of supplying lethal equipment to the ukraine but did not rule it out completely. at what point would the uk consider supplying lethal equipment to the ukrainian government, do you think? >> well, to answer your question precisely, i think we would consider it again but not necessarily do it if the circumstances on the ground materially changed, if we found the ukrainian army was crumbling crumbling, for example, or if we saw clear evidence that the ukrainian army was being -- was under sustained attack and was not holding the line because of inadequacy of equipment and weapons, then we would certainly

want to consider again -- the prime minister has made clear we want to keep our options open here, but we don't believe there is a military solution to this conflict and we're very wary of giving the misimpression that we perhaps do think that if we were to focus on supplying lethal equipment to the ukrainians. but equally we can't afford to see the ukrainian armed forces crumble. >> mr. john stanley. >> foreign secretary committee on arms export control, which, of course, the foreign affairs committee is part, in the latest information which you per sfrooef thereceived from the business secretary a couple months ago on the arms export high senses to russia in other words, the existing export licenses that were in place so, that there were actually a total of 248 export licenses to russia and the value of those, not only

the standard individual licenses, doesn't include the open individual licenses, was 169 million pounds, why is the british government still in this situation with the russians engaging in sequential territorial annexation quite apart from the human rights dimension in russia, still carrying out a still very expansive arms export trade to russia? >> i'm not sure that i'm going to be able to answer technically the question why those licenses still extend. they are of course to the extent that they relate to export of military or dual-use goods to military end users, they will be superseded by the sanctions, the arms embargo. so the answer to your question, but i don't have it written down here i'll have to write to the committee. the answer to your question may well be a technical one, that it

isn't necessary to cancel the licenses because they've actually been superseded by the embargo. but if i may i'll -- unless miraculously the answer to that question should come to me during the course of this hearing, in which case i'll inform the committee. if not, i will write. >> all i can hold out to you is you say superseded by the embargo. this is information provided by the business secretary on 15th of december last year, the 21st of january. so either you're saying that the business secretary's information is wildly out of date or possibly you're not fully informed as to the scale of extent licenses to russia. >> i'm simply making the point that it may be that the extant licenses simply sit there effectively extant, but

ineffective because no goods can be exported due to the embargo, which, as it were a superior instrument to the licenses. but i believe that we may be able to find the answer to this question during the course of this hearing and i'll -- >> i'll wait for the answer. >> -- break in if i may. >> the extensive correspondence we've had on extant licenses they are lie senses which are still up and running and they do not include licenses which are either suspended or have been revoked. and that is -- >> i understand that. and i don't think it would be necessary -- i think it would be -- in fact i sam certain it would be the case that if you were an exporter of an item for which you held a relevant license, that that item was now subject to an embargo notwithstanding your license, you would not be able to export that item. >> i'll await your letter, foreign secretary. is it still the government's policy to stop exports of

equipment to russia only that which might be used in ukraine? >> can you be more specific about equipment? do you mean military -- >> i mean the totality of arms export, previous statements made by ministers is that the arms block export to russia is in relation to dual-use goods which might be used in youk ukraine. >> no. >> in order a very specific geographical limitation applying to that policy. >> the ban -- the eu embargo is a ban on the export of dual-use goods for military end users and for military end use in russia. >> thank you. >> can i turn now to the issue of exports to ukraine? >> mm-hmm. >> you said in answer to mr. harvey's previous question

that the government policy is to export only nonlethal equipment. that being the case, when the government gave export license approval in december last year, recently to the 75 saxon armored personnel carriers was not the government fully aware that they were going to be armed once they got to ukraine? >> no. we had no knowledge of the intention, which has been announced, but i understand not carried out, to fit light machine guns on these vehicles. but since we have become aware of that, we've reviewed the license in respect to these vehicles against the consolidated criteria and have concluded that there are no grounds to revoke the license on the basis of that information.

>> foreign secretary you'll be aware that mr. alexander chech november nov, has quoted these saxons arrived without any armament. we will mount arms. we should provide cover for the national guard or other units to which they would be supplied. surely the british government was aware that that was the intention of the ukrainian defense ministry. >> no. the government was not aware when the original license was granted. we're clearly aware now because the ukrainians have said publicly that they intend to mount weapons on these vehicles. but this would be no different from supplying land rovers and then discovering that they intended to mount machine guns on the roofs of the land rovers. the assessment was made that supplying the vehicles would not increase the offensive capacity of the ukrainian army nor would

it alter the balance of military force in the conflict in eastern ukraine. that is the relevant criteria against which we have to judge this export. so the position is that the export of these vehicles without any weaponry on them is licensed and will be permitted to go ahead. >> but the crucial point, former secretary, in terms of the government's policy, mounting weapons on them turns them from being nonlethal to being lethal. >> no. i think -- >> sorry. if i might just continue. is it not a matter of genuine concern to you and should it not be that the foreign office and the british government are clearly so ill informed about the intentions of the ukrainian government that they were apparently in december of last year apparently wholly oblivious as to what was the clear intention of the ukrainian government in respect to the saxons to turn them into lethal --

>> with respect, we only know it was the clear intention of the ukrainian government because they've now told us that it's their clear intention, and we are now apprised of all the facts. they didn't make this clear at the time when they originally contracted to make this purchase of vehicles. and the -- i don't need to tell you as chairman of the committee on arms exports that the point at which the assessment is made of the capability of the equipment is the point of export. and we judge that the -- applying the consolidated criteria to this second basm of 55 vehicles does not change the decision, that they are still eligible for export licensing, none of the consolidated criteria is engaged on the basis that the vehicles carry no armaments. >> mr. gates.

>> foreign secretary, just before your foreign affairs council meeting i was in riga as well at the parliamentary meeting. and we had a lot of discussion there about the concept of hybrid warfare. can i take you to your remarks yesterday where you said, "there is a hard red line protecting the baltic states"? and you also said, "any russian incursion would entitle the baltic countries to seek to invoke article 5 of the washington treaty. and you were asked which is what are. and you said "and mr. putin knows that very well." can i put it to you that article 5 of the nato treaty is not necessarily clear in the sense that it refers to an armed attack against one or more of the allies?

if you are damaging the electricity grid, if you are undermining the infrastructure of a country if you are using special forces in covert activities but not openly attacking, is it not hard to determine at which point there is an armed attack on a nato power? >> yes, it is. and that's a subject of as you well know of a lot of discussion on both side of the atlantic about how hybrid attacks are to be treated and, indeed attributed because it isn't always that straightforward to be clear about the attribution of such attacks. and i think our position is that we are not clear that being completely unambiguous about this is necessarily helpful.

a degree of ambiguity can be strategically advantageous. we're also clear as the committee will know, that the response in any case to any attack to be lawful in international law has to be proportionate and therefore this might go as much to the nature of the response that would be made to a hybrid attack if it were attributed to a particular state as to whether or not there should be a response. and i think, you know there's a really very interesting intellectual debate about when and whether it would be appropriate to respond i can net kinetically to a nonkinetic attack. that's not just a question of international law but a question of reality public opinion. i think this is a very interesting and real debate that we need to have. >> is there a consensus amongst

the nato ministers as to when article 5 would be triggered? or is there an ongoing intellectual debate as you put it? >> well i'm sorry to answer the question. i suspect rather technically. but i think any member state can seek to invoke article 5, and article 5 is only considered invoked if all member states by consensus agree that the member states seeking to invoke is under armed attack. i think that's the correct -- that is the position under the washington treaty. so consensus is required for there to be deemed to be an armed attack on a member state. >> can i put it to you for a country like latvia or estonia with a substantial russian-speaking minority amongst its population, right on

the front line with russia, facing a president who has shown that he is actually prepared to admit that he planned the annexation of the territory of ukraine and who has said that the collapse the ending of the soviet union was the greatest disaster of the 20th century, that there is understandably deep concern about not having clarity from united states united kingdom, france, and the other big nato partners about under what circumstances article 5 would be invoked? >> no i'm not sure that's right. i was with you until the last ten seconds. of course we understand the concern that there is in the baltic states and nato members and the uk has been leading among them, have sought to reassure our baltic partners, for example, by offering strike

aircraft for the baltic air policing commission by taking part in military exercises in baltic countries and poland. and we will continue to do so. but i think the interest of the baltic countries are best served by a degree of strategic ambiguity around the asymmetric warfare question and by a very clear and unambiguous distinction between nato countries and nonnato countries. and one of the challenges i think we face around the management of the ukraine crisis is-nato countries. and one of the challenges i think we face around the management of the ukraine crisis is that ukraine is not a nato country and while we want to show clear support for the ukrainians in their struggle to defend their sovereignty, we must be always cheer that there is an air gap between the kind of support that we can offer to ukraine as a non-nato country and the kind of support that we

would and should offer to a nato member if it faced the similar kind of challenge. >> we're coming up to general election, and after march the 30th the house of commons is dissolved. and there is a convention about parliamentary approval for military action, sh which has seemed to develop over recent years with regard to syria with regard to iraq. with if a crisis develops in the period after march the 30th and before a new government is formed whenever that is, it could be several months, how are we going to hand that will situation if there is a case of clear interception of united kingdom alongside nato partners or even unilaterally in terms of defense interests? >> well the convention that's

grown up and established de facto by the last government and we've confirmed thatwy acknowledge it is that where it is possible in terms of time and in time of the need for secrecy to consult parliament, parliament will be consulted. where parliament is not sitting it clearly will not be possible to consult parliament and in no circumstances would bit right to postpone military intervention that was required for the safety and security of britain or the alliance because we were unable to consult parliament because it was dissolved at the time. so in compliance with that convention, my understanding is that it would require the government to bring that issue to parliament as soon as the new parliament was formed for what would be retrospective

endorsement. >> would there be any plan to consult with the opposition? >> i mean that depend on the circumstances. but when matters of great importance and certainly a matter of intervention but of great importance, where the circumstances allow even while parliament was sitting, to engage with the opposition on council terms. >> well, hopefully it won't be necessary.

given the way russia is behaving with regard to breaching the helsinki agreements and other international agreements they signed up to? >> it is more difficult but we've made a clear decision that our approach would be to engage with russia where our vital national interest requires us to engage on a case-by-case basis, and many of the examples you've given are such cases where our national interest requires us to engage. and the russians have given clear signals that they want to compartmentalize and treat the dispute that we have over their behavior in ukraine as separate from the not necessarily

terribly deep relations we have over things like syria on the one hand and the actual quite sensible working relationship we have, for example, in the iran nuclear negotiations. and i think it suits both side to maintain practical working relationships where it suits both sides. >> do you think it's a fair summary to say the militants or iranian aligned shia militias are one of the main forces in the country -- territory? >> particularly -- >> trying to recapture -- >> okay. i think iranian aligned or prod broadly iranian sympathetic

militias have been for a long time probably one of the most if not the most significant forces in iraq. and that's part of the problem that the government of iraq has. and i think there is in evidence some of military action that's been going around tikrit a little bit more than the iranian-aligned militias. we are seeing iranian forces engaged in the conflict around tikrit playing a direct role. iranian regular forces. that's another step. and of course while one can understand that the government of iraq facing the challenges that it does with the iraqi security forces is anxious to make some progress in recovering control of territory is tempted to welcome any assistance, we have always been clear that iraq

will only be a successful state if it manages to two-point a form of governance that embraces all three of the main communities -- kurds shia, and sunni in iraq ap to the extent that the iraqi government appears to be allowing itself and its authority to become dependent on interventions by iranian regular forces that is likely to make that much more challenging, much more difficult. >> there's nothing new, is there. >> nothing new on the shia militias. >> iraq secs have been fairly close over a long period of time. >> yes there is nothing new about the presence of the shia militias and the role of the shia militias has been established for many years. >> do you foresee it as a problem in the longer term? >> it is potentially a problem, and in an ideal world the

government would be raising sunni forces to balance the shia militias and integrating them together in a new iraqi security forces. but we don't live in an ideal world and the reality is probably going to be less perfect than that. but the government will have to show that it is not beholden to direction from tehran enforced by the power of the shia militia, because if it can't show that it will not gain the trust of the sunni population who are present in large part in the areas which are occupied currently by isil and will have to be part of the process of evicting isil from that territory. >> relationships between the krg and baghdad seem to be a fit bit

fragile again. what do you think is the reason for that? >> the oil crisis prince pli. and i think last autumn major progress was made but a deal was done that was predicated on $100 oil, and when oil is the currency of deals, suddenly the value of the currency is virtually halved you get a problem, and there isn't enough to go around to do what everybody thought. if the kurds deliver the oil that they said they were going to deliver to the baghdad government, their own budget will take a massive hit because the residual oil that they're able to sell is worth half what it was. equally, if the baghdad government doesn't get the oil it was promised from kurdistan the hit to its budget from the falling oil price will be amplified by the reduction in supplies from kurdistan. so i'm afraid that is at the

root of the problem. i'm visiting both iraq and kurdistan in the next couple of weeks and i will have discussions with both side as to where they are on their private discussion about how to try and solve this problem. >> is the fco on the ground in iraq trying to mend fences? beefed up the representation in irbil? >> we have a good representation in irbil, and i monitor that regularly and i hear good things about the role that our people on the ground in irbil are playing, and i have been able to cross-check that with members of the krg administration, that they are getting the access to and input from our mission in irbil that they seek and they tell me they're very satisfied. >> there was a lot of publicity over the -- continuing subject

for documentaries on television. i was very unclear when i was asking questions about the plight of these people. what we did to try and protect them what we are doing now to try and protect them and, in fact all the religious minorities of iraq who are under threat. >> i think in the case of the uzidis, going back to when they were trapped on mt. sinjar, we were involved with the united states and others in airdrops of food and emergency supplies to them and supporting kr g-forces in trying to secure an escape route from the mountain for them, and it became clear over time that the overwhelming majority of those that wanted to get off the mountain had been able to do so.

and i think in the north certainly our engagement with krg forces, the leverage that that engagement gives us the anyway quite generous instinct of the krg forces towards minority communities in the north, is the best -- the best support to offer to those minority communities. but of course it remains the case that those who belong to religious minorities in areas controlled by isil can expect a horrendous fate to await them. and as the iraqi government eventually rolls back isil control, i have no doubt we will uncover atrocities that we are not currently aware of and i'm afraid that's a horror that awaits us in the future. >> we also know that the position of uzidi women and the

fact that many of them have been sold into slavery. we've had accounts from some who have managed to escape talking about the horrors of their existence under isil. are we actually doing anything on the ground to try and rescue some of those women? >> i don't think there are any -- we don't have people on the ground in any numbers. we have trainers supporting and technical advisers supporting krg forces, but we do not have significant boots on the ground. neither do any of our western allies. not least because neither the kurds or the iraqis want outside forces on the ground. so we are independent on what in this case is peshmerga kurdish forces can do. and of course they are seeking as a matter of urgent priority to eliminate isil-controlled territory, but i'm not aware of

any sort of specific rescue missions or raids being planned. it is a systemic program to roll back isil control and retake territory that has been lost to isil. >> a ghastly spectacle, we're doing what we can to provide other countries with counseling services for women who have been brutalized in the form that you describe, and it is happening on a horrendous scale, as you say. and there will be a lot more to be done but the issue is access. >> i know the pyd were act itchi along with the peshmerga in taking part in some of those rescues. also helped the peshmerga in various situations. but still prescribed organization in this country.

is that still our view and if so, why? >> would you like to answer that? >> at the risk of sountding bureaucratic, we don't go into cities -- can't get into sort of who is being considered and who isn't being considered for prescription. they nonetheless continue to have a difficult relationship no higher with turkey. and so it's -- it's not an entirely sort of straightforward thing. >> it's also a matter for the home secretary, of course. >> yes. i've heard the answer from the home secretary. i was hoping your answer might be different. the iraqi didn't attend january's anti-isil conference in london. this caused considerable hurt to

them apparently and also annoyance. were you aware that they would not be part of the iraqi allegation and if so did the fx co have any responsibility to persuade the iraqis to take a more inclusive approach? >> well, we did -- clearly we couldn't invite them in their own right. it was a conference of nations and we did encourage the iraqis to include kurdish elements in their delegation, and we will continue to encourage them to take an inclusive approach. >> thank you. >> foreign secretary, on that inclusive approach point and around your operation that's currently ongoing tikrit, would you say that that's for the

coalition, certainly a test to see the intentions of both the actors like iran of course the militias themselves as to how they win the peace in tikrit when they eventually drive isil out and it would actually signal to the coalition as to the intent from baghdad a to how they are going to behave towards both -- in the first place the sunni population but then of course with kurdistan as well? >> i think that's right. it will be a test case and it's very important that it's handled correctly. and one of the messages i would be wanting to reinforce with prime minister al abadi when i go to baghdad shortly is precisely that that >> but is there is always the danger of snatching defeat from the jaws of victory. and the engagement of iranian regular forces in the battle for decree is a further complexity in this question.

>> foreign secretary, because you will you you've had to cut your stay here for perfectly understandable reasons and tipped off the vote coming as well, it would be great if colleagues could truncate their questions and perhaps their answers could be to focused? >> could i turn to syria? prime minister said at the liaison committee last month that it was the policy of the government to hold up the moderate opposition in practical terms. are we actually dealing with the same people? i think for most of us it's confusing as to where we are today.

>> it's a large number of often very small groups. >> many of them had areas to make sure that there are proper services and policing and rescue services on. we expect to make our main impact through a commitment to engage in the u.s.-led training and equipping program for the moderate opposition.

you'll remember that the u.s. congress last autumn allocated $500 million as an initial trench of funding. it has been quite slow not least because of the difficulty of setting out mechanisms to vet candidates for training. >> in the short term rngs is it policy to work so closely with opposition when you consider the main opposition to the west is now isil. and actually not the sad.

>> well, it's inconvenient. but we've got to fight both enemies. there's a moral reason why we should do that. he's bombing them on a regular basis. his conduct is completely inexcusable and it would be wrong of us to align ourselves. it's a practical reason, as well. asaad and his brutality is what gave birth to isil. it was anyceps that we were aligning ourselves with the regime which kills the attempts, particularly in iraq, to win

over moderate sunni opinion to the government of iraq and the coalition effort to roll isil back. we're dealing with bad and worse, but i'm not quite sure which one was which, but we have to tackle both. >> what would it be worth with the violence that's going on. >> how the kurds meant to perceive if we don't give them some recognition from what they're trying to achieve. >> the kurds have the potential to be an important part in the moderate opposition in fiekting against the machine and against isil.

historically, they have occupied, i think it's probably fair to say a somewhat ambiguous relationship with regime, where the regime left them alone and they left the regime alone. and i hope that we're moving into a phase to play a more engaged part and help deliberate syria as well as defending it against isil. >> on a completely sprat subject, if i may, you would be aware that yesterday was commonwealth day, indeed. >> indeed. >> isn't there a reason why the commonwealth office was not able to fly the flag of the commonwealth for that important occasion. >> we are often asked to fly flags by various organizations and to support various causes. and while it's a little bit like

wearing the emblems while any request may be sensible and worthy of support looked at in the roubd across the entire range of requests to provide some support. we do not fly flags of other organizations or to commemorate other events. >> but that of course, is a new rule that the government brought in to fly the flags of the overseas territories and, indeed, the formations of the united kingdom. so why not the commonwealth in

e? it is, afterall, the foreign common welt office. and, if i may say, isn't it also the case that we fly the flag of the european union? if we've got to be consistent, shouldn't we instruct to not fly the flag of the eu if they can't fly the commonwealth flag? >> on that last question the position is that outside of british european missions to fly the emblem alongside the union flag where there is a case in doing so. they have to make a business case for flying that eu emblem. >> last question, briefly. that it's showing not consistent

with your previous secretary. but on the day her majesty is here for the commonwealth surface at westminister abbey, we should surely make it a position. would you make that change before the general election? would you consider doing that? >> no. we've made a decision about flag flying this year. i know the number of people are disappointed with the commonwealth flag wasn't flying. but if we were to fly the commonwealth flag on commonwealth day i can promise you we will be inundated with requests to fly other flags and other emblems in support of articles as in other organizations.

are there any grounds for optimism about the u.n. media towards the parties in libya? >> yeah, i think there are some grounds. >> and when i meant the special representative, i have to be candid having listened to him. >> we have at least got people talking.

we have people with a focus on a catalytic event. the growing presence of isil in libya, which is i think, no cussing the minds of both people on the sides of the civil war. >> >>. >> it's a nuisance, to say the least. >> foreign secretary, quizzing you? >> thank you rngs foreign secretary. >> do you agree that peace keepers will be needed in libya? and, if so, has the u.n. government made any commitments? >> we haven't made any commitments. we've discussed on friday and saturday.

>> i think we recognized in discussing this european union that there would be a strong expectation that the european union would take the lead in providing peace keepers. that is not to say a military force to subdue the warring factions. but more of the policing force to maine tan a peace that had been established. libya is very much a step in business with roots through to the gulf of guinea, which is the

source of many of these things. it's very much in europe's interest to help to secure libya and ensure that the soit earn coast of the mediterranean is properly policed all the way along. >> >>. >> so clearly there's some steps in the peace keeping force. >> all i'm saying is that i think there is a recognition across the european union that it would be to europe that the world looked to provide such a force. if flfs a peace to keep in the future. >> so that element was discussed. was there any other developments? that were discussed last friday around some con kreet steps in libya to win the peace?