transmission lines would total about five gigawatts of additional capacity coming into the northeast. >> we had a hearing just a week ago i think on really the natural gas desert of the new england states. we have the governor of maine here which would address pipeline infrastructure and probably cross-border also with them. ..

bring greater clarity and predictability to the process and help in this energy diplomacy part. [inaudible] >> the formulation of criteria balance energy impacts would consider ration. especially in energy diplomacy lithuania and a lot of people have heard that before toward the lng terminal. this energy diplomacy for friends around the world, whether japan or the eastern european countries is really critical to get them choices of energy. the question is cost benefit analysis and how can you expedite it. you're quadrennial review addresses this a little bit. >> the whole that she'll is we

are looking in a broader sense the traditional way. maybe not here but if you'd likely be happy to come to your office and discussed the work specifically since that seems to be adventurous. we are trying to expedite these issues. >> &-ampersand the chair recognizes the gentlelady for five minutes. >> thank you, mr. chairman. good morning mr. secretary. i'd like you to elaborate on the distribution beyond what you clarity testified to. america's energy infrastructure is aging. it is not well matched with the new service and supply. it is exposed to increasingly dangerous weather events associated with climate change such as sea level rise. in my neck of woods were concerned about more intense electrical storms and droughts

and wildfires did i know you are sensitive to the potential for cyberin physical attacks as well. part of america's policy right now is to encourage clean energy supplies and raider energy efficiencies such as the availability of solar that holds great promise for household businesses across the country. and her growing energy efficiency factor that will rely on smart meters since margaret distributed generation, but these run completely counter to the traditional electric utility model. you've testified already about energy assurance grants. maybe you need to go into greater detail than my programs. but must they be looking for to modernize america's grid and infrastructure going forward?

>> in terms of the great including the transmission and distribution systems, one major theme is we need to push forward on what we just barely started and that israel information technology and all of the assist gated requirements to take the data to be analyzed of course. we can discuss that some other time. sensors control systems. coupling information technology into distributed decision-making so that the great can respond -- can respond quickly if there's something developing on the reliability side, for example. said that really is the overarching theme of more and more information technology integration into the system. that does of course potentially exacerbate another thing you

mentioned, which is the cyberrisk we have to say i had us. i would say they are under the leadership of our deputy secretary we had something called the energy sector court mating council which has aei and a number of ceos that meet three times a year to discuss these kinds of risks to the infrastructure, choose the grades especially. there are some other issues besides those i mentioned such as the role of potentially long-distance d.c. transmission where that is much more prevalent in other parts of the world right now. i would say number one in terms of where we have to go. >> would they be open tuesday through local communities and businesses be able -- >> there's still a lot of program designed to do to talk

to the members about it. that way we envision is through the states, but helping the states are competitive with localities and tribes for example. but that is solid detailed program design. >> i hope you open it up to local regional collaborative sometimes recalcitrant states. is an unwritten state policy in florida right now. i can't even say climate change so that doesn't bode well for our ability to compete for grants. >> will take that under consideration. it has been raised before in terms of cities wanting to be direct applicants. >> there's been some discussion about experts of oil in gas. yet he is the number today. how much right now is america importing of petroleum and gas? >> we still import close to

7 billion barrels a day of crude oil although we are not exporters of about 2.5 million barrels of oil products. our night in paris or maybe 4.5 million barrels. >> doesn't the export heavy focus around counter america policy imperative to reduce carbon pollution? >> well frankly current situation where we are still nature importers, relaxation of evidence is privately likely for more let's just walk around oil quality theater places as opposed to lead to tremendously increase production or demand. that is my view. >> so you do not think that exporting additional carbon fuels would exacerbate the

problem on carbon solution? >> i think the key is even as we are producing more and this debate is going on in terms of exports the important thing and we satisfied this is keep your eye on the ball for reducing oil dependence and that means we are aggressive on efficient vehicles. we are aggressive in terms of developing low carbon fuel alternatives like next-generation biofuels. and we are aggressive in supporting the move towards electrification of vehicles with clean electricity supply in a few goals. >> gentlelady sign could >> if you look at it, we are competing for an example in the last number of years, maybe a decade, even as our population has increased as our gdp has

increased 13%. we have actually decreased naturally in field use. >> the gentlelady's time has expired. right now from pennsylvania mr. pace for five minutes. >> thank you, mr. chairman. thank you, mr. secretary for coming today. the chairman offered his interest in ukraine in the e.u. getting resources over there. it's not something you are doing a lot with ukraine. would you care to elaborate? >> i would be pleased to. starting in the middle of 2014 the g7 together with the e.u. met to discuss energy security issues and that included specifically the russia ukraine situation. out of that came a commitment to work with ukraine for that winter and so dob led a team of

several u.s. agencies plus canadian expert that went to ukraine several times and guided them to a winter contingency plan for energy. so that occurred. including, by the way, a tabletop exercise that the level of the deputy prime minister. then we are back there helping them again look forward to next winter but other things as well. for example we pointed out the dependence not only on natural gas for russian nuclear fuel. you may have seen now that is what to westinghouse now has a contract to be a fuel supplier for the russian reactors in ukraine. this has caught the attention of some breaking the monopoly again. so we are working in a number of ways to help ukraine on the

energy situation. >> thank you. the department of energy has made progress on a few islands she export applications and the fact of the matter is more than 30 applications still await final decision from dob. i realize you decided to reconfigure the process to about ferc to go first with the environmental review. the process as a whole remains complicated, unpredictable, especially for u.s. allies unfamiliar with the bureaucratic process between d.o.e. and ferc. when will dob finalizes follow-up economic study of exports in the 12 to 20 billion cubic feet per day range? >> i can't give you an exact date that i expected quite soon. i don't think it is going to be an impediment because today we are 8.5 bcs today approved for

countries. >> with the transpacific partnership with the trans-atlantic trade partnership cleared the way for automatic lng export approvals? >> that will depend on the specifics of how it is negotiated, but it may very well provide fda status to more countries in which case the approval is more or less automatic. although i would caution because the state and is often raised with regard to teach at and year out that the reality is that the market prices probably have a bigger impact whether you are labeled fda fta or non-fda. >> do you support provisions within the discussion draft, which would affect the league gave dob 60 days to act on an application following the ferc

environmental review? >> we made our statements very clear i'm not appearing in the senate that we frankly find it unnecessary. we have been acting quite quickly. it is workable. we have said is workable. we can work with it but we don't think it's necessary. >> u.s. oil production has risen rapidly in the last several years and imports are falling. only one quarter petroleum consumed in the u.s. is imported from countries which is a level of 30 years. when lifting the ban ban on oil exports you made the point the u.s. still import oil, which is a fact. given our goal of the global market, would it make sense to import and export oil? >> well again, i imagine we will meet our needs. right now if we export a barrel, we will import a barrel to

replace it. as i said earlier the only real issue is whether that would lead to any material increase the production as opposed to just in effect swapping oil. there could be some issues in terms of oil quality. for example, the mexicans have specifically petitioned for a swap in which we would send light oil to mexico in return for healthier oil coming back. i have to say it is not as though we've not been able to absorb all of the oil production today in the united states. so anyway. >> thank you. my time is expired. >> the gentlelady from california for five minutes. >> thank you mr. chairman. i thank you mr. secretary for your testimony. the discussion of our nation's energy infrastructure is very important as is the

administration's work on the quadrennial energy review. i'm particularly interested in the pipeline safety aspect of it. over my years on this committee, i have referenced many times the santa barbara oil spill of 1969. the oil spell had tremendous local and national ramifications, giving birth to our modern environmental movement in many ways in changing much of the way our nation as a whole has viewed the environment in oil development. sadly the santa barbara community was recently hit with another terrible oil spill along the coast. or than 100000 gallons of crude oil from the all-american pipeline along the treasure coast just north of santa barbara. the oil quickly flowed under the highway onto the beach and into the ocean where the oil slipped and spreads out for miles along the coastline. while the exact cause are still

being investigated, it is already clear that woefully inadequate federal pipeline safety standards have played a significant role. it turns out the all-american pipeline is the only federally regulated pipeline in santa barbara county. also the only transmission pipeline in the county that does not have an automatic shutoff valve built into its system and this is not a coincidence. every other oil pipeline on-demand at shutoff valve because the county has required it. the federal pipeline and hazardous materials safety administration does not meet this requirement. while it may not have prevented the bill it certainly could have minimized it. it was actually a lot to squirrel away tens of millions of dollars into what they call a contingency fund for when their pipeline would inevitably fail. yet they would've been required to spend a fraction of the

amount uninstalling build prevention technology. the estimated five common sense that it cannot be allowed to continue. this is just one example of safety standards. mike richards are understandably angry and i share their anger. with all due respect for my seat named mr. green who is here right now all the development at its core is dangerous and dirty business. the mere fact that planes and other companies have oil spill contingency fund shows that there is no such thing as a safe pipeline. spills to happen and they will continue to happen as long as we do depend on fossil fuel for energy needs. we cannot and the dependence overnight but we clearly need to take a verbal directions to achieve the clean energy future that we all know is needed. secretary moniz, he pressured

the president or strong commitment to renewable energy. the objective of q. we are are important. we cannot build a future without modernizing infrastructure and preparing for challenges but we must of everything in our power to ensure the infrastructure is the safest possible. congress has repeatedly directed to strengthen standards and yet they have done very little. the qer development would help strengthen some of these standards but nothing has been published so far. in 2011 congress enacted legislation explicitly direct dating sims two require shutoff valves by january last year. still not even a proposal. i know d.o.e. does not have direct control over this agency.

transportation does or rulemaking. but what is the point of replacing aging pipelines in building new ones if they are all built using ineffective and outdated safety standards. the pipeline to burst in my district was not even 30 years old. it is clearly not the only factor here. mr. secretary, my question for you and i appreciate if you get back to me because i've taken most of the time but what is the administration going to do to ensure that a new pipeline infrastructure is as safe as possible? >> as you said fhmsa is in the of transportation and i'm certainly happy to talk with secretary fox and get back to you. obviously to qer focuses we've got to rebuild infrastructure in a way that is reliable and resilient than i would say this is an example of resilience by having the safety systems in

place. maybe not avoid but dramatically limit the impacts. this is why we need the discussion. >> thank you very much. >> the gentleman from ohio, mr. latta for five minutes. >> thank you mr. chairman. mr. secretary, welcome back to the committee. if i could just follow-up of the gentleman from pennsylvania, what mr. pitts was asking any mention about the swap versus heavy with mexico. some folks might not understand why you had to have a swap. why is that for heavy crude? >> i just mentioned that because currently we do not have authorities are exporting oil directly to mexico so my understanding is they asked for this kind of idea thought. under consideration i believe

the department of congress. >> is very much. another issue not only has the subcommittee taken up but also the telecom subcommittee in regards to cyberattacks that could occur to her infrastructure in this country. it's not only a growing concern we all have as to what could have been. the discussion draft on energy reliability provides a secretary of energy the authority to take emergency measures and grid security emergency. are you in support of that year we have been authority? >> well, i believe we have the authorities, but only under emergency conditions. >> let me ask, what other rich security recommendations have been made that we should consider at this time?

>> well i don't know for the statutory direction, but physical security, and many of them have taken significant steps since the california incident. they are not always advertise for obvious reasons but they have been doing that. similarly by the way many of the utilities but the reason we need to complete a study on the transformer reissues, whether a physical attack or wear and tear a number of utilities have really moved in terms of their backup air but it is not uniform and of course we had different utility structures so it's very different for ious versus co-ops, et cetera. so i think that is an example where after a study of statutory action could be called for in terms of how we provide appropriate gazillions to the

probability that very high consequence of not having that transformers. >> me ask this, how concerned are you about electromagnetic poles against the grid system? >> that is another risk we identified. there are studies on matt. i would say it is one again an example of probability the significant consequence probability. >> what percentage probability? >> i will not give a number, but it seems low. but it has been done by many. >> okay thank you. can you explain the importance of information sharing and public-private partnerships that relates to securing the electric grid? could you explain the importance

of information sharing and public-private partnerships that relates to securing the electric grid? >> i think that's very important. once again the energy sector coordinating council barry deputy secretary had as part of the public rather partnership geared by the way groups like aei have been excellent partners and not. in terms of information sharing, when particular example there's a lot of information sharing and terms of reliable operations, et cetera. one area i would highlight that the council does is including providing selective security clearances sharing cyberthreats with the private sector. >> okay finally in the short period of time i have been analyzing recent power plant retirement community we are mentioned to market factors

among low-cost natural gas and coal prices behind the retiring. would you agree environmental regulations like the mercury air toxics standard of the clean air power plant played a role in the electric generating units? >> certainly things like mercury restrictions raise costs and that is all -- always the cost calculation. by far the dominant issue has been gas prices at 250 and certainly even the variable cost is read by natural gas combined cycle. >> mr. chairman, my time has expired and i yield back your >> the gentleman from vermont mr. welch. >> i want comments in for a question so i will go lickety-split. .com make you have been getting praise for being a great secretary of energy and sideline

as a negotiator. i don't think people know you did the best imitation of the wine of delivery page and our member should aspirate demonstration. >> to look to god. >> the whole thing. this committee has been doing great work on energy efficiency. energy efficiency and vermont has been fully in raise semi to our transmission being able to avoid the expenses associated with transmission lines. i want your comments on what we can do with can do as a committee of the federal government can do to help get the benefit of avoided cost. second we have been trying to get real-time information on electricity rates in new england because i rates are very high in your department has been helpful to get real-time information in all the states and canada and

mexico but is having real challenges in actually getting the information. i am curious to know what you find is the reason why this don't have to get that and what the department and messier e. can do for new englanders. third, a smaller issue but quite. we have some biomass manufactures and standards evolve. one of those companies is hard and they're having a real time to get in and there on what the standards are so that they can comply. so they have a great product. they don't ought to standardize so it's tougher to stay in the market and they been having an awful time with that. a small company then port company. finally that murdering.

that is tough if you want to deploy energy efficiency. on one hand it has an impact on the economic model. vermont has gone in a different direction than most states led by the biggest utility to embrace and promote expansion net metering. what can we do at the federal government to help the process that is going to help deploy energy efficient heat, but also deal with the economic realities? thank you. >> thank you, mr. welch. the third question on the emissions and there's biomass goes i sent them that we will get back to you on because i don't know the answer right now. be energy efficient the and vermont will again -- vermont has done a fabulous job in terms of efficient the novel business models for supplying energy.

but i would say there to maintain, the recommendation in the? we are our developments to that into a third experiment than that adrian is filed as we need to develop an idea we will start delving into this much more. we need to devise a much better way of valuing all the services provided in an electricity system. efficiency storage diversity, capacity power quality. there are all of these issues and the traditional business model was basically one way from a central plant to a house. it kind of all but one together. now with much more diversity, distributed generation we know

that energy efficiency this involves another hot issue right now in the court is to what extent does end-use efficiency come back all the way to the wholesale market, which ferc is engaged in. the issue of valuing the services is really poor and that is something we want over the next month to really work hard on and that is something that needs dialogue with the members. that is an absolutely critical recommendation. >> in terms of electricity prices in real time, i note that the eia fact launched a new project which has much more real-time data being good and

combined together so one can research it and one can understand how prices are moving. >> gentleman's time has expired. the gentleman from west virginia mr. mckinley for five. >> thank you, mr. chairman. thank you again for coming forth. the last week during the break i returned to west virginia and was on overload of the negative information coming at us in west virginia. the first newspaper i got when i got back there was dark days for minors. they just announced 2268 jobs were lost. 2268 families are now looking for jobs as a result of this. then soon thereafter we got another power plant closed down

even no ferc has testified before the concern i have is we will have ruling blackout in the midwest if we don't start replacing power plants but we continue to shut the power plants down. another one went on to say it one small community they are going to lose $61 million in wages as a result of this. so i am stealing with all of this crisis. when you add the additional losses the 2268 the chairman mentioned earlier today that we have now lost to west virginia 45% of coal miners are unemployed since 2012. just three years we have 45% of coal miners looking for work. last friday i met with the coal

association. they said there will be further contraction as a result of what policies that are happening nationally. they are concerned about what is going on with other power plants. it challenges the great stability we have come a dependability. but it goes beyond that. what about property taxes? what about the low income tax people will pay. you can take away the power plant, but now you are affecting the schools. you are affecting our community operates with this happening. my first question is to questions with me while would you suggest for the coal industry to reverse this decline? >> mr. mckinley, first of all of course we all feel for

whatever reason, when there are major disruptions in communities, it is obviously some thing we need to pay attention to in the administration does have some programs to look at some training particularly in the overlap areas natural gas production the power plus plan that is put forward. i recognize these don't address 45% of the workforce so they help in the right direction but they certainly do not solve the problem. >> keep in mind. coal miners every day are in their 50s. my second question because unfortunately you don't have a quickie is to read the is how to up the hemorrhaging. so if you are sitting in the kitchen with this 55-year-old

that just lost his job. he's been working 30 years in a coal mine what you tell him? >> again, i'm completely with you. this is very difficult. in the end it is about having to try to produce some other economic opportunities revitalization, some retraining. >> you understand these are real people. >> the following is not on the right timescale for you. i said previously in front of this committee as well that we do have many programs, many different kinds of programs that are addressing the issue at the future of coal even in a low carbon world that will not solve the gentleman's problem tomorrow. >> he's got a mortgage payment. what are we doing for him?

>> the key has to be economic development and providing other opportunities. i might just mention i'm happy to say here recently senator mentioned has asked me to come to west virginia and i'd be happy to join him and you income to west virginia and understand the situation and what we can do. >> at this time i recognize the gentleman from new york mr. engel or five minutes. >> thank you, mr. chairman. mr. moniz, thank you for her testimony. we appreciate it. i would like to join everyone. >> i'm having a hard time hearing you. >> generally not so hard to hear new yorkers talk. i will try to talk a little louder and not slur my words. i want to applaud your efforts and the efforts of everybody

involved in producing the first record of the qer task force. it establishes a sensible blueprint, and make in our lecture. more resilient and to identify and improve vulnerabilities in our transmission and distribution system. as you know super storms know superstar and sandy slept through my district and the surrounding region in october 2012 knocking out power to over 8 million people and causing distribution problems. some new yorkers in my district waited more than two weeks and struggled the whole time to keep families safe and warm. as a result i'm focused on the ability of our energy transmission and distribution system to withstand future shocks and also recover quickly from any outage that might occur. could you please discuss how we are better prepared today than

we were 2012 for a storm like sandy and how the suggestions would build on the improvements we've made in touch on the establishment of the potential expansion is distributing generations to the revenue shares in new york. >> thank you. first on the regional gasoline reserve, as you note that has been pledged with a million barrels distributing three locations from the new york harbor area of two main and that is a compliment to heating oil reserve. i might point out one of the recommendations by the way which i would put in front of the committee if it would be very useful that the authorities for using those reserves could be harmonized because they are

quite different and this would not help in terms of the coordinating response. that is successfully put in place. it is paid for as well for four and a half years of operation. i might add we are currently now about a third of the way through to using the remainder of the money to repurchase 4.2 million barrels of crude oil to go back into the reserve. we took out 5 million. 1 million gasoline and four and a half years of operations in the reserves. secondly, with regard to the grid and resiliency again i would like to highlight what we consider to be most important recommendations and ideas

actually two recommendations. one is to support in our fy 16 badger request, state insurance grant to allow planning for hardening and for structure and this is a pace we have to find out working with you how to raise the revenue and raise resource is but to establish several billion dollars for competitive resiliency projects that concludes things like micro-grant, but designed for resilient the of the energy system. >> thank you did let me ask one more question. the qer report recommends ways for the energy structures of the u.s., canada and mexico and the ideas to enhance market opportunities for security sustainability. some transmission lines and hydropower from québec to the

northeast united states for more capacity on more trains mission lines in the region. could you please talk about bubble if any of you should play in our future? >> these are very important because one that was approved recently with the champlain have been line that would take power from new york -- hydropower and there are a variety of projects for four to five gigawatts of additional hydropower available to the northeast and upper midwest. this obviously would be clean energy to meet our needs. >> thank you. thank you, mr. chairman. event chair now recognizes the gentleman from virginia, mr. griffey for five minutes. >> thank you mr. chairman. i do appreciate that. let me reference to comments

made a mr. kenley of west virginia. we have had hundreds of layoffs in my district alone. of course in my neighboring state of west virginia and kentucky there have been thousands and it has been devastating. the reference national gas is one of the factors. of course it is one of the factors. but the regulations coming in us that yesterday they closed down the facility and my district. it was paid for by the ratepayers. it was only being used at this point are the peak. that is now gone. the clinch river facility in my district had three electric generation power plants. they are conspired in two the three to natural gas. however the third is not converted in the two thirds of used to be there will produce half of the electorate d.

i am concerned in the peak periods of years now that they are gone how it plays in southwest virginia and other parts of the aep footprint. >> i don't know well enough the exact geography and distribution of the power plants. clearly if i talk more broadly one of the issues clearly is the continuing buildout of the transmission system who power around effectively. i was a little bit surprised frankly with the data that came out in the qer after spending on transmission in the country has reached 14 $15 billion per year with a continuing basically over the last 10 to 15 years. so we actually don't think that the significant increase in

resources will be required. the issue will be to make sure the lines are configure to make sure energy gets to all the various places. >> i get that and that brings up pipelines and talking about this and they build it if my district with great opposition for many people who don't like the pipeline concept. they are building the district. i noticed in the qer the existing pipeline can you suggest a d.o.e. grant program designed to allow states to receive funds to pipeline infrastructure. i support improving our current system for existing pipelines that i'm interested in learning about the details. what new authorities do you think you need or do you want in order to create the program and will you be providing language to the committee said that we

can put that into the appropriate bill. how do you invasion the dia weaver placement program working? how would the funding get to the existing states? would it be the existing funding for new funding? what is the timeline of how would this state that i comment that direct. i'd be glad to review them but i don't want my time to run out. >> i will have to get back to you with a lot of the detail. first of all we are very clear that we do have about half a billion dollars proposed in the fy 16 budget to address various qer recommendations. another $15 billion that need identified which we were very clear. we have to have a discussion of where the resources can come from. that is over many years.

specifically, funding for the acceleration of natural gas distribution infrastructure replacement is not in our budget. that is one of those cases. we have in the past of course have many examples of raising resources in anyways for major infrastructure projects. that is the discussion with the congress are we prepared to find mechanisms for a significant push on energy infrastructure. msb transmission menus were natural gas, it would seem at some point the funding that's going to have to come forward, which means it will be passed on to the ratepayer and yet another expense added to one of their energy bills. >> and what we have seen today by the way i have a place in d.c. there is a specific surcharge on there for replacement of natural

gas distribution. what we are seeing as we think this needs to be accelerated. i will be clear. whoever it is the surcharge is for a 40 year replacement program. that seems like enough a long time. so we need to -- utilities are typically doing this. many decades to keep the rate low. we say we need to accelerate this. what we are proposing is funding that go to help low income households. >> the gentleman's time has expired. the gentleman from ohio mr. johnson for five minutes. >> thank you, mr. chairman. thank you mr. secretary for being with us today. at the risk of piling on i want

to associate myself also with the concern already been mentioned regarding the coal industry in my district as a district in a state heavily dependent upon the coal industry for reliable energy, but also the jobs they represent. you know i was on a trip to europe a couple of weeks ago and one of the statement that one of our european colleagues in the energy sector made was that over the last 20 years or so and they have led america in shutting down much of their coal industry in an effort to reduce carbon emissions. some of those european countries and we ask them what the energy profile looks like, they are returning to a higher percentage of the use of coal.

when i questioned them about that i said why is that the case then how do you think you will reach 41st and reduction by 2030? this official said look we have learned our ratepayers our businesses and residential customers have said they are no longer willing to pay the exorbitant high prices for energy. the idea is you may call expensive by taxing carbon emissions that renewables and other alternative forms of energy are more economically is. they are going back to coal. i don't know why america, mr. secretary why we have to learn the lesson the hard way that poll provides the most reliable affordable energy on the planet. let me get off of the subject as i have others i want to talk to you about. you expressed a willingness to

calm. can we sing through ohio at the same time and i would love you to talk to some of our coal mining hole operators in the manufacturers who are being asked to idle their plans because there's not enough energy on the grid to make the peak demand. and that is today. >> if i may make a suggestion that it might be useful -- we have a very excellent person named dave foster who is really the creator of our job strategy council. perhaps a meeting with those of you with appalachian connections of core tube brainstormed. i'd be happy to do that. >> can you help facilitate that? i office will be in touch. >> the two of you at mr. mckinley would be among those. >> who would like to do that.

let me move quickly to these other discussions. the ceo and the "washington times" notes the council of economic visors for 2015 details the beneficial effects for lng exporter. for domestic employment geopolitical security and energy in street in the environment. he makes the point unless we act soon we are going to lose many of these benefits. while the american policymakers procrastinate from other countries stepped up to meet these needs. the united states has in his intent not to raise. our window of opportunity is closing. with that in mind what are your thoughts not only on lng exports but are there any specific steps we should be putting in place today to realize the opportunity before it is lost? >> i have to say first of all about procrastinating.

now we have approved separate from the conditional approval that it made last week for the alaskan project because that is a separate data source. for the lower 48 we've approved roughly eight and a half cubic feet per day to non-free-trade agreement countries. we have no other applications to work on at the moment. the largest lng export in the world is gunnar and may have about 10 cubic feet per day. >> i hear you mr. secretary. life the rest of the world still urging america to get into the lng export market on a global basis? why does the rest of the world and the oil in gas industry think we are not participating?

>> first of all a lot of misunderstanding to be honest. number two clearly they are sitting there with 12 $15 gas and they see us at 250 anything that looks pretty good. of course by the time he reaches time when you add $6 to $7 for the supply chain, it is not our prices, but still beat their price is. clearly they have an interest. the fact is if you look at the economic studies that have been done not by a week, by others in terms of what they expect to be a real export market very few conmen about 10 per day given competition in various parts of the world. all i know status for the private dirt to sort out. we have studies that take us up to a potential 12 bcf per day.

we commissioned another study that would look at 20 per day. in the mean time we've approved a point eyes. the first cargoes will get on the water probably the beginning of 2016. and then we will start exporting. another issue in a lot of our european friends say you know they want to gas. i might just point out no value judgments, there are a lot of places in the world they don't want to develop their own indigenous resources, but would like ours. okay that is fine but we do not direct where cargoes go. we approve export licenses to non-fda countries and those are commercial contracts frankly the constitutional issue in terms of

not doing it. >> i would submit to our committee into the secretary there's a big disconnect somewhere as the experts tell us our price is going to rise when we get in the global export market. we haven't seen that. we heard the global market price will come down. we haven't seen that. i don't know where the disconnect is that there is a disconnect somewhere. >> thank you. at this time, the gentleman from missouri, mr. want for five minutes. >> thank you, mr. chairman. mr. secretary, the discussion draft provides the department of energy with a response abilities beyond your mission. we study the feasibility of establishing a federal strategic transformer reserved and armed the department of energy with new authority to address grid

emergencies, which is foremost in everyone's mind as far as great security. do you believe the department of energy has the expertise and capability to meet these new duties? >> yes, sir. first of all of the transformer reserved we are moving forward to study that. we had one study from our western organization. we are moving forward on that and we will depending on the study engage in the appropriate public-private partnership to make sure we are secure. with regard to great security emergencies again we already do a lot of this. we work under the fema umbrella and where the lead lead agency for infrastructure. so for example you may have

read about the typhoon going through guam a couple weeks ago. we had a person in on best part of the fema response for energy infrastructure. we are already doing additional authorities could be helpful. >> okay. in your testimony you mentioned that the key energy object is is enhancing energy reliability. what impact do you think the proposed clean power plant will have an energy reliability and transmission issues? >> first of all we analyze these issues that we don't have a final rule yet to know how to analyze it. what we've done to date and what we've done in terms of technical analysis around the proposal of last year again suggest a liability will be quite manageable. we have to wait to get the final

rule before we can really do -- >> you don't think the proposed label have a big effect? >> as i mentioned earlier about one example of something we did with his issue around a projecting significant increase in natural gas for the power sector versus coal and when we look at the infrastructure issues said the gas delivery we did not find there was likely to be any significant challenge. it would be worth to do, but not a significant challenge. >> week, with mr. griffith from virginia a while ago had a discussion and with the quadrennial energy review recommend providing state financial assistance, which you all spoke about a few minutes ago and investment plans for electric reliability and efficiency. can you discuss the criteria

regardless of where the money is coming from because there's a shortage of money. can you discuss the criteria of the department of energy will require for states to receive the financial assistance assuming again there would be money there. >> the money issue is relevant and i must say i was very disappointed in the appropriations mark which did not provide any funding for either the reliability or the assurance grants, which i think is shortsighted to be perfectly honest because the states need to have this planning capability. we provide technical assistance. in terms of program design, that remains to be done. what we envision will be ultimately proposals around things like micro grids, for example for reliability and resilience. we would see again the integration of i.t. and smart

grids as providing those services. and as i said, we hope in the reliability and assurance arenas to then have funding for competitive cautionary graves. >> with the criteria be the same from state to state or would it change across the country? . ..

>> thank you, mr. chairman. i hope secretary moniz will send someone to the discussion this afternoon. of course i want to talk about exports like my friend mr. barton did. one of the things he talked about is that one of the good reasons for the ability to have oil exports is because you have a better matching of the qualities needed by the refineries in different geographical areas around the world. you didn't go quite far enough i don't think because one of the things that happens when you have it better matching is the of economic efficiency, and economic efficiency releases additional capital and that additional capital base am i a curious with 30 years in the business would go back into investment which stimulates the production. next time you're answering a question if you go all the way through that economic cycle i think it would be helpful.

the next thing has to do with i guess i would call it a safety valve question. as you know there are multiple versions of proposals for oil exports. and some of them include given the president the authority, the ability to suspend oil exports in the situation where we have some sort of energy crisis or if it's deemed a national interest, or to be able to use the strategic petroleum reserve under the same circumstances. and so with those two safety valves, features in place doesn't that make it more compelling to allow oil exports? >> well again, obviously the more flexibilities are always welcome your but i think the fundamentals are the oil export question are those that we discussed earlier. i agree with you of course in terms of your economic argument.

>> okay. one of the things that was interesting about timing is while you're agency and others working on the qer the administration was also involved in negotiations with iran. in early april, you're agency estimated a deal with a deal in place and the sanctions lifted iran might start selling us stockpile of 30 million barrels or more and raise it to 700,000 barrels by the in between 16 pictures of come to time when you have a global glut of crude oil. so my first question is this. what analysis, evms do we are formed to better understand implications of the entry of iranian oil into the global market, global supply and demand? >> i think first of all you stated the basic conclusion that one would see over some year or two years, certainly several

hundred thousand barrels per day, probably increase production. that would go into the 95 million barrels a day or so pool. they are someone certainties in a timescale, in particular on the demand side. for example, a recovering european economy would put substantial pressure on the supply side. clearly, the nuclear negotiation is quite independent of that dynamic. that's about nuclear weapons issues that we think are important to block. >> no, i do not can not in the independent nature of the two discussions, however, the impact is the same. the outcomes are the same. >> it's all supply and demand. >> exactly. i guess under the circumstances doesn't it seem like the president would have an increasingly difficult time

justifying lifting the sanctions on iranian oil the same time keeping the sanctions on domestic oil in place? domestic oil can't be sold abroad. >> i think a big difference is we import 7 million barrels a day of crude oil. we are not a net exporter. we are an importer speaker right but we are on track to be in position to export. so it makes sense to lift the sanctions? >> that's quite a few years away. even if you add in oil products we are still at four and a half million barrels a day. >> i have no additional questions. thank you. i yield back. >> at this time i recognize the gentleman from oklahoma, mr. mullin for five minutes. >> thank you, mr. chairman. secretary, thank you for being with us begin today. i know i believe this is the second unyielding in front of this panel. >> more than that. >> well, i mean, that issue. and if i'm not mistaken, at least it's the second time you

and i had an opportunity to visit. the last time we spoke we talked about the lack of infrastructure with the power plants as far as the coal powered plants that are coming down. we have report from southwest power pool the would be 12,900 megawatts lost just in their area. just a while ago when you were being questioned i believe by mr. long you said that you didn't see any significant challenges to meet those needs but yet where is the power going to come from? if we're going to lose 12,000 just in my region, then where's the extra power going to be going to be made but where is it going to be produced? the gas lines are not there. we are seeing for years to take a permit to simply get a permit to install a gas line. unless there's power plants are being built that i'm not aware

of in my region, then i believe there is going to be a significant challenge to meet the power needs. >> again, but first i'll let me emphasize that i did state that what we've seen to date but we, of course, await a final rule. secondly of course demand now i'm talking nationally, not any particular specific region. >> well, but specifically speaking to local power plants are any specific region -- >> scheuer. every plant -- >> i understand that but we have 12,900 megawatts being lost in one region. and you said you didn't see any significant challenges of meeting those needs. where is the extra power could come from? >> first of all i made it very clear that the same when i discussed the natural gas transmission pipes there will be local issues that have to be resolved in some places with the

new infrastructure. but if you look again all i can do is look at the broad picture nationally and note first of all come electricity demand nationally is not going up. it is essentially flat. we are building significant amount of natural gas and wind in particular capacity spirit it's okay because the number of -- >> either way there's plenty of wind. >> yes, but it's okay to bring the pardon because we don't need it right now? i mean, that's like saying -- >> i did not say that. all i said was we are building substantial capacity even as our demand is flat. and secondly we have -- >> where is the building? you say we are building significant capacity. when you cannot replace what we have. you can have miles and miles and miles of wind farms, which we have a noble which i frankly don't think it's very pretty. i think it leaves a lot bigger

footprint anything else but that's another topic. but we're losing 12,900 megawatts in one area. i'm going back to what you said with the gentleman from missouri, when you said you don't see significant challenges meeting those needs. so what i think i hear you saying correct me if i'm wrong, it's okay we lose it because our increase for electricity isn't andthen it isn't there so it's okay we lose it is that what i'm understanding? >> no. what i'm saying is that, first of all we have about 16,000 megawatts of wind. but what i'm saying is that there will obviously all the local planning authorities will have tb planning. but at the macro level we are not seeing the likelihood of enormous challenges. we are being cautious to graduate for the final rule to come into place. >> but you guys already moving forward with it.

mr. secretary, your over the department of energy and jonesing at the local communities, local areas need to get together. what is the least specific plan to meet this need. is there not any? if it's in we're going to let them go down about everybody else figure it out? it's not our problem? >> first of all in our system, the private sector build power plants. >> that you guys are the ones who pick winners and losers. >> no. >> yes, it is because you said coal is going out wind isn't a new thing. >> obviously bears responsibility of government whether statutory regulatory to set certain rules of the road in terms of environmental protection, et cetera, et cetera. the private sector and typically state regulatory bodies then respond to that. >> so if i'm hearing you correctly there is no plan. which is going to drop the power and let everybody else figure it

out. >> the gentleman's time has expired. >> i yield back. >> mr. pompeo is now recognized for five minutes. >> thank you, mr. chairman. we are getting getting towards the end so all of the questions have been asked and cement i will open aperture just a little bit. starting with this, deeply the american expert has received a good value for the tens of billions of dollars have been spent on carbon capture technologies, federal dollars have been spent on carbon capture technologies today, yes or no? >> first of all i don't think it's tens of billions of dollars. so it's quite a bit less about. >> whatever the number. do you think we've gotten good value for the? >> i think the entries yes it will put it up in very, very well spent. >> i think to look more like solyndra than success, so we disagree. do you agree with the french foreign minister said that global climate change agreement that has been negotiated should be awarded a way that does not require congressional approval?

>> i'm not aware of that statement. >> so do you think, i'll ask it more directly. >> if i may say, currently obviously the climate action plan that we are executing is based on administrative authorities to get an economy wide approach that will eventually require legislation. >> pickup at your part of his negotiate an agreement this year at the end of the year and since itthen into an agreement that made it very clear. deeply the agreement that the united states enters into ought to be submitted for congressional approval? >> i think we need to see what the nature of this agreement is. there are many -- >> placate the key to suggest that you think a climate agreement should be approved by congress? >> i think very much depends on what the nature of the agreement is. >> i will take that as a no. today you have a lot of questions that crude exports. it seems to be me the only country are currently advocating to export crude oil as iran from is

that right? >> excuse they? >> we're going to free up the reins to export their crude products but you will not advocate for americans to be able to export their crude products spent as i said the situations are completely different. we are a large importer of oil. >> the situations are identical to it would benefit each country greatly benefit each country credited them to access foreign markets to sell the product -- products at market prices around the globe. >> obviously for iran -- >> it's a simple question, mr. secretary. it's not a trick question. >> iran have sanctions lifted come it's help their economy. economy. >> and if we lifted our they would help hours. >> as i said earlier, the only issue on oil exports in the united states of large scale relevance is whether or not it is a significant increase in production as the result.

and i've said in the current oil market that may be a difficult case to make. >> guiltily been supplanted and when it comes to crude oil export. you think no more supply will be launched so we been through the air in 18 months there will be a new president although maybe not any secretary of energy. one never knows. your qer was prepared based on this president division of greenhouse gases, the impact around the world, and america's role in diminishing them. is the next president comes in and has a different view with respect to that, tell me what remains of the valley of the qer work that you all did. >> essentially all of it. the qer is really aimed at facilitating more clean energy, but it's about energy security, resilience of our infrastructure. it's about energy north american energy.

it's got huge, huge applications for our energy infrastructure independent of the climate issue is. >> yeah, i just have a different view of what's in that qer. when i stare i see their houses and appreciate the. i agree with your analysis of the requirements for increase infrastructure. we don't disagree there, but it seems to be most of what is in the qer was and federal intervention in the marketplace. you had several references to classic marketer with respect to public goods and negative externalities. i think much of the conclusions in the qer about how that infrastructure will be ultimately build and who will decide which infrastructure will be built out is that they depend on this president division for climate change and how the united states can impact of that. i just think, i think is a wonderful exercise. i'm glad we did work with respect infrastructure i think the conclusion drawn into it would be revisited by the next

administration. with that i yield back mr. chairman. >> that concludes our questions. we have one potential member though mr. kramer of north dakota who is a member of the energy and commerce committee is not on this particular subcommittee that he is been so focused on these issues at the center for to a half hours with us and we'll give them the opportunity to ask five minutes of questions. >> well, thank you, mr. chairman. and thanks to alex for the indulgence. it doesn't take one could north dakota and to represent the entire state so i spread myself everything, mr. secretary, and so i think the members. i also want to thank you not only for being here but for at least agreeing to if not joyfully i think you're a joyful catchment joyful person, holding one of the listening sessions in north dakota. it was a late request and late addition to the agenda for u.n. secretary fox and others but i threw enjoy the time you are out there. i noticed in the qer there's a lot of reference to things you

learned last august in north dakota a special as it pertains to the transportation infrastructure. and some of the challenges particularly reflected on the challenges for the railroads that move multiple commodities as you know. and you heard quite clearly i think again indicated in the report quite clearly that there were challenges but at the same time one of the things i want to do is sort of bring the records up-to-date a little bit. last august we were following on to record winters and to bumper crops, two seasons in a row that strained the infrastructure for sure for agricultural commodities. one of the more bigger challenges was the fact not only was it a record crop or a bumper crop but it was a late harvest due to weather. also late and a very wet harvest the so there was a consolidation of all those commodities. and the additional moisture

creating other transportation problems like the movement of hoping for example, for grain drying. that perfect storm of greed incredible stress on the infrastructure. and along with of course have had thousands of barrels per day of oil being moved by rail. so there's a fair bit of there was a lot of criticism last august come a fair bit of that reflected in the report, but just in the last 10 months the storm sort of shifted again. i want to stress some of those points but also encourage you and the team to continue to monitor it on every radio basis because some the things that were identified have worked. the stb's weekly requirement for the week reports for example a class one railroads have been very helpful in transparency allow better planning. a warmer winter with a more traditional harvest season and frankly, lower commodity prices

have created more normalcy. and during which time, and i can be the railroads worst nightmare but also want to acknowledge when you done their part and i do say for bnsf, which is obviously our largest railroad by far they have invested mightily in personnel, locomotive, energy, cars, and certainly double track, double tracking much of the boston region and much of the upper midwest. pashtun bakken -- i want to encourage you to remain flexible and updated report brightly to acknowledge his robust infrastructure does exist, and it's my hope and my expectation that the additional and more robust and rail infrastructure actually enhances all commodities. i also think it's worth noting because of the stb reports we have noticed that they are pretty well caught up. matches pretty well caught up but got to the point where there's extra capacity. and much like the electrical

grid, it doesn't hurt to have a little extra capacity, but it also creates opportunity for growth. i would only probably ask that for you to comment on my commentscommentif you would like to come but he can express my appreciation for your attention to the issues. >> thank you. we certainly appreciate it by the way your participate in the qer field hearing in north dakota, along with your senate colleagues. first of all i think you put your finger on really what was the main driver of our discussion on this subject, the qer, that was the need for more data. to be perfectly honest the railroads have not always been the most transparent in terms of data availability and it has certainly been improved and certainly the issues around coal, for example, have been certainly -- there are other issues in terms of oil by rail that are being addressed, and i

might say that with a department of transportation, we have now launched the next phase of the study relevant to the grid properties and rail. it will take about 18 months before we are ready with it. but i think you're absolutely right. we've had some progress on the data front and that allows ntia by the way playing a role in there as well. so it's great. >> thank you, and thank you again, mr. chairman. >> thank you and that concludes the first bill. secretary moniz, thank you very much for your testimony and answered your questions, and we look forward to continue to work with you on many pressing issues as we move forward. and thanks again for your leadership. mr. rush will be notifying you formation of the fan club and we will be getting together soon. >> thank you, mr. chairman.

>> will have our first meeting relatively soon. >> okay. >> and there will be a huge crowd there. and 20 on our second panel today, we have mr. rudolf dolzer who flew all the way to the u.s. from bonn, germany, to testify and we appreciate him being here. we have mr. jason grumet who is the president of the bipartisan policy center. and we have mr. gary katz, vice president of extreme research and consulting. we have ms. alison cassady's director of domestic energy policy for the center for american progress. we have ms. emily hammond is professor of law at george washington university law school. and i'm going to call on my colleague mr. pitts of

pennsylvania, to introduce one of our witnesses as well. >> i wonder i'm very pleased to introduce mr. scott martin, a county commissioner from lancaster county, pennsylvania, former chairman of the commission and also acted statewide association of county commissioners outstanding commissioner who i'm very pleased to travel down from pennsylvania to be with us today. thank you, mr. chairman. >> thank you. mr. martin, they can bring with us. once again i want to thank all of you. we would look forward to your testimony and i'm sorry that there was such a delay in your testify. we had to reschedule a bit of mr. dolzer, i think you can the longest distance from bonn, germany, and i think you're in the german parliament at the time and you're a professor also add the university of bonn.

so we generally appreciate your making this effort adequate to recognize eu to start with for five minutes, and then after everyone has concluded we'll have some questions for some of you. so mr. dolzer, you're recognized for five minutes. >> thank you chairman whitfield, ranking member rush, members of the committee. my name is rudolf dolzer, i'm a german national who altogether slipped about eight years in the united states. in germany i became a law professor. subsequently i was director-general of the federal office of the chancellor. this is where my gray hair come from. and since i was appointed three times to the german parliament's commission of inquiry. we had that in germany. you can be appointed to parliament without the right to vote.

in the u.s. i studied in spokane, washington, at gonzaga university. then i spent a long period of the harvard law school. i later taught at five u.s. universities. the last time in dallas, texas. in houston i'm a member of the advisory board of the association of independent petroleum negotiators. a month ago i published a larger study of international cooperation in global energy affairs. mr. chairman, the year of abundance as you said opens up new opportunities the leadership for the united states and the world is looking at the united states. this reminds us also at least me that energy is not just about energy your it's about foreign affairs.

it's about national security. it's about finances. but ultimately energy has its own characteristics and dynamics, and this is my first major point. foreign affairs national security and also issues such as trade must be folded into the fabrics of the energy politics and not the other way around. this is also my view as regards limit change. energy politics mr. chairman and another pitcher draft on energy diplomacy, energy politics also calls for arrangements of its own when it comes to international cooperation. title iii of your bill, the president represents an innovative moderate approach, also from an international point of view. this may even be strengthened by transatlantic trade and investment partnership. again trade is not just one aspect of energy.

recent events come and visit been addressed this morning come in russia, and ukraine, in europe in general have underlined that energy independence will require safe energy supplies, and will require political foresight and a robust long-term strategy. together we misunderstand the nature of that issue. europe, and this is not well-known, europe as a whole will in the coming decades become more vulnerable as our resources dwindle in particular in norway. so this is europe as a whole. the forums as proposed in your bill will serve to provide a common basis, but i propose that we go further and establish a more advanced concept which i called the transatlantic energy agenda. we need to update and broaden existing arrangements. we have a long-standing arrangements for cooperation in foreign affairs, in national security in agriculture, for

example, for energy arrangements of this kind. are lacking in anything that ought to change. we need more exchange, better exchange, we need to -- we need to know what we're doing and we need exchange of best practice. america's abundance also leads itself to strengthening the regional partners. in europe we have particular experience industry. since 2009 the european union has the confidence to deal with the establishment of a single market but the member states have retained their sovereign powers to determine the energy mix. the french nature no one touches the right to work with atomic power. this is a very complex jurisdictional situation which we have in europe. we now be set of rules promoting

competition in europe with liberalization with unbundling. we have less progress, and i think this is of interest here so far with regard to internal and cross-border connections to overcome isolated domestic markets. vicki kennedy said which has been worked out in the last 24 months has been the idea of project of common interest as it's called. the new rules call and i think this is of interest here, for a much more rapid process of approving permits. so far that time don't be astonished, took about 10 years or more to buy the permit for a transport arrangement. this is not going pashtun this is now going down to three and half years at a maximum according to the new law. also a member states now must introduce one step authorities instead of a multitude of

institutional arrangements we've had so far. the funds needed for a single energy market will be considerable, but i think the advantage with justify the cost. cost in terms of secure supply new infrastructure urgently needed, more options for the customers, more better position negotiating position on the international endeavors when you negotiate with russia or the opec or venezuela that i think the larger your market, the better it is. in north america i think the new task force by the nafta countries similar to the european commission might help to the elaborate a unified energy strategy. mr. chairman, i conclude. in the past energy issues have at times been a bone of contention between the united states and europe are sometimes a bitter contention.

i think your bill with title iii has the promise and the hallmarks of a new era of cooperation with tangible benefits on both sides of the atlantic. thank you very much for attention. i very much appreciate this opportunity to express my views before your important committee. thank you very much. >> thank you. our next witness is as this is mr. jason grumet who's the president of the bipartisan policy center, and thank you very much for being with us or you're recognized for five minutes. >> take you very much chairman whitfield, mr. rush and the members of the committee. him at the bipartisan policy center it's a pleasure to join in this important discussion on economic policy architecture company our nation's energy. my testimony can be summarized into three main points. first i want to applaud you for focusing significant things to strengthen north americans energy integration and collaboration. north american energy security and self-sufficiency are

idealistic goals that must be vigorously pursued and not taken for granted. my second point is increased north american cooperation is a critical point of a larger effort to promote economic growth in efficient markets finance north america's role in global energy trade and to project u.s. power and global interest. my third point is we must seize the opportunity to translate this strength of abundance and a long-term and sustainable energy strategy and not allow this strength to result in unintended complacency. in short this committee and congress has the challenge of managing success which is a new problem for our nation when it comes to energy policy. i think it creates real opportunities we need to discuss. let me begin by saying a little bit about energy collaboration to ugly to provisions in this legislation that about better quality engineering, 20 power are all essential to achieving the promise of north american energy security. the opportunities are particularly pronounced in the

case of mexico. a few discoveries have much to gain increased trade with mexico it is hard to overstate the importance of energy production from the mexican economy. even after years of decline in energy production remains a key source of high-paying jobs and is responsible for a third of mexican government overall activities. if monetization efforts succeed can energy production could be a significant driver of mexican economic development and individual opportunity implications are quite broad. a bipartisan those into believes we must reform our nation's broken immigration system. while this hearing is not the place to discuss the challenges of protecting the southern border or enhancing our legal immigration there is no question that improved economic opportunity in mexico is an essential component of successful and lasting immigration reform. let me turn now to the issue of citing. while our technology has evolved

dramatically, are permitting policies date back to the 1950s and '60s. we commend the committee's effort to make the cross-border permanent process more transparent and predictable. we commend the political judgment and crafting this provision to exempt the still pending keystone decision. it is time to have a broad-based bipartisan energy debate that is explicitly beyond keystone. it is encouraging to see the committee working diligently to avoid a focus on symbolic disagreements in favor of producing an agenda that can become law. i'd like to move to the second point which is a focus on the components of the north american place in the larger global picture. our nation's made good progress of late importing lng exports but as we discussed earlier turkish restrictions on undermine our commitment to sufficient markets, diminished our ability to vote free trade and about our adversaries who seek to use energy as a weapon.

i can build a mr. barton's studies except agree that there's been a space of analyses that all conclude adding reliable supply of crude to the global market will continue to exert downward pressure and actually protect u.s. consumers. my final point is on the challenge of how we use this abundance promote our long-term sustainability security needs. there is a broad critique of the abundance the candidate must be grappled with. the concern is supplies of oil and gas are undermining investment in a diverse array of technologies our nation's world will require over the next century. to protect our strategic interest and to confront the risks of climate change. this legitimate concern leads to different policy pathways. the bipartisan policy center believes additional action must be taken to confront climate change but we reject the idea that we should pursue a low carbon future by erecting and

undermining barriers to resurgence of oil and gas production. perpetuating in efficient markets and creating transportation and infrastructure bottlenecks and help of some of reducing global reliance on fossil fuels is not an effective climate change strategy. and if anything it will result in increased emissions. instead as we vigorously pursue the benefits of abundance we must be equally determined in conducting the research and creating incentives to develop and commercialize the next generation of energy breakthroughs. we must find ways to encourage greater investment despite the current low price environment. america's hydrocarbon renaissance has given us the gift of time. the question before the committee in congress is what do we do with this time? in closing a bipartisan policy should look for to continue to work with the committee as you build an architecture for abundance that growth our

economy, enhances our security and conference the messy and global environment fund threats. thank you. >> our next witness is already been introduced is mr. scott martin county commissioner of lancaster county pennsylvania. thanks for being with us. you are recognized. >> that you mr. chairman. [inaudible] >> i'm going to let you and mr. pitts work that out. >> thank you, mr. chairman spent but thanks for letting me know that you're welcome. and one and members of the subcommittee for its our to be. i serve on the lancaster board of commissioners. united states must work to develop a coherent logical include national energy strategy. i applaud chairman upton force architecture abundance legislative framework that will hopefully stimulate a wide-ranging and bipartisan debate on the need for long-term national energy agenda based on economic element commonsense regulations, a modern and safe

energy infrastructure, greater efficiencies, increased exports a special with lng to support our foreign policy goals, environmental sensitivities, minimal government involvement and utilization of free market economic principles. there's many positive elements however there are numerous challenges and issues that urgently need to be addressed the longer we wait to address solve these issues will make it more difficult, expensive complicated and controversial. one of the most pressing priorities is energy independence. energy independence can only be achieved with new and the couple sources. the infrastructure exists. the environment is not hostile capital is available to finance theostile capital is available to finance the expansion in both domestic and international markets are functioning properly. thankfully did or saw the hydraulic fracturing known as rocking and the discovery of vast new oil and gas reserves, america's now the world's largest oil and natural gas producer. as they should energy prices have been decreasing.

the united states is increasing able to export large amounts of lng around the world and especially to european countries. a volatile and tense situation and you can clearly why we need to build a keystone xl pipeline. great lakes with the permitting of lng export facilities and work to exploit the belly of pipelines and compressor stations. a significant improvement has been the use of tracking and extracting natural gas from shale. the use of rocking in pennsylvania and the construction of necessary infrastructures had widespread and significant economic development impacts. some of these include 96% of new energy hires were found appellation area, 45,000 new building trade jobs in that same region 243000 new energy jobs in pennsylvania, over $1 billion invested by the shale industry and road and infrastructure improvements and including grants to community college and trade schools to train the workers needed by extracting

companies in the marcellus shale region with a cool way to $60,000 a year. this increased shale gas production in pennsylvania have saved the average pennsylvania to between 1200-$2000 annually in energy savings cause. this is another institution energy users have benefited from the greatly increased availability of cheap natural gas. the pennsylvania national guard and army reserve components the garden spot public school district and the shady maple company all in our area have experienced significant savings in energy bills after switching to natural gas. cheaper energy will further develop and test you and manufacturing renaissance in america. lower energy costs create more disposal income and greater aggregate demand. decrease transportation costs lead to lower prices, and american products are more globally competitive. the domestic oil and gas revolution cannot be successful long-term if the necessary pipelines are quickly built and brought online. the williams company has proposed to build 180-mile

interstate pipeline known as the atlantic sunrise project from northern pennsylvania and connected to their main u.s. gas pipeline that traveled from texas to the northeastern a connection point would be in southern lancaster county. 37 miles would go through my county and we're talking about $2.6 billion economic impact throughout the construction. williams has been cooperative come easy to work with as concerns. over 100 route changes which is more than half of the original route had been made based on stakeholder input. williams is committed to making a pipeline open access so that potential customers could directly access the pipeline. as you can imagine a project that decides does generate controversy and opposition. one early controversy was propose routing a pipeline through protected environmental a sensitive area general to the river. the board of commissioners working with several local organizations went to williams and expressed strong concerns

regarding disrupted williams found in a route and completely move away from the sensitive area. they did so with native american sites and water source areas. lancaster county five significant pipelines running through our county. many property owners are not even aware of the pipelines across as their land based upon discussion with local farmers having existing pipelines on the property williams including with a major u.s. pipeline, has been very responsive to their needs. lancaster county is one of the leaders in agriculture production not only in pennsylvania but across the country. needless to say, the county ordinances that govern our farmland preservation program have a lot of pipelines since inception. since november 2014 there have been two elections with a proposed pipeline was in a de facto manner on the ballot and the voters were cleared in rejecting efforts to stop the proposed pipeline, including a

never to two townships about a community-based ordinance that would declared that federal and state laws do not apply in these municipalities. i believe many of these voters recognize this pipeline represents the concept of a greater good being served. in closing i once again emphasize how incredibly important the ongoing energy revolution is to the future of the united states feed the world where renewables, greater efficiencies come clean coal, next-generation nuclear and secure as margaret are vitally important. it is the unlimited supply of clean recoverable natural gas from shale that will lead americans into the future. thank you. >> thank you, mr. martin. our next witness is mr. gary katz, vice president of upstream research and consulting. and thanks for being with us. you're recognized for five minutes. >> thank you, mr. chairman members, thank you for having me here -- >> did you turn your microphone on? >> i would do that.

how about that? is that coming across? okay. mr. chairman members, thank you very much. i'm very pleased to be in front of you today because in my world, which is -- >> forgive me for interrupting your would you mind taking ms. cassie's microphone and try that one? >> thank you very much. again, my apologies. i hope this doesn't eat into my five minutes. mr. chairman members, thank you. i'm very pleased to be a today because the world that i usually am and is the business world, and exploration production business. i'm a geologist. i've been around oil and gas industry for 30 years. you can decide whether that makes me objective or not in this business, i think i'm fairly knowledgeable. i'm also representing the work analysis and experience of my

colleagues at my company. what i really want to talk today about is competitiveness of the epc sector. more than the volumes of data been produced, sublicense you just as important for you to think about is the incredible competitive business of the energy industry right here. the reason it's about competitive basically means cost and efficiency in reaction to market conditions. so for example, as we look at this period which has many benefits for the economy consumers, et cetera, at one point clearly perhaps the saudis and others thought that the u.s. oil industry which is a phenomena of oil high prices. that was not the case. in other words, many thought that this into shape in the shale oil and gas industry could survive only with high oil and gas prices. it is not the case. that's when my first point.

this is not a phenomenon. we have had low natural gas prices for about six years, and shale gas production has sustained come in fact grown. that's critically important. why is that so important? when it comes to think that energy diplomacy and the idea we can export the volumes that we have because we will match or meet the internal requirements it's not just about volume. what we are really exporting is competitiveness. i want to make the point that anything you might consider in terms of the energy diplomacy objectives or goals, which are actually quite admirable, they will be sustainable and viable as long as this competitiveness exist. because it's not just offering to send supplies somewhere. the marketplace is what's pulling them. whether it's the ukraine or parts of europe or mexico as i'll talk about next year, a great example they wouldn't be

doing this if the supplies exporter from u.s. shores were not competitive in a lower-priced alternative to other factors. this is particularly important because if we define very simply what energy security is, which is really we would argue reliable supply it affordable prices. so let's take mexico. right now there's a lot of interest in mexico because of the opening of the e&p sector, that's exploration reduction. reduction. because of the fact that over 70 years of a monopoly of the state oil company pemex going to be reversed, but that's actually not the biggest issue going on. bigger issue is the fact that mexico is going to be importing a lot more natural gas of the united states. i'm sure the committee knows that by now the import about 2 billion cubic feet a day. that number could go up to five or 6 billion cubic feet a day within the next 10 years.

it's a bigger impact because two things. one all this will drive much more gas fired power generation if the reforms work in the midstream and downstream in mexico, and we hope that they will. that should result in lower energy prices for the entire economy. we don't know yet if it's 10% lower or 30% lower but the impact of that on the mexican economy competitiveness, this is the big picture. it's not so much the oil side is what i'm trying to say. it's a gas side and women about to do. that's a very important factor. now it is said and it is quite true, that mexico has substantial natural gas resources. but in this case the decision they made was if they tried to develop their own natural gas resources right now, it's so expensive that it made far more sense to import less expensive u.s. natural gas.

that's a choice for competition. it's a choice for competitiveness. and again if you want to look at it from an energy policy program for the u.s., a tremendous success because as this goes forward, that competitiveness that lower price inefficiency is what is going to have a larger impact on the mexican economy and a huge contributor to what has already been troubled at times but a very successful u.s.-mexican relationship. so that's the argument i want to put in front of you. that one shale production is not a high-priced phenomena. also insurance it to the supply points we have is the competitiveness of that. if it's going be part of use energy diplomacy initiative, then that needs to continue to that's going to undergird all that in order to be successful. and, finally, gives infrastructure processes of

regulations, naturally have to be equally competitive in order to allow this to be sustained. thank you very much for giving me the time. >> thank you mr. kepes at our next witness is alison cassady who is the director of domestic energy policy for the center for american progress and thank you very much for being with us. and you recognized for five minutes. >> thank you, chairman whitfield, ranking member rush and members of the subcommittee. thank you for the opportunity to testify today. my name is alison cassady and i'm director of domestic energy policy for the center for american progress. c.a.p. is a nonprofit organization dedicated improving the life of americans through progressive ideas and actions are before i jump into a more specific comments on the energy diplomacy section energy diplomacy discussion draft i would like to violate the topic that is not the subject of today's in but i think should be and that is climate change which to me is the most urgent

and challenging energy diplomacy issue of our times. climate change has become a priority in international relations because the climate science is so clear. they failed to act on climate change risk severe irreversible impacts on a global scale. as the committee considers the nation's energy policy and its interaction with the rest of the world, c.a.p. urges you to put climate change front and center of any policy that you develop. we can no longer afford separate energy policy and climate policy. so with the introduction or context in mind unphotogenic a few thoughts on section 3104 of the discussion draft about cross-border energy projects. as you all know under current law, entities wanting to construct or operate a cross-border pipeline our transition line are required to obtain a presidential permit. this section of the bill eliminates the requirement and instead requires the relevant federal agency to issue a certificate of crossing. that is, as less the agency finds

that the cross-border segment of the project is not in the public interest of the united states. i have a few concerns about this approach. first, the new process presumes that the project is in the public interest, placing the burden of proof on concerned stakeholders to demonstrate that it is not. instead of asking applicants to make the affirmative case that it is the second, under the new process the applicant only needs to obtain federal approval for the portion of the project that physically crosses the u.s. border, even if the project itself spends hundreds of miles. and, finally, the new process limit environmental review under nepa teachers across section. this makes no sense as we all know these types of projects can have environmental impacts well beyond the border. for a truly transcontinental project such as a pipeline that runs through numerous states down to the gulf coast, the current presidential permitting

process is the only venue for the public and stakeholders to examine and understand the potential impacts of the whole project that's under consideration. under the process established by this bill, the review would be fragmented, it would be state by state, no one except a project applicant whatever examined the project as a whole. i also have a few concerns about section 3106 which is the lng export section. this section sets a 30 day deadline upon the completion of environmental review for the d.o.e. to issue a final decision on any application to export natural gas going on free trade country. the united states is well on track to becoming a net exporter of natural gas. to date the d.o.e. has issued final authorizations to six facility to export up to 8.6 billion cubic feet per day of lng more than 10% of daily u.s. natural gas consumption. and that's on top of the we already export to free trade

countries like mexico. the existing d.o.e. permitting system appears to be working. it puzzles me therefore why we need a bill that seeks to fast-track new do we permit approvals. to be clear, c.a.p. is not a post-lng exports in principle but we have concerns about placing an artificial deadline on agency review of permit applications. congress should not preclude the we from taking the time it needs to make a considered and well informed decision, particularly on most difficult projects. the stakes are simply too high for natural gas consumers in the united states. last year the energy information administration concluded that increased lng exports lead to increased natural gas prices. and these higher natural gas prices create economic winners and losers. certainly natural gas producers and employees of natural gas producer would be clear winners. but for example manufacturers that use natural gas as a

feedstock would face much higher energy costs. in short the decision to export significant lines of natural gas, even to our allies is a complex one that should not be made lightly given the potential consumer impacts here in the united states. this decision is made even more complicated given the growing demands here at him for natural gas in both the electricity sector and the transportation sector. so if the united states over commits to natural gas exports via long-term 20 a contract consumers are could pay the price. and that's why a deliberate -- deliberative process is so important. with that i would end my testimony and happy to answer any questions. ..

in short common those provisions fail to properly account for the reliability, fuel diversity and environmental implications of energy policy and they also fail to adequately permit the energy agencies to undertake their work in a participatory deliberative and well reasoned manner. let me start with the interagency task force. despite the lines between energy and the environment no longer truly exists, the composition of the task force have significant gaps that will hinder rather than help the development of a

good energy policy. most critical is the absence of agencies of environmental expertise. but other key agencies like those whose missions relate to jobs the economy and transportation are also emitted from the task force. in the qer that we heard about this morning, all of these agencies can successfully work together towards unified policies and when agencies collaborate in this way they are more successful in that they tend to a broader stakeholder support and may have reduced vulnerability to judicial challenges. for the same way since coming to criteria the interagency task force's plan should include environmental issues and especially climate change. failing to do so boldly deep in the current dysfunction dinner

energy regulatory system energy markets. second, the authorization for cross-border infrastructure projects does not make clear how d.o.e. would implement authority differently from how it currently does under the presidential permit for a mark. current procedures and do account for environmental issues and this should be retained. i note as well the provision striking portions of the federal power act and in particular section 202 s. threaten to undermine important authority that the federal power act retains for ferc and allow it to ensure grid reliability for interesting projects that cross international boundaries. i urge the subcommittee to carefully break them in the striking provisions of this section. the 30 day deadline on lng

application is of concern. even if d.o.e. is able to act quickly in some circumstances it is more flex ability it threatens more delay. first, or this discussion draft tends to impose delays if the suits are successful. with stakes so high and such engage stakeholders, judicial challenges are inevitable. we can easily predict lawsuits no matter d.o.e.'s decision and if d.o.e. is rushed in making its determination the record is less likely to be carefully developed. the agency's reasoning may not be clear on one again it is likely to be more vulnerable to judicial remand and imposition of even further delays.

to summarize, the relationship between energy and the environment must be considered as the united states seeks the uniform energy policy. careful attention to administrative procedure and its role in promoting good governance must also accompany any new energy statutes. if we move forward with u.s. energy policy with these principles in mind we can make substantial improvements for the future. thank you again for the opportunity to testify today and i look forward to your questions. >> thank you of a mystery and three. that opening statement. i want to make an announcement that we are expecting those around 1:30 or so. we each get five minutes. i think that we can make it through and give you an opportunity to respond if we go efficiently and quickly. i