n the united states can get behind. and over the years they've proven successful at driving innovation and effective options for consumers at the pump. and as many of you may know iowa leads the nation in biofuel creation producing 3.8 billion gallons of clean burning ethanol and 230 million gallons of bio diesel and that is from the 2015 members. we are also the home to the two state-of-the-art cellulosic ethanol facilities with another coming into production later this year. additionally, we have retailers across the street that offer affordable ethanol and bio diesel blends to consumers. when passed by congress the original intent was to create consumer choice for clean fuel by spurring investment and research production and infrastructure.

unfortunately they are now using the lack of infrastructure as an excuse for setting the levels lower than originally mandated which flies in the face of the law. this issue is of critical importance to the state of iowa as well as the nation. including the security promoting innovation in the next generation of biofuels is crucial as we move forward. as you may know in february i invited the epa administrator to visit iowa and two cvn pact that could delay the release of the volumes. last week of the the entire delegation, republican and democrat come of the entire delegation sent another letter to the administrator urging her to hold a hearing on the level in the state. can we expect either of these to

happen? >> thank you senator. i can't speak for the administrators schedule but i can certainly take back to her that you raised this this morning and her office can respond. in terms of the hearing as i mentioned we are holding a public hearing in kansas city kansas. we have a regional office. there's great there is great interest in this issue across the country and is a challenge for us to choose the location of the limited number of hearings that we are able to have. and we thought having the hearing in kansas city was well located for many states that are interested in this issue and we have the support of our local office and we have to assess yesterday about 250 people signed up including a number of people from iowa so we look forward to a very good attendance and robust attendance. >> if you would please emphasize to her him the space to her that that is an open invitation

because we do want to see the administrator to experience some of the difficulties that we have had with the lack of action on the part of the epa. we can move on to infrastructure and congressional intent. your testimony you cited a lack of available refueling infrastructures as justification. however when they passed in 2005, only two types of the waivers were included, and that was a lack of supplies and severe economic harm. at that conference committee rejected the available refueling infrastructure which would have severely limited the consumer choice and the availability or the ability to get more of the biofuel into the marketplace. despite the production from

congress the epa has now decided to choose the available infrastructure as a condition to leave the standards even though congress expressly rejected that when they said the law. can you explain why the epa has blatantly overlooked the law? >> i would be happy to discuss this and this is an issue that there are many views as well as i would be happy to explain ours the language of the statute as you observe have two reasons for the epa to raise the standards. the one that we are looking at here is the one that says inadequate domestic supply debate and i understand that there are some activities. there was activity in the finalizing of the words but in fact those words are very simple in the statute and do not explicitly say what that means

and as it is often the case it is the job to reasonably interpret the congressional language in implementing the statute. we look at this and proposals and we would be happy to share that with you if you haven't seen it but the bottom line senator, is that our interpretation of the term is that congress intended for the fuel but only to be produced but to be used and that's where the value in greenhouse gas reduction at the diverse energy supply and consumer choice comes. so when you have a situation where the fuel cannot be delivered to consumers on the time frame that was sent out in the statute and congress provided this belief it is a reasonable interpretation for us to reduce the volumes to the

level that will still comply with the intent to drive the fuel. this was a big thing that congress did. it was calling for big and significant change created a program stretches out over a number of years and in order to change a system, it is taking time. we believe that looking over the history of the program in the last few years and what we can project forward to set the standard for the statutory volumes would simply not be appropriate. there is too far a way to go in so it's there for the epa to use and set ambitious but responsible levels. >> my time is expired. i would argue that we are caught in a very vicious cycle with the producer not knowing what that

volume will be. so, we actually delay the production and research into furthering of those types of fuel. without the standard being said, we don't know where to go. so, i would continue to state that we need reliable energy sources for all of our consumers. thank you very much mr. chair. >> senator. >> thank you mr. chair. i have a series of questions to follow up on as well. it feels to me like what you hear from the epa about the production volumes into the department of agriculture are quite different and there's a lot of discussion in the review about the coordination so i will come back to some of that in a minute but i just want to associate myself with the questions as well have they considered the proposed rule for the standard you use any studies or metrics to model how the rule would affect the transportation fuel prices?

>> the weight of the program affects the transportation price is very, very complicated. and we did not attempt to estimate the impact of the transportation fuel. hispanics are no studies or models. >> we certainly look to all of those that we ourselves did not try to estimate the impact would be. >> would be possible to get a list of the models that you consulted? we will follow-up. thank follow up. thank you. >> in the proposed model did you conduct any studies on how it would affect the international trade coming and in particular i wonder if you evaluated the trade flows and biofuel between the u.s. and brazil. >> we didn't do any of that. again these are issues that many people look to and we certainly pay attention to the work that others do but we didn't do it ourselves through your stomach

when you are evaluating the role and deciding which he will promulgate are those studies and what you consulted that we could have access to? >> anything that we looked at, you certainly can. >> thank you. >> in your testimony, and again this is picking up on what the senator was arguing. he said we have a door that we need to repair. you said they will continue to engage stakeholders and be working in consultation with the usda. in april the department of education released its -- i'm sorry, energy, released its quadrennial review and it stressed that it would be they would be continuing the research and demonstration activities to develop the drop in fuels for large vehicles. in addition it states that department of energy would be providing technical support to the state communities and private entities wishing to invest to dispense higher-level

ethanol plants. the part states the amount of corn used in calendar year 2014 is estimated to be 14.2 billion bushels up from the estimate and average yields at the record high of 171 bushels an acre. i think what this means is that usda is saying there's plenty end that department of energy says we need more structure and research. i think when you listen to the corn growers in my state they are skeptical of the promises and the close consultation across the department and also with different geographies and they actually just wonder if you all are skeptical so i wonder if you see the skepticism and if you can explain to them how it's believable that you are listening to these other agencies.

spackling work closely with the u.s. and i myself have been involved in many conversations with staff and leaders in those agencies and there is a commitment across the administration to work to implement the development and use of renewable fuels. it's hard to convince people that might have a different view but the proposal reflects the fact that we consult with those agencies and we are not agricultural economists. we don't try to be. we must work with them and we do. >> so to a lot of people that try to make the production decisions it is hard to reconcile the views of the future of the crop. i make former sponsor of the

bill introduced that expands that make it harder to be used in the summer driving season and i have questions related to the problem. some of these may be technical enough we need to do it for the record but the state of nevada was able to provide a breakdown in the number of registered vehicles by fuel source including those that are capable of using flex fuel in the state of nebraska and in light of your concerns over the refueling in the issues in the u.s. would you be able to provide an epa estimate of how the vehicles and the total u.s. fleet are above the 15 and in particular how many can use flex fuel and would you be able to elaborate more on the breakdown by the amount of the vehicles that could support each category of fuel? >> we do have the numbers to answer those questions. i would be glad to provide them. >> okay. thank you.

>> senator. >> thank you for your hard work and your work in administrating the program and i look forward to working with you in the months and years ahead as we continue to work on this. as a senator from michigan, i always looking for ways to diversify the vehicle making the nation more energy independent improving the environment. i believe it has been a proven program that is driving forward the alternative fuel in the economic development is creating new energy jobs and it's also strengthening the agricultural markets. i appreciate the effort of the targets would also trying to balance ip leave the targets do not fully reflect the intended goal. when they passed the intent was to set ambitious targets to spur innovation and in order to

accomplish the goals i believe we have to stay the course and keep intact. the latest proposal is an improvement over the 2013 proposal but they do have consequences for the security and environment and in addition to delays in the rule making over the past two years have shown that this is a big concern for necessary investment in the cellulosic biofuel as they reach the reached the commercial development. the latest proposal cites a lack of supply to reduce violence and it wasn't the congressional intent to allow them to cite the availability of supply for the blending distribution as a condition to its waiver authority. i joined a letter signed by 37 senators stating the conditions i did outside of what we think is defined as a waiver authority. in relation to the infrastructure investment ivy league it's clear that it will

depress the credit crisis and the incentives that exists today for infrastructure investments and this is troubling given the fact that before the investment was rising very rapidly and now it has stalled as a result of what is your plan to get the infrastructure investments made if this proposed rule is finalized without any changes. as you cited the certainty of having the volume is critical for people to know what is coming. the administration and the epa to steadily grow volumes over time and that certainty is very important. it's very committed to looking for enhanced and improved infrastructure that have recently announced a program to help do that with the funds to

help build infrastructure. and we think that the combination of those efforts that we are doing to streamline the pathway approval process so that we can get these new and innovative pathways approved and into the market will also help and as you put them together, certainty from the regulatory side, some support from usda and others across the administration and people realizing that more fuel and choice will attract consumers who want these fuels. those things will help us move in the right direction and continue to make real progress. >> so before we had the certainty i think that the biotechnology organization revealed that the recent research has found that

13.7 billion the investment in the biofuel was lost during the one year since the proposed leap. does that sound accurate and is that a big concern? >> i couldn't speak to that number, but we absolutely are concerned about the lack of certainty created and that's why we are getting the program back on schedule. >> did you see the amount of fuel blended and increasing in the future years beyond 2016 and if so i mean how do you see that playing out past 2016? >> i do see it continuing to grow. the senator acknowledged that there was very little fuel in the market and now there is more than there was and we see growth and the sea pathways coming in and i have many conversations with stakeholders from across the biofuel industry that are very optimistic about their ability to supply fuel to the market place. and as i noted before this law

is calling for something of a significant transformation in the way that transportation fuel is provided and these volumes we be beef will continue to encourage and promote and drive the changes. >> what were the results? >> greenhouse gas emissions are fundamental to the purpose. when we set up the program in the 2010 will, we did an evaluation of greenhouse gases for the annual fuel volumes we don't do an independent look at the greenhouse gas missions. >> i look forward to continuing to work with you. this is a critical industry in my state as well as the other states here. it's a critical part of the energy independence for the country, and with the agriculture in particular. we have a special connection given the fact that i represent

michigan which is at the center of the auto industry as well. so i look forward to working with you. >> we appreciate you being here in the conversation. let's walk through some history that we walked through together because we are looking at how to resolve this in the future. 2010, the final rule was four months late. in 2011 and it was a good year only two weeks late. the 2012, 1.5 months late 2013, nine months late. 2014 to 18 months late and counting and 2015, six months late and counting. the challenges once we get into 16 17, 18 and keep going how does this get better and how do they get on schedule so that it's ready by november and is the congress put a requirement it cannot fulfill. is there something in the

structure that they cannot meet this requirement? >> i think that is a very fair question. they do not like missing deadlines. i think that a couple of things have happened as we talked about last time when i visited with you that 2014 was particularly challenging and led to the significant delays. i am an optimistic person. my job is to implement this program and meet our statutory obligations in terms of time of timeframe. so i'm confident we will do that and i'm confident for a couple of reasons. one is through this rulemaking this year, we will get ourselves back on track. we have 2014 was something of a significant year because of the impact of the ethanol which was a significant issue that people engaged in very, very robustly.

and that's time was going to come at some point in the implementation and last year was the year that it came. we learned a lot from the process and all the conversations we have with people and our proposal, the current proposal reflects a very different approach to implementing the required volumes in the statute evaluating those in light of the fact that we are now at and below the wall. the approach that we've taken now which as it leaves out for years can show that epa thinking over that three-year period of time. if we were to continue with this sort of approach, we would have an approach that we firmly believe would enable us to issue the annual volume standards in a

timely way. our staff of technical folks are working on it all the time. so it's not that we -- been a get is just a matter of the method and the concern. let's say 14-15-16 so we have that out. then come november of 2016, now we are at a recent time. i would assume there is no chance we're going to hit for 2017 based on the statute and what is required so that will require the reset we are nothing to be 50% unless there's a tremendous amount of cellulosic that comes on board. with the assumption of all the way the statute is written with a corn-based ethanol continues to decrease as it is required in the statute and the cellulosic continues to increase. if there is a clear aspect of the law that is clear.

it is also not possible based on the production. so, you've are in a very odd quandary come november 2016 to promulgate a 2017 so where i'm coming coming at it as it looks like we are going to announce 2016 on time and 2017 is coming. how do we avoid? >> a couple of things in response to that. you mentioned the requirements of the statute it does lay out circumstances under which we consider the reset, which is a significant undertaking because it is for multiple years in the future. >> but what you've agree in the cellulosic we are going to decrease that by at least 50%? >> yes, i would agree. and depending on how these volumes turn out we may hit the reset trigger for the other volumes as well. we actually think that it makes a lot of sense to focus the reset on all volumes at one time. and it will provide a lot more

certainty to everybody to do that. we also recognize we have an ongoing obligation to set the annual volume. so, we will be looking to plan our work so that we can accommodate setting annual volumes while also proceeding to continue reciting it to trigger those for the volume. >> let's talk about how you get the comment in a conversation going on the reset because setting the proposed volumes, that is one methodology the methodology that there is a conversation right now and then you will finalize the rule by november 30 of this year. then we have got to do both the reset and volumes next year. will that be two different processes processes or the comment period based on the reset and based on the annual will they be combined? because i would assume you are creating a method basically on how to reset in case it has to be done again in 2018 and 2019 to try to evaluate from their periods. so two different processes or

one? >> it is likely that the process would take longer than the one required for the annual volume. so while this is an firmly decided, my expectation as it would likely be the two processes. and each would have the comment opportunities and multiple opportunity for stakeholder input. we would do much information gathering as a part of the process. >> width of a recess process would that be before 2016 begins if it is going to take more than a year because you have to promulgate that amount by november of 2016. if the reset which i would agree with take longer in the conversation because it would be contentious to say the least there are different players interested in this and i come back to the conversation on corn-based ethanol that the mandate and the statute said decreases in the cellulosic increases and we have to figure out how does that work when it doesn't exist near the quantities needed so as that comes through when do you

anticipate i will go out for the comment and we will start. >> the highest prerelease to make sure that we get the 2014 and 2016 volumes out. that doesn't mean we don't already have to start thinking about the kind of things they need to think about for the reset. so i do not have a schedule for you on that reset rule making. but i can assure you that the one minute 2016 is done we will be pulling a plain or full attention to the 27 rule and the reset. >> this is what i would like to do. there has to be around for water cooler conversation and the timing. you are very good at planning these things and trying to back up if we are going to have that here we have to have it here. you can plan all that stuff in the draft proposal and proposed rulemaking way to know that agenda and so can you give a recess recess time frame at

least on what the major calendar events will be on the reset? is that a reasonable amount of time to give? is going to tell us how would the reset is that when the major decision points are being made and when the comment will come out? >> i would be happy to talk about folks how much clarity we can give you in the timeframe senator. >> if we could do that in a month and come back and say let's at least get the schedule so that we know where things are going and give you enough time to get a level of predictability. >> thank you mr. chairman. >> for soft, i don't think that we know what volume ethanol can be produced because we haven't given the market certainty so we stalled out the investment. so somehow there will not be enough supply to meet the standards and select trust -- let's not presuppose or prejudge that discussion in terms of

what's going to happen in the marketplace. but i would rather get back to the rule that we are talking about and debate. i think i mentioned in my opening comment the senator followed on and kind of walking through the legal authority to basically deviate from the statutory mandate. when you said the legal justification is inadequate to the domestic supply, i think most ethanol producers would tell you to them just explaining the supply of ethanol and there's plenty certainly of bio diesel in the marketplace. in fact, we stalled biofuel and shut down the bio diesel facilities because we didn't have enough access to the market. so the inadequate domestic supply and means what it means to anyone that would read it which is a supply of the product of the fuel.

it's basically the refueling infrastructure waiver. did you look at the legislative history in 2005 when the house language pretty clearly addressed this by saying based on the determination that there is an inadequate domestic waiver and the determination that there is an inadequate drastic supply or capacity to meet the requirements what does that tell you if amended out of that is the distribution capacity and all you have is domestic supply? what would that inform you of in terms of the history? >> what i need to look at is the language in the statute. if you are going to read the language inadequate domestic supply and read it and what i would consider a fairly twisted

way you should look to the legislative history that's what lawyers do and the judges do. but the intent of congress and when congress reveals the language or rejected the language in their final analysis distribution capacity what does that mean what does that rejection mean? >> to me it means that there was a discussion and there was interest in this issue specifically from at least some members and that language didn't end up in the statute. >> what does it mean when there's language for post in one when you eliminate or take out language? it seems that isn't the intent of congress to use that. you can't bootstrap the domestic supply language to deal with refueling it in its infrastructure. i'm not unsympathetic to the challenges you have in implementing this but let's not pretend that you have a very good legal argument for the waiver that you've done.

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>> so i look forward to seeing the schedule i imagine we'll have discussions whether it's in the agriculture committee or whether it is an issue that is going away anytime soon as senator lankford said we are a recess and obviously trying to finish these years.

by finalizing the rule for the marketplace that has a 70. we cannot see this delay. it is incredibly disruptive. thank you mr. chairman. >> this is going to be a more open dialogue. i would mention one thing with my colleagues as far as the congressional intent of the law i would remind everyone especially on the corn-based ethanol if there is anything that is clear in the law it's clear that corn-based ethanol is a decreasing percentage of what is used in the days ahead at about 20 or 22 environment of the number correctly 44% of the ethanol that is used is to be cellulosic. so the corn continues to decrease. it's one of those clear areas and so you have a big challenge that we are not producing in the

amount. if i were to recall correctly adding in the cellulosic as well but a bumped up the numbers and capabilities that because the cellulosic technology hasn't come through completely with the switchgrass and what products and everything else that has been included in that category. was there a discussion on the shifting has been continued and is that some of the conversation that babies even that cellulosic category more? where does that go as far as definition? stacks to get back to you on some of the specifics, the additional fuels are coming in to qualify the cellulosic. so as those coming those come in time that we added those to -- >> talk us through the definitions that are in the

cellulosic. >> the one that has happened recently is biogas, which was recently approved encouraging the amounts, so that's one. we also have various ones that are in process. kenny kress that's one. we would provide details on the recently proposed. >> it is somewhere around 206 million gallons for 2017. i believe the mandate is around 4 billion. so again coming back to -- i do not see any way possible that we will not have a significant time [cheering] as we approach that number on the cellulosic side of things in there that goes. help me understand. we talked about 2017. the methodology that you set for 2017 i would assume is going to bleed through to 2022 when this really is very open at that point.

when the statute stops to think rarity and the epa has the ability to be able to determine the amounts in all of these as you do with the amount of diesel right now. where does that go into the example a good example to be able to look at the path considered for 2022? but as we are looking on the horizon for 2022 isn't that far away right now. what is the best model we can see heading towards 2022. >> is both near and far and we have much to do in between here and there. there is a look at those volumes and that will be an important place to think about that. i will say that it's our hope in the approach that we laid out in the proposal is one that we can rely on and people can look to as a way of thinking about how to predict the volumes in the future years no matter how much

the reset cool comes out in terms of changing the volumes in future years. >> that's what i'm trying to get at. there's a tremendous amount of capital investment whether it is in iowa during capital investment or plans or where ever it may be everyone is looking at a ten year window in the capital planning. what is going to happen in 2022 is incredibly significant right now because a facility doesn't come up to speed in a year or year and a half or two years. so, that investment portfolio is incredibly important. when could we expect any kind of clarity in the epa on how the path is going to lead to 2022 and what happens at that point if you could get a picture of the kind of timeframe but you hope to accomplish noting there are billions of dollars of investment that will be affected but have to have some advance advanced planning. >> the standard itself set levels out to 2022. and in our view and in the view of many those standards are

ones that placed in the near term here we think are achievable. our job as given by congress in the case that the volumes turn of the volumes turn out to be problematic to achieve, to reset those volumes, that is the rulemaking that we would have the public discussion and go through the information and reset those volumes into the future which then would provide that certainty in the future and the idea is that those would be the volumes that would be reasonable, responsible, achievable and meet the intent of congress growing peaceful humans, so that we wouldn't need to be talking about the waivers in the future. >> let me help provide some clarity to be able to join the in the conversation. when you talk about the reset about resetting a number or the method of how you will get to the number each time.

i'm talking about the process because because you are right we talk of two different processes for setting the number so the process of how we will set the was at the numbers and resetting with the new numbers will be. my understanding is that that is what we will do what we've undertake a rulemaking looking at all of those factors to determine then what the number should be for years out into the future. and then the annual -- i'm sorry to interrupt you. >> to help us understand when you talk about the reset side of things. >> the statute goes through 2022. so i'm not prepared to discuss today because we haven't really thought about the issue about what would be the responsibility to go beyond that.

but we would be certainly looking at the statutory. >> said the hope is to get some sort of a recent number that goes out multiple years with the annual coming-out on time in november. and then i would just say to you again it would be extraordinarily important for all players involved that we start working towards the certainty on this. >> thank you senator. yes, the cellulosic has been an important move. we have bio diesel of the ethanol and that is up and running. innovation and technology is advancing so rapidly and we have those investors that really do want to join. i think think the senator is that senator eluded to earlier that the investors when there is not a proposed volume out there they are very hesitant to engage.

so we have to cellulosic plants that are up and moving and we have a third set to come online. but for any state in any investors to move forward, they want to know that there's going to be a second volume and a demand for those products. so, first we have to do with know what those volumes are in order to invest in this area. and we also need infrastructure that is available. and again, you used that as an argument on why we need to lower some of the volumes. but i think that one of the original intent of this was to incentivize getting some of that infrastructure into place. the high volumes of bio diesel ethanol are used throughout the midwest we have the plans, but we also have the infrastructure in place to support it. so many of the vehicles are being purchased on the coast and they don't have that type of infrastructure that we do in the

midwest. so, i would argue that we need to continue investing in this area and make sure that it is available. it is all about consumer choice as well. so that senator asked something and i would like you to follow up a little bit about the greenhouse gas. because i find it really ironic that this administration for public focus has been on the clean environment and reducing their greenhouse emissions. and yet, what you are proposing is a direction that will increase those carbon emissions by the utilization of these biofuels. so maybe if you could comment a little bit about that. >> we do in underpinning of the

program. it's reduction in greenhouse gas. they get into the advanced and cellulosic advanced biofuels. that's where the reductions can be to qualify their greenhouse gas emissions need to be 50% less than for the cellulosic 50% less. that has been happening. of course the volumes have been increasing steadily over time. we take the cellulosic biofuel from 33 million gallons in 2014 to 206 million in 2016. for now that represent a substantial growth.

those that were associated with categories and by growing the volumes by setting the targets to drive growth in the responsible way we will be seeing reductions in greenhouse gases because every gallon of gasoline that is replaced by cellulosic advanced biofuel is the greenhouse gas emission. >> i would like to make a point about this. the proposed 2016 standard for the cellulosic biofuels with the lowest greenhouse gas emissions is 170 billion gallons which is six times higher than the actual 2014 volumes. i think that it is worth noting that it is likely because the commercial scale refineries can

online in 2014 and one more slated for the end of this year. the refineries were made possible by the investments that were created before. when you look at -- guess how many proposals have been online blacks zero because we disrupted through this rule and it through the lack of timely rulemaking we disrupted the environment. we need to get back and i think no matter what our view of the wisdom of the rss is if it is a lovely expected to be administered in a way that congress intended. and i think that the senator is on the right track when he says tell us the schedule is. tell us what the plan is because if we can debate the wisdom of this wall in congress that is our job. but it's our job to administer the way that congress intended and that means giving of timely

because i think that we can meet these standards if the investments know that they will have access to the market. and so come, it is just critically important that we not automatically assume we are going to have a crisis on the cellulosic biofuel or ethanol before we get the certainty to the market. >> i would agree. with the cellulosic as well we have other advances coming. and of course, investors are not looking at that in a way that we had hoped they would if they had a six volume three of us are again, technology is advancing as a great renewable energy source taking basically waste products into producing a fuel that is very low of the greenhouse gas emission. and so i would agree. i think that we have a law in place. we need to understand what the volumes are. but we do need to move forward and follow the intent of congress and i am at a point

where i don't think that the epa is doing that, but i hope that we can work through these issues. >> let me do something everyone at home is going to be shocked at. no one has been able to make it in a quantity that is affordable yet. that's been the challenge of it and the largest manufacturer of the cellulosic products just went bankrupt in this past year. they were the leading industry that after a decade of trying to make the technology work they couldn't get work at the price they could afford. there was a lot of experimentation with this it's not close to being market ready.

whether the lots of folks are experiencing with switchgrass in the voting stock and algae and other great ideas so far that is not a technology that exists. it would be produced by the solar power. it's now 2015 and we are not close to that number. their own studies have come out and said that if we had the totals, the ozone levels go up across america and in many areas we have been significantly. so the challenge that we have right now is that we are dealing

with a balance of how to we get our totals. there's a lot in there. but i would agree that there are a number of factors that have affected the development of the cellulosic fuels. we work very closely with the producers and the developers. we spent a lot of time with them so we can understand the challenges that they are facing and we certainly are here as you have described the desire for certainty in a market. we also hear about other challenges the fuels have had getting up and running. and i think that at everybody wants those types of fuels to be successfully produced and marketed and the more that

happens to prices will come down and people will use them. but i would agree with you. it's going to dramatically increase the usage even six months from now. trying to figure out the assumptions that went into that because my understanding is there are enough of the vehicles on the road right now to meet the requirements that many of those individuals that have the eap five vehicles choose to purchase at that as a consumer preference. so i'm just trying to figure out how they assumed that the e. 85 would jump when the owners that choose not to use the product. there are some on the road today that can use the id 85. our information is that there are about 3,000 stations in the -- i see that as my gas station

but not everybody does. there are issues in the pricing of its because the energy value. i don't think people fully understand that, and this is a long process to change peoples understanding of the choices on the transportation fuel and prices in moving in directions that will enter which people to understand that that can be an economical choice for them and i think that that is a multi-year process and we have seen progress there. they want the fuels to be driven into the market. there is not a method that we

anticipate on the car purchases or availability that people have the vehicles will start using this product more. >> we looked at a variety of things and we know that there are the fuels out of their that are not now. there is not a precise mathematical formula used. >> is more of an aspirational goal. we see this and anticipate that use. >> i would say that it is an optimistic goal that informed by our judgment. there are already so many things that went into that.

and that it was going to take a push in order for that to happen they would allow more renewable fuel to be used and would be used without. >> i would say going a little bit further. again a lot of the flex fuel vehicles that are brought up there they simply don't have access to ee 85 because the infrastructure is not yet available. they would see the use of go up. so, again, i do want to go back. there are challenges to the cellulosic and the algae as we move forward but again so many other types of fuels have seen this problem in the past and it is a great example of that.

and i support tracking but it took many years to become cost-effective way. moving forward in iowa many states are using forward and cellulosic and the greenhouse gas emissions go down tremendously with the product. the nascar drivers come in and swear by this as a fuel source. i think that the jury certainly isn't back on this. >> but if you look at the analysis of the model year 2015 bora and warrantee statements and owners manuals.

the e. 15 but we haven't talked about yet and approximately two thirds of the vehicles and about 15 is approved by the epa for all 2001 and newer vehicles which really accounts for 80% of the fleet of automobiles out of their. was this taken into consideration or how did you take this into consideration when you developed the rules? >> i have an appropriation hearing i have to run back and forth on it if you would excuse me to take the cherry at this point i would return and. it was a way to get more ethanol into the system and there's been

a lot of discussion about the vehicles using it and not using it. there's there is relatively little getting into the system now. there's fewer than 100 stations that are operating in the e. 15. this is an issue that we need to be focused on. as more and more new cars come in to the system and understand and are comfortable but this is a fuel that they can use in the vehicle but those attitudes will change in the prices will change and the infrastructure will come. it's a challenge, senator i. grant you. ..

not the major distribution centers but those guys who now are concerned about the quality of their tanks, concerned about the regulation of ee 15. what is the conversation back and forth between epa and the actual convenience stores and filling stations? >> they have conveyed to us challenges and horse warning to meet the needs of their customers looking at the cost to install new infrastructure and uncertainties that they might have about new technology and just being able to cover the

cost of putting that infrastructure and by being able to sell that product. >> do you think you have clear rules on what epa's requirements are? >> i believe so. >> a lot of them don't think so. think there's a level of uncertainty and as a result they think they tend to be concerned and maybe think about overbuilding infrastructure or overbuilding their tanks so that there is no concern at all later on. >> that's something i'd be happy to take back and look into senator. >> we are just talking about blender pumps and all of those issues the infrastructure issues and what that means. we are also talking about long-term concerns about moving to be 15 so it would be good to figure out what role epa plays in providing this certainty to our filling stations as it relates to converting and moving into ee 15 which most of

vehicles basically our prayers for your. >> i'm glad to look into that. >> with the sub to the impact to our u.s. consumers if they do have that choice are using e-15 is typically anywhere from a nickel to a dime lower even than the e. 10 so across the united states the impact to our consumers is there is a savings of five to $7 billion per year in their own pockets so it's something that i think we need to take a look at and continue to refine. did you have any further questions? >> as long as we have some time here and the chairman when the cat is away. when we look at i think the

prices and just it's so complicated for a lot of people to understand but your latest proposal talks about the lack of correlation between written prices and gas prices as low as any to have higher prices to drive infrastructure however your proposal had the opposite effect in the wren rain market in d.o.e. has said we want at 10% lands by 2016. when you guys were plotting this out did you consider the disruption but that would have to the market and what that would mean long-term and does that inform how you want to deal with this in the future? >> i think one statement he said senator that everybody can hardly agree with this that this is incredibly complicated, very complex. i have been working on this for two years and i feel like i'm beginning to understand it but i'm not an economist and so

there is much discussion about this issue that goes on with that kind of training and understanding. what we tried to do was provide more information for the public record about what we have seen in the subplot -- rin market that we would not purport to say that rin prices the relationship between rin prices is very complex and is affected by many things not just the volumes that we set. >> don't you think you were a major driver? >> i wouldn't say it's not a factor but the prices of feedstocks and the many things that go into producing fuel have a lot to do with this as well. so it is not simple. it is complex. we pay attention to rin prices

but we don't formerly factor them into our decision-making because it is so complex and it's clear congress established the credit system as a way for this program to work and for obligated parties to show compliance so it is a fact of how the program works and as long as biofuels are more expensive to produce than gasoline you need the system that congress set up in order to drive those volumes up to make the fuels more affordable for people so it gets into the system and it builds and people use it. >> i guess we will have to agree to disagree. i think it was a major factor in what happened in the rin market

and i think we want to at least avoid people like me coming back to you and saying this disruption has created an additional disruption in the marketplace. i want to ask the chairwoman senator baldwin's statement for the record. >> yes, without objection. i could go on all day when he you think about the value in having renewables. it has been exciting to see the development over the course of time and we do have to remember that this is an energy area that is fairly young compared to other types of energy sources that we have had here in the united states and we have seen supported those industries for over 100 years. relatively young developing source of energy and clean burning i would say and very

supportive of our economy here in iowa which is why even though it was expressly written in the law that we used domestic sources of fuel i would encourage that in the future is something we take into consideration rather than utilizing some of these biofuels from other countries as well so that might he something we need to look at in the future. i think that would help increase our production obviously here in the united states that promote infrastructure and promote their their -- development and further technology advancements. senator heitkamp. >> i just have a final comment and it's probably not exactly on target here but we have been talking about advanced agricultural manufacturing meaning let's use products that are renewable. let's use green products. if you look at the fuels industry the fuels industry has been a building block. it's been a foundational piece. the technology that was developed in fuels led to a lot of great advanced manufacturing and so this has an environmental

effect beyond just the fuels market. this has an environmental effect on all kinds of building supply issues, all kinds of issues as we build out more and more renewable sources for building supplies and is debbie stabenow wants to say you can't eat your car seat because it's made out of soybeans. so i think this has been an industry that has been very beneficial to the united states of america and i think beneficial to consumers. we want to make sure when congress has a policy and it pretty clearly states these are their the reasons for waivers that the agency is responsible follow set policy. like i said i'm not unsympathetic but in part this was to drive the infrastructure and when you retreat from the number that has the opposite

effect and it just creates a spiral to a place where we don't want to be exist that would not be a place that would a consistent with congressional -- so i look forward to working with you ms. mccabe and talking more about what the future holds. i look forward to hearing the outcome of the hearing that you were going to have in kansas city. i know it will be very robust. i know you are probably getting tons of comments already and hopefully a real look at some of the issues that we think are possible that will in fact be more consistent, adjusting the rule and i would particularly ask you to look at that in the bio diesel area. >> yes and just on the final comment is the senator on his way back? just kind of in some of my conclusions i think we need to get these volumes set but we need to take close look at what

we are doing and how we want to encourage the market to develop and begin that vicious cycle in place. right now commodity prices are extremely low so when you see 3-dollar corn now is a good time to be developing that area and working with ethanol or cellulosic. so i would encourage a good hard look at that and again look forward to working with you. again if you would please emphasize to the epa administrator gina mccarthy that we would absolutely love to have her in iowa and be able to show her the process from the time that seat goes into ground to the time where we are producing it and sending it to producers. we will recess for a few minutes and wait for senator lang or to conclude. thank you. >> thank you senator.

[inaudible conversations] [inaudible conversations] >> we just returned back from recess. i apologize what the delay. we are working for the interior appropriations which epa has dashed. i would have appreciated being in that dialog. you and i have had this conversation about e-15.

epa police vehicles from 2001 forward can't handle e-15. manufactures on the whole tune. if you go to manufactures the last year or year and a half more manufacturers are allowing e-15 in their warranty. would you agree the vast majority of the manufactures do not believe e-15 fulfills their warranty from 2001 to 2013? >> i wouldn't want to characterize the number. i know that is an issue for some manufactures. >> i have a chart that walks through that details each and every manufacture and if they have any model at all that allow e-15 to be within their warranty is only over the past year or year and a half but even the majority above 50% of the manufactures have any vehicle model at all that would say e-15

would be tolerable in their engines. the challenge we have increasing e-15 means you are increasing e-15 a new vehicle so it's limited amounts because most vehicles are older. my truck is 12 years old that i drive. that's common for most americans to have an older vehicle so the challenge is increasing numbers of ead five and the assumption that we will have this large increase on the ead five. when there's a limited number of locations you can get into this point going back to the assumptions and the pattern here. it's a pattern of how we discern what's coming to epa and a method of making the decision. >> we did not assume hardly any e-15 in these proposals for the reasons you cite and quite a few numbers stations that offer currently. >> when we talk about the bio diesel is the same thing which

that product has exceeded the expectations of the amount that's manufactured. what i want to get as a percentage or method of your counting on the small percentage of higher diesel that cannot handle the work temperatures. we have certain percentages out there that i believe is 56 degrees and down and start serving in -- turning into a solid. so the question is how did you do that estimate and the method and expectations because bio diesel is an open amount and you can't set the amount from year-to-year based on what they feel is best information. how do you split the two there to say that this part can be used in el paso texas and southern arizona year-round but everywhere else it won't be used year-round. >> so as you know we look at these things from a national perspective and we look out the increases in the amount of bio diesel use.

i think i would say senator i would be glad to follow up and confirm this in more detail with the volumes we are proposing here we are not in danger of exceeding the amount that the system can absorb without getting into any sort of performance problems. >> i want to try to get the assumption from the growth of the specific line of product is a line of bio diesel that has difficult time with lower temperatures. you're assuming the growth and information saying that growth is in the area that is not the part that has a difficult time in lower temperatures. >> i'm not sure that it's different fuel. we will follow-up with more specifics. >> it's the one that uses animal products basically and that type of bio diesel at 56 degrees doesn't work well so you have to use it in warmer climates where you are never going to get the low bad and there are lots of parts of the country that do but

if you head north very far you will run into problems with that that. let me ask a little bit about the cbo reporting. according to cbo if it was repealed for its future mandates were kept previously proposed 2014 numbers corn-based ethanol production would remain at 13 billion gallons. was their assumption that basically corn-based ethanol is in the fuel system. the prices are where consumers want to be able to purchase it and cbo estimated that the mandate it away with that stay at 13 billion gallons according to ethanol even without the mandate. when you are looking for the push their you are trying to push some of the products into other places that the market is not requesting it that point but since the congressional mandate is to push this out of other areas. the challenge is that 13 billion cbo is estimated that the market

requests do you use that as a baseline or is that a number or an estimation that you use and you considered consistent with cbo if the mandate went away totally the 13 billion would still be there? is that some sort of baseline number? >> that number i believe is reflective of the 10% amount that ethanol now fills and gasoline. you know i think senator that we don't actually set standards for ethanol in the rule. ethanol fills them because it's considered conventional biofuel so we know where the blend wall is likely to be end of course depending on how much fuel is used and so we take that into account and then as you reflect that understand the intent of congress was to push more into the system then what be 10

accommodates on its own so we build from that. >> the issue that is interesting and again this is not your study but in 2014 cbo in a study that said that if the mandate went away on corn-based ethanol their study said 13 billion gallons would continue to be used. it's in the system and built-in and we would like to use it but it also said there are 13 billion gallons continued to be used in the price that consumers pay for gas language language -- would go down which was an interesting study to look at. that is not what the hearing is about to talk about but i want to remind folks that the people that do the scorekeeping around here have reminded us corn-based ethanol works in the market regardless without the mandate and the prices would decrease for consumers if we would remove this mandate. i want to go back to something we talked about earlier and that's the ozone issue.

i know you have to balance both of these as well as many other things. how were we doing balancing this in the internal conversations? what happens to ozone levels and how ethanol does increase ozone levels and then the coming standard? >> the setting of the ozone standard is a health evidence-based decision that the administrator needs to make. with the ozone standard is about the is the administration determination about what represents a safe and healthy level of ozone in the air for people across the country to brief. we are not permitted by statute and this is then confirmed by the supreme court. that's helped-based decision is not to be influenced by implementation issues. that is dealt with in other parts of the clean air act and that has been the work of state and industry and the epa for many years. we do our job under the part of

the clean air act that says we set the standards of the american people know what is the right level of ozone to have in the air. we then work with the states and others on assessing where across the country those levels monitored ozone levels exceed that standard and that is not everywhere in the country and not by a long shot. so once you identify those areas you look to see what are the emissions country bidding to those high ozone levels. the way ethanol can impact of ozone is not uniform across the country. it relates not just to the use of ethanol but the production of ethanol so that could be a very localized situation and those may be areas where ozone levels are healthy already in meet the standard.

so it will be a situation that we will look at place by place to determine what needs to be done in order to make sure americans have healthy air to breathe. >> we still have the same challenge ms. mccabe and then as we have a mandate to use more ethanol and the coming mandate to decrease the ozone. those two are going to be in competition we will have cities and communities that have an increase in mandate for ethanol but then they will find ways to use more public transportation to decrease their lawnmower usage or major industrial complex will have to relocate to be able to retrofit based on one mandate competing with another one. i know this has to be an ongoing conversation where communities will have to say you are telling us to do this but telling us we have to change our stuff when this rule is part of the issue.

>> yeah but it's really a question about in any given area was contributing to those high ozone levels and i don't think it's fair to conclude senator right now that there areas that will be significantly affected by increased knocks associated with ethanol use as we look at areas that might not meet the future standard if there is one. >> we will have locations that will be point to outside the range and that .2 could very well be ethanol-based. it could be part of that. the numbers are so close. if there was a big gap i would understand that but there are not many locations. ethanol will be one of those country bidding factors. so this is just going to be a large cost issue for a lot of communities and we are trying to figure out how epa is going to address that. again there will be a different

piece of legislation for a different committee. that point to differential will be significant in many communities. >> i do understand i have very much appreciate your point. the history of states and epa working together to reduce ozone levels has been to find the most cost-effective ways to reduce the precursors to ozone in areas where it is high and that is the process that would ensue if a standard is changed. so there are lots of things that contribute to ozone nonattainment in areas that have that problem. >> would there be a possibility and that portfolio of options that the community could save their .2 one of the options on the table would be the tonic to use as much ethanol in that region? >> i think that would be a very complicated situation given the competing mandate that we have.

>> that is why bring it up because you have competing mandates. if they have 10 things on the table decreased use of ethanol in the area is not an option. when we know that's intruding factor. why couldn't that be on the table as well because we have two competing mandates. >> that is a good question senator. >> we will have to resolve that and i would like that to be in the set of options that the community could have to make a decision rather than have a hit on several industrial areas when we know ethanol uses one of the contributing factors at least to have the flexibility. >> fuel use yousafzai's been an issue in considering how to meet ozone standards and the agency and the states have balanced the various requirements that the congress has laid out on fuel use against other options that they have so it will be an

ongoing conversation i take your point. >> the other issue deals with the foreign importation of some of the fuels that are coming in the near senator heitkamp brought it up before. it's a question that several folks have two asked the question. if this was about protecting the environment and american energy options was the intent and clear and statute as well. how that affects the amount and the targets. the targets going to be set should that be included in a different conversation whether we'll out to command that is the target number for domestically produced or all that is used? >> that we understand the targets for all that is used. >> could that he fulfilled entirely.

could the entire requirement be produced overseas? >> it's highly unlikely. >> highly unlikely but it doesn't basically matter whether it's foreign or domestic? >> of all we are going to use in this country. >> that will be an ongoing issue and something we will have to deal with in the days ahead because again the clear mandate of this is focused on american energy efficiency i s. and the way we ought to provide her own energy independence. if we are not doing that was the difference between importing oil and sugar cane? what other comments would you have for me in the days ahead for the timeframe that you have not had the opportunity to talk

about yet? >> senator appreciate the opportunity to speak to you today and you were true to your word that you would provide an opportunity for us to have a conversation. i know there will be a lot of discussion in the months ahead as people are getting their comments into us. i want to assure you how focused we are on this program how much we understand and appreciate and agree with so many of the things that have been urged by the senators today in terms of administering this program the way congress intended. i will reflect again that there are a variety of views even about what the statute requires and what congress intended and i assure you we are doing our very best job as we should as the executive agency charged with administering this to do our best to interpret the statute in the way we think is appropriate and is best for the american people and to make sure that we have both ambitious and

responsible efforts to implement the renewable fuel standard and that is my commitment to you. >> thank you for that. you know full well we will have an ongoing conversation with the reset the process and the time period and some predictability to know what it's going to start and what the assumptions are going to be in that conversation because the reset is coming and is coming extremely quickly. 2022 is both near and far's you mentioned before in 2017 is not far away at all. the parameters will be set by november 2016 so we are very close and we will be in the middle of the ongoing conversation. that is the one piece of this that i know we have to maintain a public conversation on but a very clear conversation on when the rules will be set in how we get us back on schedule. if we are back on schedule as of november of this year all of the rules change suddenly and i'm concerned that is going to roll

over as well in the days ahead. before we adjourn i would like to announce on july 16 the secretary will hold a hearing on briga three issues for over iraq oi route. this concludes today's hearing and i would like to thank ms. mccabe for your testimony and for the brief recess that you had to endure. the hearing record will remain open for 15 days for the submission of statements and other questions for the record. his hearing is adjourned. [inaudible conversations] [inaudible conversations]

[inaudible conversations] this week "the communicators"

visits microsoft washington d.c. offices to talk about microsoft's lobbying efforts and about what's going on in microsoft's research lineups. >> joining us on "the communicators" is fred humphries who serves as the vice president for u.s. government affairs for microsoft corporation. mr. humphries what does that mean? what do you do for a living? >> guest: i microsoft's chief advocates. i am an ambassador to capitol hill to the administration lead a wonderful team of government affairs professionals that do advocacy on publicly policy issues that range from security surveillance trade tax a whole host of issues and one that is important as education. we do the advocacy for the company. >> host: you don't come from a tech background. >> guest: i've worked on capitol hill. i worked for u.s. represented gephardt when he was the democratic leader and i've also

worked for governor porter tennessee for seven years. i hail from national -- nashville tennessee. at the opportunity to work with and meet a person named al gore when he was on the ticket with president bill clinton coming up to washington to work at the democratic national committee it seems like years ago. >> host: mr. humphries when it comes to microsoft whether one and two of the big issues that you advocate for as his you say on capitol hill? >> i would say first one issue is privacy and security but i would start off with something that just plays a week and a half ago the passage of the usa freedom act one that was a significant step in the right direction that you have to take on transparency and local election and issues like that. but i would say on the privacy side those are important issues and another one i would say

would be education. science technology engineering and math. you were here right now peter at microsoft's tech fair and we have 12 different displays and we have a lot of innovation going on but in order to have that innovation in the computer sciences. we need scientists and engineers. we have a thousand scientists and engineers at microsoft. we need more because there are jobs out there. by 2018 1.2 million jobs but you know what you will have to have? the background of s.t.e.m. so education is a pillar and foundation of what we need to be able to have so many innovative companies like microsoft and many others who are leaders when it comes to information technology. >> host: that ties into the immigration issue doesn't it? >> guest: absolutely. i'm hopeful. i take a glass half-full approach. i'm hopeful at some point congress will take on immigration because h-1b is

still very important and frankly i don't know the exact number but when we have some of the innovators that are here and the researchers that better here we have people from all over the world that make contributions at microsoft who are scientists and engineers and it's from other companies as well. they are still in need. when you look at it from a java perspective. >> host: let's go back mr. humphries to the usa freedom act. why do you say that's a step in the right direction? >> guest: i say a step in the right direction brinkley as a result of some of the activities. there've been some concern over things that trouble folks. to be able to think about how the government is collecting data it's important that it's done right and there are rules of the road and due process and things of that nature so what is happen with the usa freedom act when it comes to section 215 m.

local election and the collection of metadata it's very important and so i think that's a step in the right direction. i think other issues when that comes to surveillance or privacy i think about one bill that we are interested in a bill that senator hatch coons and heller have advance which is called needs dealing with law enforcement access to data and congressman moreno on the house side advanced a similar type of bill so how does the government collect information and what rights do we have them one of the things that takes place with the act as it develops the rules of the road when that comes to collection of information and when it comes to data and when you request a warrant and when the data may be overseas and what is the process to be able to get that data particularly when you have -- and they could be in a data center in ireland for example

and the individual may be domiciled in ireland so what is the process? just because you may download it in the u.s. what is the process to be able to access that data? what is the due process? >> host: that leads into the encryption issue which you and several tech have -- >> guest: on other things that took place in what was great to see is all the tech companies come together. it wasn't just microsoft. it was apple and it was google. it was yahoo!. it was linked in and twitter all have the same views in navigating together and civil liberties groups and many others in navigating for the usa freedom act and the work of chairman goodlatte and senator hatch and senator lee was outstanding and the president signed it and was supportive of the usa freedom act. what i think you see a on

encryption as you see the same folks saying hey we need to have strong encryption laws and not weaken them and yes everybody is interested in national security needs and issues but you have to have trust and hope that helps to enhance trust i think that's a good thing. >> host: how often do you work with the big five, big six company's? >> guest: we work on the public policy issues on many issues. there are some things we fiercely compete on a boy comes of the public policy one of the best to spend the usa freedom act. it's good that we all work together. another one that they're a similar support is when it comes to trade. today there is a markup on the house side innovation act one that is important when it comes to litigation reform on a patent piece and in the next couple of

days maybe tomorrow they will be looking at tpa and taa and customs and agoa as well on the trade site issues that are important to technology companies so we are all multinational companies doing business all over the world and making sure there are trade agreements that address ip and the respect for ip and making sure there is rule of law to be able to do business is so important. those are some of the issues where we are working together and there's a common interest. i tend to find when it comes to public policy issues there really aren't any major differences when it comes to them. once while there are a couple of nuances but the truth of the matter is we work a lot together not just with the big companies. it's important to know we work with many others. you have to look at the tech ecosystem and he wants to foster and nurture and make sure

startups are doing well and i think of it like one of our main goals is freedom to innovate. make sure that there are no barriers to continue to innovate and we are fortunate in the u.s.. there's a lot of innovation that's exciting and so many technology companies are doing so many neat things. >> host: have you found washington understands what you all do on the west coast? >> guest: actually i do. first of all washington is very interested and i also think it's an issue that is not a democrat issue and not a republican issue. both parties have a strong interest in technology and i find first at microsoft we find a receptive audience and clear the administration as well. at least two out of three have definitely been of interest in one of our main goals is to do in africa does, to educate and

share and to do what we are doing today. have members of congress staffers to come up here thought leaders trade association leaders organizations to come through here and look at the 12 displays to see the power of the cloud the power of data and visualization of the data and the predictive analytics. we have some really neat from sky translator to many other different projects here that i think you'll have an opportunity to see that make a difference in people's lives and in society. >> how big is the microsoft operation? have you increased in washington? have you found it to be even? >> we have always had a respectable size office and i have a decent presence here in d.c. particularly in the greater washington.

our government affairs office is in d.c. but we also have a public-sector office and the microsoft center in reston virginia and another office and chevy chase maryland as well. actually chevy chase d.c. right there on the border, on the line. >> host: you mentioned patent reform mr. humphries. what would you like to see done with patent reform in congress? >> guest: one of the real important things is the litigation reform that will take place. i think i would be a big deterrence as far as those looking to bring patent controls controls. also i think venue is a very important aspect and i think those are just two more specific on the top of my mind that are really important as we look at patent reform. i think that the sausage making legislative process there have

been actions that took place in the senate that started in today with the innovation act with chairman goodlatte is modernizing the litigation reform and dealing with venue issues. they are two things that are very important. >> fred humphries microsoft vice president from u.s. government affairs, thank you for your time. >> guest: thank you, peter. >> host: on "the communicators" we want to introduce you to microsoft's jeanette wing. she is in charge of microsoft research. >> guest: i am in charge of the core research labs for microsoft research. >> host: what does that mean? >> guest: the labs to what we call open basic research. by open i mean that we publish openly. we go to conferences. we are very open with what we do in our research so the public

knows what we do. by basic research i and may we do for basic research that is bold and long-term in ambition and hopefully that will lead to new innovations and lead to new products and services. >> host: can you give us an example of love, the open research and a basic research and maybe a project? >> guest: one of the projects we are demoing in this particular tech fair this project premonition and is an example of a bold very ambitious among term research project. the application of project premonition is actually to collect mosquitoes that have bitten people and to determine what kind of viruses might be around what kind of diseases might be around through taking

blood samples of the mosquitoes and figuring out the genetic code of some of the constituents of their blood. ..

>> >> if it is is really the

brainchild of one of the researchers of yvette jackson head-on of the mosquito application with lots of strong as an that challenges and we put together a team of people also a the academic partners to come together with their disciplinary team. so we have people who know how it to verify embedded systems and computers. >> computational thinking you are an expert in this? [laughter] >> in english it is the use

of concepts to solve problems but what that really means is it is said to weigh to tackle complex problems from a computer scientist and that is important rand ways to solve problems to make that come alive but more with the power of computing beyond what it's it could do beyond constitutional thinking to harness the power to solve real a complex problems.

>> hardly microsoft actually stands for many labs that we have worldwide. and we also have a lavish new york city, a cambridge massachusetts and in india and also a sister lab bin beijing china and we all do basic research in computer science. >> what are you most excited about? >> one of the most exciting things that it is happening now that you can see how we

tackle the ability for machines to solve problems that humans are good at solving. for instance and machines up until recently had a hard time doing that be better not. but we are making breakers is an artificial intelligence to perform as well as humans and we will see this is speech and mission and what we can do with computing is to put all of these things together and we call it artificial

intelligence that may have a single machine to start the neck with human intelligence >> but this separate think tank? we are part of one microsoft we are part of the company and organization and that is many parts is part of a think tank of the company. i join research only to a half years ago and the flora that i was saying professor at carnegie-mellon for over 27 years. has also served at the national science foundation for three years. and enjoyed that very much.

>> what was your role let the national science foundation? >> the foundation that fund's basic research, it is the primary source of funding for academic research. and with the national science and asian foreign day academic research enterprise. >> but carnegie-mellon has spent in the news. >> carnegie-mellon is one of the number one computer science departments in the world i would say. and it continues in color

computer science so worth:dash work of the of robotics at carnegie-mellon has always come number one or number two. it is especially strong in computer science. >> talking to the vice president of microsoft research she has her bachelor's and master's and doctorate at m.i.t.. thank you. >> "the communicators" is that the washington office for microsoft. we are of is debating the tech center what you do for microsoft? >> engineering manager

applications of research technology for demonstration purposes and things at scale for application in different scenarios. >> what does that mean in practical terms? >>. [laughter] we explore different ways to improve. >> what is your background? >> it is very. classically trained aerospace in junior and did a lot of computer science projects in that space accident investigation as well as prediction in technologies which allows major foray into microsoft and microsoft research through my engineering experience is. >> host: you have a demonstration. what are you demonstrating? to make today we have a project it is called wind

flow for gold the premise is what we would do with the data in the environment today that there is a lot of aircraft flying around in the united states that have data provide eight reformation and it is relatively available with companies like flight to where the use of information to provide information to the community would airplanes are doing. but the wind aloft. what is to bring at various altitudes above the surface of the earth. >> what is the potential vs benefit? >> understanding atmospheric is an important element in

imagine being able to predict what we're interested in predicting for those that could save fuel cost. >> what is on this church? >> the whole premise is dave geometry problem. it comes down to a position in space that is real. this is the information we get from the aircraft itself. but within a velocity and direction and it is the unknown variable so it is a neat trick to determine that is not obvious.

it is called machine learning coming into play as the methodology of statistical analysis to help converge that would not otherwise be obvious with your data set. in this case we could constrain the problem into different ways. first, where planes take off they tell them where they think they're going to go. that helps us constrain oslo to provide s similarity distribution so by using that assumption with a galaxy and distribution model from the aircraft but in this particular area that is probably what they're

doing to apply that across the broad set of data and surface area to come up with a prediction model in order of magnitude than the entire airline industry. >> is this the brainstorm? >> it was really done primarily done by lenders to people like collaborators added is a machine learning expert. we'll understood the problem pretty well and we also understood the algorithm and engineering problems. by a putting them together we have a unique approach to solve it but it is powerful with its application. >> is it application --

beneficial to have a bowling headquarters in nearby? >> we have not really worked with them. they have expressed interest but rarely by the benefits the entire airline industry for everybody buy better leverage. >> host: you have a big monitor. what do you want to show was? >> ivy is a a program that is of 3d model of the earth end we're looking at a set over northwest washington state near puget sound during an experiment to see if the algorithm marked. of these arrows depict for

what is a forecast on that particular day. >> is direction into the northeast? >> generally. i will turn this off. now what i cannot predict is a very non uniform distribution of these aircraft sensors with high density. >> where is that? >> right about here. that the waiver dash shared this with have a defamation for broader model but we created a new prediction is that it gave us this distribution.

if i overlaid them you may be able to tell the difference. in general we did have something that was different. so then we said given these projections where would it go? but given a the northeasterly flow and is said where it was planted it is 100 miles difference. so we feel really good about our prediction over of magnitud