supply side and on the demand side. on the supply side, two key factors on trade oil in the u.s. and also the ways of distribution that is sweeping through many countries. the impact of shea oil, the practice of cutting supply for prices which they have identified over the last 30 years. there are three main reasons why that is so. one reason is that the oil has change the perception of supply into supply abundance. it has huge huge resources not just in the u.s. but potentially elsewhere in argentina and russia. this has likely change the view of major producers like saudi arabia, about how best optimize revenue from the resources. the saudi and prime minister in

the last 18 months or so has repeatedly come back to the idea of what he calls the black swan. that in 20 years years the demand will not be there and saudi arabia may be sitting on a huge ocean of oil that is not worth as much as before. this is essentially intensified producers to speed up the base of extraction of the resource and maximize their revenue by a spending more now and keeping less for future generation. another way in which the oil has change the picture is by shrinking for crude oil. the u.s. does not need to import as much crude as before. that. that is also the case of your. the refineries have found it difficult to compete with u.s. refineries which have increased their activity with the development of natural, domestic resources in the u.s. so there is less crude flowing into the u.s. and europe, and the market is now heavily

concentrated in the eastern region. increasingly so in the next three years. that makes a much more difficult for opec to cap production and allocate production across the world. in fact opec producers, as well well as other producers are increasingly competing with one another in a very finite marketplace in asia. the third factor which limits the scope of opec to cap production is the way it has change the business cycle. it is a much shorter business cycle, the share industry, are very different from conventional companies. they require advice initial capital investment, they have much shorter leadtime, much shorter payback time. so that means that if opec had clung to its old strategy of capping supply it would in effect had subsidize the

production and enabled the producers to come back into the market very quickly as soon as prices came back up. so it is not entirely of surprises saudi arabia and the other opec members have given up the practice of that production. other producers also have been incentivized to produce more in their countries. this is the case of russia, iraq, brazil, all these producers have been incentivized to use more. now the demand-side, demand has been very weak and that has undermined prices as well. normal demand response one might expect from a drop in prices has not happened for number of reasons. the economy, the slowdown in china, changes in the currency of nature consuming countries, and that could d subsidize all prices by number of emerging

economies. in addition, the environment and many economies, low prices increase expectation instead of stimulating economic growth. there is concern in the oil sector with the rapid pace of penetration of competing fuels like natural gas and renewables. all these factors are changing the picture and it means there's much more supply. we are seeing out the beginning of a supply and if that continues to exceed demand, inventory will continue to dwindle in that means more pressure. longer-term there could be more pressure because incentivizing producers to maximize the revenues also incentivize them to cut their spending and invest very little in future production. there's a lack of new projects to make up for the

decline rates and the decline rates themselves are increasing because maintenance has been pushed back. so we're likely to see an increase in decline rates, and the lack of new projects to make up for those declines. eventually we see a very steep rebound in prices and inventories when they start going down. this concludes my remarks and i be happy to take questions. thank you. >> thank you. >> chairman, ranking members, senators, thank you for the opportunity to testify before this committee. i'm honored that you request my views in the state of the electric power industry and the power markets. in his remark so present high-level views of electric utilities, power producers, and

critical issues of market structure in the wholesale power markets. my name is james, i'm the managing director and head of the energy practice at capital health partners. that is an independent research advisory firm that serves mostly institutional asset managers and financial participants in the power markets. i personally have been devoting the bulk of my time to the electric power industry into the power markets. i first started following them as an analyst at prudential equity group in 2001. it has been an interesting 16 years. if i were to characterize the state of the power markets and five points i would offer the following. first,

inflation-adjusted retail power prices are at historically low level, but also consistent with the historic stable range showing that the system and the industry generally have served consumers well by maintaining low and stable prices over considerable. of time. also, wholesale power prices are still at an all-time low which shows service to consumers but reflects low interest rates and low natural gas prices which cannot be taken for granted and possible design flaws in the wholesale power markets which may not be said is sustainable. the regulated utilities space corporate managers face how to maintain earnings to satisfy shareholders at a time a power demand after a decline for the first time in u.s. history since 2008 remains flat or nearly flat as right as the eye can see. which is to say well into the forecast future. in the merchant power space, generators are hard-pressed to show a return on equity that would justify new investment in competitive markets that serve two thirds of the u.s. population. step change downward and natural

gas prices since 2008 which will credit to the share revolution is part of the story, but so also are troublesome issues in the energy markets and the development of appropriate pricing mechanisms for reliability and ancillary services. finally, as this can committee know so well, the demands of the epa clean power plan will drive the greatest investment cycle ever in the power industry. perhaps perhaps mounting to hundreds of billions of dollars as existing baseload power plants retire. beginning beginning as we have already seen with the mercury of 2015 and continuing through 2030 and beyond. the single biggest challenge in the power markets today is financing new technology investment and the infrastructure upgrade cycle needed to replace retiring baseload at the and handled new and offer seen between now, 2030 and beyond.

this challenge must be dealt with now in a prudent, thoughtful, timely manner listed the failure to act price increases could be managed or mitigated now becomes disruptive later. the power industry has been battered by a series of shocks including rates, commodity prices, on the effects of the great recession of 2008. at the same time, this always evolving industry is in a period of rapid technological innovation. policymakers should take a balanced, long-term view looking to maintain a diversity of options into the future. new technology and innovation by all participants should be welcome. at the same time, policymakers policymakers should recognize the existing structure with its models, fuel types, public and private ownership represent not just the spinning reserve or fly will that keeps power flowing, but also the deep pool invested capital that keeps the system

working financially as well. that concludes my remarks, i look for for to your question. >> thank you sir. >> good morning. thank you for this opportunity today, this is my first appearance before this panel, i appreciate the opportunity to contribute. i'm here today is my role in the analyst as bloomberg's energy finance analyst. the group provides investors and others with data and insights in what we call new energy technologies. these include renewable such as wind and solar, electric vehicles, energy efficiency technologies, power storage, such as storage, such as batteries and natural gas, among others. i open my remarks represent my

views. i would like to say that these are without doubt auspicious and exciting times for new energy technologies, both globally and in the us. thanks to a thanks to a confluence of economics and policy actions. i would argue that the fundamental rethink is now in your way about how energy gets produce, deliver, consume, and managed, and manage to many parts of the world including the u.s. in 2015, investment in new energy sectors achieved an all-time high of 329 alien dollars, globally. the. the volume of renewable energy capacity into wind, solar, and other powergenerating technology soared to a record, globally. what is notable is this new projects is rising at a much quicker pace. in all, the clean energy sector has received over $1 trillion in new capital over the past four

years and over 2.5 trillion over the past decade. with approximately one half of all new capacity built worldwide in 2015 represented by renewables, it is it is fair to say the clean energy is no longer in alternative source but now very much in the mainstream. what is behind escrow? improved price competitiveness for these technologies and policy support from government. it should be noted that the latter, policy actions certainly assisted in achieving the former, clean energy prices. here in the u.s. we are seeing the power sector continuing on president shift away from traditional, in that regard last year we likely remember to be a watershed year for decarbonization. consider then 2015, and annual record volume of coal, fire process, record volume of

natural gas is burned in power plants and gas accounted for approximately one third of all u.s. power, but the same as coal for the first time. solar capacity added an all-time high with a strong growth in both rooftop and utility, use clean energy totaled $56 billion. since 2007, the share including large hydra products, natural gas, nuclear search for 49% to 65%, with when, gas, solar counting for nearly on the capacity that has been added. the net result is the co2 emissions in 2015 fell to the lowest level since sometime in the 1990s when the with the power sector. the average retail power prices remained roughly level while average wholesale prices dropped. regarding energy efficiency, over the past five years the u.s. demand for electricity and for all sources of energy has

remained basically flat. even if the economy has grown. efficiency improvements to homes, buildings, buildings, and automobiles all make contributions. as an aside note i would say that many of these trends will be highlighted in the back but that will be released in a few weeks. the achievement of the past year for clean energy came even as fossil fuel prices, most most notably oil but also gas and coal were falling. by far the impact on new energy impact has been muted for a variety of reasons. the one area where low oil prices did impact the sector was in the sale of hybrid electric vehicles. however, p electric vehicle sales continue to rise and automakers are now rolling out new, more affordably priced electric vehicles with longer ranges, thanks to lower price batteries. looking ahead, the growth path appears wider and better defined at them perhaps anytime.

the so-called paris agreement at the end of 2015 saw over 190 nations committing to reduce co2 to emissions. the clean power plant has potential to offer greater certainty for the clean energy for the next decade. finally tax credits for wind and solar insured solid growth for these technologies as well. just as and partly, the plainfield continues to expand thanks to technological innovation and economies of scale. while this and potential obstacles still exist outlook overall is generally positive. thank you again for this opportunity. i i look for to your question. >> thank you. >> thank you. my thanks to the committee for the opportunity to testify this morning, i am dan, principal of the strategic group

and issues management firm based in washington, dc. strategic resources are core elements of my practice. my visor company includes texas resources, graphite one, american megan's, that are working to develop new sources of metals ranging from copper, graphite, magnesium. i also's consulted the institute for defense analyses which support the department of defense. that said, the views expressed today are my own. the committee asked a single question at the entry point of today's hearing and that is where i will start. the near-term outlook for the commodity markets can be summed up in a single word. we have heard about the collapse of the price of oil, the same is generally true for hard rock commodity prices. aluminum, copper, lead, zinc, aluminum is down 36 percent, led

35, sink down 40, five, think down 40, copper is down 55, nicholas down 64. it is not if commodity cycles -- the market is self corrective and in the long run that is true. it is also true that in the long run we are all dead. i can answer the question how long is the long run, what i can discusses what risk we run now and in the near term all we wait for the long run to arrive. those risks are real good when it comes to critical levels in a states is committed. thirty years ago the u.s. was 100% oil dependent for 11 minerals and oils. today more than nearly half of all the naturally occurring

elements on a. a table. this dependency has serious implications for national security. in the most recent defense stockpile report of the 12 materials the pentagon recommends for stockpiling, china has a significant supplier of all 12. we are in the midst of a material science revolution, access to the so-called minor metals is taken on major implications. unfortunately, many cases u.s. dependency is severe, even complete. consider clean energy. graphite is cleaned to batteries and energy storage, the united states% zero. we are 100% does dependent. solar panels are made of materials, copper, indium, we have a 600,000-ton copper gap at present. we are 99%, the list is long, we need rain him on fighter jets, it is copper processing and we are 83%% dependent. we need rare earth and too many

applications to list. when term bible, lasers, smart phones, smart bombs, we produce zero, we again 100% dependent on china. in the effort to reduce our resource dependency, the american mental security act took a step in the right direction. work is being done to address strategic metals need. critical materials institute and at the white house the white house material genome initiative which aims at supporting u.s. efforts to discover advanced material twice as fast at a fraction of the cost. that is a laudable goal but it will prove difficult for innovators to be twice as fast when our processes twice as slow and many other mining nations. we do more to encourage recycling from scrap laptops and so-called urban mining, we should could continue finding

substitutes. we must recognize that the search for substitutes might swap our dependency on one scarce material for another, equally or even more scarce. that is why am a subscriber for all of the above of let's recycle, seek substitutes, but also but also let's recognize there's no way out of our dependency without added production. going back to the commodity cycle, pricing will come back. remember the long run. if the u.s. allows the process even longer, production of key metals will take place elsewhere. the manufacturing the manufacturing we want to see right here in america will be pulled where the metals are. i close with a comment and a question. i don't think there's another nation in the world that can match american ingenuity, we can pioneer the ideas behind wind and solar, we can design more powerful technologies for war fighters, but where will the materials come from? i think the committee for this opportunity to testify look i look for to your question. >> thank you.

i think it is so important to the conversation that we be discussing minerals on those commodities. i think we get focus on the vulnerability that we historically when it comes to reliance on others for oil. that is understood, but they failed to make the connect when we're talking about the need for our minerals and what it is that we use them for. i look forward to that discussion with you. i want to ask the question that is on everyone's mind here today as we have seen over the weekend the implementation day with the agreement with iran. the fact that the sanctions that have been put in place on oil coming out of iran have now been

lifted, that those reserves that were sitting in tinkers offshore are now able to go out and find customers. you have suggested that in 2016 we should anticipate about 300,000 barrels a hundred thousand barrels coming out of iran and into the global market, by 2017, 500,000. that is what i would like to ask you about because there has been suggestions about what we'll see ultimately from iran is in the range of 1,000,000 barrels per day coming from iran. when you look to the longer-term and what is happening with the response today from iran getting irate the oil out on the market,

the impact to the global market unto the price of oil, the fact that we already have a glut of oil out on the market, what does that mean for the short-term pricing of oil? you have indicated your estimate is somewhere be tween 40 and $50 between 2016 and 2017. can you give me more certainty going beyond 17 in terms of what iran does to the market and also you can discuss the situation in venezuela and the fact that you have indicated that we cannot ignore venezuela in this discussion is we're looking at the international pitcher in

production. if we can have this conversation, iran, venezuela, just for good measure we can throw in saudi arabia here. >> senator, iran had been producing about 2,800,000 barrels per million barrels per day of crude oil and other liquids. we think that think that could hit 3.3 million barrels per day by the end of 2016. these numbers move around, a lot depends on how much comes out of storage and how much comes out of production. i will come back to that in a second. we thought the number could hit 3.7 million barrels per day by the end of 2017. that is that is a little less than a million but close to a million barrels per day growth level. the annual average would be a little different because the trend is up so the annual averages are going to be a little bit lower. something about iran, there are

two aspects to this, they have between 30 and 50 million barrels of floating storage in tankers that could come onto the market fairly quickly. a lot of that is believed to be condensate, very like kind of oil. the markets without a mostly in chemicals business. a lot of it was probably done stand for china and we'll just have to see how that works into the estimates for china's economic growth. the second aspect is how quickly production can actually grow and that may depend on how rapidly foreign investment is allowed to come into iran to help them rebuild their oilfields. that could be a bit slow too, there are are a lot of uncertainties in this.

layering on something that antoine mentioned earlier, this relationship between saudi arabia and i rack, and iran is very important. iran is one of the three big players in the gulf area and how each of those countries puts their volumes of crude oil on the market has a lot to do with where prices end up. there will probably be a lot of back-and-forth between those countries. those countries. i think we're back to that observation that says the uncertainty in crude oil prices, as we look out over the next year to is very high. >> i agree, totally. i think for iran, there questions to consider. the first, how much can they produce now? how much are they willing to produce now?

how much is the market capable of absorbing now? how much is long-term production capacity to increase capacity in the longer-term. ? the bottom line is, nobody nobody knows how much they can produce today. we try to look at it when i was working at another agency people have access to the fields there. our perception was that iran had managed to repair some of the damage that had been cause under the previous president on that it had the capacity to increase production rapidly, almost instantly somewhere between 500-800 barrels per day. the question is, how much is it willing to sell. since the early days of the iranian revolution advice taken

the view that the west or the market should pay more for oil and oil is worth more than the market is paying for. so not surprisingly, iranian leaders have made contradictory statements over the last few months. they say. they say they want to ramp up production but they also said they don't want to crush the market or flood the market to quickly and cause the price to fall further. so the real question is how much the market can take. i don't think it can take more than a few hundred thousand, initially. the capacity longer-term would depend on the willingness of investors to go back. that's more questionable and longer-term. >> go ahead because i asked about venezuelan we have not heard that yet. >> venezuela struggling, it's production capacity has been degrading over the years. volume has been following. it has managed to produce as much as i can but the revenue got hit in

the drop in volume of the drop in prices. now the oil company is asking for its foreign partners to pay for to blend that heavy crude, these partners are not willing to do that. it is going downhill and the social outlook is also looking bleak. the question there is whether social turmoil can actually cause production to fall or be disrupted as was the case in 2002, 2003. my view is capacity is down more than i have been at the time but the outlook and capacity looks very dismal. >> thank you for your comment. this discussion about iran is so

evolving. as a representative from the state that has enormous potential, we will as the country tell iran, go ahead, produce more while at the same time we are going to continue locking up our potential for further oil exploration and production. whether it is a potential for on land or offshore. so, know that this will be a year where you will continue to hear me not complaining, but being very discouraged and really quite angry at the way we have chosen to advance a policy when it comes to greater reliance on people, nations that have not been good actors, and

yet continuing sanctions on ourselves which is what we are doing was certainly alaska production. >> thank you madame chair. i want to thank all the witnesses. when i think of your collective wisdom here of covering energy markets over your careers, so they must be an interesting time to have your expertise ask for. we are on a roller coaster of swords, so i'm so i'm sure it has been very interesting. i come from a hydro- states where cheap electricity has rebuilt our economy over, and over, and over again. so i appreciate, it's not without some environmental costs but efficiency which i think is

in the context of where we are, efficiency in every business model, efficiency is going to continue to drive the energy sector as well. that's why so many people are interested in distributive generation because it automatically cuts out big part of costs. i wanted to ask about the significant shift of generating cost comparison between renewable energy apostle fuels, so can you talk about how you see these trends moving forward? whether they will continue to compete based on price, how do you see solar and battery technology in their trajectories in continuing to lower cost? >> thank you for that question.

the first thing to know about renewables is that they are increasingly cost competitive. they are not cost competitive everywhere. the playing field is growing every day. obviously, the place where they are competitive and we have excellent natural resources and/or very high income it prices so they can compete against -- so when most competitive is often center in the country in oklahoma, texas, also iowa and minnesota, elsewhere we have extraordinary wins. that combined with the fact that we seem bigger and more effective wind turbines that can scoop up more of the wind to generate more power is making wind up more power competitive

all the time. on the solar site price has been dropping quite rapidly. we don't see quite the same level of decline over the next three years although we do see declines longer-term. quite rightly when you are competing at the local level, solar can be the best position. in other words, electricity is priced at wholesale, and retail, retail is much higher. and inevitably solar can be much more competitive at a retail level, behind the meter because you just have to offset the price at the homeowner or business is pain the final price which includes a distribution cost of getting it there. those costs in the regions where this is taking place is expanding all of the time. i would say that looking

forward, big part of thinking about how competitive renewables will be will be contingent on the price of natural gas. gas is the price center of the market. gas that $2 per btu today they're forecasting $3 in the next few years. as well as gas prices stay low though based on competition. if gas prices him up then renewables are in us extremely good position. >> if you are going to describe this ending of the ballgame and reducing costs, we are probably just in the first or second inning. >> smr may be in the third or fourth. everyone thinks that one day they will wake up and it doesn't work like that. it is a great big complicated world. over time different places are seen more and more of this take place. the last thing on storage,

similar economics. power storage storage starts to make the most sense of the distributive on the meter level at first because you're helping to offset the cost of retail power. in some cases you are helping to offset if you have to pay search pricing for any fees related to excessive use of power, if you can offset that with power storage you are in good shape. we'll probably see some of the stuff going to the money first but there's been a lot of developments run utility power taking place as well. battery prices have been dropping. we can to need to see those drop. >> i just want to make more investment because when i look at where this discussion is gone about oil, and i remember on the finance committee a few years ago what the price was on the development, his a very forthright he basically said $60 per barrel. we are at $30 today, 60s the

recovery cost, seems to me that there's going to be a correction at some point in time. i am not hoping for back to 60-dollar-barrel oil though. i want today bursa by and make sure that we have a smoother path towards his transition. >> i heard senator mention, that either wind or solar now provides more jobs than those which are in oil and gas. if that is what you say, may be i miss her, that is not true. the bureau of labor statistics points out the direct employment of oil and gas and gas is about 1.6 million jobs, 1.86. renewable jobs related to all renewable jobs in the united states is 724,000. there is a greater differential.

mr. zimmer, you speak about how renewables now count for 67% of energy production but you include natural gas as a renewable. is that in your list of those that account for that 67%? was that a misquote -- or. >> i think i said if you include renewables, a natural gas those are different categories. >> so under renewables you are lumping. >> i think what i wrote was that they were different categories. >> i will look at that again, i think i read differently. but not to dwell upon. i enjoyed your testimony. i have never understood, i have enjoyed it all. i never understood the perspective until i read your testimony. thank you for that. a few questions on that.

you had mentioned that imports of light oil into the united states are increasing, why why is that if we have all of this surplus light oil in the united states? >> that the function of differential between u.s. prices and european prices. >> but i presume all louisiana light and texas intermediate is price now similar, but the transportation costs have to be less here. obviously you are shipping from louisiana into a gulf coast refinery so it seems like that would be a price advantage. >> that's the trick about u.s. transportation of crude oil within the u.s. it has to be done by -- war rail

>> or by pipeline off the louisiana coast. >> yes but there's a line so much that can be moved by pipeline. where the in ports of the light crude have been coming. >> i'm still not quite sure - magazines like most of the west texas intermediate is coming by pipeline. so i'm still not sure the impact. i can see if you're moving from louisiana to philadelphia, but since most refining capacity is on the coast i'm still not sure that importing that light oil into philadelphia. >> yes, my end their standing is like crude tend to go to the east coast. >> okay. next, this is not related to your testimony but it is something you're probably familiar with. the eia has projected decreased energy consumption relative to

baseline a little bit ago. if there's a baseline five years ago you would your more recent forecast is that it is here. there is a tight correlation statistically between economic growth and energy consumption. is it fair to say that eia has decreased its forecast for the amount of energy consumed because you forecast economic growth? >> economic growth forecasts have come down slightly over the past few years but i think that is just a reflection of some of the overall economic conditions and not just in the united states but globally. say that the ratio of energy consumption of the gdp generally have been approving because of efficiency gains and some

structural changes in the economy. so as you move from energy and industrial activities to service sector, consumption goes down. >> so manufacturing and enterprises offshore to china and what is left are service related jobs. so if i may interpret that, so you end up using less new gdp is down but also less electricity in the service job. >> i think these gains and efficiencies are taking place around the world, including china. >> i read the fine may, in times past when efficiencies have increased the amount of electricity increased because the cost input is now lower, therefore folks are able to ramp up production because the cost and put his lower. >> one of the things when eia has done our long-term projection and our annual

outlook, electricity side, they do know the a lot of a lot of the and efficiencies, reduced use have come about in households because of improved efficiency of lighting, improvements in the efficiency a big energy. >> i'm way over, hopefully they'll be a second set. i'll come back to that. >> thank you madam chairman, a seat now we have alaskan water which is very nice. >> alaskan glacier. >> yes, that's great. thank you. >> i like to thank all the witnesses, the obama administration continually makes it harder and more expensive, more difficult to produce oil and gas in this country through regulation and other restriction. at the same time, making it

easier for adversaries to produce export oil and gas and an example is recently lifting sanctions on iran. that is actually born out in your projections, both of you and maybe others just got done informing us that u.s. domestic production will decline by approximately 600,000 barrels per day over the next several years and that iran production and export will increase by 800,000 barrels per day over 2016 and 2017. i think that is the wrong approach. i think it has ramifications and job creation, economic growth, and a national security and the standpoint of energy security. so my question to you, and i

appreciate all of your testimony very much, i might also ask you to put in some projection of what you anticipate for price over 2016 in 2017, and others can respond to this as well. i would like you to give me your recommendations as to what we should do from a public policy standpoint so that our industry can better compete in this global economy. as we look at energy legislation, i knows senators have energy legislation they want to bring to the floor possibly this week, what type of provisions should we advance to help our industry compete? >> senator, i think i will let antoine talk about policy

recommendations. if i want to keep my job i should stay away from those as well. on the question of what has been the main factor driving oil prices, oil production down, i think it is the price. i do not think it was policy decisions that cause oil production. >> that was not my question. my question is how do we empower our industry to compete rather than shackle it, at the same time our adversaries, actually taken steps to assist her adversaries. that was my question. >> right. well one thing that congress and the administration did in a bipartisan fashion was to agree to allow crude oil export. that that would be one answer to your question. that allows for u.s. crude oil production to computer global

markets. the thing that is limiting the impact that would have in the near term but there are a lot years to go yet, is that the prices are very close together so the advantage that her crudes have on global markets is somewhat limited. >> i agree. that's a very good example of what i'm talking about. what else can we do that can make a difference, again empowering our industry to compete. if. if you don't want to make recommendations i understand. what can we do that helps our industry compete that benefits our nation? >> i don't know whether it's necessarily government function senator, but i think one of the big advantages of u.s. industry has had an is likely to continue to have is technology.

the technology of shale oil development occurred here and maintaining the improvements and costs of drilling and production is something that would make a big, positive difference for our producer. >> do you have recommendations as to how we can better help our industry compete in this global economy? >> i wish i had, but i think is doing a good job competing. i did lifting the export restrictions is a very positive step because it allows oil to go where it's needed in the market. the u.s. can compete in that. it's. it's opening up new markets potentially, support and exporting, so that's a very good step. another thing i think is very good for competition is what adam has been doing at that eia, the more the market knows about

how the industry is doing, where the talks are going, what are the trends of production and demands, the more investors are capable of providing the right response to making the right moves and helping the industry compete. i think it's a new world for the whole industry. for most of of its history oil companies have operated under a price umbrella whether under the rockefeller oil system, or the texas wayward, or opec, there's always some type of protection against the fluctuation in prices that were provided to industry and enable them to make very large, long-term investment. that umbrella has distant. it has disappeared. my projections are that once the

rebalancing of the market runs its court and market is recovering, the u.s. industry will be in good shape. i do not think the oil company in the u.s. will be the largest, opec will come out pretty good, saudi arabia, kuwait, and u.s. and u.s. company will come out on top. the bigger victims of the downturn will be the very heavy, big-ticket projects, all the very high investment intensive projects. those will likely be more affected by the downturn. >> any other recommendations, specifically? thank you. >> thank you senator. very important questions in terms of where these forecasts

place the united states and our domestic production and what it means for our economy, what it it means for jobs, what it means for prices for the american consumer. it has been a tough 18 months or so. in alaska we have seen shell lay off almost all of their folks up north, conoco has had major layoffs, be be announced last week major layoffs in the state. another canceled their winter project. it has been a very discouraging time, low prices in alaska don't necessarily translate to good news. our treasury is certainly

hurting at a state that is very reliant on oil. as i mentioned, low prices for the consumers don't necessarily line up with what you're seen in the lower 48. i mentioned the prices in alaska, i tried to get a better read and what they were actually an act in october they were $6.88, now they're about $5.50 per gallon. this weekend gasoline at $9.99 and they're trying to work with the park service to be able to haul some fuel across park service plans. i don't know whether we will be able to do that but by gosh we will try because nobody should be paying $9.99 for their oil

when people here in washington, d.c. eric getting it for $2.10 or whatever it is here. a great deal of inequity and that's what gets me upset. when i look for the opportunities that we have created for iran that we are not creating, not allowing for alaska or other states like north dakota, or louisiana, it should get us riled up. i recognize that so much of this is about price, but it is also about the policy we put into place and making sure that you have an environment that is constructed. this is where i want to talk a little bit about the critical minerals on the situation that you spoke of. you said that outlook is bleak when it comes to our critical minerals and particularly with our rare earth. you have stated that 2015 will likely likely be remembered as a watershed for decarbonization.

i think you went on to state exactly how important these minerals are so that we can move forward with wind, solar, and all of the smart technology that we want. we really do not want to be even more reliant than we already are. i i appreciated what you did in terms of outlining how historically we have been so reliant in certain areas that instead of making progress, it it seems that we are actually going backwards. you have indicated that there are some areas that we might be able to reduce this dependence. the fact that we produce zero rare earth and are now 100% dependent on china for our where earth should be unsettling to all of us.

so we have lousy permitting process, in terms of permitting for minds, minerals, where if we are not the worst in the world, we are close to be the worst. i think new guinea a is worse than us, but you also mention prospects for recycling and substitutes. you have indicated that really even with that, unless we do something to increase our production, we are not going to get ourselves out of this hole. can you speak a little bit to what you think are genuine alternative may be when it comes to this reliance on our mineral. >> thank you senator. it's a very deep dependency first of all. in terms of bridging topics from our own gas to hard rock

minerals, as we look from the energy side new energy sources, i certainly would not want us to move from a dependency that has been difficult for us over 50 or 60 years into a different sort of dependency for a new sort of technology. >> in fairness, are we there already already? >> we are. that's why as i said in my remarks, all of the above. we have to recycle, such as her degree of dependency. we have to reclaim the minerals that are in the devices that we use every day. small and large. urban mining as we say, we have to look, i did not mention one in the oral testimony but a lot of waste piles from mines that are no longer under operation that they bet 50-100 years and

the rate of extraction there is very dependent on the technology of the time. also our interest interest of the minerals at the time. in many places of the united states we do have opportunities to reclaim a waste -- by extracting the minerals that are still there that either we did not do efficiently enough the first go around our we are not after them at all the first time. now they are part of the periodic table that we are interested inches we should be doing all of that, we should be looking to substitute but i am concerned about the easy discussion of substitutions. when you look specifically at the possibilities are with the natural sciences are where you're substituting and you can substitute for some of the

minerals. are we looking at the degree of dependence that are reinforcing and looking at the geopolitics of it? so pushes me back in the direction of we apps will have to expand where we can, bringing new production into play. the metals and minerals we're talking about, all of the devices we use, we are at the very bottom edge of that. i really do believe there is some revolutionary going on in material science. it is impossible that it is not going to put a lot more demand pressure on us. we are going to have to get inventive, we are resource rich but are we bringing these new resources into development or are we creating obstacles there? is this sphere is evolving so rapidly i don't think our ability to process the physicality of the needs.

were bringing power from the wind and the sun, the physicality of bringing it to the grid and distributed it. what are those devices made of? are we going to be buyers of those vices or would we rather be producers of those devices. some big issues for consumers in national security. >> the good news for us is that not only are we blessed with amazing resources when it comes to our energy potential, we have some amazing mineral resources as well. >> thank you madam chair. i want to go back to electricity for a few minutes. obviously the business models are changing for utility in most states feel that at the moment but i think future change will drive that.

used to have vertically integrated monopolies, strong transmission lines distributed, the customer billing, now customers and consumers and businesses are demanding more controlling getting it. they're looking at cleaner sources and clearly there is a lot of change to what has been the traditional utility model. we want to continue investment as well, so i want to ask you how do you see these business models evolving for utilities over the next several years? how to make sure that consumers feel even more empowered to get the kind of efficiency they want other energy prices? >> thank you for that very important question. the in utility business model has been evolving rapidly, ever since 1882 with thomas edison, the

initial concept served us well into the 1970s is the idea of economy as a scale. get low consumer consumer prices we needed bigger operations. that broke down for a lot of reasons in the 1970s and actually in the seventies, eighties, 90s when we heard about distributed generation on a big scale. back then it was focused on natural gas but still raised the issue of unbundling. i think the model of cost-based regulation has been very helpful in providing infrastructure. we are moving into a model now where scarcity base pricing is what applies to the wholesale power markets. that is really the fundamental issue here. you need to define scarcity base pricing in such a way that you adequately price reliability, load following, ancillary services to keep the grid going. for that reason, you need to pay

attention to a balance of industries and balance of business model so that you have the power reserves that keep the great going but also the financial wherewithal to keep the thing flowing financially. >> i should just not that we are big fan of cost space bar the pacific northwest. >> so i would say that this is a very interesting time for utilities and in particular the question that you asked earlier about distributed generation is what is causing probably the biggest sense of disruption and concern. when a customer in your operating area starts generating power off of their proof, then don't tobias much from usc utility. if you compound that by the fact that there may be metering where they can sell the power back to the grid for retail price, that can be threatening.

we have seen but confrontational situations between utilities one has sprung up to be a relatively small industry of installers who put these systems on people's roofs. i would hope that utilities would view this trend is something they want to participate in and take advantage of. to find models where they can be the ones to help be directly involved in installing or partnering some of these players. i say that because in our view, this is inevitable. the costs costs are coming down, technology is getting easier to put on roofs, is going to happen. it's probably better to be involved rather than being conflict with what is an emerging industry. >> to have a way to communicate that? >> testified before the u.s.

senate committee. >> i hope you're right. i see as i mentioned in my opening statement everybody from tea parties to environmentalist coming to terms to the fact that they do not want to be overcharged just to get more energy efficiency as they participate in creating energy. i think utilities have to understand that. will submit to the record on green energy jobs versus fossil fuel jobs just to show the growth and what is happening in that sector. >> i just want to follow up on the question of regulated utilities in the business model. with regard to distributive generation, one of the key issues as cost allocation, how to price the power, how do you price the grid. there's a lot of experimentation going on at the state level. i think it's only a matter of trial and error, until we find an answer that will work consistently across the country.

if you look at what happened last year the equity markets, the s&p were down 1%, utilities don't 7%, on the whole utilities have a much more stable business market. utilities regulated space actually have their own interest scale as well. direct interest would be merchant power markets where last year we saw stock prices going down anywhere from up to 70 percent. a lot had to do with natural gas but also with market prices use a policy questions about how markets should be structured in the future. while i think we can certainly accommodate the distributive generation in a variety of ways, the area that is probably most urgent right now is the wholesale power market that serves two thirds of the american public. >> i would just note on that, we in the northwest have one of the largest employment of electric

vehicles just because we have cheap electricity. there there is upside as well to the utilities. clearly i think we should get on the side of the consumer and see the many applications that can grow the business. thank you. >> when i look at - my going back to our last conversation, whether not the residential efficiencies can totally make up of this loss of projective power, looking at eias annual energy outlook figures and i will mention them. your 2015 basecase had 4070 terawatts in 2015 increasing to 4691 terawatts in 2030.

enter what being 100 billion kilowatts. under the clean powerplant rule, there is actually a savings if you will of 581 billion kilowatts, which is to say 580 terawatts. can we really save 581 terawatts on residential efficiencies? is that part of your predictions? >> there are three big factors, fax issues regulatory issues and technology issues. >> ..

>> we will have that as part of the 2016 annual energy outlook. how the -- where the savings come from that would be required with the reduction in coal, there is also the other side of that which is the possible increases in output of electricity from natural gas and, of course, renewables. >> no natural gas is basically stable.

we have been looking at how much we would have to invest in renewables in order to make up for the shortfall. it is like the entire state of massachusetts would be covered with the highest efficiency windmill sort of thing. it just doesn't seem practical. that is what the numbers go. by the way, i apologize. you do read renewables, natural gas accounts for most of the increase and i thought you were including the tube. of course natural gas is the lion's share of that. distributed energy, we speak in terms of solar panels, but i remember being in california and before putting in distributed energy natural gas generators at their office buildings. it comes to mind, almost

prerequisite for renewables to be competitive for a high cost of electricity. electricity. to what degree are the distributed energy sectors actually natural gas for solar wind. >> come back to you. iyou. have to get back to you about exact numbers. in the most recent years most distributed phenomenon has been around solar. >> certainly in terms of insulation. obviously the systems can be small. in terms of kilowatt hours produced it is a smaller margin. as an interesting opportunity there for gas finding its way into the economy and lots of different ways. there was a good deal of talk run natural gas vehicles before the oil

price collapsed. there are more and more ways i would say obviously when you do on-site natural gas generation you get the gas there. there can be those issues, but it's not like the solar distributed generations that precludes gas. >> showing the international instability that is being created, some countries created, some countries have an increased instability because of high-energy. two things. high-energy costs and/or low energy, low income from energy production. i'm struck. for renewables to work the baseload has to be extensive. is cheap worldwide.

india and china clearly best tremendously in coal. coal is cheap and there. if you are to bring in high-energy costs the seem to be a prerequisite for mass scale electrification of india. that almost seems unaffordable for india. i say that because economic growth is clearly in the interest of india. theindia. the chinese will head off instability with economic growth. in this context is a practical, is it for seeable that those two countries will forgo the use of their own natural resource coal for a renewable sort of grid? >> you are absolutely right that coal is very attractive and has been the backbone of

the chinese energy sector. we have seen some retrenchment in china, coal use that has been declining. >> is that related to the economy declining? >> the economy in part. with coal and for instance the pollution in major cities has become a top concern for chinese policymakers. the beijing area, social protests and riots. renewables, take market share at the margin. it is not entirely based on the domestic availability

also some of the coal has been very ineffective. and those are the ones that have been targeted for closure 1st by the government. in india coal remains aa very big part of the picture and for the foreseeable future, but therethere the case for renewables comes from the idea is generated, distributed generation and leapfrogging so the costs that have been associated with transmission and distribution other economies that have gone through expansion. >> amount of time. is that okay? >> i would just jump in. on india in particular i am happy to share with you some of the exciting things that have gone on around renewables, particularly

solar. there are 400 million people in india with no basic access to electricity, and one of the most interesting developments as a result of the law are very tiny micromicrosystems that i'm being distributed for hundred dollars or less that provide basic power needs to turn on the radio. these are the most basic needs that people have. so i definitely competes. >> the enterprise that elevates them out of poverty. >> tough one for 400 million people is to turn on a light bulb. >> i yield back. >> a couple of brief questions here. i want to go back for a moment on natural gas. and the reality that we have to move the natural gas.

some of the opposition to infrastructure development. you noted this in your testimony, and i think you state opposition infrastructure development can prolong the supply get -- excuse me,me, supply glut and put the timing of relief in question. if we have a situation where it is delayed on a bigger scale what do you think the consequences are for natural gas and could these type of impediments, and we are seeing them believe me. particularly in certain parts of the country where there is not attitude that we want to have pipeline transmission but we don't want running through our state.

could we be in a situation where because of just that political opposition we have a real threat to natural gas supply itself. >> well, we have too much of a good thing in some parts of the country. there is a tremendous amount of gas that is really building out. it is lower in that region. this putting huge pressure not just on prices but nuclear. so take away capacity for that is key. on the other hand, three, four, 500 miles away we have new england which is totally dependent on gas. very efficient network, but they don't have access to this great gas supply. we have been fortunate to

have warm weather, but we came very close to severe weather events during the polar vortex,vortex, not once but twice. new line what is in a situation where they can be warm weather emergency away from a serious power or heating crisis. that shows the urgency of delivering gas from areas that are gas rich. oversupply to areas that are quite exposed right now. they are doing quite a good job moving forward.

while natural gas is still a carbon -based fuel is cleaner than the alternatives. i was driving to the coal country of southwest virginia people in my client meetings are constantly asking about what is happening with the constitution pipeline flow what is happening with any number of other projects there was a lot of uncertainty among investors asked whether you could build a new power plan. >> this is a huge issue for us. they don't get near the attention which is why -- why i think it will be important that we move energy policies forward such

as we have within the anti- policy modernization act that we hope will bring to the floor shortly. in the same context about the impact of natural gas and what it does to other energy sources whether it is coal or nuclear, i want to ask about your projections on nuclear because in your chart, your table, number one online hydro renewables expected to make up 9 percent of electricity generation we indicate that by 2017 the nuclear generation makes up less of the overall portfolio that it has in years past. if we have a situation, as we have just been talking about where you are not able

to either move that gas to where it needs to get all what does this do to your projections? how do you see the liability of nuclear as part of the energy portfolio going forward given what we are seeing with some of the constrictions on natural gas. >> senator, i think in our annual energy outlook we have a small amount 800, the difference chain 789 and 808 billion-kilowatt hours of the generation from nuclear in the annual energy outlook new line of the final numbers up soon. i would say that is it wears flat because we have total

electricity consumption growing by .7 r .8 percent per year nuclear share is slightly decreasing. back to the question that senator cassidy was asking, we do see under the clean power plan and the extension of the ptc and itc for wind and solar, the tax credits as well as improvements in technology that have been talked about by other members of the panel that there will be improvements in the use we are also assuming the natural gas fired generation goes up in the annual energy outlook and the clean power plan.

the amount of generation under the clean power plan will come down a little bit, be replaced by more wind and solar and natural gas, not so much nuclear back to your question. lower call, the total amount of generation is just a little lower, and so you do not have to have massive changes in the inefficiency in the residential sector to make up for that. basically residential users will be using more solar end wind capacity as well as natural gas capacity the nonnuclear. >> amount of time. >> very quickly back on the gas pipeline question comeau we are looking at are forecasting. the 65 billion cubic feet

per day being added. there is a lot of pipelines that have been improved that are coming online that are directly related to marcella's in utica. >> we are hoping so. >> senator. >> thank you, madam chairman. i want to go back in terms of the energy talk about this blacks one concept or by opec and others may pump a lot of. thethe thought that later there may be less demand. by the hundreds of his appear to cover their all in cost in terms of spending

and budget. how does that impact their continuing to produce at a high rate with prices as low as they are? how long do they continue that? >> thank you. so maybe i can produce and then draw on this reserve. there is no immediate pressure. suddenly they are not being. >> the financial reserves. but they have the capacity perhaps more than any other producers to continue funding for quite a while. however, we are seeing signs of pressure and signals it's hard to say how much of that is for real there is tons of

shift in the makeup of the economy and the mindset. in russia is a different situation because russia has benefited from the collapse of its currency. so production costs compared to revenue which continues to be in dollars which partly explains why russia felt so much better than anyone expected. thinks -- since things started looking really bad. how long can this go on? not forever.

the system is such that the companies have managed to hold onto a lot of. the state budget has suffered most. that's where it's going to put a stop on the kind of study production like we have seen over the past few months. >> months. >> is going to drive prices higher at some. we happened is very difficult. currently the futures market

hundred $50 a barrel, i don't think that's realistic. forecasters of long-term prices. in my view it's almost given the prices will be significantly above by 2020. the timing is difficult to assess. iraq has dramatically increased production her by the capacity to bury the countries operating there for the dramatic increase since the collapse.

their seem production in the us. thoseus. those declines continue. eventually there would be a rebound. quickly when the price turns. >> who is that? >> one of the big questions is because back to the market the degree to which the cost efficient how much inflation we are likely to see as demand for all services rebound the price increase. >> your thoughts? with the chairman's permission. >> senator, i grew up in pennsylvania a my 1st

rodeo. i've seen seven big price declines. prices are coming back. getting at the heart of your question, let me try separated into two parts. parts. the number of countries, a rack, venezuela, numbers calculated a while ago. they hundred dollars to make their budget. emerson's case the collapse in the ruble and the strengthen the dollar have really improve their position. they export oil and get dollars per cost-sharing rubles. the currency exchange has helped russia. in the saudi case they might not need a hundred dollars a barrel anymore because they have taken price reform and

are now starting to look at ways to charge people more for gasoline and electricity and so on. they can make changes. but coming back to the heart of your question is, can we have $30 a barrel lawyer -- $30 a barrel oil continuing indefinitely into the future and the answer is no. prices could go lower. there's three layers of cost in the oil business. this is like what you need to hang on. you might not be doing really well, but you are paying some of your debts is all. you are not being shut

down. that is probably in the range of 40 to $60 a barrel. and then there is the full cycle cost. what does it take to go out and find more oil and meet rising demand for oil and those numbers are at least $50 and possibly as high as 75, maybe even $80 a barrel. so at some.ii think we have got to get back to that. equal cost range because if we don't this big buildup we have seen in inventories of the last year and a half we drain down and something will happen and we can come back to the senators question. i thinkquestion. i think it was your 1st question. what about venezuela? exporting 2 million barrels a day on that, and that can go off the market given the

social put a cultural oil. and then we would not be talking about the layers of cost. we will be talking about what is it take to replace 2 million barrels a global market. >> i have ai have a couple more questions, but i would certainly defer to you. >> enjoying this exchange. the alaska legislature is convening for their inaugural kickoff. and the questions that are being raised in the discussion here is as important as anything for estate like mine that relies so heavily on oil and estate like yours that has relied so heavily. we have seen what happens when the price tanks and what that does to your economy.

please continue. >> the testimony really is important. the testimony that you and others provided, the information you provided was important. in a minute place for 40 years. show the benefits of doing so. in terms of creating a public policy half your comment about reducing the price curve, it's incredibly important key just like understanding long-term the pressures that will drive underlying pricing which is

not just important a fossil fuels. it has a dramatic impact on what happened. i want to shift to call for a minute. what will the impact from the administration's three-year moratorium policing: federal land? what will the ramifications be? this is in addition to the co2 regulations, the buffer rule regulation, many other things. what is the impact going to be? >> thank you for that question. that is an extremely important question. i prepared an analysis. obviously it is going to be quite significant because it

points to assets which are being tied up through nixon -- extended studies and maybe developed in the future subsequent to increase charges were card -- carbon charges while land access charges. so this is interesting. we actually have oversupply in call which is driving coal prices down. but i think you need to watch what the administration is doing to see what this means for all fossil resources because if we have to have programmatic environmental impact statements looking at leasing on federal lands for coal this is clearly the 1st up for doing such programmatic environment will impact statements pertaining to leasing oil and gas on public lands. so the economic significance given coals depressed state

is not a major issue right now, but the precedent this sets for all other fossil fuels and public is generally is quite substantial. >> thank you. >> senator, some facts. 2014, the latest data. 42 percent of coal produced, us coproduction was federal lands. the main states montana, colorado, wyoming, new, wyoming, new mexico, arizona, north dakota, possibly alaska might even have some pull production, so there are issues there that in the longer term could be impacted.impacted. in the short-term there's probably enough property under lease to maintain

output. i wonder if i could take a minute to come back to your question. i'm going to risk talking about policy which i am not supposed to do. i want to do over on your question. >> i think that if you were looking to say what could you do to enhance us energy production and the oil area maybe even a few of the other areas, the issues of infrastructure are important and policies that do with the answers. the ability to move oil around is an important one. the pipeline which runs into this area is running pretty full. even issues like the electric grid which is being looked at by many people including the department of energy, the strategic petroleum reserves and the ability to get oil water

borne from the strategic petroleum reserve so that it can be used other parts of the united states and the doe is looking at that. it was part of the law that just passed. there are a lot of policy issues associated with improving the midstream. not so much the well head, but in the middle before we get the products to consumers that were ripe for a good look at the policy issues surrounding that. >> thank you. that is absolutely right on and i appreciate it. you bring up an important.when you describe how the moratorium that the administration put forward, what are the ramifications

for other types? i think your point is well made and deeply concerning. as part of the legislation that our chairman and ranking member are advancing one of the provisions included is the certainty and transparency act. i would like some sense of -- and i would start with viscous -- mr. sliwinski. for many of you, in terms of if we are able to advance legislation and more readily allow for lng export what do you see the ramifications in terms of making a difference with our allies and not only creating market share at home but making a difference

will that help? are there other things that would help? >> right now the main impediment is not permitting there are a number of federal agencies involved in permitting. the engineering and environmental aspects in the department of energy office of fossil energy. >> and you are not just saying that because you are part of the department of energy? >> it was at one point of you that there was a bottleneck, but that does not seem to be the case. there has been an alignment between the department of energy the federal energy regulatory commission on permitting.

i think coming back to what are the issues? is largely the economics. with lower oil prices and lower us natural gas prices, the spread has narrowed and it has made it more difficult to ask for lng are looking at the economics. if we should see a recovery in oil prices that would probably do much more to improve the prospects for further exports. it is still making sense,

the asian market. possibly in the europe. i think that things will look very different get the.that we give back more toward those. costs associated. >> ii think the rise in, future rise in us lng exports is part of the game changer, transformation of the gas market. i would.out the ways in which things are different comeau one is, one is the growth of nasa's international global market with probably different pricing mechanisms looking forward.forward. that will be important for european energy security because it provides gas supply very important for

asia. have an impact. us lng it is increasing the love for more competition between poly parents. increases in gas the energy transition. >> well, you are correct that if you want to help our friends, gas consuming friends japan and asia and elsewhere we want to increase global supply which will help europeans looking for broader supply. it is not just our friends. we

have competitors. in a very tight market that could be competition to see who built the export facilities hennessy against the export business. anything we could do on the margin the means us projects have an edge or more certainty against last-minute delays does help us producers and improve our competitive position. it helps our friends but we need to think comparison to competitors. >> very, very quickly, one area ifsaid take a look and keep it interesting. across borders will continue very interesting area. major reform underway in mexico that can drive even further guesstimate in mexico. >> thank you,you, madam chairman. >> senator, that was the longest question session.

>> i know. it is been a good discussion , the panel, i think the witnesses. to me and no one argues much about the past is for the future. i think your answer; about the chinese iq a.that part of a discussion here is political and that consumers are demanding a different world in china is responding. belting india will build plants beforecode plants before nor do i think that china will pursue that. i think the president's actions as we have 20 years of coal under lease is important to only assess was expect it's with 30 percent beyond that looks like. my question is the corporate

installation of renewables because this is also where people are driving consumers and i think corporations are driving. corporations are looking at it is a win-win. walmart looks at it and says energy efficiency is a win for us. i think that's where google and other people are. the purchase corporate to do grid scale renewables will look like for 2016 in the future? >> last year roughly a 3rd or so of all power purchase agreements signed in the us were signed by corporations essentially directly but by the literacy themselves, and i think the motivation is primarily economic which is essentially gives you the opportunity to know what your price of power will be

that they are buying all of the power from renewables, but if they can lock in some junk they can offset the risk going forward. that has been one of the main motivators, and you are right and noting google and microsoft, but not just through a tech company with others as well, kaiser permanente. i think that is how they view it. eliminate one risk gas prices and other things. that is an area we think will continue to look interesting. it is predicated on the notion that you have fears about power prices rising. if they go down corporate might get less interested

because they are not as worried about fluctuation prices. thus far most of the attempt has been the lock in a price. >> what is happening is consumers find out more information about pollution, particularly in china raising great concern and people are trying to respond, but i see it across the board, not only the fact that it is a next-generation car but that it is built with renewable energy. they are trying to say it is the all renewable from the beginning and how power was generated to created in the fact that it is recyclable material. people are trying to win in the marketplace and consumers are demanding it. i think it is probably both for now anyway.

i definitely think it is something to continue to look at how grid scale renewables solve some of the questions that we want answered as it relates to distributed generation and moving forward i don't know if you have anything else about questions we want answered but obviously everybody are pouringputting lots of birds and the battery and technology as it relates to giving us more flexibility on renewables and building the capacity and the grid. >> thank you. i am not sure what i can say specifically in 30 seconds. clearly putting power storage on the grid and combining it on the edge of the grid is something that could revolutionize the

industry. it provides a lot of solutions for many issues. the grid is a totality in the grinch has a core. at the moment it is the core transmission that is keeping a griddle light. i think back to discussions of things like participant funding or stranded assets which was part of a discussion. these are not necessarily new issues. power has a price, regulators to very good at figuring this out and we figure out how you can fairly priced resources whether it is the energy cyber infrastructure side. i'm confident we will see a robust partnership to develop.

i think you will see a lot going forward. >> i like that analogy. when i look at the ability to have that technology not only utilized in the us but around the globe, that is a major translation. >> thank you to each of you. we have gone well over usual. when you think about what has been discussed today we really are at that point of substantial change. you write in your testimony, a fundamental rethink is well underway about how energy is produced, delivered, consumed, and managed. i would think that you would

all concur with that and when you think about where we are, the discussion that was raised by coal, the impact that we will have of the three-year moratorium leasing on federal lands, the clean power plan, where we are with natural gas, what has happened with the low prices, the potential for some disruption because of infrastructure issues, when we talk about the necessity for critical minerals and how that will allow us to build out a renewable energy source through enhanced technologies and yet we recognize we are going the same direction, the oil

picture we could take a week of hearing and understanding what is going on. we did not talk about libya. russia later and now a discussion about our ability to export onto the global oil market and what that means. the impact all of this on nuclear as we are seeing changes are policy but the price of natural gas does what we are seeing there, distributed generation in the mix of renewables on the policy decision that we made last month to allow for a continuation of the production tax credit, the policies being put in place juxtaposed the political and geopolitical aspects of energy, the pricing situation, infrastructure,

it begs for modernization of our energy policies which is what they have produced. it might not solve all of the problems in the world but what it does do is update our energy policies from eight years ago which desperately need updating and all of these different areas whether is permitting, how we look at the grid how we move forward in the energy space. my hope is that we will be able to move quickly. i think it is an imperative for our economy. we are talking about energy security to me that

translates to national security this translates to economic security. we appreciate your guidance this morning and i don't know if you have made the crystal ball clear for it reminded us how cloudy and complex it is