those three countries. so i think we are back to that observation that says that the uncertainty in crude oil prices as will look out over the next year or two is very high. >> greater volatility. mr. halff? >> yes. i agree totally. ..

and that it had the capacity to increase production fairly rapidly, almost instantly somewhere between 500 and 800,000 barrels per day. the question is for iran, how much is it willing to sell given its price appetite. it has always been a hawkish member about opec. early days of iranian revolution the west and markets should pay more for oil and oil is worth more than the market is paying for it. surprisingly iranian leaders made contradictory statements past couple months that they want to ramp up immediately, but they also said they don't want to crash the market and flood the market with more oil and and flood the market even further. question is how much can the market take. i don't think it can take more

than 100, 200,000 and gradual ramp up for iran's market share. the terms offered, that is much more questionable, much more longer term. you had -- >> go ahead. i asked about venezuela. we haven't her that yet. >> venezuela is struggling. its production capacity has been degrading over the years. production volumes has been falling. it managed to produce as much as it can but its revenue is doubly hit by drop in volumes and drop in prices. it can sustain the production. now the national oil company is asking for foreign partners to pay for the imported of blends of heavy crude to export it. the partners are not willing to do that. it is going down hill and social outlook and social stability outlook is also looking very bleak. now the question there is whether social turmoil could

actually cause production to fall and be disrupted as had been in the case in 2002 and 2003 during the general strike there and my view capacity is more insulated from social turmoil than it had been at the time but the outlook and capacity to sustain production looks very, very dismal. >> thank you for your comments. this whole discussion about iran is so appalling as a representative from a state that has enormous potential. we will, as a country tell iran, go ahead, produce more. while at the same time we're going to continue locking up our potential for further oil exploration and production whether it's on anwar or -- anwr or potential off shore.

so know that this is going to be a year where you're going to continue to hear me, not complaining but being very discouraged and very, really quote angry at the way that we have chosen to advance a policy when it companies to greater reliance on people and nations that have not been good actors but continuing sanctions on ourselves which is what we're doing certainly with alaskan production. senator cantwell. >> thank you, madam chair and i want to thank the witnesses for all your collective wisdom for covering energy markets over the years, it certainly must be an interesting time to now, having your expertise asked for because certainly we're on a

roller-coaster of sorts. so i'm sure it has been very interesting. i think for me you just have to understand i come from a hydrostate where cheap electricity rebuilt our economy and over and offer and over and over again and so i appreciate not only, it is not without some environmental costs. there clearly have been but the efficiency, which i think is the nom de jeur in the country, efficiency in every business model and efficiency will continue to drive the energy sector as well. that's why so many people are interested in distributed generation because distributed generation being closer to the source automatically cuts out a big part of costs. so i wanted to ask you, mr.

zindler, the year has bought a shift in comparison costs for new energy and fossil fuels, by bloomberg finance. how you see these trends moving forward whether they continue to repeat based on price and how do you see solar and battery technologies and trajectories and their lower costs? >> thank you for that question. the first thing to note about renewables, i hope i made that point in my comments that they are increasingly cost competitive. they're not the cost competitive everywhere. and essentially the playing field which this competition is taking place is growing virtually every day. and so obviously the place where renewables are most competitive are places where you have excellent natural resources or very high incumbent power prices so they can compete against

incumbents and potentially win. so the places where we're seeing wind most competitive are often in center of the country, particularly in oklahoma and parts of texas and iowa and minnesota and elsewhere where you have extraordinary winds. that combined with the fact that we are seeing bigger and more effective wind turbines being deployed that can essentially coop up more win and generate more power is making wind more competitive all the time. solar power costs noted in your comments quite rapidly. we don't see quite the same level of decline incomes couple years although we see declines longer term. as you note when you're competing at local level solar can be best positioned. in other words, as i'm sure you know, electricity is priced on a wholesale basis and priced at a retail basis and at retail basis those prices are much higher.

inevitably solar can be competitive as retail behind the meter because you have to offset the price of homeowner or business owner is paying for final price of electricity they're paying which includes distribution cost of getting it there. those costs in regions where this is taking place is expanding all the time. i would say this. looking forward a big part of thinking about how competitive renewables will be contingent on the price of natural gas. gas is increasingly price center at the market. gas trading at $2 mbtu today, adam forecasts $3, we're story casing same ballpark. as long as gas prices stay relatively low there is strong competition. if bass prices zoom back up we think renewables are extremely well-positioned but we think renewable costs continue to slope downward not same accelerated case we've seen recently but more gently

forward. >> if you were going to describe the inning in the ballgame reducing cost we're probably in the first or second inning? >> somewhere maybe in the third or forth. everyone thinks one day we'll wake up, wow, clean energy is cheaper than fossil energy. it doesn't work like that. it is great big complicated world and over time and different places we see more and more of this take place. last quick thing on storage. you did ask about that and i didn't answer, similar sort of economics. power storage starts to make the most sense on distributed behind the meter level at first because you're helping to offset the cost of retail power. in some cases you're helping to offset, if you have to pay surge pricing or particularly high pricing or any kind of fees related to your excessive use of power. if you can offset that with power storage and good shape. we'll probably see some of the stuff come into the money first. there is a lot of developments around you till scale power as

well. battery prices will drop and continue to drop as more capacity comes online. >> to that point i want to keep making more investment because i look where the discussion has gone about oil, and i remember mr. tillerson was before the finance committee a few years ago and i asked him what the price was just on development. he is a very forthright, basically said $60 a barrel. if we're at 30 today, 60 is the recovery cost, seems to me as mr. hal said there will be correction at some point in time. i'm not hoping back to $60 a barrel. i want to diversify to make sure we have smoother path towards this transition. thank you. >> senator. >> first i heard, i heard mrs. cantwell, senator cantwell mention, i think i heard senator cantwell, that wind or solar provides more jobs than those

which are oil gas. if that is what you said, maybe i misheards that is not true. just to point out the bureau of labor statistics, direct employment under oil and gas is 1.6 million jobs, 1.86 and renewable jobs related to all renewable jobs in the united states, 724,000 and there is greater differential if you include indirect. just to mention. mr. zindler, you in your testimony speak about how renewables now account for 67% of energy production but you include natural gas as renewable. is that, your kind of list of those which account for that 67%. was that a misprint or? >> i think i said if you include renewables with the large hydro and include nuclear and include natural gas. those are different categories. >> so under renewables you're lumping -- statement renewables

plus natural gas. >> i think what i said what i wrote i describe these different categories. that is my intention. >> i'll look at that, again but not to dwell again. mr. halff, i really enjoyed your testimony. i never understood, i enjoyed it all but i never understood the perspective of the saudis as well until i read your testimony. thank you for that. let me ask a couple questions on that. the, you had mentioned that imports of light oil into the united states are increasing. why is that if we have all this surplus light oil in the united states? >> so that's a function of the, thank you for the question. it is a function of differential between u.s. prices and european prices. >> but i presume that our louisiana light sweet and west texas intermediate is priced now similar to brent but yet the

transportation cost has to be less here. i mean obviously you're shipping it from louis into a gulf coast refinery sort of thing. so i think that would be a price advantage for domestic users? >> the trick about u.s. transportation of crude oil within the u.s. it has to be done with jones act vessels, or by rail and -- >> or by pipeline off the louisiana coast. >> right. >> but there is only so much that can be moved by pipeline from east to west and to the markets where the imports of light crude have been coming into. >> i'm still not quite sure, just again seems most of the louisiana, most of the west texas intermediate is coming by pipeline and so, i'm still not sure the impact of the jones act point. i could see if you're moving from louisiana to philadelphia but since most of our refining capacity is on the gulf coast, i'm still not sure, unless you're saying we're importing

that light oil into philadelphia? >> yes. my understanding is the imports of light crude, light sweet crude, tend to go to the east coast of u.s. >> gotcha. gotcha. next, mr. sieminski, 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 baselines a little bit ago. so if there is baseline five years ago you predicted energy consumption would be here. your more recent forecast has energy con shun there. there is tight correlation and reflected in in eia data between economic growth and energy consumption. is it fair to say eia decreased forecast amount of electricity consumed, and electricity consumed because you forecast

less economic growth. >> our economic growth forecasts have come down slightly over the past few years but i think that is just reflection of some of the overall economic conditions and not just in the united states but globally. say that the ratios of energy consumption to gdp generally have been improving because of efficiency gains and, and some structural changes in the economy. so as you move from high energy contending industrial actives to service sector consumption goes down. >> so manufacturing, energy intensive energy enterprises if you will offshored to china and what is left service-related jobs. if i may interpret that you end up using less when your gdp is down and use electricity in service job relative to energy intensive industries? >> i think these gains and efficiencies are taking place

around the world including in china. >> i read though, if i may, actually in times past when efficiencies increased the amount of electricity use as likewise increased because the cost input if you will is now lower and so therefore folks are able to ramp up production because the cost input is lower? >> one of the things that when eia has done our long-term projections and our annual energy outlooks on the electricity side i do know a lot of the improvements are reduced, the improvements in efficiencies, that's reduced use, have come about in households, for example, because of improved efficiency of lighting, improvements in the efficiency of big energy users. >> i'm sorry, way over. hopefully there will be a second set. so i'll come back to that. thank you. >> happy to do that, senator. >> [inaudible]

>> thank you, madam chairman. i see now i have alaskan water which is very nice. >> alaskan glacier water. >> yeah, that's great. thank you. i'd like to thank all the witnesses. we have an administration, the obama administration, that continually makes it harder and more expensive and more difficult to produce oil and gas in this country through regulation and other restrictions and at same time making it easier for our adversaries to price and export oil and gas. an example is recently lifting sanctions on iran and, that's actually borne out in your projections, i think both mr. sieminski, mr. halff and maybe others got done informing us u.s. domestic production will decline by approximately 600,000 barrels a day over the next several years and that iran

production and export will increase by 800,000 barrels a day over 2016 and 2017. i think that's the wrong approach and i think it has ramifications in job creation in this country, in economic growth in this country and in national security from the standpoint of energy security. so my question to you, and i'd like to start with mr. sieminski, and mr. halff. i appreciate both your testimony very much. i might ask mr. halff to put in some projection in terms of what he anticipates for price over 2016 and 2017 as mr. sieminski did and others can respond to this as well, but, i would like to you to give me your recommendations what we should do from a public policy stand so that our industry better can compete in this global economy.

and as we look at energy legislation, i know senator murkowski and senator cantwell have energy legislation they hope to bring to the floor possibly this week, what type of provisions should we advance to help our industry compete? i'd like to start with mr. sieminski. >> senator, i think i will let an antoine talk about polly recommendations and if i want to keep my job i should as well. main factor driving oil price, oil production, as well, i would say it was the price. i don't think that policy decisions caused oil production declines. >> that wasn't my question. >> right. >> my question is, how do we empower our industry to compete

rather than shackle it, at at same time that our adversaries we're actually taking steps that assist our adversaries. that was my question. >> right. well one thing that congress and the administration did in a bipartisan fashion was agree to allow crude oil exports. that would be one answer to your question. i think that allows for u.s. crude oil production to compete on global markets. the thing that's kind of limiting the impact would have in the near term but there's a lot of years to go yet in the oil area is that brent and wti prices are very close together and so the advantage that our crudes had on global markets is somewhat limited. >> i agree. lifting oil export ban was very important. that is very good example what i'm talking about. what else can we do that can make a difference, again

empowering our industry to compete? if you don't want to make recommendations i understand but i go to mr. halff. what do we do to help our industry compete that benefits our nation? that is what i'm looking for. >> i don't know necessarily whether it's a government function, senator, but i think one of the big advantages u.s. industry has had and is likely to continue to have is the technology, the technology of shale oil development occurred here and maintaining the improvements in costs of drilling and production is something that would make a big positive difference for our producers. >> mr. halff, do you have recommendations as to how we can better help our industry better compete in this global competition, this global economy? >> i wish i had but i think it is actually doing a pretty good job company beating and i would

agree the lifting of export restrictions is a very positive step because it allows oil to go where it is noded in the market and u.s. can compete in that. opening up now markets potentially, differential support, exporting so that's a very good step. another thing which think is very good for competition what adam sieminski has been doing at eia is improving data transparency. the more market knows about how the industry is doing, where the stocks are going, what are the trends in production and demand, the more investors are capable of providing the right response to making the right moves and helping the industry compete. but i think it's a very knew world for the oil industry. for most of its history, oil companies have operated under some kind of a price umbrella, whether under rockefeller standard oil system or the seven

sisters railway commission or opec there is always some kind of protection against fluctuation in prices that was provided to industry and enabled it to make very large long-term investments. now that umbrella has disappeared, is gone. opec is out of the picture now. could come back later. it is out of the picture now. industry has to live in very different world. this is process we can manage naturally but my project projections of rebalancing the market and markets recover, u.s. industry will be in pretty good shape. i don't think oil companies in the u.s., will be largest, main victims of price correction. opec i think we come out pretty good, gcc countries, saudi arabia, kuwait, u.a.e., and i think u.s. companies will come out on top. the biggser victims of the downturn would be very heavy, big ticket projects, deepwater,

west africa, other very high investment, intensive projects. those would likely be more affected by the downturn in my view. >> any other recommendations before i specifically, that help us compete? all right, thank you. >> thank you, senator hoeven. very important questions in terms of where these forecasts kind of place the united states and our domestic production, what it means for our economy, what it means for our jobs and what it means for prices for the american consumer. it's been a tough, tough 18 months or so in alaska. we have seen shell obviously lay off almost all of their folks up north. conoco had major layoffs.

bp just announced last week major layoffs in the state. repsol canceled winter contract which meant contractors not moving forward in projects. statoil returned their leases in the offshore. it has been a very, very discouraging time. low prices in alaska don't necessarily translate to good news. our treasury is certainly hurting as a state that is very reliant on oil but as i mentioned, low prices for consumers don't necessarily line up with what you're seeing in the lower 48. i mentioned prices in nome. i tried to get a better read what they were actually. in october they were at, hanging at $6.22. when i was there in january they have dropped to about 5 1/2 dollars a gallon. the clips this weekend have

gasoline at $9.99 in noatak. they're trying to work with the park service to be able to haul some fuel across park service lands and, i don't know whether we're going to be able to do that but by gosh i'm sure going to try because nobody should be paying $9.99 for their oil when people here in washington, d.c. are getting it for $2.10, what every it is here. a great deal of inequity and that is what gets my dander up and my ire up and i look opportunities we now created for iran, that we are not creating or al not allowing for alaska like 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 policies we put in place and making sure that you have an environment an environment that is

constructive. i want to talk a little bit critical minerals and situation that you spoke of, mr. mcgroarty. you said the outlook is bleak when it comes to our, our mineral, critical minerals and particularly with our rare others. mr. zindler you say 2015 is watershed for decarbonization. mr. mcgroarty went on to state exactly how important these minerals are so we can move forward with wind and solar and all of the smart technologies that we want. but we really don't want to be even more reliant than we already are. i appreciated what you did in terms of outlining how historically we have been so reliant in certain areas but

instead of making progression it seems we are actually going backwards. now you have indicated that there are some areas that we might be able to reduce this dependence. the fact that we produce zero rare earths and are now again 100% dependent on china for our rare earths should be unsettling to all of us. so we've got lousy permitting process where in terms of permits for mines, minerals, we're, if we're not the worst the world we're close to being the worst. i think papua, new guinea is worse than us in terms of permits. you mentioned prospects for recycling and substitutes but you've indicated even really with that, unless we do

something to increase our production, we're not going to get ourselves out of this hole. can you speak a little bit to what you think our genuine alternatives may be when it comes to reliance on these minerals. >> thank you, senator. it is very deep dependency first of all, and in terms of bridging topics of oil and gas to hard rock minerals, as we look at just from the energy side, new sources, new energy source, alternative energy sources i certainly would not want us to move dependency difficult for us over 50, 60 years, for a different sort of dependency for all new technology. >> in fairness are we there already? >> we are there. that's why i said in my remarks,

all of the above. we have to recycle, such is our degree of dependency. we have to recycle and reclaim and metals and minerals in devices that we use every day. small and large. urban mining, as they say. i didn't mention one in the oral testimony but a lot of waste piles from mines that are no longer in operation that date back 50 years, 70 years, 100 years and the rate of extraction there is very dependent on the technology at the time. also our interest in the metals and minerals at the time. in many places around the united states we may have, we do have opportunities to reclaim a waste tailings by extracting metals and minerals that are still there that either we did not do efficiently enough first go round or we learn about them after all the first go round and

now they're part of that periodic table we're sudden hely interested in. we should be doing all that looking to substitute but i'm concerned about easy discussions of substitution when you look specifically at what the possibilities are, the material sciences on these issues, where you're substituting for, you know, renium 83% dependent you can substitute to have made yum. but we're 95% depend depth on vanadium from kazahkstan and china. are we looking dependence we're reinforcing and looking politics of it. this pushes me back in the direction we absolutely have to expand bringing new production into play. the metals and minerals we're talking about, all of the devices that we use, we're at very bottom edge of that. i really do believe there is a revolution going on in material science and it is impossible, that is not going to put a lot

more demand pressure on us. so we're going to have to get very inventive, we're a very blessed nation, we're resource rich, but are bringing these new resource into development or creating obstacles there? i think as this whole sphere is evolving so rapidly i don't think our ability to process the physicality of the need. we're bringing power from the wind and sun. the physicality bringing it into the grid, distributing it as we talked about today, those take devices. what are those devices made of? are we buyers of devices or would you rather be producers of those devices? big issues for manufacturing, national security and there are just a whole lot of metals, minerals and we're going to get used to treating same way we talked about oil and gas. >> 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. senator cantwell. >> thank you, madam chair. i want to go back to electricity for a few minutes. obviously business models are changing for utilities. i know they feel that intensely at this moment but i think future change will continue to drive that. used to be we had vertically integrated monopolies, built power plants, strung transmission lines, distributed, customer billing and now customers and consumers and businesses are demanding more control and getting it. they are looking at cleaner sources and clearly there is a lot of change to what has been the traditional utility model. we obviously want to continue to stir investment as well, so i wanted to ask you, mr. zindler

and mr. lucier, how do you see these business models evolving for utilities over next several years? and how do we make sure consumers feel more empowered to get kind of efficiency they want out of their energy prices? >> well the utility business model, thank you, senator cantwell, for that very important question. the utility business model has really been evolving rapidly ever since thomas edison's pearl street station in 1882. the initial concept that served us well into the 1970s, economies of scale. lower consumer prices we needed bigger and bigger operations. that broke down a lot of reasons in the 19'70s and '70s, '80s, and '90s we heard about distributed generation in big scale. back then it was focused on distributed generation of natural gas and raised ish you of unbundling. cost based regulation is helpful

for providing infrastructure but we're moving into a model now where scarcity based pricing what applies to the wholesale power markets and that is really the fundamental issue here. you need to define scarcity-based pricing in adequate way you adequately price reliability, and adequately price following and adequately price ancillary services to keep the grid going. i think for that reason you need to pay attention to balance much industries an balance of business models and not only have flywheel, power reserves keep the grid going but financial wherewithal to keep the entire thing flowing financially too. >> before mr. zindler answers we're pretty big fans of zero based power across the midwest. >> i think this is very interesting time for utilities and in particular the question you asked earlier around distributed generation is what,

what is causing probably the biggest sense of disruption and frankly concern. obviously when you, when a customer on, in your operating area starts generates power off their roof, they don't need to buy as much necessarily from you as the utility. if you compound that by the fact there may be so-called net metering effectively they in effect sell power back into the grid at retail price that also can be threatening. we have seen what i would say at times confrontational situations between utilities and what has sprung up to be a relatively small industry but growing of installers who put these systems on people as roofs. one hopefully constructive statement i could make about that i would hope utility was view this trend as something they want to participate in and take advantage of. find business models they can be the one who is help be directly involved in doing installing or

partnering with some of these players. i say that only because at least in our view this is, to a large degree inevitable. the costs are coming down. the technology is getting easier to put on people's roofs. it is going to happen. and so probably better to be involved rather than being in conflict necessarily with what is an emerging industry. >> do you have a way to communicate that? >> testifying before the u.s. senate energy committee. >> i hope you're right. i hope you're right. i see as i mentioned in my opening statement i see tea partiers, environmentalists coming to terms with the fact they do not want to be overcharged just to get more energy efficiency as they participate in creating energy. so i think utilities have to have to understand that, and i, madam chair, will submit for the record, department of energy jobs and green energy jobs versus fossil fuel jobs to show

growth and passing that sector. >> senator, i want to follow up on regulated utilities and business model. with regard to distributed generation one of key issues is cost allocation, how do you price the power, how do you price the grid and there is lot of experimentation going on at state level. i think it is only matter of trial and error evolution, until we find an answer that will work in systems across the country. if you look what happened last year in the equity markets the s&p were down 1%, utilities were down about 7% but on the whole i think utilities have a much more stable bismarckket and utilities in regulated space actually have their own interests and utility scale, solar as well. where i really direct your interest would be merchant power markets where last year we saw the stock prices of major merchants going down anywhere from 30, 40, even 70%. a lot having to do with natural gas but also a lot having to do

with market price issues and policy questions about how markets should be structured in the future. so while i think that we can certainly accommodate the dynamic of distributed generation in variety of ways the area that is probably most urgent right now is the wholesale power market that serves 2/3 of the american public. >> i would just note on that we in the northwest i think have one of the largest deployments of electric vehicles just because again we have cheap electricity. so there is upside as well to the utilities but clearly i think as mr. zindler said get on side of consumer and see many applications here that can grow the business but grow it in a different way. thank you. >> senator cassidy. >> mr. sieminski, yeah, when i look at the, going back to where we left off with our last conversation, whether or not the residential efficiencies can

totally make up for this loss of projected power, explain it if you will, i'm looking at eia's annual energy outlook figures and just others can not look, i will mention them. ire 2015 base case had 4072 terawatts in 2013. increaseing to 4691 terawatts in 2030. a terawatt being 500 billions -- 100 billion kilowatts i think, yeah, 100 billion kilowatts. under the clean power plant rule you actually, there's actually a savings, if you will, of 581 billion kilowatts which is to say, 581 terawatts. can we really save 581 terawatts on residential efficiencies? i mean is that part of y'all's

projections? >> well there are three big factors that are driving the deployment of renewables. tax issues, regulatory issues and technology issues. >> no, wait, going back to this question, can we really, is eia -- granted this is clean power plant projections but eia is estimating a 581 terawatt increase over the clean power plant rule in 2030. you had mentioned some of those savings will come from residential efficiencies. is it reasonable to assume that we can save 581 terawatts from residential efficiencies? >> i'll have to get back to you with numbers. we have not done our final analysis of the clean power plant overall impact. we'll 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 are, there is also the other side of that which is the impossible increases in output of electricity from natural gas and of course renewables. >> now under the clean power plant rule natural gas is basically stable. it is amazing, we've been looking how much we would have to invest in renewables in order to make up for the short fall. it is an incredible -- like entire state of massachusetts would be covered with the highest efficiency windmills sort of thing, just doesn't seem practical but that said, that's what the numbers show. okay. mr. zindler, by the way i apologize, you were right, when i read your statement again it is, you do read renewables natural gas, account for most of the increase and i thought you were including the two but turns

out natural gas is lion's share of that. i misread. i apologize. mr. louis -- lucier, and mr. zippedder, we speak in terms of solar panels and i was in california and people were putting in distributed natural gas generators at their office buildings. comes to mind, mr. zindler, almost a prerequisite for renewables to be competitive is for high cost of electricity in that setting. to what degree distributed energy sectors, natural gas and these areas of high electricity like california as opposed to solar or wind? >> come back to you, i have to get back to you you about exact numbers but at least in the most recent years most of distributed phenomenon has been around solar. >> now is that in terms of

volume of kilowatts produced or in terms of installations? >> i believe in -- certainly in terms of installations because obviously these pv systems can be very small. in terms of actual kilowatt hours produced probably still smaller margin as i understand pv. you raise a good point, there is interesting opportunity for gas and gas is finding its way into the economy in lots of different ways. in fact there was a good deal of talk around natural gas vehicles before oil price collapsed and now more challenging for gas to compete in vehicles. but there are more and more ways. i would say this. obviously would you do on sight narrowly gas generation, you have to get gas there and there can be those issues but certainly not, nothing about the solar distributed you know generation revolution that we're seeing that precludes gas also being a distributed source. >> gotcha. mr. halff -- i'm running out of

time, mr. lucier. you showed good time showing international instability created -- some countries have increased stability because of high energy, two things, either high energy costs and or low energy, low income from energy production if you will. i'm struck, mr. zindler says for renewables to work, the base load has to be expensive. coal is cheap worldwide. india and china clearly invested tremendously in coal in an effort to increase their economic growth. obviously coal is cheap. it's there. they don't have to import it, that sort of thing. if we were to bring in those sorts of high energy costs that seems to be a prerequisite for mass scale electrification of let's say india, that almost seems unaffordable for india? i say that because economic growth is clearly in the interest of india. they're going to chinese will

head off instability with economic growth. so in this context, is it practical, is it foreseeable that those two countries, for example, forgo use of their natural resource coal for a renewable sort of grid? >> you're absolutely right that coal is very attractive for those countries and it's been the backbone of the chinese energy sector but we've seen some retrenchment in china coal use. coal ice actually has been declining lately. >> now is that related to the economy declining or is that related to -- >> i would say it is related to the economy in part because there is less industrial activity but also external costs associated with coal for instance, pollution in major cities has become a top concern with chinese policymakers. it has deterred, for instance,

workers from going to the bejing area. caused social instability. it has been a cause of protests and riots and dissent. so it is a top concern and we've seen renewables take market share from coal in china at the margin. so it is not entirely just based on domestic availability and cost. there is other factors at play. also some of the coal power plants, for instance, or coal-run factories in china have been very ineffective. those are ones targeted for closure first by the government. in india coal remains a very big part of the picture for the foreseeable future but there the case for renewables comes from the idea of generated of distributed generation and leapfrogging some costs

associated with transmission and distribution in other emerging economies as they have gone through periods of expansion. >> gotcha. mr. zindler, i'm out of time but is that okay? mr. zindler? >> i would jump in say on india in particular i would be happy to share with you really exciting things gone around renewables and particularly solar as an twain mentioned 400 million people have no basic access to electricity. one of the recent developments last few years as a result of lower cost of solar, very tiny micro systems distributed for $100 or less into rural communities to provide basic power needs, to turn on a light, a radio. these are, these are the most basic needs that people have that are starting to be served. frankly if you do the math on that, versus building a giant

coal map and hub and spoke network. it works with that. >> works with that, and -- >> step one for 400 million people is to just turn on a light bulb. >> i yield back, thank you. >> thank you. i've got just a couple hopefully brief questions here but i want to go back just for a moment on natural gas. and the reality that we've got to be able to move that natural gas and some opposition to infrastructure development. you noted this in in your testimony, mr. lucier. i think you stated opposition to infrastructure development could prolong the supply gut and excuse me, supply glut and put timing of relief in question. the question to you where we have situation where pipeline siting and permitting is delayed on a bigger scale, what do you

think the consequences are for natural gas and could, could these types of impediments, and we're seeing them, believe me, we're seeing them particularly in certain parts of the country where there's a nimby attitude, well, we want to have pipeline transmission but we don't want it running through our state, move it through somebody else's there, could we be in a situation where because of just that kind ever political opposition we have a real threat to natural gas supply itself? >> well, senator murkowski, we have too much of a good thing in some parts of country. in marcellus obviously there is tremendous amount of gas and it is really building up there. we don't have the takeaway capacity. what that means that the price of gas is lower in that marcellus region which corresponds to pgm and this is

putting huge pressure not just on power prices but coal-fired power plants and particular on nuclear. takeaway capacity for that gas is key. on other hand, three, four, 500 miles away depending where you count we have new england. new england is totally dependent on its gas for merchant power. very efficient network but they don't have access to the great gas supply from the marcellus. we've been fortunate this year to have warm weather. we have el nino shining on us. we came close to severe weather events during the polar vortex in 2015, not once, but twice. new england is still in a situation where they could be one weather emergency away from a serious power or heating crisis. that shows the urgency of delivering gas from areas that are gas-rich. in fact oversupplied, to areas that are actually quite exposed right now. i think in your oversight you should definitely pay attention

to efforts to build pipeline capacity into new england. but on the broader question of delivering natural gas to provide clean gas generation, we're seeing record number of pipeline proposals for ferc right now. that is straining resources at ferc. they're actually doing quite a good job moving forward but we're seeing ferc surrounded by hunger strikers, that ferc issue no new permits for anything. litigation is slowing down those pipelines. while natural gas is still a carbon-based fuel, it is cleaner than alternatives. i was driving through the coal country of southwest virginia at this time last year. i noticed anti-pipeline signs. the state of virginia wants to build natural gas power plants to reduce its overall dependence on coal but if you can't build a power line in virginia, if the atlantic coast pipeline is held up, if people in my client meetings are constantly asking what is happening with the

constitution pipeline, what's happening with any number of other projects, there is a lot of uncertainty among investor whether you can actually build new power plants if you can't actually supply goose to them. >> this is a huge issues for us and they don't get near the attention. that it is important that we're able to move some energy policies forward, such as we have within the energy policy modernization act that we hope we will bring to the floor here very shortly. in this same context then, about the impact of natural gas and what it does to other energy sources whether it's coal, whether it's nuclear, i want to ask mr. sieminski about your projects on nuclear? because in your chart, your table, number one on non-hydro renewables 9% of electricity

generation by 2011, you indicate by 17, our nuclear generation makes up less of that overall port than it has in years past. if we have the a situation as mr. lucier and i have just been talking about where you're not able to either move that gas to where it needs to get, what does this do to your projections? how do you see the viability of nuclear as part of the energy portfolio, given what we're seeing with some of the constrictions on natural gas? >> senator, i think, in our annual energy outlook, we have just a small amount, .8 i think

or 800, the difference between 789 and 808 billion-kilowatt hours of generation from nuclear in the annual energy outlook. in the clean power plan proposal, we'll have the final numbers out soon but that didn't change very much. so i would say that was, nuclear is flat because we have total electricity consumption growing by about .7 or .8% per year. nuclear's share is slightly decreasing. back to the question that senator cassidy was asking, we do see under the clean power plan extension of ptc and itc, for wind and solar tax credits

and 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 of solar and wind, as you look out but we we're also assuming that natural gas fired generation goes up both in the annual energy outlook and in the clean power plant. so it doesn't, the amount of generation under the clean power plan will come down a little bit. it will be replaced by more wind and solar and natural gas, not so much nuclear back to your question. lower coal but the total amount of generation is just a little lower and so you don't have to have massive changes in the, in the inefficiency, in the residential sector to make up for that. so basically residential users

will be using more solar and wind capacity as well as natural gas capacity, but not nuclear. >> not nukeclear nuclear. mr. zindler, i'm out of time but if you want to ad something. >> we're looking at our forecasting for 2017 we're probably see more capacity added for natural gas delivery than we've seen since 2008 with about 65 billion cubic feet per day being added over next three years. there are a lot of pipelines have been approved coming online directly related to marcellus and utica. it is worth noting that may ease some of the bottlenecks existed so far. >> we're hoping so, thank you. senator hoeven. >> thank you, madam chairman. i have want to go back to mr. sieminski and mr. halff in terms of their energy, i guess price outlook and mr. halff, you indicated that you talked about

this black swan concept whereby opec and others may pump a lot of their oil now with thought that later there may be less demand. given that saudi needs about $100 a barrel, in fact russia needs about $100 a barrel to cover their all-in costs in materials of their spending in their budget, how does that impact their continuing to produce at a high rate with prices as low as they are and how long do they continue that? mr. halff. >> thank you. so senator -- produce withdrawal on reserves at this time. there is no immediate pressure. suddenly they have been dipping into their reserves. >> you're talking about their financial reserves? >> yes. but they have the capacity perhaps more than any other

producers to continue at fairly low prices for quite a while, however, we're seeing signs of pressure and we're seeing signals that they may be considering some quite revolutionary changes in the economy. there's talk of privatizing the national oil company to some degree. it is hard to say how much of that is for real but there are signs of pressure and signs of a shift in the makeup of the economy and the mind set. russia, it's a different situation because russia has in a way benefited from the collapse of its currency. so its production costs have come off dramatically compared to the revenue which continues to be in dollars. so that, i think partly explains why russia has done so much better than anybody expected. in fact its production has increased dramatically since things started looking really

bad for russia, since the beginning of the price drop and the imposition of international sanctions, production had been expected by many to fall and it actually increased steadily and what has been producing at record levels. so, how long can this go on? not forever. one advantage that the russian companies have had also is that they haven't been affected by price drop as much as the state revenues have. . .

i don't think that's realistic, and futures market is not good for caches of long-term market. in my view, it's almost a given that prices would be significantly above $50 by 2020. the timing is difficult to assess. the capacity from many countries will be the greatest. rush i don't think will continue producing the kind of growth

we've seen. iraq as dramatically increase production but it will be hurt by its incapacity to pay the companies upward in there. so dramatic increase we've seen more than 1 million euros since the price collapse and the take over of the most of my i suspect that will not likely to continue. -- mosul by isis. those declines i think will continue. eventually there will be a rebound, we will be able to come back quickly when the price turned. >> who is that? >> shale oil. one of the big questions, will shed oil when it comes back, when growth comes back will come back growth comes back the comeback of the candidates we've seen over the last few years or at the diminished pace backs one key factor there will be the degree to which the cost

companies have enjoyed, whether that will stay or how much we inflation we're likely to see as demand for oil services rebounds with the price increases. >> mr. sieminski, your thoughts? >> with the chairman's permission -- >> would you like -- >> senator, i grew up in pennsylvania and not in the great state of north dakota but there is a phrase that might apply. this ain't my first rodeo. i've seen seven big price declines and i've seen six big price increases. i think antoine and i agree that prices are coming back. i think getting at the heart of your question, let me try to separate it into two parts. a number of countries, iraq, venezuela, numbers calculated a

while ago, they needed $100 to make their budgets. in russia's case for collapse in the ruble and the strengthen the dollar have really improved their position. to export oil -- to export oil. the current currency exchange has helped russia. and the saudis gave they may not need one or dollars a barrel anymore either. there's going to look at ways to charge people all of the more for gasoline and electricity and so on. they can make some changes, but i think coming back to the heart of your question is, can we have $30 a barrel oil continuing indefinitely into the future? i think the answer to that is no. prices could go lower. we could see $20. why? because the cash costs, they're sort of three layers of costs in

the oil business. there's cash cows, and that's what you need to cover your immediate bills in a sense comed that's down to $20 a barrel. then you've got midcycle costs. this is kind of like what you need to kind of hang on, like you might not be doing really well, but you are paying some of your debts and so on so you're not being shut down. that's probably in the range of 40-$60 ago. then there's the full cycle calls. what does it take to go out and find more oil into meet rising demand for oil? he does every forecast i've seen this instead. and those numbers are at least $50 i think, possible si has 75, maybe even $80 a barrel. so at some point i think we've got to get back to the full cycle cost range.

because if we don't this big build up we've seen in inventories over the last year and have is going to get drained down and then something will happen and we could come back to the senators question. i think it was your first question, senator murkowski. what about venezuela? they are exporting 2 million barrels a day and i could go off the market given the social political turmoil in that country. and then we wouldn't be talking about these layers of calls. we would be talking about what is it take to replace 2 million barrels on the global market where there's not a lot of spare capacity? >> i'm going to -- i have a couple more questions but i will certainly deeper if you have come if you want another round. [inaudible] >> enjoying this exchange. the alaska legislature is

convening this morning for their inaugural, the kickoff of their session, and the questions that are being raised in the discussion here is as important as anything for a state like mine, that relies so heavily on oil, and a state like yours that has relied so heavily. and we've seen what happens in the price kind of tanks. not kind of tanks but when the price of tanks and what that does to your economies. so please continue and i will have some when you're done. >> thank you, madam chair. the testimony really is important. it a look over the last several years, the testimony that you and others provided, the information you provided was important. we just recently, led by our chairman, and to the oil export ban which had been in place for 40 years. that was only possible because of the information you put forward that actually showed the benefits of doing so in terms of

jobs, economic growth come energy security, lower prices at the pump and all those things. in terms of creating i think the public policy, his testimony matters dramatically so we do create an environment wherein american entrepreneurs and our companies could unleash their ingenuity in tempe. mr. halff, your comment about reducing the price curve and the ability respond to marcus is an incredible important key chiswick understanding long-term the pressures that will drive underlying pricing. that's not just support fossil fuels. i think it has a dramatic impact on what happens after realistic approach in terms of renewables and other types of energy. i want to shift to call for a minute. what is the impact going to be from the administration's three-year moratorium on leasing call on federal lands? what are the indications going to be for the coal industry as a

result? this is now in addition to the co2 regulations need administration has put forward your many other things. now what does the impact of this three-year moratorium going to be? >> thank you for that question. that's actually an extremely important question. i haven't prepared an analysis of the impact of a three-year moratorium on coal leasing, but obviously it's going to be quite significant because it points to assets which are being tied up through extended studies in which an actual be developed in the future, only subsequent to increase charges, carbon charges, land access charges to increase royalties, et cetera. so this is interesting, the coal industry right now as you is tremendously depressed. we have oversupplied in cold 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 a programmatic environmental impact statement looking at leasing on federal lands for all, this is clearly the first step for doing such programmatic environmental impact statement pertaining to leasing oil and gas on public lands, too. so i think the economic significance is actually not a major issue right now, but the precedent this sets for all public lands generally is quite substantial. >> thank you. >> just some facts on this, in 2014, that's the latest data, the 42% of coal produced, u.s. coal production was from federal lands. that's a fairly high number. the main states, montana,

colorado, wyoming, new mexico, arizona, north dakota, senator, i think possibly alaska might even have some coal production from federal leases. solid or issues they are that -- so there are issues there that in the long-term could be impacted. in the short term that is probably enough property under lease to maintain output. i wonder if i could take a minute to come back to your question about, i'm going to risk talking about policy which i'm not supposed to do. i want a do over on your question. i think that if you're looking at distant second what can you do to enhance u.s. energy production in the oil area, maybe even in a few of the other areas, the issue of infrastructure are really important come and policy -- i

was reminded because you're asking about the ability move natural gas around. i think the ability to move oil around is an important one. even crude oil products, the colonial pipeline which runs up 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 reserve and the ability to get oil waterborne from the strategic petroleum reserve so it can be moved to other parts of the united states, if the d.o.e. is looking at that. in fact, i think there was part of the law that just passed that instructed d.o.e. to do so. so there are a lot of policy issues associated with improving the midstream. but not so much of the wealth and but i think that bit in the middle before to consumers that

are i think really ripe for a good look at the policy issues surrounding that. >> thank you, mr. sieminski. i think that's absolutely right on come and i appreciate it. mr. lucier, i think you bring up a very important point, when you describe how the moratorium that the administration has put forward is right on coal but what are the ramifications of that for other types of energy like oil and gas. so i think your point is very well made. it is deeply concerned. i would just wrap up with this question, and that is come as part of the legislation that our chairman and ranking member are advancing, one of the provisions is the certainty and transparency act. i would like some sense from, and i would start again with

mr. sieminski, mr. halff, but for many of you, in terms of if we are able to advance that legislation and more readily allow for lng export, what do you see the ramifications in terms of actually making a difference with some of our allies, for example, not only greedy marketeer at him actually making a difference for some of our allies in europe and so forth in terms of reducing russia's tremendous control because they are the energy supplier to europe? >> will that help or are there other things that could help? >> right now i think that the main impediment to lng exports is not the permitting, which is, there's a number of federal agencies involved in permitting a to make love engineering and environmental aspects, and the

department of energy office of fossil energy for the national -- >> you are not just saying that because you are part of the department of energy. >> i think that there was a one point there was a view, senator, there was a bottleneck but that doesn't seem to be the case. there has been an alignment between the department of energy and the regulatory commission on the permitting. so i think coming back to what are the issues that i think it's larger the economics with lower oil prices, the spread between lower u.s. natural gas prices, the spread has narrowed. and it's made it more difficult to export lng, or to look at the economics of lng exports. if we should see a recovery in oil prices, that would probably do much more to improve the

prospects for further lng exports. in eia's numbers we do have lng exports are going up. i mean, it's still, it still make sense into the asian market. and possibly into europe. i think that things will look very different at the point that we get back more towards those full cycle costs associated with oil prices that you were asking about earlier. >> mr. halff? >> i think the future rise in u.s. energy exports, that's a game changer they are, a real transformation of the gas market. i would just point out a couple

of ways in which things would be different. one is the growth of gas as an international global market with a different pricing mechanisms looking forward, more international competition. that's going to be very afford for european energy security because it will provide additional source of gas supply in addition to sources that europe relies on right now. also very important for asia, and i think one key factor would be, one key way in which energy will have an impact, u.s. energy, australia energy which are increasing, would be to allow for more competition between oil and gas and an increased use of gas in the energy transition.

>> mr. lucier? >> center, you are really correct that if you want to help our friends, special our gas consuming friends in japan, asia and elsewhere, we do want to increase global supply. this will help europeans looking for broader supply. but it's not just our friends that we have to think about. we have competitors, too. and in a very tight lng global market by now there could be competition to see who builds the export facilities in to see who gets the export business. so anything we can do on the margin that means that you as projects have an edge or use projects have more certainty against last minute delays does help u.s. produces and it does improve our competitive position. it helps prevent but i think we need to think of ourselves in comparison to competitors as well. >> a very quick point, which is i think he lng, i agree with everything set of lng.

look at exports into mexico which is not lng but just simple cross-border southcom and that's we think will continue to rise very interesting area for the gas market and major energy reform underway in mexico as well that could drive even for the gas demand as well. >> all excellent points. >> thank you, madam chairwoman,. >> senator hoeven, that was the longest key question session in this committee. i understand and so i think it's been a good discussion and panel. and again i thank the witnesses. mr. halff, i thought to me, i don't know so they want to argue as much about the past as what you plan for the future. and i think your answers to my colleague about the chinese are deployed, the part of the discussion here is also political and that consumers are demanding a different world, and

china is responding to that. so no, i don't think india is going to build coal plants galore when the issues, nor do i think china is going to pursue the. i do think the president's action since we already have 20 years of oil, i mean of coal under lease, i think it's important that we assess for the taxpayer what 30 years beyond that looks like and make sure consumers are getting a fair price. so my question is to mr. zindler, on the carpet installation of renewables, because i think this is also where people are driving consumers are somewhat driving behavior but also corporations are driving efficiency. i think corporations are looking at it as a win-win. i think wal-mart looks at ss energy sufficiency is a win for us. it is a win for consumers and for power. that's where google and other people are. what do you think the renewable purchase from corporate to do grid scale renewables is going

to look like for 2016 and into the future? >> that's a good question. last year roughly a third or so of all power purchase agreements were signed in the u.s. for large-scale clean energy were signed by corporations, essentially directly to abide electricity themselves. and i think the motivation there is privately economic, which is essentially give you the opportunity to know that, what your price of power is going to be over a long fixed period of time at essentially blockaded. it's not that they are buying all their power from renewables but if they can lock in some chunk of the then they can offset the risk of fluctuations going forward. that's been one of the main motivators i think that we have seen take place so far. you are right in noting google, microsoft in your state, but not just tech companies but others as well, kaiser permanente, ikea, others have been involved in different ways in renewable

energy. i think that that's how they view it is if you essentially eliminate one risk, which is the unknown of electricity prices which are tied to a variety of factors we talked about who to date including gas prices and other things, you essentially blockaded. that's an area we think will continue to look interesting. i will say this, which is it is predicated on the notion you have fears about our prices rising. if power prices go down, the corporate might get a little less interested in this area because been there not as worried about fluctuation of prices because they feel like they could go down into future. most of the attempt has just been to lock in a price that you know it will be over a long period -- long fixed period of time. i think people are trying to respond but i see it across the board even in marketing i three which is a great vehicle by bmw who is advertising not only the

fact that it's this next generation car but it is also built with renewable energy. they are plant run is using hydropower. they are trying to the it's all renewable car from the beginning of its origins and opera was generated to create a. and the fact it's recyclable material within the car. i think people are trying to win in the marketplace on this issue and i think that consumers are demanding it. i think it's probably both at least for now anyway. i definitely think it's something for us to continue to look at, how grid scale renewables solve some of the questions we want answered as it relates to distributed generation and moving forward. i don't know if you have anything else on that point, mr. lucier, about questions that we want answered and electricity grid. but obviously everybody, a long

must do many others who are putting effort into battery technology as a relates to giving us flexibility on renewables and building the capacity into the grid -- elon musk. >> thank you, senator cantwell. that's a big open invitation to i'm not sure what i can say so single in 30 seconds. clearly putting power storage on the grid and combined with the generation on the edge of the grid is something that really could revolutionize the industry. it survey does provide a lot of solutions for many issues. i would just point out the grid is a totality, and allow the grid has an edge, the grid also has a corporate at the moment it is the core transmission networks, the core generation assets but keeping the grid of light, you will. i think back to discussions of things like participant funding or stranded assets back in the '80s and '90s. that was actually part of a

discussion that lead into distributed generation in the '90s. these are not necessarily new issues. the key point is that power has a price. regulators they do crop cost allocation are good at securing -- figure this out. we did figure out ways in which you can fairly price resources, whether it's the energy side or the infrastructure side. i'm very confident we'll see a very robust partnership to develop. i think there's an opportunity for many thousand flowers to bloom come at a think we'll see a lot of innovation going forward. >> i like that analogy. i think that's what we get out of the grid is a layer of efficiency. when i look at the ability to have that technology, not only utilized in the united states but around the globe, now that is a major transformation. so thank you, madam chair for this hearing. >> thank you, senator cantwell come and thank you to each of you gentlemen. i appreciate the time you've

given us. we have gone well over our usual time. when you think about what has been discussed here today, we really are at that point of substantial change. mr. zindler, you write in your testimony can you say a fundamental rethink is now well underway about how energy gets produced, delivered, consumed and managed in many parts of the world, including the u.s. i would think based on the testimony from each of you that you would all concur with that. when you think about where we are, the discussion that was raised about coal, the impact that we will have of his three-year moratorium on placing on federal lands, the impact of the clean power plan, when you think about where we are with natural gas, what's happened with the low prices, the

potential for some destruction because of infrastructure issues, when you talk about the necessity for critical minerals and how that will allow us to build out our renewable energy sources through enhanced technologies and yet we recognize we are going in the same direction with the critical minerals that we were historically with oil, the oil picture we can take a week of hearing and just understand what is going on in iran and iraq and saudi arabia and venezuela. we didn't talk about libya. russia. layer in now the discussion about our ability to export onto the global oil market and what that means. the impact to all of this on nuclear as we are seeing changes, policy decisions made through clean power plan's what

the price of natural gas test a nuclear, what we are seeing there. there. distributed generation in the mix of renewables is a policy decision that we made last month to allow for continuation of the production tax credits, the policies we are putting in place juxtaposed to the political and geopolitical aspects of energy, the pricing situation, infrastructure. it begs for a modernization of our energy policies, and that's what senator campbell and the members of this committee have produced and a boatload of the committee in july. it might not come it might not solve all the problems in the world in fact i think we can guarantee that it won't get but what it does do is update our energy policies from eight years ago, which desperately needs updating in all of these different areas, whether it is

permitting, whether it is have a look at our grid, how we move forward in the energy space. so my hope, and i think senator cantwell, is to move through this quickly. i think it is an imperative come imperative our economy. because we were talking about energy security, to me that translates to national security which also translates to economic security. so we've got a lot to offer into space and know that we'll be working on it. we appreciate your guidance this morning, and i don't know if he made the crystal ball more clear or has just reminded us as to how cloudy and complex it really is but we appreciate your wisdom. with that we stand adjourned. [inaudible conversations] >> the u.s. senate is about to

begin its session on this thursday with an hour of debate on emotion to override the president's veto of the senate's nullification of the ministrations new clean water rules are in about an hour we will take a first vote on the resolution. now live to the senate floor. the chaplain: let us pray. eternal god, our rock, our strength and our life. thank you for being our high tower and strong defense. because of you, we can conquer all anxieties and fears, sins and follies, failures and doubts. may we never forget

that our times are in your hands. grant that this day our senators will draw near to you and seek your divine guidance for the decisions they face. transform their lives, heal their wounds and create in them clean hearts, as you renew a right spirit within them. fill their hearts with your joy and give them your peace. we pray in your holy name. amen. the president pro tempore: please join me in reciting the pledge of allegiance to our flag. i pledge allegiance to the flag of the united states of america,

and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. mr. mcconnell: mr. president? the presiding officer: the majority leader. mr. mcconnell: next week, the senate will turn to broad bipartisan energy legislation. the energy policy modernization act will help bring our energy policies in line with the demands of today and the opportunities of tomorrow. it will help americans produce more energy. it will help americans pay less for energy. it will help americans save

energy. that's what the energy policy modernization act will do. here's what the energy policy modernization act won't do. it won't raise taxes. it won't add a dime to the deficit. the broad energy bill is the result of a truly bipartisan process, and it shows, which is why it was supported in committee by a vote of 18-4. i look forward to debating the bipartisan energy bill starting next week. but we won't have to wait until then to consider bipartisan legislation. we'll consider a different bipartisan measure today. s.j. res. 22 passed in november with the support of several democratic colleagues, and it would have overturned the obama administration's waters of the u.s. regulation. here's what our democratic colleagues have had to say about wotus. a democratic senator from west virginia has used phrases like

completely unreasonable and dangerously overreaching when discussing the issue. the democratic senator from north dakota said there is not one single regulation in the entire country that has caused more concern in her state. a democratic senator from indiana said it was incredibly important that the rule be rewritten. now, that's just what the democrats are saying. the administration's tried to spin wotus as some kind of clean water measure, but a bipartisan majority of congress understands it's really a federal power grab clumsily masquerading as one. wotus would grant federal bureaucrat dominion over nearly every piece of land that touches a pothole, ditch or puddle. it would force the americans who live there to ask federal bureaucrats for permission to do just about anything with their very own property. that's why congress sent bipartisan legislation to the president to overturn it.

his decision to veto that bipartisan measure made a few things quite clear. number one, he apparently stands with washington bureaucrats on this issue, not the american people. number two, he apparently thinks america's clean water rules should be based on washington politics, not a scientific and truly collaborative process. so it was good to see democratic colleagues stand with the american people when we first passed this bill. i would ask the rest of the democratic caucus to join with us now to do the right thing. vote with us to override a veto that's about federal power grabs and washington politics, not clean water and the american people. mr. president, i understand there is a joint resolution at the desk that's due a second reading. the presiding officer: the clerk will read the title of the joint resolution for the second time. the clerk: s.j. res. 29, joint resolution to authorize the use of united states armed forces

against the islamic state of iraq and the levant and its associated forces. mr. mcconnell: in order to place the resolution on the calendar under the provisions of rule 14, i would object to further proceedings. the presiding officer: objection having been heard, the joint resolution will be placed on the calendar. the democratic leader. mr. reid: for three weeks into the new year and already back to wasting time watching the senate with partisan attacks. today my republican colleagues have chosen to once again attack clean water protections that millions of americans depend on. on tuesday, president obama vetoed the republican attempt to roll back the clean water rule, a rule that basically restores important safeguards to shield our water pliewgz from pollution and contamination. there are special interest groups that have tried to raise money based on this.

one of the groups that has tried to raise money on this with fallacious information is farm groups. they have gone out, it's terrible agriculture. agriculture is exempted. so anyone saying that this is horrible for agriculture is simply wrong. underearp the specific language of the legislation, agriculture is exempted. the clean water rule resolves years of confusion, provides regulatory uncertainty for businesses, farmers, local governments and communities. it creates no new permitting requirements and it maintains all previous exemptions and exclusions. despite president obama's veto, republicans remain determined to undermine the environment. safe water is critical to the health of our communities. one need go no further than flint, michigan, to find out that, in fact, is the case. and it's important to our economy.

at this very moment, as i've indicated, 100,000 people live in flint, michigan. all those families, thousands of families, have been forced to worry about their children's health because of lead contamination in the drinking water. these little brains are adversely affected by lead in the water. we've known that for a long time. but in an effort to save a buck, the governor and others of michigan decided they would try something else, and in the process have really drastically damaged the lives of the little boys and girls in flint, michigan. our country is one of the wealthiest -- not one of the wealthiest, we're the wealthiest country in the world. no american should have to worry about whether they drink safe water in america. its unconscionable to think that we would waste valuable time in

the senate attacking a rule dealing with clean water designed to keep our nation's water safe. and while we're doing this waste of time here in the senate today, flint, michigan, is in a state of emergency. republicans are so wedded to ideological purity, they have lost touch with reality. they have somehow failed to recognize that clean water is a basic priority for all americans. the reality is that federal funding and reasonable protections are necessary to ensure public health and safety. the governor of the state of michigan, he is an antigovernment person. that's his mark. he wants especially washington to stay out of michigan government. but what is the first thing he does when he finds out he and his whole government have messed up the state of michigan? he calls washington for help.

he along with many of my friends on the other side of the aisle disparage the federal government every chance they get. when a crisis strikes, i repeat, who do they call upon to help? the federal government. rolling back clean water protection is the wrong thing to do. republicans should refocus their energy on solutions to keep americans healthy and safe. mr. president, a flood of dark money has engulfed the american political system and diverted our democracy. the billions from millionaires have drowned the system and rigged the system in their favor. americans should know that democrats are fighting to restore their voice which is being overshadowed by the billions of dollars being spent to push the republican presidential nominees and at

every level of the government this dark money is there, drowning out the voices of average americans. over here, we stand united in our commitment to advance the interests of the middle class, working families. it's important to remember how we have gotten to the point where i saw the other -- yesterday that the junior senator from florida and the former governor of florida have spent about $150 million so far running for president. one of them is at 10% in the national polls. the other is at 6%. but they have got the money to slosh around and spend. we got here because six years ago today, the supreme court of our great country erased a century of sound government regulations to protect the

fairness and integrity of elections. it is determined during the republican reign of teddy roosevelt that there was too much corporate money in american politics, and so under his leadership, it was eliminated. but the supreme court changed it in a very narrow decision 5-4. the disastrous citizens united ruling opened the floodgates for these shadowy billionaires to influence our elections. most of this spending is done in secret by special interests and shell groups that refuse to disclose their donors to the american people. these billionaire donors stop at nothing to buy a government that favors them and their special interests. there are two brothers who i believe are determined to buy america, and we'll find out come election night maybe they have been able to do that.

charles and david koch are shrewd business people. their wealth is nearly unmatched anyplace in the world. they have amassed a fortune from inherited wealth that they have magazine anyified. it's come from oil. it's come from chemicals. it comes from a lot of different places. they inherited this originally from their dad, a multinational corporation. no one knows really their net worth, but some say $100 billion, $150 billion. no one really knows. they have become two of the wealthiest men in the entire world. they seek more wealth, but that's not all they seek. a new book by jane meyer, a dignified, renowned author, journalist, in her book reports

that immediately after the election of president obama, the koch brothers, they wanted to double down on what they had done before, and they have been working on this for a while. but they didn't like this man, barack obama, to be president of the united states, so they gathered likeminded billionaireh money it would take to get rid of him for a new term and basically undermine our democracy. you can't make up a story like this. these are the facts. capitalizing on the citizens united decision, the koch brothers have poured over $1 billion into our political system to create a country that protects the wealthiest .5%. the america they envision is drastically different from the vision most americans have for our country. here are some of the things that they have advocated for decades. it used to be fringe, but now

you have people running for president that agree with them. they want to change drastically social security. they want to abolish social security. they want to eliminate minimum wage laws. they want to dismantle medicare as we know it. they want to dismantle our public education system. they want to create tax operation for themselves. they've done a pretty good job f that. they're prepared to use enormous wealth to accomplish their goals. they put their money where their mouth is. they spend it because they have it to spend. they've pledged to spend about $1 billion this cycle, not counting all the money they spent in the years past. they have been involved in years past to make sure the john burj society had a place in our society, libertarians. they were libertarians for awhile. they paved the way for robber barons -- the supreme court

has -- robber barons like the koch brothers to create a government that works for the richest of the rich. democracy demands that every american have an equal opportunity to have his or her voice heard. it should not be dependent on how much money you have. i'm sorry to say our supreme court has determined that your voice is going to be much louder if you have a lot of money. a democratic system should give every american a fair shot, but every time we've tried to make an effort to fix our broken finance system, republicans have said "no." we had a disclose act, mr. president. we brought it before this body. it would have passed the house at that time. there were 59 democrats. we needed one republican -- one republican to make more apparent so that the american people could see where this money was coming from. not one republican would join

with us. now i came to the house of representatives with the senior senator from arizona. i admire him. he's an american hero, in spite of what donald trump says. he proved himself in battle and in the prison system set up in vietnam. so i admire john mccain. i can remember his working with russ feingold, a senator from wisconsin, and they passed the mccain-feingold legislation. it became law of this country. and it was really a good, strong step forward. citizens united wiped that out. my friend, the senior senator from arizona, had an opportunity to help this bad, bad financial system the supreme court has put forward, and he didn't step forward. he decided to take a pass on it. i'm very disappointed. i've never forgotten what he

didn't do. he could have done it. one vote. we only kneeled one -- we only needed one vote. we had 59 and needed one more. rather than secret political spending, we should have immediate disclosure. some disclosure. rather than corporations buying it influence, we should restore legislation that limits the power of special interest. rather than empowering the wealthy, we should create small contributions. we should make clear once and for all the united states of america is not for sale. mr. president, we criticize and complain about the soviet union, how it was. and then we were so happy that the soviet union fell, russia became a democracy, in parenthesis. now people say russia is an oligarchy. what is an oligarchy? an oligarchy is a country run by a person who is controlled by wealth, wealth, individuals and

families. that's what we have in russia and that's what we're going to have in america if this is allowed to continue. the koch brothers and a few other billionaires will be in concert with -- you see characters running for president on the republican leader ticket. it will be with them. it will be an oligarchy first class. it will match what's going on in russia today. we must make clear that the united states is not for sale. the citizens united decision that we celebrate and in a very adverse way today it's anniversary is bad for the country, and i hope the supreme court understands how bad it has been for the country. one of the worst decisions in the history of the supreme court, if not the worst. mr. president, would you announce the business of the day? the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will resume consideration of the veto message on s.j. res.

22, which the clerk will report. the clerk: veto message to accompany s.j. res. 22, joint resolution providing for congressional disapproval under chapter 8 of title 5, united states code, and so forth. promise under the previous order, the time until 10:30 a.m. will be equally divided between the two leaders or their designees. mr. reid: mr. president, i would note the absence of a quorum and ask the time be charged equally between the majority and minority. the presiding officer: without objection. the clerk will call the roll. quorum call: