permitting process. the deepwater plays are significant, but the shallow water drillers have really been hurt. and according, mr. chairman, to this report, which is really the hidden story of the mccondo spill and the, i thought, inappropriate moratorium, put down 41% of the respondents said they are not currently making a profit. these are the small oil and gas independent marine operators. 70% said they have dipped into their cash reserves. so they're not laying off their employees, but at great hardship to these small and independent but there's a lot e servicing ad underneath. so i'd like to submit that for the record. >> we'll be glad to include that. >> secondly, in the report, supply rising in the west growth at risk in iraq, i think it's -- the page is not numbered, but this is in your report -- you all say that we have pencilled in an end to output losses in the gulf of mexico after the

mccondo spill. and it's in the paragraph where you talk about the u.s. will lead the growth in liquids, et cetera. can you help us understand what the output losses in the gulf were after the mccondo spill? yes. >> yeah, i'm not sure that the report you're reading from is iaea, but maybe it is. >> maybe it's mr. diwan's report. >> yes, i'm sorry, mr. diwan. >> i can help you with your question anyway. >> let's get him and then we'll get you. thank you. >> well, delaying permitting has an impact on our projection for the deepwater output. and was the restart of the permitting process. now we are not seeing decline anymore, and we're seeing a flattening further out on the horizon.

we passed the bottom of that forecast. >> but i'll say as the representative from the state that has the most besides texas of offshore drilling, it's been a very painful three years. and i know that senator portman talked about producing more. we've got to get the gulf back up and operating and producing. not only is it the home to tremendous opportunities for oil and gas both deep and shallow, but the refining capacity for the country is, in large measure, or a large part of it, and the pipeline system, which is much more robust than other pipeline systems there. so getting the gulf back up and operating, mr. chairman and ranking member, is important, and it's going to remain a priority. let me ask any of you to further discuss the significant increase in liquid fuel production because while climate is important and the environment is important, i'm really, and my constituents, are very concerned about the economic vitality of the united states going forward. the president talked about building an economy to last.

people are very interested in making america more energy secure. you talked about the increase -- substantial increase in liquid fuels. could someone describe in a little bit more detail, are we talking about oil, or are we talking about biofuels? where is the growth potential there? and what about new fuels created from other agricultural or other scientific processes like algae, et cetera? does anybody want to comment on that? because the combination of increasing our liquid fuel production and decreasing our use through efficiencies and automobiles is extremely exciting because i think if i'm hearing what you're saying that we could have a major impact on not just job creation but on the economic security of the united states. am i reading too much into the possibilities here?

starting with you, mr. diwan. >> yeah, actually, i think you're not reading enough into what we're saying. we all believe that actually the production of crude oil and natural gas liquid in the united states will grow tremendously over the next ten years. the technology is there now. the resources are there, and industry is investing to bring them up. so we're really talking about a major revival of the u.s. oil and gas industry. i don't think we really disagree on the magnitude even. so we all believe it's really the biggest thing happening in the oil and gas industry going forward. and the investments are available. the funds are available. we have, as jim described, issues in finding enough people, actually, and costs are rising because of that. that development, i think,

limits also the growth of the other fuels outside of oil and natural gas liquids because we have such an abundance now. and so much to invest into that area that i think we all have limited growth in other fuels. and -- >> and we call them drop-in fuels, you know. alternative fuels that you can drop into the pipeline without having to redo all the pipelines. what are our most significant opportunities in drop-in fuels? go ahead. >> yeah. in the energy independence and security act of 2007, you know, congress enacted and the president signed a very ambitious mandate for increased use of biofuels. i think that's pretty challenging. right from the start it looked pretty challenging for us. the cellulosic biofulls in particular which is supposed to grow to 15 billion gallons by

2022, you know, we've always been fairly skeptical that you could actually get there, and the passage of time has not ameliorated that skepticism. but one of the things we do think of as -- there was a vision perhaps in some people's minds that a lot of that would be cellulosic ethanol. and we believe that a lot of that what is done which we think will be less than the full amount would be a drop-in, what we call biomass to liquids. a diesel-type fuel that unlike ethanol would go into the normal stream of commerce, if you will, as, you know, interchangeable with regular fuel. >> it doesn't require as much of a subsidy. and anything from you, ambassador jones? and thank you, mr. chairman. >> first of all, i agree with all of the comments that have been made. in terms of biofuels worldwide, all types of biofuels, we, in our world energy outlook, we saw them tripling between now and

2035. so that's probably a little bit more than 3% per year worldwide. in the united states. so they're fairly aggressive policies, although they fluctuate. and again, i agree that cellulosic biofuels are going to be a long time coming. ethanol is going to be the main source of biofuel. i think for some time. particularly sugar cane ethanol, which the brazilians are trying to spread their experience around the world in tropical climates. but other crops can also turn -- >> and one other thing i'd mention that's significant, the country, first mr. chairman and ranking member, issued its first permit to build an export facility for natural gas. the company received its permit. and i helped to push that and proud of it. i know there's a debate about whether we should keep the

natural gas as an island. the problem is if you don't create a market for it, you get prices as low as they are today which is a disincentive to production. so you've got to figure out the right price point where you can get people to invest in natural gas which is a cleaner fuel, but also, you know, so opening up that export i think is the right thing to do. and i just want you all to say yes or no. do you agree with that or not? opening up exports for gas. yes or no. >> i don't think i'm allowed to have a position on that. >> ambassador jones? >> yeah, we believe that trade should be more driven by the market. if the market -- if there's market demand for it, we don't think that there should be export restrictions. >> developments that foster and enhance global trade of energy makes for a more robust system. >> mr. diwan. >> i agree with them. >> senator murkowski, did you have additional questions? >> i do, mr. chairman.

a couple follow-ups, one on iran sanctions, and then the second on the issue of reserves that i mentioned in my opening. so let me start with the sanctions. and this is directed to you, mr. diwan. dealing with the potential additional impact of sanctions. we know that the europeans have agreed in principle to ban the imports. but reading from your testimony, it seems that neither italy nor greece will comply at least to the extent that would have been expected. and given your point that you've got india, you've got south korea, turkey, all increasing imports combined with what we know about the strong demand from china, what do you think the practical effects of these new sanctions will be? >> italy and spain will have to comply with the sanction by july 1st. the question is would they do

much between now and then to try to diversify their social supply? they have long-term contracts. i think it's not very easy unless the iranians decide to embargo them. the problems are specific for each country -- which refinery gets what from there and there's long-term commercial relations. but it's likely that over the course of the year by the end of the year, they will not be allowed. they won't be able to import as much as they are right now. so we believe that they will have to decrease their supply by around 400,000 combined. the question is, are there other countries willing to pick up that slack from iran and in a way just shift the barrels as ambassador jones said. when you look at the countries which are really potential clients here, turkey can increase a little bit, and the question is how much will the u.s. face the sanctions. it's unlikely that a country in asia will take more iranian crude. and the question is really how

much india and china are willing to become more dependent on iran as a source of supply. we don't believe, actually, that china will be very aggressive in increasing its imports of iranian barrels because it will make them more dependent and volatile to disruption of iranian barrels. and they have somehow indicated that they're likely to keep the percentage of imports from iran stable which is around 10% of their crude imports. their crude imports are rising. so that 10% means a little bit more barrels than the year before, but it's not significant. the question is really india. but the volume we're talking about, 400,000 to 500,000 per day from iran which do not have a place to go in europe, it's unlikely they can absorb that much.

in a way, iran will have difficult to be able to replace these markets. and we believe it's more likely actually that we'll have to shut down some production or at least have floating storage for some of that production before they shut it down. >> then following on that, can you discuss the ways that iran could possibly circumvent the current sanctions both in terms of financial payments or physical delivery, then? >> well, they need a client who's willing to circumvent the financial sanction. and the way to do it is to deposit local currencies into a local bank that the iranians can draw from what they need to import back into iran. i think they'll have real difficulty to go through the international financial system. it limits, again, which countries have the capability and the ability to do that. >> so really, it's going to be incumbent on all those that are

adhering to the sanctions. some pretty robust monitoring and some enforcement there. i would imagine. mr. -- dr. gruenspecht, i wanted to follow up with regards to the eia's lower natural gas reserve estimates. indicated that they've dropped precipitously 40%, as i recall. do you expect that this lowering of the estimates may possibly discourage further exploration? is this going to have any impact one way or another? >> i would say not. again, whether the u.s. has 100 years of total recoverable resource at current rates or 90 years of total recoverable resources estimated at current rates. i just don't think it has much of an effect. i think the thing that would affect development would be the

view of companies on the ground as to how much it costs them to drill a well and what they can recover by drilling the well. and the price so they care about the quantity they can recover by drilling a well. what it costs them to drill a well and what they think the price is going to be. that's really what they're focused on. you know, whether we have 90 years of total recoverable resource or 100 years. >> i would agree with that. 40% reduction is noticeable. but as you put it in those context -- let me ask, then, how much of the eia reserve estimate, then, is actually driven by the production data that's out there? >> again, i would say that usgs is the primary agency in the united states government that does resource estimates. we do the work on reserves primarily. resources is a larger concept. the usgs had not done a

marcellus estimate in a long time. they had a very what we consider to be a very low estimate, one that we couldn't use. so we made up or developed our own. made up is a bad word. >> bad word. >> strike that from the record. and then after we did that, usgs came out with an updated marcellus estimate which was the 84 trillion cubic feet compared to their prior estimate. the 84 trillion cubic feet was significantly lower than the number that we had developed internally. you know, we're obviously sad that when they came out, we would update our work based on the usgs work. we did try to do that. >> so do you think that you will revise the estimate again? >> i think this is a really tough area. i think there's too much emphasis put on that number, no matter whose number it is. i think that as we gain more and more experience with actual drilling, the numbers will always tend to evolve on total recoverable resource. and again, i don't think it's that material for the 25-year horizon that i think we have been looking at in our projections long term that the

iea looks at. in fact, we have more production and lower natural gas prices in this outlook than we had in the previous one. and that really reflects the drilling costs and the productivity. >> i think this is an important part of what it is that we're talking about and understanding what's going on. again, the president's state of the union that he gave last week, he, again, repeats the fact that -- i shouldn't say it's a fact. the statement that this country only has 2% of the world oes oil. well, when we're talking about reserves versus resources and recoverable, we all -- you all know at this table that the number can be all over the board here. and it's how we define it. and i think sometimes it's a pretty loose definition that would lead people in this country to believe that we really don't have much of a recoverable resource. so it's important that we use

the right terminology and try to be as accurate as we can, recognizing that we're dealing with a very fluid assessment again as our technologies and our capabilities expand. did you want to finish up? >> no. >> okay. no, i appreciate that. mr. chairman, that's all that i have. thank you. >> thank you. let me ask one other line of questions.

dr. gruenspecht, your testimony, in discussing the world or the international energy outlook, you say renewable energy is projected to be the fastest grow ing source of primary energy over the next 25 years. the renewable share of total energy use increases, in your projection, from 10% in 2008 to 15% in 2035. do you also have in your report an analysis of what those trends would be with regard to renewable energy? >> yes, particularly in our annual energy outlook, there's a lot of information on renewable energy. again, it's very fast growing for two reasons. one, in the transportation sector, you have the mandates for the biofuels, which even

though we don't believe that the target at 2022 would actually be met. that certainly is driving renewables in that sector. and we have a lot of renewables in the electricity sector. the share from renewables i think grows from, like, 10% of generation to 16% of generation. so that's a pretty big increase. generation is going up. although not too fast. we have renewables being pretty fast growing in the united states. on the electricity side, it's mostly driven by the state renewable portfolio standards. there's also some interaction between the transportation side because the plants that produce cellulosic biofuels, those plants will throw off some. it's a very interesting story. >> does the analysis that your agency has made, is it consistent with this as far as renewable energy being the fastest growing source of

primary energy over the next 25 years? >> well, it's certainly growing very rapidly, yes. i was just checking my testimony. according to the world energy outlook, the share of nonhydrorenewables, primarily wind and solar in power generation rises from 3% in 2009 to 15% in 2035. and hydro, which is a major source of generation, maintains its share at 15%. so overall, we're saying all would be about 30% of world power generation by 2035. >> okay. all right. i think this has all been very useful testimony. we appreciate you all being here. and we will try to stay in touch

with you as these trends change. thank you very much. >> thank you. president obama attends the

national prayer breakfast tomorrow here in washington. we'll have remarks live on 8:00 a.m. eastern on krc-span2. also, ben bernanke will come to capitol hill. we'll have live coverage of that hearing at 10:00 a.m. eastern here on c-span3. michigan's republican governor rick snider today expressed support for the obama administration's efforts to help the auto industry, saying the big three auto companies may not have survived otherwise. he was joined by connecticut's democratic governor daniel maloy. he said as many as 50 now thou people in his state would be affect philadelphia congress doesn't extend unemployment insurance. the two governors are followed by a panel including jarrod bernstein. >> a quar yum being present, the committee will come to order.

good morning. and welcome to the first educational workforce committee hearing of the new year. i'd like to thank govern ors snyder and maloy for participating at this hearingment your experience tez state level offer really importance insight to this committee in congress and we appreciate having you here with us. and i just talked to both of you before the hearing. and thank you. i want to thank you again. it's always very special for us when we have leaders here who can bring their experiences to us. a year ago the committee met to examine the state of the workforce. it was our first hearing of the 112th congress. and flekted our commitment to make job creation an american competitiveness top priorities. much has happened since we met in january of 2011. unemployment was 9.1%. today, it stands at 8.5%. nearly 14 million workers were unemployed, now one million fewer workers are unemployed. the number of long term

unemployed, those out of work for 27 weeks or more, also declined from 6.2 million to 5.6 million. these facts may demonstrate modest progress, but far too many americans continue to face significant hardship in this tough economy. the number of americans participates in labor force is at its lowest level in 28 years. more than eight million individuals are working part time because full time jobs are unavailable and one million discouraged workers have abandoned their job search entirely. simply put, we're experiencing the weakest recovery since the great depression. as a "wall street journal" recently reported, the recover riff the 1980s led to 18 straight months of growth greater than 5%. our own recovery over the last 2 1/2 years averaged 2.5%. the nation should be firing on all cylinders. yet our economy remains stuck in neutral. in many ways, the current administration has made matters

worse by promoting the politics of fear and uncertainty. costly regulations have failed to enhance the welfare of workers, bureaucratic actions that benefit employers and employees and politically motivated decision that's destroy tens of thousands of good paying jobs are part of what governor mitch daniels described as a pro poverty ajepda. to help restore certainty and confidence, the house of representatives approved more than 30 bipartisan jobs proposals in the last 12 months. the bills touch upon vert virtually every part of the economy from labor relations and energy security to tax relief and fiscal responsibility. no single proposal represents a silver bullet. no single proposal represents a silver bullet. but each helps remove government barriers to economic growth and job creation. while more than 25 house passed jobs bills face obstruction in the democrat-led senate, a number of our legislative efforts have reached the

president's desk. in january, i had the privilege of joining speaker boehner on a trip across latin america including a stop in colombia to visit with its business leaders and elected officials. thanks to the bipartisan effort of this congress, working with the president, colombia will soon import duty free goods and products built by american workers. speaking of our trade agreements with colombia, panama and south korea, the president stated, "american automakers, farmers, ranchers aand manufacturers including many small businesses will be able to compete and win in new markets." we need to build on this success and explore new opportunities to help workers thrive in the global economy. i'm hopeful job training reform is an area in which we can work together to strengthen the competitiveness of the workforce. for the long term unemployed, seven months without work can feel like a lifetime. effective job training support can help workers get back on

their feet and back to work. the need for a leaner, more efficient workforce system has never been more urgent. i was pleased to hear the president call for reform in his state of the union address and we stand ready to take action. already my colleagues have introduced three proposals that lay the foundation for a 21st century job training system. a key component of our effort is the consolidation of dozens of federal workforce programs and four flexible funding streams. streamlining the programs will enhons support for wore eshgz, offer a better workforce for employers and pro vent better use of taxpayer dollars. the president suggested greater consolidati consolidation. we're happy to consider a responsible plan to did that. in fact, i sent a letter to labor secretary solis this morning that asked for more details about the president's new job training proposal. i look forward to receiving a timely response so we can improve the nation's workforce investment system without delay.

over last several years, we've seen a lot of failed policies and broken promises starting with the so-called stimulus plan that created debt, not jobs. and i know there are sharp differences in this congress, in this house and on this committee. however, it is not enough to shout from the stands and criticize the plays being called on the field. i encourage all members on both sides of the aisle to stay engaged, offer positive solutions, and work to find common ground. again, i'd like to thank our witnesses for joining us and i will now recognize my distinguished colleague mr. payne for his opening remarks. >> good morning. mr. chairman, thank you for calling this very important hearing on job creation. i welcome to the governor maloy and governor snyder. i'm pleased we'll be hearing from two state executives about their efforts to expand john opportunities. you're right there where the rubber meets the road.

and i'm pleased we'll have an additional panel of experts to advise this committee on how best to move forward on this very important issue of creating jobs. last week in a state of the union, president obama challenged us to work together, to move the economy forward. i couldn't agree more. job creation is the most urgent issue for millions of families and businesses across the country. in 2008, our economy went over the cliff. the recession brought on by wall street greed was long and deep. almost immediately four million jobs were lost. another four million were losted before things started to turn around. it took strong and decisive action by the last congress working with the obama administration to pull our country back from the abyss. the action made a real difference. the private sector