dumbfounded when we complete the pipeline and they're still paying an extraordinary amount of money for a gallon of gasoline. gasoline splice are being exported to the highest bidder. i said this last week. leaving all exports in this country was fuel last year. so it is a global market. that's what we're in competition with. and this is from the chief oil analyst at oil price information service, which he said, it is a world market, and will go to the highest bidder. at a senate hearing the president of shell back in may ever last year said, simply stated, oil is a global commodity, and oil companies are price takers, not price makers. that is the same lesson that is going to be imposed on refiners. it is a global market. so who owns all the oil that is coming and is going to be stored

somewhere? well, that's really curious. and maybe we can understand global markets and how the prices are arrived at. this is a story in the "dallas morning news" 15th of may last year. some 70% of contracts for future oil delivery are now bought by financial speculators, largely big investment banks and hedge funds who never take control of the oil. they just flip the contract for a quick profit. only about 30% of oil contracts are bought by a purchaser that actually intends to use the oil. such as an airline. that's according to the commodity future, trading commission, which regulates trade in those contracts. michael mcmasters, wall street investor, testified before congress repeatedly that speculators are pushing prices well beyond what the supply and the demand warrant. and then i want to end this with, until the early 1990s, the ratio of speculative trades to

trades made by commercial users of oil was tilted heavily towards the users of oil. but from 1991 forward, the big financial players such as goldman sachs and jpmorgan want exemptions that free them from limits on how much they could speculate in future markets. now, we've attempted to do something about that, but the majority party has fought us tooth and nail on this, whether it's dodd frank or anything else that addresses some sort of a regulatory scheme that will now allow the playing of futures and commodities to the detriment of the american consumers. this is all part of it, but we seem to be ignoring a holistic approach. what really kearns me is we're going to have witnesses are going to tell us that this may not be the answer to national security. now, i think that it can be, depending on how we use the raw product and the refined product that we derive from oil.

but if, in fact it is a global market, the only way you maintain that edge is somehow making sure that there's available, accessible and affordable supply in the united states. but if you have investors that are charged with the fiduciary duty of making a good profit for their investors, and that is the american way, and i have no problem with that what do you do? do you keep it in the domestic market? or do you export it? so there's not just about the safety of the pipeline. i believe that i'd rather be dependent on mexico and canada than saudi arabia and venezuela. i mean, there's no doubt about that. but the problem we have is not a realistic approach and i guess that's what really kearns me and i'm hoping to return for the witnesses that are going to be touching on some of the subject matter that i just touched on, i appreciate your testimony today. i think you were invaluable to this whole equation of building

a safe keystone pipeline. thank you, mr. chairman. >> recognize gentleman mr. terry. >> thank you, and i guess i'm one like step, submit items for the record. so, mr. chairman, i ask you for record a memorandum from the u.s. state department, mr. keith dennis, dated june 22, 2011, and on the issue that my friend from san antonio, a little further south, mentioned, it is on the record from the state department's review of this pipeline that eliminating transportation constraints from cushing to houston would not

affect midwestern kirms in fact help crude prices decline considering that the transportation is consistent, reliable and less expensive. let's keep in mind that what we're talking about is around 700,000 barrels initially going up to 1 million barrels that would completely offset the need for us to send tankers to venezuela and fill up with their heavy crude and ship it up here. it defies logic -- >> i might just say without objection. >> thank you. i submit that. so i'll put it up here. but it simply defies logic to me that when you have a transportation system that the state department even testified was safe, the safest means of transport, the most environmentally safe transport that there be arguments that it

would not add to our energy security, and then, secondly, on the jobs, you know, it befuddles most americans as polling has shown that this president denied the permit and that jobs that would be created, if you look into the union hall at the, for the laborers or the ibew, there's people sitting on the bench waiting on, to have their names on the list to be called that when this starts they go to work. right now in nebraska there's an engineering company that has ceased doing work because of the denial of this permit on the nebraska route. and, yeah, it befuddles me and most of americans when my friends on the other side of the aisle say that, geez, 6,000 direct jobs out on the pipeline is not enough for them, and, by

the way, it's only temporary. well i don't know an infrastructure project that isn't temporary. evidently we're against all infrastructure now. it just -- it befuddles me. why they would oppose it. now, ms. gaffney-smith, i appreciate your testimony here today, and with the help of the state department, you've made some valid points that we realized and have decided before this hearing today, even after last week that we needed to make sure that we are clear in the fact that the intent of this bill was the presidential authority. needed to be moved away from the white house to an agency that had exportese in pipelines to make a decision on whether it's safety and soundness of a pipeline versus the politics that seemed to have overwhelmed this issue.

now, with that, making that correction, that recognizes that we aren't usurping the corps of engineers powers, we want you to make that review. do you have any objections to this legislation? >> i can't speak to legislation where i haven't seen the actual language, but it would be -- it would be appropriate, i think, for us to look at that and see if it, in fact, puts us back. >> can i ask why -- why, when the -- corps of engineers that testified last week would be invited -- >> your microphone. >> the light's on. >> that you didn't want to be here when you were here to be in opposing hostile witness. you're sitting here with a big

smile. >> i'm not aware that an official invitation was provided. >> let me ask you, mr. pool. in the state of nebraska -- thank you -- i hear it now. in the state of nebraska, what federal lands did the original route take? or the original route go through any federal lands? >> yes, congressman. there was small piece of land administered by bor, bureau of rec la mashgs the canal area that was south dakota, wasn't it? >> no. this is nebraska. >> okay. >> yeah. and so -- >> all right. my time is up. i'm sorry. i'll have to -- i'll submit that one for the record to get back to me on it. >> will do. >> at this time i recognize the gentleman from michigan mr. dingell for five minutes. >> mr. chairman, i thank you for your courtesy. i'd like to make a couple quick observations. in 1970, scoop jackson and i wrote the national environmental

policy act. it was to depoliticize the approval of projects and to see to it that we had the information we needed when we were going into those kinds of questions. so it required environmental impact statement. that can be speeded up and properly so. but i would dhaugs if you speed it up too fast you're going to repolitical size this and may make a fine mess out of the thing and cause no end of trouble and litigation. so i would beg you not to do this. i say that parenthetically i want to support this legislation. i think the canadians are going to do this whether we like it or not. they're going to build a pipeline going west or going south and it's better, in my view, if that pipeline goes anywhere, it goes south to the united states, because it will be a much more dependable source of energy for the united states. so i would urge my colleagues not to drive away members like me by moving too fast on this. because if you do, you'll just

simply create a wealth of litigation, the lawyers will have a fine time, make lots of money, and the business of the country will be, in fact, delayed by carelessness in this committee. having said that, first question here to mr. pool. did state department refer the application to your department or to the blm? yes or no? >> say again, sir? >> did the state department refer the application to your department or to the blm? which? >> the application that we received was from the applicant for the segment of public of land coming across montana. the right of way application. >> ms. gaffney-smith, did they refer the application to the corps? >> no. like the department of interior, the application came from the applicant. >> okay. did blm provide views on the permit application? answer yes or no. >> provide what, sir?

>> did blm provide views on the permit application? please answer yes or no. >> we were part of the environmental impact process that was led by the state department and so the mandates that we're, we have obligations with in terms of issuing right of way grant in montana, then we did review the application, in the context of the overall product. >> ms. gaffney-smith, did the court provide views on the permit application? >> in three core districts in galveston, fort worth, received for permit 12, initialled coordination with other agencies and we did provide a response to the applicant in accordance with our nationwide permit rules based on comments received from the department of state. >> so the answer is, yes? >> yes. >> under hl 3548 environmental review process would need to be completed within 30 day, even though blm would no longer be

involved in the permit review process under this bill, is 30 days enough time for blm to do the necessary due diligence on submitting its views for the keystone pipeline? yes or no. >> congressman, i would say, no, it's not enough time. >> very good. ms. gaffney-smith, the same question to you. is 30 days enough time for the corps to submit its views? >> no, i don't believe so. >> do you believe -- this goes to both. yes or no. do you believe that ferc has the experience that blm has to review a permit of this scope? please answer yes or no. >> i don't believe they do. >> thank you. >> ma'am? >> no, sir. >> now, ms. gaffney-smith, do you believe that ferc has the

experience that the corps has to review a permit of this scope? that's practically the same question as the prior one, but it's a little more subtle. yes or no. >> no. >> now, i want to thank you, and apologize for the fact that i curtailed you in your time. mr. chairman, we could hurry this process in a way which is going to create lots of trouble. and wind up ultimately with a delay or veto or profound litigation that can ge on for years. if that occurs, we will then find ourselves in the splendid position of having to re-enter this issue with all of the politics that goes to it, and all of the difficulty, or we can begin moving to try and work this thing out. i would like to move in that direction. i hope the committee will exceed to that kind of view and we can begin working on this in that

way rather than getting ourselves in a splendid fight which will generate monstrous ill-will and create a situation where there will actually be more delay rather than less. thank you, mr. chairman. >> thank you, mr. dingell. we do have votes on the floor, but we do have about six minutes left. so ms. capps, i believe you were here. recognize you for a period of five minutes. >> well, thank you, mr. chairman, because i know mr. markey also was here and wants to speak. i'm asking mr. markey, do you want some of my time? would you like some of my time? maybe it's not -- okay. i'll do it. i'm -- i come from an area that is energy producing as well, and i am very impressed with, i have one image in my mind, because it was you, mr. pool, when you were in charge of the blm for the

city of california and i was newly elected who escorted me for the first time to see what we call the shangri la of the west. the credo plain eastern portion of san los business pispo county the land was 300 years ago in which all of the vested interest, the mineral rights, the cattle ranchers and all of the stakeholders have found a way to preserve the natural history, under the leadership of the blm and also make that an economically viable area. oil and gas industry have all had their role there, and i picture this pipeline going through this plain and i'm very concerned that we take the time that's needed to preserve in the midwest what i know from my area to be the possibility of

protecting the land as well as furthering economic interests, and i see this latest attempt by house republicans to short-circuit the review process. and i want to ask you, because i know your expertise, mr. pool and i also have a number of army corps projects in nigh district as well and have had the pleasure of working with that agency. mr. pool, would it make sense for the bureau of land management or the fish and wildlife to issue service for a pipeline with an unknown route, which is what we have before us today. >> congresswoman, i can only speak to the segment in montana that we are knowledgeable of that area and the application is very precise as to where it would be located. >> but now for the further part of it you have no knowledge exactly where the precise -- about the preciseness is that correct? >> generally speaking we do on a map. and when we see the whole delineation of the pipeline from north to south, but if it

doesn't fall within public land jurisdiction, it's not going to pertain to blm. >> would you like to respond and then i want to return to my colleague. >> repeat the question, please. >> does the army corps of engineers typically provide permits for pipeline projects when the route of the pipe lynn is unknown? >> no, we only evaluate permits for applications that have been submitted by project applicants that have a project. >> and now i would like to yield the balance of my time to mr. markey, my friend. >> i thank the gentle lady. under this bill, are there any guarantees that all of the friendly canadian oil that is sent through the pipeline will be sold here, in the united states? no. no. so let me get this plan right. step one, transcanada puts the dirtiest oil on the planet into the brand new pipeline, the republicans are giving it. step two, transcanada sends that oil to the gulf coast where they can make billions more than

where they currently sell it in the midwest. step three, refineries in the gulf coast reexport it to other countries, at world oil prices, and don't pay any taxes for doing it. step four, americans get higher gas prices and no increased energy security. and step five, transcanada and the chsheiks in saudi arabia lah all the way to the bank. that's pretty much what this bill allows. make no mistake. this bill is not about energy security. it's not about jobs. it is about oil company profits, plain and simple. this bill just turns the united states into a middleman in a multi-national oil deal between canada, south america, europe or china. the republican slogan last year was, drill here, drill now, pay less. now, we're letting canada drill

here, ship here and reexport so all we have to do is pay more, both in terms of money at the gas pump and cost to the environment. today i along with mr. waxman and congressman cohen and connolly and welsh will introduce a bill to require that if this pipeline is permitted, the oil will stay here to benefit americans. if we are going to go to the extreme lengths of legislating the construction of an environmentally destructive pipeline, to benefit a canadian company, we should at least are sure that we in the united states can realize the energy security and consumer benefits that we've been told the project will bring. let's play it straight about the straits of hormuz. without my bill, this pipeline will not do a thing to enhance the security of our country, of our brave men and women stationed all over the world for purposes of protecting our fossil fuel interests. we need a bill if it does pass

that guaranteeses the oil from this pipeline stays here in the united states. the ceo of transcanada sat right there and said he would not support that legislation. that's all we have to know about our relationship with this transcanada company. this oil is to be exported around the world. not to keep prices lower here in the united states. i yield back the balance of my time, mr. chairman. >> i might say of all the u.s. petroleum products they were currently exporting less than 5%. at this time -- >> the number one export for the united states in 2011 was oil petroleum products. that was the number one product of all products. >> we want to increase our exports. >> not of oil. not of oil. that's our security. >> all the member, gone. we still have a vote on the floor. so i'm going to release this panel. ms. gaffney-smith, thank you for being here. mr. pool, thank you for being here. we'll recess for about, i would

say 35 or 40 minutes, and then we'll come back and we'll begin with panel two. thank you. we're in recess. so about a 40-minute break in this hearing on the keystone xl pipeline this morning. the second panel happening in 40 minutes. members heading over to the house chamber for a series of votes onstreamlining the federal budget process a vote on extending faa programs another four kbreerps see live coverage on c-span. while this break is underway a portion of the hearing's the pipeline held january 25th, republicans refusing to invite key democratic witnesses. that hearing was referred to several times this morning. i'd like to call this

hearing to order this morning, and the subject of this hearing is american jobs now. and we're going to be considering hr-3548, the north american energy access act. i would also like to welcome those members of the referee training class. i didn't realize y'all were going to be with us this morning, but we're delighted you're here on the second row. and i hope you'll enjoy the hearing as well. today's hearing gives us the opportunity to learn why the obama administration denied a permit to build the keystone pipeline from canada through parts of the united states. how could the obama administration, when presented with the chance to create thousands of jobs, and at the same time significantly reduce our dependence on oil from the middle east say no to the american people? today we will examine how such a

harmful decision was made and explore opportunities to reverse that decision while the administration struggles to find a rational decision to reject the construction of keystone pipeline, we're going to look for ways to build the keystone pipeline. this is a project that would cost about $7 billion to build. there would not be any government money involved in this project. it is all being supplied by private industry, and it would immediately put at least 20,000 people to work. that certainly sounds like the national interest to me. if our president decides that sending three aircraft carrier strike groups to the strait of hormuz to defend the free flow of oil, if he thinks that's in the national interest, and one

would also think a pipeline from canada that would help us be less dependent on middle eastern oil would also serve the national interest. the president's own state department determined that the pipeline would have no significant impact on the environment. the president said it himself. his rejection of the keystone pipeline is not based on its merits. he said that. which makes us believe that the decision to reject the pipeline was solely a political decision to help him be re-elected. at this time i would like to yield the remainder of my time to mr. terry. >> thank you, mr. chairman, for holding this hearing on this bill. a couple of points, with the couple minutes i have. this is what the state department has by way of environmental studies on the keystone route. as you can see, it's very

voluminous and it's difficult to understand why this would just be discarded, and we'll get into some of the points later during questioning. i want to go off my regular script and just express my displeasure that the state department decided, or objected, to our nebraska witness that could help put in context the nebraska exemption and what nebraska is doing. the state department objected, because they don't sit on the same panel as a state witness. so the head of our nebraska department of environmental quality is not worthy enough to sit there, and because of then time constraints, his ability to answer a question had to be deleted from this panel and frankly, i'm disturbed by that. but we're going to get into the

false excuse of using the state of nebraska as the reason, reading your testimony, as the reason for are the denial. in fact, the bill was written so you wouldn't have to make that decision, and we'll get into those statements. i yield back. >> thank the gentleman for yielding back. i might say also the last night the president in his state of the union address talked about the importance of infrastructure for america to remain competitive. >> mr. chairman, i'm going to have to -- really going to have to say that you know, this isn't in order. the five minutes is up. so we should proceed, because the regular order is up. your time is up, mr. chairman. >> well, i think when you said that, there was still 30 seconds left, but -- >> i looked at it.

it was five minutes. >> we will enforce the five-minute rule and recognize the gentleman. >> thank you, mr. chairman. thank you for recognizing me. mr. chairman i am also delighted to see the referees there, it's a good opportunity for them to exercise their craft, but i expect there to be a big battle to take place this morning as this morning's hearing, before mr. chairman, today we are holding yet another hearing on the keystone xl pipeline as follow-up to the last hearing. the last markup, and the four more we had where the majority attempted to force the obama administration to hastily make a decision on the keystone xl pipeline. let me remind you the majority first tried to move legislation that required the administration forgo its legal obligations and its due diligence and come out with a favorable decision for keystone xl by november 1 of

last year, and mat jorty's recklessness and irresponsible view, so be it, if the american public was left unprotected, because the administration did not have the time needed to conduct a thorough review. i want to repeat a thorough review, and oversight of this project. for my republican colleagues, as long as industry got what it wanted, then that was the most important role of this congress. after that tactic failed, the majority held hostage the payroll tax cut extension, which would benefit millions of middle class working families in order to attach a rider that attempted to force president