eric it seems to me that it makes no sense to have another government agency out there doing one of your reclamation projects when we have hundreds of other projects within the bureau of reclamation. by having the central utah project office come within the bureau of reclamation, i believe it will allow us to do a better job so it's an efficiency major on our part. >> given the data prior to the 1992 act taking effect, suggesting that just the opposite was true, how do you respond to that point? is there something that's different now about the way the bureau of reclamation was run? >> i think senator lee, if you look at the leadership that we have been able to bring into the department at the highest levels the assistant secretary for water and science, mike connor, the commissioner of the bureau of reclamation, we are doing tremendous things on water

supply and i have no doubt the same commitment and same level of support for the central utah project in terms of our staff will continue within the new configuration. >> i see my time's expired. thank you. >> senator franken. >> thank you, mr. chairman. thank you, mr. secretary. as you well know, oil and gas companies are making record profits. in fact, the big five oil companies combined made a reported 137 billion in profits in 2011 and so i'm pleased that you have proposed a $4 per acre fee on leases that are not being used. there's a lot of leases that the oil companies have been granted by or by the federal government that they're not using and creates incentive for them to drill on these leases. i'm also pleased that some of the permitting expenses have been transferred to the companies.

in light of that, i would like to ask you whether the $45 million ulsgs fund you intend t use to study ho dry fracking, will that also be paid by companies engaging in that activity in we had testimony from the commission i think that studied this and i wondered whether the companies that benefit from this would pay for that study. >> the answer to that, senator franken, is that the president is strongly supportive of research and development and developing the science. in fact, much of the great boom and promise that we now have with respect to shale gas in the united states is a direct result of investments that this congress has made both in the united states geological survey and in the department of energy, the bachen formation is an

example of where the usgs has been very involved in developing the numbers there and helping industry develop the technologies. so this money in response to your question is part of our investment in understanding shale gas within the department of interior i believe the number is $18 million that would be appropriated in the 2013 budget for usgs to continue to do these study. we will work closely with the department of energy as well as epa to make sure there's a coordinated effort. >> you say 18 million but the testimony is $45 million. >> you're correct. it's 45 million overall. >> well, my point here is that this just seems like in a time when we have these tight, tight, tight budgets, the top five oil

and gas companies are making $137 billion profit, $45 million, that seems like it could be funded by the oil and gas companies themselves or the gas companies that benefit from that. let's move on because i got a project where i could see that $45 million going and you may no what i'm talking about. it's the lewis and clark water project, which we've talked about, the regional water system in minnesota, iowa and south dakota. your budget requests include $4.5 million for this project, which is much more than the $493,000 that you requested for this last year and we talked about it at this hearing last year answerd i thank you for th increase. unfortunately this money still barely dents the remaining cost share of more than $190 million. we've discussed before the local

partners have prepaid 99.7% of their share. so they're just waiting for the federal portion. and the delay is holding up economic development in the region. so my question really is what is your plan to make sure this project get completed in a timely way or that it even ever gets completed. >> senator franken, let me first of all let me say thank you for being such a great advocate for a great project that is very deserving of additional money. and frankly because of the fact that your water users, local communities, have stepped up to the plate, have put up their cost share, we were able to prioritize this project and have put in as much money as we possibly can in these very tough budget times. as i said, it's a squeeze budget with some painful decisions. if we didn't have the constra t constraints we're sffacing, we would put in a lot more money and get the project done because

it's a top priority project. this committee knows better than probably any other committee in congress that the needs that we have with respect to water supply, especially rural water supply, are huge. even the requests that we put in front in this budget in 2013 barely makes a dent on the need that we have there. >> i really appreciate that and i appreciate your response and i would just -- my time is done but i would just note that he here's $45 million to study fracking where the industry that benefits from it is doing really well. they're not hurting. they could pay for that and there's $45 million that could go to a water project or several water projects. and i'd just give some thought to that. thank you, mr. secretary. >> senator ross. >> thank you, mr. chairman.

thank you, mr. secretary, for being here. last week president obama went to miami to give another speech on energy. he stated that, quote, i will do whatever i can to develop every source of american energy so our future isn't controlled by events on the other side of the world. nice words. the president too often says one thing and then does in my opinion something very different. to mes that been nowhere more evident than what we're seeing in the interior department. the president says he supports an all out, all of the above energy strategy but the department has repeatedly taken steps to limit american energy production. a couple of examples. in november the department proposed a five-year plan for offshore oil and gas development, which excludes both pacific and atlantic oceans. the plan excludes the development oft coast of virginia, even though both senators, both democrat senators and the governor of virginia, republicans, supported such development. in january the department withdrew approximately a million

acres in northern arizona from uranium production. the department withdrew this la land, even though both senators and the governor opposed the withdrawal. the department is limiting coal production, even though members of congress from coal producing states oppose the regulations. we get to the pain at the pump. on friday the headline was "most ever could get hit by $5 gasoline." the president said he's focused on production but department policy seems to speak otherwises, as does the 2013 budget, which includes millions of new taxes on energy. the president can't have it both

wa ways. a couple of questions. following up specifically with the release the president did last year from the stra totegic petroleum reserve. has the administration doning in to tap the reserve? >> all options are on the table. >> d prices last year following the president's decision to tap the strategic reserve? >> i would say all options are on the table and i would disagree as you expect i would with you in terms of your characterization of the president's agenda. from day one in the department of interior, we have worked to develop our oil and gas resources in a safe and responsible way. and we have done so both on the on shore as well as on the offshore. we also have moved forward to develop other energy resources,

including renewable energy and for the first time since three mile island we opened up the door to the possibility of nuclear energy as well. so when the president says an all of the above energy strategy for the united states, he's serious about getting us moving beyond the gridlock that has basically kept us energy program in the united states in a failing paradigm for the last 30 years. >> in "the washington post" last year said the release of the 30 million barrels from the petroleum reserve, quote, whatever the rationale, it's a bad idea, you're going to continue with the bad idea on the table this year is what i just heard. could you explain to me what your assessment is of the purpose of the strategic petroleum reserve? >> first strategic petroleum reserve, it was under the jurisdiction of my colleague secretary chu and the president of the united states. the president is very cognizant of the pain at the pump that

people are feeling. we have an energy strategy and a policy that we've been working on from day one and we believe it continues to show good results so we'll move america to a new energy future. we're committed to doing that. and in terms of dealing with immediate issue of the high gas prices, all options are on the table. >> are you familiar with senator schumer's insist enence -- the president has refused to move forward in granting the peopleline from canada. do you agree with senator schumer we should be pressing for more middle east capacity rather than north american production such as can be brought in from canada via the keystone pipeline? >> first on the international effort, that's obviously something that is a focus of the administration along with

dealing with what we can produce here domestically in the united states. that's part of all the options on the table. on the keystone issue, we just remarked that the pipeline that was proposed by transcanada yesterday, that we'll take the segment from cushing to the gulf is a step in the right direction. that has to be processed. no judgment was ever reached on the keystone pipeline xl project because frankly there was no -- because of actions that were taken by the congress in sufficient time to move forward with the processing of the alternative that is required. >> the keystone pipeline was actually proposed seven years ago and it's still not enough time. >> i'm sorry, senator, if you -- i was the governor from nebraska yesterday. there were serious concerns raised by both the republican governor as well as republican colleagues here in the senate with respect to that proposed pipeline. so the alternative to that

pipeline is still to come from transcanada and then it will be evaluated. so we play by the facts, it lab process and then a judgment will be reached on the facts just as a judgment will be reached on this segment from cushing down to the gulf. >> thank you, mr. chairman. >> senator shaheen. >> thank you, mr. chairman. mr. secretary, deputy secretary hayes and miss hayes. we're pleased that you're here today. mr. secretary, you talked about your new role to help develop a tourism strategy for the country and the importance of protecting our outdoors and our beautiful environment and special places as being critical to that tourism strategy. and as you know, the land and water conservation fund has been one of the federal programs that has been most successful at protecting our special places and wildlife habitats and public

recreation. in new hampshire we've got all kinds of examples from the lwcf. our umbaga national refuge have all been protected through the land and water conservation fund. i was pleased to see additional funding in the proposed budget for that program answered know that you said you're committed to getting full funding for lwcf by 2014. i wonder if you could talk about your plans for how we should get to full funding and whether you think there is a dedicated funding stream, an additional dedicated funding stream to what been proposed by congress but has only been fully funded i believe twice since the program started. >> senator shaheen let me first say thank you for your leader shooich on this issue and i thank the chairman of the committee, senator bingaman and others who have worked hard to

try to get full funding often the conservation fund. it part of our tourism and job creation strategy as we see through l.l. bean and so many other wonderful stores that have a press neence in your state, t hunting community, the angling community. the reality of it is is that it's been a broken promise to america. 1960s it was authorized to take a portion of the proceeds that come from offshore oil and gas production and yet if you look at the books of the treasury, is t is now north of $17 billion that are owed to the conservation programs of this country. so even in these tough fiscal times i think it's important for to us look for the possibility of that funding. it pains me, frankly, when i look at the list of land/water

conservation projects which we are not able to fund. senator barraso just left but we're putting a significant amount of money into buying some of the holdings in the grand titan national park. in every one of your state there are huge needs probably in the $5 billion range for the foreseeable future. so from my point of view, the $450 million set forth in the 2013 budget is a fraction of what is needed. but it is, as i said, at the outset this is a very tough budget and eight very painful budget for me personally but if we could find ways of doing more with lwcf, i think we should be open to that. senator landrieu and senator alexander in the passage of the gomisa act were able to set aside a permanent conservation royalty and maybe there's more of that that can be done.

>> thank you. i was pleased to work with some members of your staff after the oil spill in the gulf to try and address the out are continental shelf reform act of 2011, deputy secretary hayes, we worked on that. and i was believes to get a model for an ocean energy safety institute that was modeled on a partnership that noaa h had with the university of new hampshire called the coastal research response center. and was very disappointed when that legislation has not gone forward. but as we think about the research that we still need to do to address clean-up to oil spills, are there opportunities,

additional opportunities for partnerships like the one we have at the university of new hampshire with noaa to do some of that research that is going to be done at least right now as a result of the legislation that's not gone forward? >> deputy secretary? >> senator, first of all, thank you so much for your assistance on the ocean energy safetience constitute. we continue to believe it very important that we have in the law the authority for the bureau of ocean energy management to have a safety institute that will as a primary mig have the ability to partner with universities and industry and others to be on the cutting edge of research. we are -- we do have ongoing research through the bureau of ocean energy management. this budget has pretty row bus investment in continuing to raise the bar of safety but i

think until we have a dedicated institute, we're not taking full advantage of where we should be as a nation. >> thank you. and my time is up but i think it's important to point out that it's not just safety we need to protect. we need to figure out how to deal with the problems after they occur because as much as p prevent spills, the reality is we're probably going to see some in the future so having the best technology to address those and research to do that is very important. thank you. >> if i may, mr. chairman, i think it's a useful conversation with all members of this committee, april 20th of 2010 was really not that long ago and this committee, like the rest of the nation, was laser focused on what was happening as 50,000 barrels of oil were spewing out into the gulf of mexico every day. it was a national crisis and

something that we all have lived through and we ought not to ever have amnesia as a nation, the president nor i have amnesia about what happened in the gulf of mexico nor the members of congress should not have amnesia either. but to your point, senator shaheen, there's a lot of work that has been done but a lot more work that has to be done. today tom hunter, well known in the state of new mexico leads up a committee for us on offshore safety looking at a whole host of things, from the technology to allow preventers to other things to be done to make sure we have the safest production. we will move forward in the development of oil and gas, but we need to make sure we do it in the safest possible way. having the additional resources to develop the kinds of

technologies that will keep us at the cutting edge is very important to the united states. i'm mindful as well, senator shaheen, with respect to your question here that, this goes way beyond the united states of america. when we talk to any of the oil and gas companies, which do i on a regular basis, we know that they are a global industry. ands so what's happening off the coast of nigeria and algeria or off the coast of brazil or off the coast of norway and russia, those are all important matters. and so how we elevate the technology in terms of dealing with all aspects of ocean drilling is a really important opportunity for the united states and we have do it from the safety side, the prevention side, the response side, all aspects of ocean energy development. >> senator heller. thank you, mr. chairman. mr. secretary, thank you for being here. nevada's 110,000 square miles,

so you got a lot of work to do. 85% of it, as you know, is owned by the federal government. that i think in itself presents a lot of unique challenges. the economic activity on the public lands in nevada is important and obviously comes in a lot of forms, mining, renewable energy, development, ranching and recreation, some of those things. so i'm concerned about the president's budget as it concerns your office. and obviously there's concerns to my constituents also. they include smaller budgets for hazardous fuel reduction. i believe misguided prioritization of land acquisition, the 74% fee increase on public land grazers and in my opinion an ill conceived proposal to tax mining out of competitiveness. unfortunately all those take a back seat to rises gas prices in my state today.

and i've seen the bumper stickers you talk about back in 2006 during those interim elections coming from the left. so both sides i think have issues and concerns and certainly like the bumper sticker politics. but i want to talk a little bit about verbiage versus reality. i think the -- ms. murkowski made comment to the production of natural gas on public lands, that -- and waters that in fiscal year 2011 have actually dropped 11% from the previous year. according to the interior data, also oil approach ducproduction lands has dipped 14%. as the administration talks about all this new approach duc -- production, none of if is being done on public land, it's all being done on private land.

in 2008 when you were a senator, you refused to vote for any new offshore drilling. in fact, you had a conversation with leader mitch mcconnell at that time where you objected to allow any new drilling on americans' outer continental shelf, even if gas prices reached $10 a gallon. well, you're halfway threre. halfway there. the question is is this the direction that this department is going and are we at some point believing under your leadership that gasoline prices? >> senator heller, let me first say that i think that exchange on the floor of the u.s. senate, like the exchange that you're engaged in, is part of the phony can debate with bumper sticker solutions is one of the must fundal issues -- >> are you saying -- >> let me finish. when you speak to the statistic of what happened in 2011 in terms of production, you have to look at what was happening in

the gulf of mexico. it's about 30% roughly of all our domestic energy comes from the gulf of mexico, which senator luandrieu knows full well. there are more rigs on shore and offshore in the united states than any time in recent history, maybe all of history. whatever dip there was in production is because of the dip that happened in the gulf of mexico in the wake of the 2011 oum we oil well blowout. >> i get the question just to follow up, did that exchange occur on the senate floor? is it accurate? >> senator heller, i know you will appreciate this, that there

are lots of conversations that take place on the floor of the senate which are made for a political statement and at that time it was a political statement. >> so it was a bumper sticker. >> it's a bumper sticker. we move forward with a have row boous outer continental shelf production. i think people thought after the deepwater horizon there would be not be any deep water production in the united states of america. i think we're going to continue lead the world in both the technology as well as the production that we're doing there. the 3d 00 million lease sale that occurred just in december in new orleans i think is telling that that we're moving forward in that direction. in terms of my credentials and the president's credentials in offshore drilling, i have confidence we're moving forward

in the rightdiection. >> thank you. >> senator landrieu. >> thank you so much. mr. secretary, thank you for your focus and interest in the gulf coast and your many visits down and your commitment to the restoration of our region and the investments in our national parks and state parks. i know that you have a passion for conservation and we appreciate that. but i want to add my voice to try to clarify that in fact the oil and gas production in our country, as you've just tried to explain, is lower than it has ever been on federal lands both offshore and on shore and the increase has come from production on private land. those are the facts. i'm not argues about the price

of gas. i would say to my republican colleagues that they should know we can't drill our way out of this problem. we cannot drill our way back to $2 or $3 gasoline. and i don't want to engage in bumper sticker politics, but do i want to engage in good policy for this country. and speaking from louisiana's perspective, we need to get a more aggressive drilling policy in this country. we can't drill our way out, but we most certainly can create jobs. we most certainly can strengthen the u.s. independence. we most certainly can reduce our reliance on foreign oil. and the facts are that drilling on public lands are down and they need to be increased. the other fact is contrary to the inference that we are drilling everywhere we can in the outer continental shelf, you

know, mr. secretary, the facts are these -- we are drilling on less than 2% of the ocs. 2%. now only a small portion is leasable and of that leasable portion, we're drilling on 2%. the ocs is 200 miles wide and it goes from oregon to maine and we're drilling on less than 2%. so i just think that it's important for us to be clear about what our situation is. in addition, i want to say that despite the administration's arguments that are laid out that you all are all guns blaring and green lights for drilling, the facts that i checked and if you disagree tell me, only 21 permits for offshore drilling have been issued by this team in 2010 there were 32 permits. i just left the annual conference of