louisiana oil and gas association, mr. secretary, yesterday. they are beside themselves with not being able too get their permits processed. toans you, mr. franken, let he say exxon and smell may be making record profits but according to a study recently done by the greater new orleans ink, 41% of our oil and gas independent operators and service companies, i'm not talking about exxon and shell that have operations all over the world, i'm talking about companies in the gulf coast in texas, mississippi, louisiana, alabama. let me tell you what the studies show about their profits. 41% of them are not making a profit at all. 70% have lost significant cash reserves. 46 have moved operations away from the gulf and 82% of business owners have lost personal savings as a result of the slowdown. part of it is the accident and

part of it is the permitorium. i can tell you the reality in the gulf coast is not there. that is one point that i wanted to make. secondly, and i'll get to a question in a minute, this 4% of an acre is being proposed for nonpropofol duesing leases, can you explain where that -- how much money that would raise, where it would be going? because we're already experiencing an increase of fees, a decrease in permit. we don't know if that money is coming from us and going elsewhere but we need more inspectors to get our permitsnd way in the places where people support drilling the the country needs the jobs. where is the 4 cents going to go and how much is it going to raise?

>> i disagree with your conclusions. the fact is when you've lived through a national crisis, it's think it's very responsible we've moved now forward with the approval and over a hundred permits and deoil permits and the rigs are back and working and is very much a public knowledge. i've answered -- we feel very comfortable as far as the production that is coming off our public lands, on shore and offshore. i'll have the deputy secretary make a quick comment on that as well. >> thank you, mr. secretary. very quickly on the on shore, we have 38 million acres available for leasing right now. only 16 million are in fact being leased. last year we had 32 on shore lease sales -- >> i realize that. not to interrupt you. it's not about what percentagend production that are leased. if you said how much land do you have in the united states on public lands and then took your percentage of what is leasable and then took your percentage of

what is drilled, you'd give the people of this country a better picture. i'm not an expert on on shore but i am on offshore. 2% of the ocs is being drilled. do you agree with that or not? yes or no? >> we've made available 75% -- >> that is not what i'm asking. >> we are not leasing areas where there is no oil -- >> what percent of the entire ocs of this country is being drilled on right now. >> let me take that, david. >> march rirks senator landrieu, the fact of the matter is there are tens and i think maybe it's -- it is over 30, 40 million acres we just did in the one lease sale. there's more that will be leased. the lease sale i did in

december -- >> when ymr. secretary -- >> when you make available tens of millions in lease sale -- >> mr. secretary -- >> the fact is we are moving forward with a very robust -- >> we are never going to get, in my view, mr. chairman, we're never going to get clear as long as we continue to talk around and throw statistics out that try to make both sides look good. i'm not trying to make you look any worse. i'm just trying to get the facts out to the public. when you speak, you get people thinking that we're drilling everywhere, on shore and offshore and the facts are not -- don't justify that. up know that 98% of our offshore is limited to drilling. we can't even explore there. we're talking about what we're drilling within that 2%. and my final point, i will say this, mr. chairman, you've been very good to me. i as a senator from louisiana have to come to this meeting every year and i've now looked at my notes to find out that wyoming last year got $1.7

billion in royalties. the senator is not here. but i want my colleagues to know the state of wyoming has 500,000 people. they got $1.7 billion that they kept. i don't know what they're doing with that money, i don't know if they're preserving land or conservation. louisiana, which produces more oil and gas than they have off of our shore, has more infrastructure got $160 million and weep have 4.5 million people. mr. chairman, this is the greatest injustice to the gulf coast of this united states and i hope nobody puts a revenue sharing bill anywhere around this committee because this senator will fight to the end, no state is going to be treated like our state and we've been treated like this since 1920. >> do we have senators that haven't had the first round? i don't think so. let me start with the second round. mr. secretary, let me pass out and give to you some -- a few

charts that are from previous hearings we've had and some that we've developed ourselves. and i'll go through the three charts and then ask for any comment. is someone passing those out? the first of these charts is the one that mr. burkhart from cambridge energy research associates provided to us at our hearing about a month ago and he entitled it "the great revival of u.s. oil production."

it says it has made the united states a leader in global oil production growth and pointed out that there is substantially more growth in oil production in this country and that's both private and public land obviously but it's a useful document. another chart that i've passed out relates to weekly retail price for premium unled gasoline from '96 to october of 2011. it's not this chart but it's a different one that has been passed out showing the price of gasoline in the united states at the retail tracks pretty closely the price worldwide for gasoline with the exception of course that we don't have the taxes

that the rest of the world has and that's the big difference. and then the third is the chart that we put up here on the board that shows u.s. oil production and gasoline price, the percentage change year over year for the last two decades. and i think it's clear from this chart, at least it's clear to me, that there is no relationship between the amount of oil we're producing in any particular year in the united states and the price of gasoline. the price of gasoline is determined on the price of oil in the world market and what we are producing here in the u.s. willing relatively constant. it has gone up a little bit, somewhat in the last several years but the price of gasoline has fluctuated dramatically during that period of time and

it has done so as shown on that previous chart, it has done so because of the changes in the world price of oil. i guess i bring these charts out and distribute them here in order to make a point that there's an underlying argument on this gas price issue that the high price of gas at the pump is a result of some failure to allow production to occur in this country. the truth is production in the u.s. is up, is up substantially. production on federal lands is up but in spite of that the price of oil on the world market is also up and it's up because of iran and it's up because of all kinds of factors that increase demand from china and all kinds of factors that are

causing the world price of oil to rise and unfortunately it is impacting consumers in this country. i wish it weren't. i wish we had some way of -- in the near term of disassociating ourselves from the world price of oil but we don't. and that's what's hurting us. at any rate, mr. secretary, i give you those charts for what they're worth and ask for any comments you have in the last few moments of my time. >> thank you very much, chairman bingaman. i would say two things with respect to the presentation that you just made. first oil and gas production in the united states is higher than it's been in a very, very long time. and as your chart indicates, it's moving in the right direction and i think there probably is no figure in my mind that says it better than the fact that we're importing less oil today than we have for a

very, very long time. so we are producing more here in the united states. i think the second point you make is one that economists have recognized for a long time, that we don't control the price of gasoline here in the united states based on the amount of production that happens here in this country. it's a global marketplace that sets the price of oil and it is the global factors that we see both in terms of iran as well as the growing demand that we see from countries such as india and china, which are a part of what we're seeing in terms of the global economics which we face today. >> thank you very much. senator murkowski. >> thank you, mr. chairman. i think we would all agree, senator landrieu has mentioned theans is not just drilling, coming from an oil produce being

state, the answer is not just drilling but it is part of the solution. so i think it is something that we would agree we are subject to the vagaries of the market. we are certainly subject to the volatility on the global scene. but i think that the fundamental problem that we have here is that we're too depnd ent on our oil imports from the opec countries and we too vulnerable to the price instability in the global market. so i'm not sure how we can argue that approach duesing more oil here at home and lessening our dependence on opec oil wouldn't make a difference. it just seems to me to make sure to have as much a cushion as we can because i think we recognize that the cushion that is available within the world markets is one that we're not entirely sure. senator schumer has asked that saudi arabia crank it up a bit

so that we can get more from saudi arabia. how much spare capacity they have. i think this is one of those things that causes the volatility that we see. i want to move off that subject for a moment and bring up the issue that i raised in my opening comments and this relates to the legacy wells that were drilled again from 1944 to 1981 when the government drilled more than a hundred wells. they have only plugged and properly abandon about ten out of 137 wells. when i was in the legislature giving my address, a representative from the house asked me, well, senator, what can we do? what's our action plan on this? i said we need to raise a little hell. we we need to point out that there cannot be a double standard here. there's a resolution that was passed by the state house of representatives and i'd ask that it be included as part of the

record -- >> we'll include that of course. >> thank you, mr. chairman. it points out that the federal government has received over $9 billion from lease sales within the petroleum reserve where these exploratory wells were drilled. the state can't impose fine on the federal government, but if it could, the fines would exceed over $8 billion. if the statute of limitations were disregarded, the fines would exceed over $40 billion. so, again, what i'd like to do, mr. secretary, is work within the department to figure out how we can do a better job of this. right now doi has suggested to the state of alaska that we can do one well a year. if that's the rate that we're going, we're sit hearing with over a hundred years to remediate and repair.

i need to have an action plan for the people of the state of alaska on this, and i need you all to be working with me a little more aggressively. in that same vein, i will also bring up the alaska land conveyance act. and again, asking you to assign to me -- i know that secretary hayes has been tasked with the double duty of taking on so many of alaska's issues. we appreciate that. but we need to have a better path forward as to how we're going to complete these conveyances, again, if we keep on the track that we have been on, it going to be an additional 70, 80 years for alaska to get our lands conveyed, the lands that were promised on statehood, promised to alaska natives under the alaska native claim

settlement act. it's too long for the government to keep its promise. i need to be able to go back and report that in fact we are making progress and better than just a couple conveyances a year or a couple legacy well as year. so i would ask for your commitment to be working with me with your folks and the people in alaska. >> senator murkowski, we know the priorities for both of these issues and we agree with you that both of them need to get done. and as i said at the outset of the budget, it's a painful budget because i wish that we could do more, including on the legacy wells and on the conveyance issues for alaska. the priority that i've placed on the legacy wells, i think you can see evident in terms of the investments that we made from the american recovery act, the stimulus package, which helped us move forward with the plugging and abandonment of some of these wells.

>> we got three. >> well week did then in the recovery act. >> and we proposed an additional three in the 2013 budget. but i recognize there's more to go, close to 40 more that we have to get done. i hope we can find a way to get it done. the same is true with the alaska conveyance. if we could put more money and get it done a lot faster, we'd be happy do that. we'd be happy to work with you to tell you what the plans are given the fiscal constraints we face. if there are other ways which we can get to the same end, which we both agree on, we both agree we need to get both of these things done, we'd be happy to work with you on that. >> well, we need an action plan that works and so far it's been -- and it's not just this administration. i had to put the previous administration on this as well. i don't think that any other state would sit and wait for 50 years to get the lands that were promised at their statehood. thank you, mr. chairman.

>> thank you. senator lee. >> mr. secretary, i want to make sure i understood what you said a moment ago. surely you're not suggesting, are you, that there is no relationship to use the verbiage of this chart there is no relationship between u.s. oil production and u.s. gasoline prices. would you agree with that statement? >> what i said, senator lee, is that gas prices are set as a matter of the global marketplace in terms of oil. >> as a result of the complex ent action between supply and demand and all the factors domestically and internationally that affects supply and demand. >> and u.s. oil production is one of those factors. >> yes. >> your office issued a problematic environmental impact statement dealing with oil shale production basically. use of federal lands for oil

shale production. this peis proposes to replace a previous peis issued by your department in 2008, i believe. the 2008 peis identified about 2 million acres of federal public land that could be potentially suitable for leasing for the development of oil shale and tar sands. your new peis proposes to limit that amount by more than 75%, bringing it down to about 450,000 acres. meanwhile in 2007, the bureau of land management issued several r & d leases for purposes of oil shale development. one of those r & d lease was in utah. can you assure me that your recent peis won't effect those

previous leases that were issued in 2007? in order, will those be taken oft map now as a result >> with respect to your specific question, let me get back to you. with respect to the more general question with oil shale in utah and wyoming and my state colorado, the fact is, there's still a lot of research and development that needs to take place. we visited a couple of those places, there are huge unanswered questions in terms of water supply. the companies themselves admit they need to have answers to those questions. my approach to oil shale is a conclusion that i have reached that we ought not to engage in a wholesale giveaway of the public domain until we have some of these questions that are answered. at the same time, moving forward

in full support of the research and development programs that are underway in my state as well as your state. >> you're aware, of course, mr. secretary that this technology or variations of it, has been in place in use in europe for about 100 years, and has been used to produce oil and in some circumstances to produce oil, to produce electricity, and is still in use to some extent in europe, i believe they produce about a million barrels a year, from oil shale in europe currently. and they do all of this meeting european environmental standards -- so we -- it has not been used extensively in this country on a commercial scale, but it has been in europe. so is that really what we need? is it another 100 years of research? what is it that we're waiting for? what's the magic bullet? >> we're waiting for the

technology to be developed to be able to assess the potential here. the fact is, i think you were warned by them -- may remember the 1980s and what happened in colorado and other places with the oil shale bust that was after the investment of billions and billions of dollars. with respect to the development of kerogen from these rocks which is different from shale gas and oil. we are supportive of going-forward with the research and development to get the answers. >> there was a bust in the 1980s, and a lot of the reasons have you to do with the kinks in the technology that have been worked out. the amount of process water, the amount of energy that's been required. the carbon footprint that's required. a lot of that has been worked

out. but i think it's important to remember, i don't think it's your job to mitigate and protect against all risk from the oil companies. in other words, if they want to make that investment, they are placing their own investment at risk. should they not be given the opportunity to make the investment and to lease these federal public lands for that purpose, knowing that they could develop oil there? an estimated 1.2 trillion barrels of proven recoverable oil in just a small segment of three western rocky mountain states, 1.2 trillion barrels, more than the combined petroleum reserves of the top ten oil producing countries in the world combined. >> it's my job to protect the public lands of public resources of the united states as a custodian of america's natural resources, when i look at the

oil shale potential your state, wyoming and colorado, i think there's potential there. we need to look forward and ask some very tough questions, including one of the key questions. if it's going to take upwards of 1 million feet of water on the oil shale, where is that water supply going to come from. what's it going to do to municipalities, and those questions have not been answered. that's why the research and developments which are underway are important. we will get answers to those questions, as part of what we are undertaking right now. >> i see my time has expired. let me close with the fact that this is one of the reasons you will allow this research and development to move forward. allow the r&d leases to move forward, don't cancel them, let them do their thing, they'll prove their ability to make this -- to make it happen in an environmentally responsible and a commercially feasible way. thank you.

>> senator matsch. >> thank you. i have two points i want to talk about. the aml fund from osm, office of surface mining. i see that where you all have made some changes, it's a grant fund. the hazardous sites in the states that have been most affected. the money had been distributed a little differently by tonnage. how much mining was done, how much per ton. then it was coming back in that same, where it was kind of a not related addressing the environmental needs. i think you're taking that step in the right direction from what i can see here. you estimate there'd would be great savings on that. i would like to hear. the savings, i guess, would come. and it might be, if you want mr. hayes if he's worked on that, whatever you would think about that, how the savings are

calculated? >> let me just say, i appreciate the comment senator manchin. >> the state has a lot old mining, kentucky has a lot of old mining, pennsylvania has a lot old, old mining that really help helped build the country. and i think it's a step in the right direction that we can clean up and do something withed land. >> i'm going to have david or noel get back to you on that. >> from focusing on the intent of the macro, which are the coal mine issues themselves, as opposed to other deeds. >> i interpreted it by looking at them now targeting the return on the aml money, the abandoned

linemaned money, it's going to where the need is. >> right. >> where we've with always said. >> the savings would be that basically we're able to clean up and put land in production. i would with assume that's the effect you all have. >> does everyone agree to that? >> now where i disagree. >> you're afraid -- >> concerning the osm and the bureau of land mines, the merger, i can't find anybody that seems to be in favor to think this would be a good thing. i don't see the generation of savings for the disruption of how the operation -- and osm, it's been a long, long term relationship learning how to work. as a partnership, making sure there's a balance between the environment and the economy. going into the blm or recommending that merger. i know you're doing it on trying to -- from cost effectiveness,

and i can understand that, i don't see the savings for what could be the downturn of having more regulations to the point we can't do anything. we're having a hard time now. maybe somebody would want to talk to -- are you all serious about the merger? is it something we can -- >> let me first say, i think it's important for us in government to always take a look at our agencies and see how we can do a better job. it's in that vein that we move forward with my effort, which i authorized the proof and support ed them. based on the review we've gotten and our report, which is currently on my desk, i think is there will be efficiencies that we can find between blm and osm. i have not yet read the final report, the deputy secretary has been leading it, my sense is, that the guidance from this committee and your staff, especially sam fowler, who knows a lot about this, means that

there's not going to be the wholesale consolidation. there will be changes and there will be more efficient ways of doing so. >> i understand that. and that's not a problem. the bottom line is, i think we were expecting a report by february 15th? >> it is. >> you have your report. >> i is heed it last night, it's in my briefcase. >> you will be sharing it with us? >> i will be reviewing it. >> and it will not go the direction we thought it might have been going before? >> i think we should have a separate conversation as soon as we get it. i think it will improve the functions of osm and blm, and we will find some efficiency there's. i hope you'll be positive in your response. >> i know it's been talked about briefly. i'm concerned about the definition. i mean, i want people to know, west virginia, our streams are very