today. the -- as you hopefully, you saw from the interests and even i would say the passion of the members of the subcommittee, this subcommittee takes its responsibility very seriously. today we've had the opportunity obviously in this kind of final subcommittee hearing on the energy and forest tri titles, to get some ex-lcellent input and information. our next step is to write a farm bill using the information that we have here. so we will be under the leadership of chairman lucas, we'll be starting that process. certainly any additional resources and we'll look forward to the data that you talked about. open invitation to continue to forward additional information you think would be helpful in that process. we, you know, i think i speak on behalf of all of the members of

our commitment to do due diligence in preparation for the best possible farm bill for all titles within the farm bill. and so given that under the rules of the committee, the record of today's hearing will remain open for ten calendar days to receive additional material and supplement tri written responses to witnesses of questions posed to the member. this hearing is ajourndjouradjo. >> i think this is one of the markets that i think people vote

for the don't vote for the party. i think this is the city which the votes for the candidate. i think you've seen a lot more of that, though this i heavily republican, midwest, which is dynamic and it's great, but i think you're seeing more of that in the recent years here in the midwest. they are really voting more for what the person stands for. >> june 2nd and 3rd, book tv and american history tv explore the heritage and literary culture of wichita, kansas. >> the first place i want to show you the monger house, the only remaining original structure from the 1865-1870 time. and it was a very important building in our history in that it is a residence but it's also the headquarters of the wichita town and land company that came down here to create, shall we say, the city of wichita. >> watch for book tv and american history tv in wichita on june 2nd and 3rd on c-span2 and 3.

>> this is c-span3 with politics and public affairs programming throughout the week, and every weekend, 48 hours of people and events telling the american story on american history tv. get our schedules, see past program at our websites. join in the conversation on social media sites. now the senate energy and natural resources committee holds a hearing on the role of government and energy and innovation. witnesses include ceo norman augustine who leads the american energy innovation council. according to committee, mr. augustine will say, while the private sector should remain primary source of energy innovation, government has had, and should continue to have, a role in the process. this is live from capitol hill. we expect it to start in just a moment. live from the dirksoe

office building, the senate

energy and natural resources committee holding a hearing on the role of government and energy innovation, one of the primary witnesses former lockheed martin ceo norman augustine. it should get under way in a moment. u.s. senate continuing debate on extending food and drug administration user fees that fund fda reviews of prescription drugs and medical devices. also creates a user fee for generic drugs and a national system to track prescription drugs. see the senate live on our companion network c-span2. the house taking memorial day rece recess. they return for legislative work next wednesday. of course you can see the house live on our companion network c-span.

while we wait for the hearing on the role of government and energy innovation to get under way, the press reporting that ryan crocker will be leaving his post as ambassador to afghanistan some time this summer and that is the word from an embassy spokesman. mr. crocker came out of retirement last july to take over the post after a request from president obama. it's unclear why he's leaving the post a year ahead of schedule or who will replace him. there have been persistent rumor his wanted to leave for personal reasons. in a quote, ambassador crocker confirmed with regret he will be

leaving kabul this summer, from an acting embassy spokesman. >> why don't we get started here. thank you all for coming today. we are here to discuss the report of the american energy innovation council on the role of government and developing innovative energy technologies, the business leaders of the council have a long track record of commercial success building technology companies that compete in the global marketplace and they make a strong case in that report, that with the government as a partner the united states can continue to lead in the clean energy sector. as all of the witnesses today point out in their written testimony, there's a global race

on to produce the next generation of energy technologies. prices on our electricity bills are at the pump do not always reflect it, our current energy system is very expensive and the costs all of us pay in national energy and climate and economic insecurity are unacceptably high, and it's likely the fast-growing economies throughout the developing world will be looking to a new generation of technologies that avoid these costs. it's not only a concern of costs and their effect on future generations it's a significant commercial opportunity for u.s. entrepreneurs. fortunately, developing new technologies has historically been a great strength of the united states and as the witnesses have pointed out an area where the government has been a -- an effective partner, although there has been a broad

consensus in congress in the past in favor of investing in the emerging technologies, we have been sending much more uncertain signals recently, support programs have either already expired or appear to be in danger of expiring and despite repeated calls to address the real problems of the so-called valley of death in initially technology deployment, instead of expanding on crucial current programs, some in congress are looking to end these programs that we have in place. meanwhile, our competitors and potential competitors in the developing world continue to press ahead aggressively to court new energy companies and the talent that will develop the next innovations in this area. as these technologies continue to improve and become more cost competitive, we should view this as an opportunity to take a global leadership position. we have some of the best minds

in the world working on this problem. it's very much in our national interest to show them a clear pathway toward developing and deploying these technologies here and exporting them abroad rather than forcing them to go overseas to find opportunities. i've said many times that i believe the only losers in the clean energy technology race will be those that fail to participate and i hope that the recent paralysis we've seen in congress does not lead us to miss this opportunity. the witnesses testifying today have given a great deal of thought to what leads to success with all of the new technologies. i look forward to hearing about their conclusions and what we can do here to put american entrepreneurs in the best position to succeed in this vital area. let me call on senator murkowski, acknowledge this is her birthday, we're delayed just a minute while we were celebrating that in the back

room. but let me call on her for any comment she has before we turn to the witnesses. >> thank you mr. chairman. and indeed fine birthday present if we could figure out as a committee how we advance in good, strong energy policy for this nation using the ingenuity, the -- just the opportunity that we have as a nation to really build on all of our strengths. so thank you for that recognition. i'd like to welcome mr. augustine to the committee here this morning. also mr. jenkins everybody mr. zindler. it was your report on competitiveness, rising above the gathering storm that served as a foundation for legislation that passed by an overwhelming margin back in '07. it wouldn't surprise me if your work on energy innovation encapsulated in the report that we're going to hear about today ultimately could lead to a similar result. i think most would agree that it's time for us to renew a

coherent, long-term approach to energy development truly in all of the above-approach. innovation, of course, is absolutely at the core of that strategy. i think it's one of the few areas of where the government can and should be providing greater funding. at the same time, i'm aware that if we do decide to spend more on energy innovation we have to make very difficult choices about the amount of spending and the duration as well as what our priorities are for it. a couple comments in each of these areas. first, the obvious, investment is code for spending and that's going to retire taxpayer dollars with our debt situation at $15 trillion right now, grating spending in the area's going to need to be offset. it's challenging to find space in the budget. i think it also presents us an opportunity here to be financially creative. let's figure out how we make this work, let's assess the priorities and focus on it. for years now, i've

significantsignifican significantsignificant suggested portion of the revenues should be devoted to energy innovation. it's a key part of my anwar legislation which would raise an estimated $150 billion for the federal treasury at today's oil prices. even a fraction of those revenues could go a long way towards developing the resources and technologies that we'll rely on in the future. so i'm glad to see the revenues from energy production listed as a possibility in the catalyzing american ingenuity report. now beyond how much we spend, i think we also need to think carefully about our priorities. when we look back at where taxpayer dollars have been spent in recent years i think it's clear that we haven't really gotten to that all of the above policy. we can see that in how much the federal government has spent on solar and wind as opposed to some of the other areas. i'm always pointing out the opportunities that we have with methane hydrates. we can see that in the direction the administration has taken in

choosing to focus on an electric vehicle, perhaps as compared to other promising alternatives. and finally, a point about how long we should be involved here. it makes good sense to invest in energy rnd, that's clearly in our interest. i think it's against our interest to keep subsidizing the same resources and technologies year after year without a clear path toward allowing those technologies to stand on their own in the market. to strike the right balance, require reform of existing programs, possibly the phase-out of many of the subsidies currently in place. some experts believe federal efforts should be oriented toward basic research, away from deployment because in tight fisc fiscal climate the government should spend on priorities, the other institutional fund i agree with the approach. i think when it comes to energy innovation we've got a lot of thinking to do, a lot of decisions to make, and i hope with the hearing this morning we'll have an opportunity to

explore some of that. i appreciate the good work that has gone into the report. thank you, mr. chairman. >> our first panel is norman augustine, who is retired claire and ceo of lockheed martin corporation. he spent a witness before our committee many times in the past. we look forward to any comments he has about the report and what he thinks the congress ought to do. go right ahead. >> there we go. thank you mr. chairman, members of the committee for this opportunity to share with you some thoughts on america's energy future. i'll be drawing, as was mentioned, on the work of the american energy innovation council that's an informal group of seven us of who came together because of our concern over the underr

underinvestment of rnd. the names of the six members are in the written statement i'd like to provide for the record. >> very good. we'll include the entire report. in fact, in our record. >> excellent. thank you. i also should acknowledge that we received excellent technical and administrative support from the bipartisan policy council, an organization formed by four of your former colleague. today i'm not able to speak directly for my associates in this project, because we are highly informal group. on the other hand i think comments will reflect the vies of the group. we have prepared two reports, the first of those had to do with the underfunding of research and development in the energy area in our country, both by the government and by the private sector. we also came out very strongly for supporting arpa-e which exceeded our expectations to date.

the second report we put out deals with the need for the government to involve itself in energy, research and development and i'll speak more to that in my remarks. it's probably fair to note that we are not a group that in general welcomes government involvement in the private sector's business in industry. the reason being it tends to form distortions in the way people within business behave and it hurts our competitiveness globally. on the other hand there are certain areas where there are programs that are of importance to the citizenry. but which the private sector can't or won't invest. and those would seem to me to be exactly the sort of thing that governments are designed to do and that indeed our government has done in the past. there are two areas where the private sector particularly reluctant to invest.

the first of these has become known as the valley of death. in the case of energy research, i think there's a second valley also second valley of death, if you will. the first of these describes a situation where basic research leads to a promising idea but it's not yet been proven to be feasible in practice. and it is very risky, because applying research or performing research is a long-term proposition in terms of time. it often produces failure and even when it succeeds, the performer over the funder of the work may not be the end beneficiary. yet the work may well benefit society as a whole. the second challenge, the case of the energy field, is energy is so capital intensive and that tends to discourage new entrants into the marketplace and discourages putting new ideas

into the marketplace, because they are so disruptive to the investment in place. the government, of course, has many options to support energy research and development and the advancement of energy in general, this goes all the way from contracts to grants to direct involvement in the marketplace to regulation to tax policy, in kind support and more, and the government has done many of these things in the past that we're all familiar with. one thing that one certainly has to reflect upon and be aware of is that when performing research and also the kind of development we deal with in energy where the second valley of death requires taking a proven concept and showing that it could be scaled, be economically competitive at

scale, and that's a costly jump, usually more costly than the first threshold. it's a threshold that's fairly unique to the energy field. innovation -- i was going to say, we certainly should be prepared to accept failures. that's a characteristic of research and development. i wouldn't, for a moment, ex-excuexcuse fair actuals due to incompetence but we're dealing with the unknown, when you do that the best intentions could lead to failure. finally i would just note that innovation is the key to succeeding in this area and fortunately, americans have been -- america have been very good at innovation in the past. in fact, it's one of the few nondiminishing advantages that we have today in the global marketplace. in that regard, i believe that

our ability to solve the energy challenge is really just a microcosm of very important microcosm, but of america's position in the overall competitiveness arena in today's global marketplace. so with those opening comments mr. chairman, members of the committee, i'd be happy to address any questions you have. >> well, thank you very much. and thanks again for all of the work that went into this and other reports that you've championed and been involved in. let me start with a couple of questions. you know, whenever we get into this discussion, it strikes me that a major change in the environment which needs to be acknowledged, as we talk about, what role should our government play in working with industry in these areas, a major change in

the environment is what's happening with other governmental support around the world, and i think, you know, for a lot of our history, the involvement of the government, in order to assist or work with industry, partner with industry, to be successful, was not really required to a great extent. there are a lot of exceptions to that. but it strikes me that when you look at what's happening in renewable energy technology development now, worldwide, you have very aggressive efforts going on by the germans, by the chinese, by various other countries to not only further develop the technology, but also help with the commercialization of the technology and the capturing of the jobs that result from that technology and

that's -- that puts a new -- a new importance on our own government finding the right level of involvement, the right type of involvement, to have in this same area. i don't know if you have thoughts about that. >> well, i would certainly agree with your conclusion, that things have changed greatly. we do have foreign governments very much involved in they're supporting their so call private sector. and i've learned the hard way, in my own experience that private companies can't compete with governments whether it be another government or our own. and so i think it's unfortunate thing that's taking place. on the other hand, i think it's a fact of life. my hope would be our government would have to involve itself only to the extent of one helping preserve a level playing feel so our companies can

compete fairly internationally and, secondly our government would support those things that the private sector can't do or won't do and the government's done for many years all the way from building highways to putting the research in place to produce the internet or gps or many of the other things we take for granted now. so, yes, it is a changes world. other governments are deeply involved. and the first priority of our government should be to try to encourage other governments to limb et their involvement to that second category i described and not to become active participants in the marketplace. the, i guess, piece of good news for governments have become overly involved when they make a mistake, it's usually a big one, and carries throughout the economy. so i think there are good reasons for our government supporting itself as it has in

the past but we can't hide from the realities of today. >> yes, sort of a follow-on to that first question. we love to give speeches around the congress here about how the government shouldn't pick winners and losers. and like most -- most of these statements, it's a clear, simple formulation that as pointed out is almost always wrong. you pointed out that arpa-e has been a great success so far. and of course, darpa, which you are intimately involved in, has been a great success over decades. they are, as i understand, the way that darpa has operated and arpa-e is now operating, it is in the business of trying to pick the winners. now it doesn't always do it, and it doesn't make big bets by in a

relative sense, but it certainly tries to identify those areas of technology development that have great promise for the country. and you mentioned some of them, the internet, gps, some of the others that have proven to be very useful and have been winners. so i'd be interested in any thoughts you've got on this concept of picking winners and losers. >> certainly the first accusation that usually is made, you don't want the government picking winners and losers, and if you make it that simplistic i would agree with the comment. the comment is in the real world the government does, and has to, pick winners and losers every day. government decides who wins contracts, who gets grants for research, what projects are continues, which ones get canceled, and that's, once again, a fact of life. and