multibillion-dollar efforts here. so unless we have certainty and know who's got the right claim and who controls that area, our money will not go there, and i think marv odom made it quite clear in his statement. >> let me state for one minute, mr. chairman, on the issue of capital, what it takes, whether it's to dig up rare earth minerals or whether to go for oil and gas and whether it is to make other advances and the capital doesn't come if it isn't safe. money goes where it's safe and where it can be profitable and where it's protected and so when we're talking about certainty, we're talking about a form of protection that we know we can get the permits and of course, we can always say we have a great navy even though we're shrinking the size of the navy and we haven't done

sequestration yet and all of that sort of thing. i think it's a lot cheaper, and i think it's a lot smarter. i think it's a lot more credible in the courts of the world to be a party to this treaty. and we lose side of the fact that when we're on the outside that we'll tell them we have great, massive navy power and we'll do -- if we ever came to that, i think we can, but i think it's important. we're going have competition for these areas. if we don't lay a claim to these extended area, there are lots of other people as you mentioned, i think it was you, in the arctic. we've got the russians and the chinese will be there, everybody's up there and everybody wants to get in on the deal. why don't we just put our footprint there. all we have to do is put this treaty in place, with the adjustments that need to be made

and put our people there and lay claim to what is rightly the resources with this country. >> yes, mr. timmons? >> 161 other countries would likely not recognize our claims if we're not a party of the treaty and they are, and the world is a very different place, and we're a global economy and we compete internationally and we are competing for the 95% of consumers in the united states. many of the companies that would take advantage of the resources are international in nature and they have operations in other countries through commit ams and treaties and they rely in other countries and, and i.p. protection and these other countries and these companies want to follow the rules, as well, or they simply will not

invest. >> now, let me ask you one other request with respect to this, that we're hearing from some people. we're hearing from some people that this may be a back doorway than enforcing the treaty like the kyoto protocol. i know we've had many discussions about that. we've worked together on some energy stuff. i know the chambers and other people's concerns about costs being dumped on you and that's been a major issue as we learn how to wrestle with these things and we'll ask each of you the very same question. do you have any concern that joining the law of the sea will require the united states to somehow be mandated into the kyoto or any other climate change agreement. if we read what seems to be the

treaty's environmental interest, we've met all of them, period, and if we were a party to the treaty and inordinate or particularly inappropriate climate and dehands were made on us and we would have the ability to veto it. veto it. it takes one veto. >> and he'll tell me how you think he does and i'll be happy to discuss it with you. >> it's a very important point that mr. don hugh has made and we would have the sea bed authority and we would have the right to object to any provisions that are put forward. that said, there's nothing in the treaty that i've read that indicates that we would have to join kyoto or any other treaty

of that type and that's coming from an organization that does not support kyoto or has serious reservations about a cap and trade regime. >> some treaties argue that if the u.s. joins the convention we'll lose jobs. does the chamber of commerce agree with that? >> no. if you expand the economy, and many of our jobs in the future come from mining, energy and trade and this clearly is a treaty that will enhance that, not detract from it, and i believe that as we have said public publicly, not only about this treaty, but about the whole energy mining and other issues, these are where a lot of the jobs in the future are, and i think they'll create jobs. >> anyone else want to comment on that? >> senator, surely, it will be a

job creator and let me add one other anecdote and the keystone excel pipeline. a lot of people don't realize that the keystone excel pipeline has 2400 companies from 49 different states. we've only not found someone in the state of hawaii that's involved in the keystone excel pipeline development. so when you look at energy infrastructure and energy investments they're huge job creators and they occur in places that you least expect. the multiplier effects particularly in oil and natural gas are very significant and so we see nothing, but upside through ratification and the extension process to secure those rights hopefully so we can secure the opes to develop that resource and it will flow clear across this country in a variety of different ways. >> thank you. >> mr. chairman, i would point out in our industry, the

telecommunications, the buzz word, the number one word is reliability and we invest as a company, 16 to $17 billion a year into our networks and we in the undersea cable area in particular invest in mesh networks so that we can avoid issues with large storms or earthquakes off the coast of japan. so we invest to get the level of certainty for our customers. when a nation takes a unilateral action like i referred to in my testimony, you can't counter that with another investment. so this treaty allows us to have certainty around those sorts of unilateral actions and the belief that we can resolve any conflict anticably and quickly. and that will help us with the certainty around investments and we will make that and that in

turn will create more jobs. >> my time is up. thank you, mr. chairman. i want to pursue more of the argument and this was made by others in the earlier hearings in the committee and during the last hearing and former secretary of defense donald rumsfeld who testified against the treaty. so i raise the question, and secretary rumsfeld, how we deal with the situation and how american companies are testifying as we have today that without certainty they would not be prepared to invest the billions of dollars that are required and thus that would not be the creation of the jobs nor the degree of energy independence or the other attributes. his response, and i hope i have justice to it, he observed that

while businesses always prefer certainty, we have uncertain investments all of the time when they believe the potential benefits justify the risks. on that basis he suggests to the united states companies that saw potential benefits from deep sea bed activities then go right ahead and make those investments even if the united states did not ratify that convention. there is no impediment and they're doing so outside the convention rules. secondly, observe u.s. companies might consider entering into joint ventures with companies from countries that are parties to the law of the sea convention. they can therefore secure rights under the convention and that way and now that the united states needing to join the convention ourselves and these were supporting comments in terms of not ratifying and the basic thoughts of the opponents

thought that we are forfeiting sovereignty or forfeiting money through the royalties and those aspects and finally that it's no reason why we should not proceed anyway. and if we're challenged and we have the ability to rebutt whoever is challenging us. so as it's a repetitious, but nevertheless, these arguments have been strongly made. this is the reason that we're going through these hearings for the third time and not having had ratification and started from 2003 onward, how do you respond to secretary rumsfeld suggesting that after all is said and done, he likes certainty, but you take risks all of the time and you have to sort of consider what the profit may be and proceed given our fleet and given our general stats in the world.

have you ever thought about that? >> i do. there's risk and then there are risks, senator lugar. in this case, there are risks every day, everyday risk associated with business and making risk assessments and judgments. very fundamental to that risk assessment is property right and who has right and who doesn't have right and this is a fundamental issue and you go beyond the 200 nautical mile today, the risk goes up very significantly. i would suggest that if the return is great then there would be people there today and there aren't. to the second point that he has raise side probably correct. what will eventually happen is u.s. companies will be forced to partner with other nations who have ak seeded to the treaty because they cannot find certainty or protect their own

interests through u.s. law or u.s. practice and so we find they're teaming up with the russians and with the chinese and others or their preference would be to take the lead and to go alone or to find others as their junior partners in assessing and managing this risk. >> my definition of these partnerships, we divide up the profits, leaving aside the royalties in the sixth year. >> well, that's right, and plus you're at the behest of others in looking for those partners. we have, i might say, the best companies in the world and the most technologically advanced and we are on the cutting edge of the abilities to go out in the deep waters and produce these energy resources. wide open risk without any limitation is a clear detriment and as you heard those people making the decisions in the board rooms, the risk is too high. >> how do we deal with the second proposition being offered and that is after all, we do

have the largest fleet, the only fleet that's everywhere and the idea is if there's a problem, someone should just shoot them up and you plow right on through that people recognize and so forth and it's simply as a nation, losing our sense of sovereignty and our sense of ability to manage thing and why doesn't that work in the real world. we are party to many agreements around the world and there is a lot of opposition to them and a lot of people were upset and we went to the wto. and what we have found a single important thing, and to adjudicate between countries and most of the time, and on

occasi occasions we'd, and when we have our own detriment, but i happen to think that we have great competence in the military. i happen to think that it could be better if we could avoid most of the need to confront militarily by joining an organization that 161 countries are already in and couldn't all be one, and having a way to participate in the process, and giving the money that pays some sort of royalties or fees is a fraction of what the government will make on this deal and clearly it would be much, much better to find a way to explore these tremendous resources without having to do it under the protection of enabled power. under that argument, we could sail across -- go anywhere in the world and pull up with our navy and by the way, we will dig

right here and maybe you're -- those people may be claimants to that property because of their participation in the treaty. i wouldn't know, but i just think the argument that we're the toughest guys on the block so it's simple and we'll just go in there and do what we want is probably not the best argument for us to make. >> senator, just a couple of comments on your questions here, and while we balance that in all of our investments, it is very prudent for us to look at opportunities to lower risks wherever we can and this looks like a very reasonable way to do that. we do partner with many different companies to do these large undersea cable networks that i talked about and some of the disputes that i've mentioned, we've had to go to countries like the uk and france and ask them, frankly, to carry our water for us.

and it seems like almost an assault on our sovereignty that we have to do that because we don't have a seat at the table. for me to try to convince the navy to dispatch a destroyer with the garden hose-sized cable seems to be a bit of overkill. >> thank you very much. >> senator corker. >> thank you, mr. chairman. thanks for having this hearing and your diligence in having many of these and thank you, as witnesses for being here. i know most of you well, and i appreciate you being here, and i will say that it's a little bit of an out of body experience to have especially you, mr. gerard and you're talking about something the administration is doing to help the oil industry. it's not to say that they've done everything they can to hurt the oil industry. the keystone pipeline that you talked about is a great example of this administration,

basically trying to keep something that's in the interest of americans and american jobs from happening. it looks like, for political reasons and, yet, you know, we've had members up here -- people up here many times talking about this being good for the oil industry. so secretary clinton was up here talking about the same thing. as you can imagine i'm sitting up here and it's a little bit of an extraordinary experience and i wonder if you would explain to me why you think the administration is working so hard to help the whole industry with this treaty and yet domestically doing everything they can to damage it and keep it from being productive. >> i appreciate the question, senator, and the irony wasn't lost on me either when i was invited to testify. let me step back and let me take a broader world, u.s. view. what we're talking about is the

future of the country and where we'll stand in the global economy and our potential opportunities. so in our mind, we separate, if you will, those current and domestic challenges or in our view. inadequacies in terms of allowing us to produce our own oil and natural gas, what you are alluding to, senator is 80% of the continental shelf is off limits today. as a result of u.s. policy where we do have sovereign rights currently and frustrated by that, our views on that have not changed. we look to the future tookly in the arctic and under the expanded continental shelf, we have the potential to move that 200-mile limit out to 600 miles. >> let me ask you this -- >> that's a big deal moving forward. >> and i understand. i appreciate you being here, and i appreciate you experiencing the irony, too. so you'd be better off -- >> i would appreciate his full answer, too. >> well, i had a feeling it might last a long time.

>> there's a lot to say. you have to allow these things. >> the 200-mile piece, though, is probably easier gotten to by u.s. companies, is it not? and the extended piece is deeper and more difficult to explore, is it not? >> yes, oversimplify it in some places in the arctic and the water is relatively shallow in some areas, and off the pacific coast it goes lower quicker and it varies in the area around the world. you can understand the perplexing nature advocating for the petroleum industry with what we see here is something very different. >> i understand. >> yea. thank you so much. mr. mcadam, i -- i heard you talking about laying cable on

the sea bed, and i know you have companies that operate in the uk. as a matter of fact, you have a major base of operations there, and i know that the uk is signatory to this treaty. so i guess i'm confused, if you basis, and most of the companies that the chamber represents that care about this treaty operate all around the world. i mean, these are not companies that operate in tennessee. i don't understand why you can't adjudicate these claims through the u.k. if we're not signatory. it doesn't make any sense to me that all of this is riding upon u.s. -- the u.s. -- us being signatory to this treaty. >> well, senator, i just feel that we would be much more effective having a seat at the table and having that discussion. to go to the folks in the u.k. who are good partners certainly, and try to convince them to

carry our water in talking to another country i think is difficult for them and they have to balance that with all of their priorities and i think one step removed makes us less effective. >> let me make sure i understand correctly. a company doesn't have the ability to try to make claims itself. it has to have a country representing them in the process, is that the way it works? >> well, we would certainly be active with our legal folks and with our operations on the ground, but our opportunity to be back-stopped by the federal government is important to us and i believe will make us more effective. >> but -- but -- but to answer the question clearly, you have the ability to make claims directly, do you not? you don't have to come and ask permission of the united states government to do so? >> certainly. we would use existing -- >> so to say -- so to say that -- that our country has to be signatory to these treatise -- to this treaty when basically every one of these

companies operates on a global basis and has other outlets through which to make claims is not a true statement, is it not? >> well, obviously we've operated for years without the treaty, but our point is today merely we would be more effective if we had it. >> and tell me how you'd be more effective. because i would assume that the many people that work for you in the u.k. believe that they have a very effective government that they work with, and i'm sure when you're there, before their governing bodies you're telling them how effective they are. so tell me why that would make you more effective. i'm having a hard time understanding that. >> well, i think the issue is that you have many countries around the world, like the example of malta that i used, that can take this sort of unilateral action, and there isn't a framework for redress. so this gives us the ability to not only work with -- work with malta directly ourselves but also to bring in the state

department or other federal government rather than having to go a circuitous route through the u.k. >> now the issue of -- the issue of malta is not one of those issues where there's even a veto process, is there? i mean, we can weigh in, but just to cite your malta issue, that's not something where the u.s. government would have a veto process. that's one where we would have a voice among many other nations in trying to cause that to be successionfullycessfully agreed correct? >> i would have to get our legal experts to weigh in on that. i'm frankly not competent to answer that. if you'd like i'll get that for the record though. >> i appreciate you all being here. i don't know whether you're being here as good soldiers or whether this is something you're passionate about, but you certainly are people that i respect, and i'm very neutral on this. i'm here to learn.

i've been to every one of these hearings, and certainly there are people in the audience, senator warner and others that i respect greatly in addition to all of you. i do want to say to you, mr. donahue, who i know well and certainly have worked closely with, your comment regarding the veto on the climate issue is categorically incorrect, and i would like for the record for your legal person to give us an opinion to that correct -- to that statement and i know that you're here and you don't know every word of the treaty as i don't, but i think you're mixing apples with oranges. and on the issue of the climate issue, we do not have a veto process in place for our own country. so if you could have your legal folks tell me differently as part of the official record or tell me that i'm right, i'll greatly appreciate it. i think you're very wrong on that. >> senator, it wouldn't be the

first time i'm wrong. >> yeah. >> but i'm very enthusiastic, and not here on behalf of anybody else as the senator indicated. i was the one that was pushing him to do this. i would be very happy to have our legal guys do that. i think they're probably involved the next 24 hours or so on what just came out of the supreme court, but by early next week we'll be very happy to do it and i'll come up. now that i understand that you are neutral on this and trying very hard to -- as we all did for a long time, to get a good grasp on it, i'll make it my business to come and talk to you about it. >> might bring that legal opinion with you. >> i'll send it beforehand so you have a chance to look at it. >> and i say to all of you, look, i hope that what we'll do -- i do want to make the right decision on this treaty, and as in every issue, i really want to understand the details, but i hope that the responses will be deep and notretore rick

call. i think there are a lot of issues that relate to the climate issue and other issues that matter to us and some of the sovereignty issues matter to us. i respect all four of you. i know there's no way that you could possibly know the details of this. you're here because you're the leaders of your organizations, and you have people in the bowels of your organization that do know the details. but i do look forward to future conversations and very much thank you for being here and i will see you, i'm sure, very, very soon. >> senator, just one point for the record, you know that the chamber is perhaps the most aggressive organization in the city on climate issues that affect adversely this country and our economy, and talk about something i'm really worried about is the climate decisions that were made just two days ago

by the district court. and that's a real problem. so we have our -- we have very good people on this. i'll be very happy to get you an answer to your question, and i just want you to know, i looked at this as a worrisome issue until i believe i have been carefully advised that we're okay here. but i will get that and come and see you. >> and if you could, since -- and i thank the chairman for giving me an extra minute or two. mr. mcadam, i would -- i would love it if somebody from your government relations office would share with me truly since you operate around the world in most of these companies that mr. tim mons, mr. donahue, mr. gerard represent and do, i really would like to know for a fact why it enhances a company's ability to make claims when they can easily make it through any other country that they operate in. i would really like to know that.

if you would send that to me, i would appreciate it. again, i ask these questions with great respect. >> can i take a moment? i want to add, senator, if i could, just for a minute. first of all, you know how much i appreciate the due diligence you do on this stuff, and i really am grateful to you for taking the time and looking at this without all the external influences and kind of working through it, but let me just say to you, with respect to the dispute resolution, and we'll get this for the record. you've asked it of mr. mcadam, but we'll also have our own counsel add in which is important, and we can spend some time with you on it, you cannot -- only a country has access to dispute resolution, not an individual company. so it's irrelevant that they may have a company working here or there. they have to get the country to represent them. and that's where we are disadvantaged, is that the united states can't bring that on behalf of our own company.

you'd have to persuade another country, not the company within the country. so they don't have some sort of ability because they have affiliates around the world to just use the affiliate to advantage their interests. that's number one. number two, with respect to the veto, there's a split decision here. it is correct that the isa, which is the larger group of the representative countries, doesn't have a veto. the council has a veto. mr. donahue is absolutely correct with respect to the council and the issues within the council. and there are specific issues limited to the council. >> but climate is not one of those. >> you're correct, climate is not one of those. you're correct, but, and here's the critical but for you, there is a section which specifically states that you cannot be held accountable to any international law regarding climate or anything else unless you as a nation have signed up to