we are pleased to have jack gerard to speak on behalf of the american petroleum institute and explain why what i said is the case. he is not alone. you can listen to rex tillerson who wrote urging ratification of the treaty. listen to the head of shell oil company that employs over 22,000 people in this country and strongly supports joining the law of the sea. marvin was unable to join us today, but he has submitted testimony for the record. in his full testimony, we place in the record as if right here in full. a short excerpt. if the united states were to become a party to the convention, it could participate in the internationally recognized process for claiming extended continental shelf and the rights over oil and gas which would provide legal certainty for accessing and developing those energy resources. without this clear claim, our

company would not find investment conditions favorable. finally, we turn to manufacturing. as many of you know, rare earth minerals are critical to a large part of modern manufacturing. rare earth minerals are an essential component of communication systems and defense control systems and missile defense control technology and other weapons systems. it includes the breath of their scope of rare either mineral use and it's in electronics and in computers and cell phones and all of the advanced weapons systems, some of which i named. today, my friends, china controls about 97% of the production market for these minerals. can anybody in their right mind suggest that the united states

is safer and our companies are advantaged sitting in a situation where you can't invest because you can't be safe or legally protected and we are sitting on the outside? we cannot secure international recognition for deep sea mining claims that our companies want in order to invest million of dollars unless we are part of this treaty. on rare earthquake minerals and oil and gas, on whatever unknown minerals and or products may be findable under the ocean, we have a choice. we can either join the major industrial nations that already joined up and already using this to their advantage and secure the benefits of the sea for the law of the sea as well as the sea for our businesses and industries or we can remain on the outside to deprive the companies of the legal

investment and operational security that they seek. seed american competitive advantage and watch what other countries take the spoils. i think the choice is clear. today we have speak speaking with much more authority because it's their lively hoot and their life endeavor. i think we need to listen to them. president r the president and ceo of the u.s. chamber of commerce and the american petroleum institute that all of the major producers are partners. jay timmons, president and ceo of the national association of manufacturers and the chairman and ceo of verizon. thank you for being with us. say hello. >> thank you, mr. chairman and join you in welcoming our distinguished panel of industry leaders. i appreciate especially their

efforts on behalf of the law of the sea and willingness to explain how the convention will help them create private sector jobs and every major ocean industry including shipping, fishing, telecommunications, oil and energy gas and the united states succession to the law of the sea treaty. this is not a support and has been unanimous going back to 2003. we initiated the process that resulted in the committee vote to hospital law of the sea to the senate on that occasion. a few years later at a foreign relations committee hearing on october 4, 2007, a business

panel identified and only that powerful unequivocal testimony, but the major industry backed at the convention and appeal for ratification. and the pace of the united states economic activity. this is the paramount issue with the voters. more over because of our national debt, we have few stimulus options. the com bad of a downturn. these increase the importance of the jobs creating impact and our own natural resources.

open up at a critical time of the economy. international decisions related to resource eh e exploitation and navigation and other matters will be made oat context of the convention whether we join or not. we will not be able to go far more likely on the new requirements on our navy and ocean industries the united states is absent. the job creating activities on the decisions ratified. they don't want to be at a

disadvantage. by not joining the law of the sea, we are diminishing the scope. some argued that the united states succession and they are unnecessary to secure the legal basis for companies to fully exploit oil, natural gas, and mineral wealth on the ocean floor. that is not what the opinion of the american companies is. that might invest the resources in this activity. they tell us without the certainty of title provided by law of the sea convention, they would not go forward with many projections requiring large investments. their concern is that after doing the expensive exploration, research, testing and construction necessary to explore the site, they have to be certain.

they challenge their claim. the drilling and mining companies prefer to pay a small royalty beginning in the sixth year of production. in return for international system that gives them undisputed game for the resources produced. this provision was negotiated with the participation of extraction companies. and the value of what might be produced especially since the first five years of production will not be subject to any royalty. our resource extractors are telling us if we want them to move forward with scale, development, of ocean floor resources that contributes significantly, united states energy security and jobs, we need to ratify the law of the sea. i look forward to our discussions.

>> i am reminded by your testimony, but it flagged that this is ground that this committee has been over as previously led that effort. they had a long time association with at stake in this effort. i wanted to acknowledge that and thank him for his ground work and record that we have. if you would clean up. thanks. >> thank you, ranking members and the committee here or will be here. we appreciate this ability to testify. i am pleased with the strong support for approval and the law

of the sea treaty. i focus on why the treaty is in our economic interest and our national security interest and why it's essential to the american global leadership. on the economic side, the trey will be a boom to u.s. economic growth by providing american companies with the legal certainty and the stability that they need to hire and invest. it would codify the legal rights to use international shipping lanes and delay and service under water cables and to develop vast amounts of oil, natural gas and minerals off the points and in the deep water sea bed. the treaty would benefit several industries key to economic growth, job creation, and u.s. competitiveness. it would benefit the energy

industry by providing sovereign rights the sea bed resources 200 miles off our coast. if criteria are met, the zone could extend to 600 miles or the so-called extended continental shelf. proper delynn nation of the extended shelf could bring an additional 4.1 million square miles of ocean floor under u.s. sovereign rights, an area larger than the lowest 48 states. the treaty would allow the u.s. to have an expert elected to the international body that determines the claims in the artic and there going to be a lot of them. securing international recognition for u.s. rights in these areas and defending against the unreasonable claims of other nations is vital to the economic prosperity of our

nation. the telecommunications industry needs the treaty to codify the right to lay and maintain under water cables in the oceans of the world. it also needs them to provide stronger protections for damages by other parties. a wide range need the treat to enable access to new source of mineral resources including rare earth minerals as the deep sea bort flaw. they need the legal certainty and the stability provided by the treaty in order to minimize the investment risks and developing these resources in the extended continental shelf

and an area beyond that, the deep sea bed. that's why the treaty's approval is so important to sustain iing and protecting american interest close to our mainland. the treaty is clearly essential. they have a long and proud history of supporting america's national security interest. for example, we play an stramtal role in mobilizing the industrial might to fight and win world wars 1 and 2. i put that in there because we just celebrated our 100th anniversary and took the time to read about why they were founded and that was to represent the american business community and represent at the highest level

with the greatest country our country needs. we have long supported a national defense and we have recently launched a major effort called hiring our heros to employ veterans by matching them with employers all-around the country. it is in this tradition that we support approval of the law of the sea as it relates to national security. at any given time, hundreds of flag ships and ships owned by companies rely on the freedom of navigation rights cotified in the treaty while crossing the world's oceans. they transport 95% of all goods imported to or exported from the united states, including essential commodities like oil. you can ensure lawful passage of flag and owned ships, the shame

ber strongly supports the navy's desire to cotify rights to freedom rather than rely on the customary international law or a strong navy. the treaty is critical to the global ship. as the world's preeminent pair time power, the u.s. has more than any other country to gain or to lose based on how they are interpreted and change. with or without our approval. our nation and they are best protected by being an active participant. another side comment, there is a

lot of suggestion that this organization set up in jamaica will, but what a mistake we make if we don't join the treaty and put the representative there who would have the absolute power to veto any action suggested by the organization. the treaty who i have a lot of respect for, but two of the chief criticisms. this couldn't be further from the truth. this treaty promotes our sovereignty by cotifying the property rights and our extended continental shelf. it will be ours and people will know it's ours we have every right to defend it. the second is opposition to a small portion of royalties from development that would be going

to the international sea bed authority. my response to that is simple. the u.s. treasury will lose hundreds and hundreds of billions of dollars in royalty revenue by not providing companies the legal certainty and stability to develop the extended continental shelf. it's a simple witness. we get most of the money under that system. the treaty provides that the ability to explore and develop and produce billions of dollars in royalties going to the government. finally like any agreement, this treaty is not perfect. it will be changed like all treaties are. we better be sitting at the table. today the benefits far outweigh the cost and we must protect the benefits. for all of these reasons, the u.s. chamber urges the senate to give advice and consent to the law of the sea treaty. the treaty has the enthusiastic

becoming of every industry and impacts including energy, telecom, shipping, mining, fishing, biotech, etc. it enjoys the support of every living secretary of state and the joint chiefs. senate approval is imperative to expand territory beneath the oceans to prosect vital national security interests to develop new commercial interests and to create jobs. i thank you for allowing me to share these obvious comments. i'm sure the discussion will get more specific, but the bottom line is simple. the benefits are all to accrue to this country and to our economy and we ought to move forward on it. thank you very much. >> thank you very much. that's very clear testimony. we appreciate it. mr. gerard? >> thank you, mr. chairman and ranking member and senators web and corcoran and isaacson.

it's a pleasure to be here with you. i guess we need to thank tom for this opportunity as well, that is right? >> that's right. >> always good to be here with him and the others. on behalf of the 500 member companies with the 9.2 million american, men and women who work in the u.s. oil and natural gas industry, we appreciate the opportunity to be here today to testify in support of success of the law of the sea treaty. we agree with hillary clinton and the former secretary of state condoleezza de vries and with the other secretaries of state before her as well as presidents of both political parties who have urged succession. that joining the law of the sea is truly in the best interest of the united states. the u.s. relies on over 60% of all the energy we consume. recent projections by our own department of energy in the

obama administration shows that 30 years from now, 57% of all the energy we consume in the united states will continue to be oil and natural gas. other projections show that the demand for world global energy led by oil and energy 20 to 30 years. energy is a very serious issue particularly to our global economy. companies spend billions of dollars annually looking for and producing oil and natural gas around the world to give you some insight from 2009 to 2011, the industry spent over $700 billion just in the united states drilling and exploring for additional opportunities. just last week at the lee sale conducted in the gulf of mexico, the u.s. oil and gas industry paid $1.7 billion in bonus bids to the federal government to

secure rights to develop those resources in the gulf of mexico. preliminary studies estimate that the u.s. extended continental shelf as a result of the law of the sea treaty likely totals 1 million additional square kilometers and could contain resources worth billions, if not trillions of dollars to our u.s. economy. the convention provides a clear objective means of asserting u.s. authority and gaining international recognition of that authority, reducing the potential for jurisdictional conflicts between nations. this provides certainty for business planning so that companies can manage their financial risk over the lifetime of their investment. i might add, that when we in the oil and gas business look for investment opportunities, we're not looking quarter by quarter, year by year.

we look 10, 20, 30, at 40-year horizons when we're talking about multibillion-dollar investments. this certainty will increase the likelihood of companies investing in the extended continental shelf. this, in turn, will result in more u.s. jobs, more u.s. revenue to our federal and state governments and many other benefits. the convention also broadens the definition of the continental shelf in a way that would significantly favor the united states. as tom touched on earlier, it would secure an additional 4.1 million square miles of ocean and provide natural resources in the arctic and other areas where in other countries and russia, for

instance has already laid claim will protect our navigational rights and freedoms for our vessels. we understand that there are legitimate concerns about certain aspects of the convention. we greatly appreciate the attention by members to ensure that this convention is truly in the best interest of the united states. i'm here today to express to you the benefits for the oil and gas industry. our expectation is the administration and the congress will continue to work to ensure that the u.s. interests are protected as they represent the nation in the implementation in the treaty. in short, the law of the sea convention will advance and protect america's energy interests. it will mean a level playing field and new opportunity for marine sources development all around the world. thank you again, mr. chairman and members of the committee, and i look forward to your questions. >> thanks very much, mr. dryden and just before you do start, let me just say in response to your expressed hope that the

congress -- that the senate is going to make sure that we protect and address any of those concerns. i want to say to my colleagues that we will have a set of specific declarations and understandings that clarify some of the concerns that have been raised by people as they've govern along here. so there will be crystal clarity with respect to issues raised by tax and issues and that will be taken care of. >> thank you very much, mr. chairman, senator lugar and members of the committee for the opportunity to speak about the law of the sea treaty which is vital for both our national security as well as our economic security. the national association of manufacturers is the nation's largest manufacturing trade association and we represent 12,000 manufacturers of all sizes across our country. i am pleased to have the voice of manufacturers in support of

the adoption of the law of the sea treaty because its approval is absolutely critical for the manufacturer's ability to compete and succeed in the global marketplace. one key to manufacturing growth and competitiveness is exports. 95% of the world's consumers live outside of the united states so reaching these potential customers is absolutely necessary for manufacturing competitiveness. most significantly it is 20%. 20% more expensive to manufacture in the united states than it is among the major trading partners and that's after you remove the cost of labor. this treaty will help reduce the cost of manufacturing in two very important ways. first, it will provide new opportunities as you've heard from my colleagues here, for energy exploration, secure and reliable sources of energy are a significant concern for manufacturers which consume one-third of our nation's energy output.

secondly, it will open up access to critical inputs from many manufacturing applications. if you use a cell phone or a computer or drive a hybrid car, chances are that components of that product contain what are known as rare earth minerals. rare earths are the basic inputs in the production process for many items such as renewable energy, products, defense products, consumer electronics and others. today, as was noted by the chairman, china produces upwards of 95% of the world's supply of rare earth minerals. brazil, india, malaysia and canada are the remaining sources and while china uses 60% of the rare earths that it means today there's no doubt that it will likely use all of that, that it produces eventually. if that happens, that's going to jeopardize manufacturers' access to these materials. costs will rise as they have been.

not only on manufacturers, but also on consumers. the economy will suffer and more jobs will be in jeopardy. the united states has an opportunity to tap a new source of rare earth and avoid the scenario, but first, we need to ratify the law of the sea treaty. the development of resources on or near the deep sea bed, companies in the united states are unlikely to invest heavily in deep seabed mining because of the risk of legal challenges to their activities. today, many u.s. companies have means to explore and develop these resources and minerals, but they will only do so if there is a structure in place that contains internationally recognized agreements. ratification will give companies the certainty they need to begin to develop these resources. mining companies whose governments have joined the convention have access to the international bodies that grant

the legal claims to operate in the deep sea bed area. u.s. companies are excluded by those because we have not adopted the treaty. manufacturers cannot afford for the united states to sit on the sidelines when it comes to the law of the sea treaty. we're in a global economy, and countries are woing, and to take away the mental, and the manufacturing in the united states maintain our economic position. we need to adopt policies that promote long-term and sustained economic growth. manufacturing in the united states employs over 12 million americans with high-paying jobs and the sector supports 5 million more jobs in this country. no doubt, everyone in this hearing room would like to see those numbers grow. a strong and prosperous country needs a strong manufacturing sector and this treaty will strengthen manufacturing and it will strengthen our nation. thank you again for the opportunity to speak with you today. >> thank you very much, we appreciate it. mr. mcadam.

>> thank you, mr. chairman, ranking member lugar and members of the committee. thank you for the invitation to speak before the committee today. i would ask that my full remarks be entered into the record. >> without objection they will be. >> so far today you've heard a broad perspective from my esteemed colleagues on the law of the sea. what i would like to do is discuss ways that the convention will strengthen protection for a global, undersea cable operator. in the telecommunications industry, during which time we've had both fixed and mobile networks domestically and internationally. as a major communications company utilizing the international sea bed to provide voice, video, internet and data services over a network of more than 80 submarine cables, verizon supports the u.s. ratification of the law of the se