president obama holds his year-end news conference this afternoon starting at 1:30 eastern before he leaves for his christmas vacation in hawaii. you can see the president live on our companion network c-span, again, starting at 1:30 eastern, with your phone calls and your comments via social media. an then at 8:00 tonight also on c-span, interviews with two committee chairs who are retiring from congress beginning with dave camp, then buck mckeon who can chairs the armed services committee. here are a few moments of conversation with congressman camp. >> i knew i wanted to get on the ways and means committee and

obviously worked hard on welfare reform and adoption issues and trade issues, but at that time the steering committee was called committee on committees. you knew you were kind of in a government process. and it really is a campaign and it's about the votes on that committee who determines who gets a seat on a committee like ways and means. so you're talking to every member on that committee and there's a particular member that i -- that really wasn't for me. and i just didn't know what to do and just sort out out of the blue i dialed president ford's office in california. >> had you met him? >> i wasn't sure he knew me. i certainly knew him. his secretary answered the phone and said, oh, congressman camp, hold, and he got on the phone and said, dave, how are you? then he said, you know, i used to be a leader. somebody owes me a favor and i'll make a call, and he did, and that person came to me on the floor and said anybody who can get former president of the united states to call me i'm for. and so he changed his vote and was for me and i did get on ways

and means. i told susan ford that story also once. i'm not sure she cared, but it was really a changing moment for me and he was very gracious. the fact he was in his office and took the call, i had not scheduled the call. i literally called him out of the blue as -- it was very much a hail mary pass. >> you can see this entire interview with ways and means committee chair dave camp tonight on c-span. just before that, starting at about 8:00, armed services committee chair buck mckeon. they share personal stories and talk about legislative achievements and give their thoughts on the future of congress. here are some of the programs you'll find this weekend on the c-span networks. saturday night at 9:30 on c-span, actor seth rogen at the harvard institute of politics. sunday evening at 8:00 on c-span's "q&a" author and town

hall dotcom editor katie pavelich. on c-span2 saturday night at 10:00, on book-tv's "after word, "an argument that the top universities are missing the mark in education and that students should learn lessons in how to think critically, be creative, and have a goal in life beyond the material. and sunday morning, just before 11:00, book-tv visits lafayette, west lafayette, indiana, to interview several of the city's authors and tour its literary sites. and on american history tv on c-span3 saturday at 6:00 p.m. eastern on the civil war, historian damian shields talks about the life of irish-american soldier patrick cleburne and his role in the confederate army during the battle of franklin, tennessee. and sunday afternoon at 4:00 on "real america," a 1974 investigative piece by san francisco's kron-tv on the history of police brutality in

neighboring oakland. find our complete television schedule at c-span.org and let us know what you think about the programs you're watching. call us at 202-626-3400, e-mail us at comments@c-span.org, or send us a tweet @c-sp @c-span #comments. join the conversation. like us on facebook. follow us on twitter. the united states has banned exports of most crude oil for almost 40 years. congress passed the ban in 1975 to try to reduce u.s. reliance on foreign oil. earlier this month, the house energy and commerce committee held a hearing to examine whether the crude oil ban should be lifted. >> i would like to call the hearing to order this morning.

and before we get into the subject of the hearing, i would mention that this will be the last hearing in the 113th congress for this subcommittee. and i did want to recognize a number of members who are on the subcommittee and have been valuable members of congress for a number of years who will not be coming back. first, on our side of the aisle, we have ralph hall of texas. all of you know ralph. and unfortunately he was involved in a car accident over the -- during the -- right after the election, and i think he's still in the hospital. we have lee terry from the great state of nebraska on this subcommittee. dr. bill cass. he'll be moving over to the u.s. senate. and cory gardner will be moving over to the u.s. senate. but i just wanted to thank them for the many contributions that

they have made and the great job they did representing their constituents. and then on the democratic side, of course the ranking member henry waxman of california served many years on this committee as chairman and as ranking member, will not be returning. mr. john dingle, who all of you know as chairman of this committee for many years. john barro of georgia and donna kristenson of the virgin islandss. so i just wanted to thank all of them for their many contributions. and with that, you can talk about them in your opening statement, bob, if you want to. that's okay. anyway, i'll go on at this time right now as myself for an opening statement. this morning's hearing we're going to be focused on the energy policy and conservation act of 1975.

we're going to get a little history lesson. it established the strategic petroleum reserve, also established cafe standards, and also set the prohibition on the export of crude oil. and as you know, ronald reagan eliminated the price controls when he became president, certainly strategic petroleum reserve and the cafe standards are still out there. and have a great impact on our economy and our society. and the big question that we hear more and more about, though, is the wisdom of maintaining this prohibition on the export of crude oil. of course, under the act, the president does have the authority to allow the export of

crude oil. but joe barton and others have raised the issue about adopting legislation that would remove this prohibition. and just as we had extensive review of the impact of such a move on the export of natural gas, that is what we intend to do on this question of export of crude oil. so we're going to have a lot of hearings. we want to hear from all sides of the issue because there are a lot of different opinions about it. and that is why we're delighted to have our distinguished witnesses with us this morning to provide us with this historical perspective. and we'll be having some more hearings about it because as i said we want to be very thorough before we make a decision to go one way or the other. and with that, i yield back the balance of my time and i recognize the gentleman from illinois, mr. rush, for his opening statements. >> i want to thank you, mr.

chairman. i, too, want to thank and congratulate and commend those departing members from this subcommittee. they were all very, very highly esteemed and contributed mightily to the work of the subcommittee, work on the congress, and certainly benefiting all the citizens of our great nation. and i just want to take my hats off to them and wish them good biddings and bright futures and many continuing presence as they many continuing blessings as they go forward in their lives. i want to take particular time to bid farewell to mr. waxman, who has been the former chairman of this -- on the subcommittee. he is an extraordinary leader on environmental issues and other

issues, particularly as it relates to consumer protection and protection of the environment and the harsh realities that we're continue fronted with today, climate change and many, many others. and i want to also take a moment out of my opening statements to commend the one man who has affected my life more than any other legislator in my tenure in congress, and that is john dingle, who has not only been a true fripd of mine and worked with me and advised me, but the kind of legislator w.h.o. learn just by watching john. he doesn't have to say anything especiallily to you. you just learn how he operates, watch him from afar, and you will learn more than most

legislators learn just watching the example of john dingle and his impact on this committee will never fade. so mr. chairman, i want to thank all of those departing members for their contribution. and i want to thank you, mr. chairman, for holding this important hearing as we enter into an era of the new american energy renaissance that we are experiencing. it is important to better understand all of the implications that are associated with exporting crude oil due to the recent surge in domestic production. i think it is entirely appropriate for this subcommittee to visit the conservation act of 1975 which restricts the export of domestically produced crude oil as conditions today have changed

dramatically from the 1970s when the bill was first enacted. what is less clear is how long this current inquiry and oil production will last and what type of impact of lessened demand will have permanently on the domestic consumers. mr. chairman, i consider this issue with truly an open mind and i look forward to hearing from today's panel of experts. to be more specific, i'm looking for answers regarding how exporting this important commodity will impact american families and the american economy in general in regards to the domestic gas prices, consumer goods, manufacturing, and jobs. mr. chairman, i'm going to close

my mouth and open my mind now, and i want to thank you, now -- i yield my time. but i will yield my time back, mr. chairman. thank you so very much. >> okay. thank you very much. is there anyone on our side of the aisle that -- okay. joe, you are recognized for five minutes. they had not instructed me who all was speaking, so i recognize the gentleman. >> i do want to talk for a couple of minutes. i can give some of my time back. i do want to talk for a couple minutes. thank you, mr. chairman. we have a number of members on this committee that probably were not alive when we passed the energy policy and conservation act of 1975. in that same time period, and i

believe in that act, we put into place a ban on the export of crude oil from the united states. now, in the mid-1970s mr. chairman, the opec oil cartel had had an oil embargo against the united states in western europe. and it devastated our economy. i can remember living in crockett, texas, and i could buy ten gallons of gas on odd days. i could go to the gas station and buy ten gallons of gas on odd days based on the last digit in my license plate. that was not fun. there were gas lines. there were plant closures. we were producing -- i can't remember exactly, but we were probably producing 5 or 6 million barrels of oil a day but we were consuming in the

neighborhood of 15 million to 16 million, i think. so putting a ban on crude oil exports at that time made some sense. to husband that resource as a strategic commodity. well, what is the situation today, mr. chairman? the united states is the number one oil producer on a daily basis in the world. today, we'll produce in the neighborhood of 9.5 million barrels of oil in the united states of america. if you combine the oil that we import from canada and mexico, our nafta partners, you can put that up to another 2 million barrels a day, maybe even three. our consumption is down, our production is up. we have a surplus on the world market today, mr. chairman of 2 to 3 million barrels of oil a day. and the result, instead of ten million barrels of oil, i think today west texas intermediate

closed at six dollars a barrel. that is a good thing for the american consumer, mr. chairman. it is a good thing you're holding this hearing. and i would hope in the new congress we take a look at the bill that i have introduced this week, hr-5814. it's a page and a half, it is very simple. it repeals the ban on crude oil exports, and it requires a studñ reported to this committee of what we do with strategic petroleum reserves. it is a different world today, mr. chairman. and when you're number one you use that status. if we allow our producers to export the crude oil that can't be consumed here in the united states or refined in the united states we put pressure on opec and russia. we create jobs here at home. and we make sure that that world

price which sets the crude oil price is based on real supply and demand. and that is a good thing for everybody. so i am extremely pleased that you're holding this hearing. i would ask you also to look at such anachronisms, i think we should also look at the jones act. and as i said earlier the strategic petroleum reserve. with that, mr. chairman, i still have about a minute and would be happy to yield to whoever you wish me to. >> does anyone seek this additional moment? okay, the gentleman yields back, either to you, ms. caps, or mr. yarmuth, do either of you want to make a comment? we've already thanked you for your service, john -- okay, well, that concludes the opening

statements. and as i said we have a distinguished panel of witnesses. and i will just introduce you as i introduce you to make your opening statement. so first opening statement will be by adam kiminsky, you're no strange thoer this -- stranger to this panel. you're recognized for five minutes for your opening statement. >> chairman whitfield, congressman rush, members of the subcommittee, thank you for the opportunity to be here today to discuss the history of the u.s. ban on crude oil exports and to contrast the market conditions at the time of the ban with those today. the u.s. energy information system, eia, is a statistical and analytical agency at the department of energy. by law, eia's data, analyses, and forecasts are independent of any other officer or employee of the u.s. government so the views

expressed here should not be construed as representing those of the department of energy or any other federal agency. at the time of the passage of the energy policy and kos conservation act of 1975, u.s. net imports of petroleum were rising rapidly due to declining domestic production while growth in consumption was rocketing up. u.s. net oil imports more than doubled between 1970 and '78 from 3.2 million to 8.6 million barrels per day, driving imports a share of total consumption. internationally, when opec declared an oil embargo against the united states in 1973, 65% of rising u.s. crude oil imports were coming from opec countries. to protect consumers from price shocks, u.s. policy response at the time was to limit the price for oil produced from u.s. wells existing in 1972 while allowing new oil to sell at world market

prices, limiting exports prevented circumvention of these domestic price controls. however, the separation of new and old oil pricing did not really stem the production declines as oil production in the lower 48 states fell some 23% between 1973 and 1980. by 1981, it was clear that the policy wasn't working, and the price and allocation controls were removed. that's on figure two of my testimony. for nearly three decades after the removal of price controls, decline in production coupled with rising demand pushed the u.s. towards ever increasing imports until net imports a as share of total u.s. petroleum consumption peaked at 60% in 2005. restrictions on crude oil exports remained in place, but limited modifications from time to time allowed exports to canada, exports of production from alaska that went through the transalaska people line, and

certain of california heavy crude oil. since 2008, however, these conditions have been reversed partly as a result of the growth in domestic supply and also as a result of slowing demand. u.s. domestic crude production has increased some 68% to its highest level since 1986. meanwhile, between 2008 and 2014 this year we're estimating for the full year, total u.s. liquid fuel consumption fell from 19.5 million barrels per day to 18.9 million barrels per day. the u.s. went from being the world's largest net importer to becoming the -- a big exporter, net exporter of petroleum products. in 2014, net imports as a share of total u.s. petroleum consumption is now down to below 30%, close to 25%. the dramatic production growth in the u.s. midcontinent and

canada has resulted in logistical constraints that are reflected in a wide variation of prices for domestically produced kruds. in 2008, benchmark crude west texas intermediate or wti sold for a premium of $2.73, a premium higher than brent that comes from the north sea. in 2014, through october, wti has been trading at a discount of over $6 a barrel to brent crude oil. eia's latest short-term energy forecast recent trend in u.s. petroleum markets will continue into 2015 with domestic crude oil production averaging 9.4 million barrels a day, 10% above the 2014 level. gasoline demand and net imports as a share of domesticic does me tick may decline.

but more so i think in the longer term than the very short term. petroleum market conditions today are very different than they were in the 1970s when the ban on crude oil exports was enacted. key trends in u.s. oil markets have reversed. then demand was rising rapidly and production was falling. now production is falling rapidly and demand is falling. u.s. crude production may soon hit an all-time high sur centering papassing the previous record set in 1970. gasoline demand is down from its peak and likely to decline even more as the vehicle fleet becomes more efficient. in addition to this personal spending reversal, international oil production is less concentrated, opec's share of production is down from 53% in 1973 to about 35% today. the existence of oil contracts on the futures markets, the development of benchmark crude oil pricing, and the availability of basic data from eia created by congress in 1977 have all brought greater

transparency to the oil markets. as described in my written statement, eia is actively pursuing a number of important issues related to the timeliness and detail of oil market data pip'd like to thank you for the opportunity to testify here today and hope to be able to answer your questions. thank you. >> thank you very much. our next witness is the president of the energy policy research foundation and you're recognized for five minutes. >> thank you, mr. chairman. >> be sure and turn your microphone on. >> yes. i think we have some slide. the next slide. so what i'd like to do is sort of put a little bit of this in context. and the first thing i think we ought to talk about a little bit is what is energy security. so we tend to think about energy security as a concentration of low-cost reserves in unstable parts of the world which tend to provide two risks to the u.s.

one, they can restrict output and charge higher prices that would prevail in more competitive environments, and, two, somebody's got to go out of business with more terrorism even embargoes. also imposing price spike and large costs on the national economy. so one of the best ways to deal with this threat or this problem is to have a production platform in a stable part of the world, which turns out to be north america. and if you look at what's happened here in this slide, you can see that you take the u.s. and canada together, which congressman barton just spoke about. we have had a remarkable increase in production, and it's very important to look upon this through a north american lens, but it is this north american lens that is so stable. and it is this rapid run-up in production, particularly if you include natural gas liquid, that has made a remarkable change.

next slide. now, you can see prices have come down. but i don't think we quite understand what this means. the reduction in price, and i've testified here many times, where members have said, well, you know, we know if we open the ban more, if we do x or y we'll get more production, but opec will just cut production, the price won't come down. well, the price has come down. and this price decrease is an enormous benefit to the world economy. the world consuming centers are going to get a savings of approximately $1.3 trillion next year if these prices persist. the american driver, who spends about $3,000 a year in gasoline, is going to get an $800 savings. this is an enormous boom and benefit to the national economy, to the world economy, and it's being delivered to us through these production gains we're having in this stable north american platform. we want to preserve that platform. right? we want to make the distribution

crew efficient, that's why we need keystone, we want good regulations, open up the federal lands a lot more. all this production we've seen has come from federal lands. next slide. this shows you the permanent activity for oil and gas drilling permits just for 90 days prior to the december 1st 2014. of course we're a little concerned that these lower oil prices -- and we're getting some evidence that the permanent activity is coming off, and i think that is a good reason to have this hearing. we need to look at our whole regulatory structure and say, okay, what do we need to do to make it as efficient as possible, because once again, we want this platform, the upstream, midstream, and downstream, we want it to perform as best as possible. and we are concerned about this, but i must say we met with some of the world's best extraction technologyists in houston the last cup dales. there's a lot of exciting things

going on out there. as long as we have an open system, i think we'll find ways to drive down these extrax costs. next slide. this is our estimate of sort of $80 environment of what we think the u.s. could do, at least in the near term by api gravity. we're producing a lot of light sweet crude and we're not sure how much this is going to be disturbed by these lower oil price environment. probably going to see some reduction there. but, you know, the outlook is still very positive. next slide. i want to leave you with just a couple of things here. one, if you look at this slide, it's quite interesting. traditionally, conventional oil had a very modest decline rate, maybe 5%, and a pretty high recovery factor, as much as 50%. what i don't think we understand is that even though we have this very high decline rate in these unconventional resources we have

now, we have to keep drilling, our recovery factor is quite small. small improvements in this recovery factor are going to make a big difference. that's why we want to see this technology continue to progress. and, you know, if you look at this whole north american success story, we get back to epcott, keep in mind that we should have a lot of humility about how we proceed. we had mandates on ethanol. we had six-month oil embargo, then we had ten years of price controlings. we had a fuel use act, which prevented the use of natural gas. so as we go forward, one of the things i want the members to think about is what are the benefits of an open system. you know, william pratt, the famous -- lois pratt, the famous geologist said in the '30s, oil is first discovered in the mind of man. and i think you want to keep that intellectual capacity going here in the u.s. thank you, mr. chairman. >> thank you very much.

and our next witness is dr. charles eminger, senior fellows at the brookings institution. thank you for being with us, and you're recognized for five minutes. ? thank you, mr. chairman, and thank you, congressman rush, for invite megato testify this morning on the origins of the crude oil export ban, which ironically was enacted nearly 40 years ago. given the profound changes that have occurred in unconventional oil and gas production that we've already heard about over the last six years, i think it's important to look back and he re mind ourselves how our surgery situation has evolved since 1975. in the years prior to the opec oil embargo, the chief issues dominating energy policy in the united states were the debate over the future of nuclear power, especially whether we should recycle plutonium and develop the breeder reactor, price controls on domestic oil and natural gas, which were enacted by president nixon back

in 1971 out of concern that inflation had reached the dangerous levels of 4.4%, and various programs, both the voluntary import oil program and a mandatory oil import program, to hold down oil imports as protection for our domestic industry. in reviewing this history, and this is a critical point, what stands out is just as is the case today, most energy issues were discussed in isolation from one another. on the geopolitical front, the early '70s saw momentous changes in the middle east and north africa as king hidris was deposed by gadhafi and the major oil producing companies mounted a unified campaign against the petroleum companies to extract more of the economic rent from their oil production. under two major agreements negotiated in tehran and tripoli between the international oil companies and opec, the opec

concerned about inflation and a general sense that they were not being treated fairly by the international oil companies, demanded a major increase in the price of their oil. after these two agreements, opec was able to introduce an escalation clause in its contracts that it believed would protect their members from inflation. this proved, however, not to be the case, but what helped opec was, as mr. shimensky noted, was the surging demand worldwide not only in the united states but in western europe and japan, which allowed opec to every time a contract was up for renegotiation demand further upward price revisions. mr. chairman, it's worth noting that the global market conditions in the early '70s could not have been more different than they are today as we heard from congressman burton. demand for oil throughout the industrialized world was skyrocketing. in the united states, domestic production had peaked in 1970, leading a cabinet task force to recommend the gradual

elimination of the quotas under the mandatory oil import program. in retrospect, given the changed circumstances confronting the u.s., it is remarkable that this recommendation did not receive more salience from the congress despite the fact that u.s. oil consumption was skyrocketing, domestic production was peaking, and oil imports were up to nearly 30% of u.s. consumption on the eve of the oil embargo. the u.s. could not have been more ill prepared for the embargo. in response one of the primary actions taken was an act of complex regulatory procedures for oil and gas prices as well as an incredibly complex system of allocation controls leading to gasoline lines in the districts and surplus supplies in potomac. unfortunately, these were so ill continue sooeched they accentuated the impact of the crisis and exacerbated gasoline shortages causing long lines for

angry motorists buying regulated volumes of fuel. and i'm glad the congressman got ten gallons because as a graduate student i only got five gallons in new england. [ inaudible ] in response to the crisis, president nixon launched project independence designed to eliminate oil imports by 1980 when comprising a host of initiatives including the energy policy and conservation act. under epca, the president was granted the authority to restrict exports of coal, petroleum products, natural gas, petrochemical feed stocks, and supplies of materials and equipment for the exploration, production, refining and transportation of energy. epca also authorized the president to exempt crude oil and natural gas exports from such restrictions where doing so was deemed by the president to be in the national interest. as the act today only relates to crude oil, the main exceptions that have been made are predominantly for shipments to our neighbors in canada and mexico and recognition of our

historic trading relationships. other exemptions to the ban are noted in detail and my formal testimony. today through modifications to epca, the u.s. allows unrestricted ekts pofxports of fuels except crude oil, and natural gas has to go through a cumbersome regulatory procedure, but it is not fwaned. the only express ban that remains today is on crude oil. in reviewing the history since the early '70s, it is apparent whenever the u.s. government has tried to favor particular fuel absent market realities, there have been unintended consequences which have been deleterious to the u.s. economy and to our national energy security. controls on natural gas prices led to the failure to develop the alaska natural gas transportation system, creating massive natural gas shortages in my home territory and the industrial midwest in the winter of '77-78 with devastating economic impacts, some of which remains to this day. the ban on using oil and gas and

industrial boilers and power generation led to a major switch away from gas and oil towards coal. this rush towards coal has led to scores of ancient coal facilities that now have to be replaced as part of our international climate policy. it is thaeft the u.s. energy situation today is far different from what it was when epca was enacted. with crude oil production continuing to rise, it would be detrimental to u.s. energy and economic policy to keep the ban on crude oil exports. keeping the ban and attempting to manipulate policy to control a globally traded commodities with hopes of the u.s. oil boom will lead to energy independence is a fallacy as the u.s. is part of the global market and must therefore participate in it. lifting the ban will generate paramount foreign policy benefits. it will increase u.s. gdp, and brookings did a major study on this issue that's on our website if anyone cares to look at it,

and it will reduce unemployment, all of which will be foregone if the ban remains in place. thank you, mr. chairman. >> thank you. and our next witness is debra gordon, who's the director at the carnegie endowment for international peace. and you're recognized for five minutes. >> subcommittee chairman woodfield, ranking member rush, distinguished members of the subcommittee, thank you for the opportunity to testify today about epca and oil transition. in my remarks i will discuss three key points. first the need to understand the changing conditions influencing today's crude oil market. second, the need for better information about the makeup and specifications of u.s. oil, and lastly, the need to deal with the environmental consequences from an unconditional lifting of the oil export ban. i explore these issues in greater detail in my wherein testimony, which i've submitted for the record. the bottom line is that oils are changing. a more complex hydrocarbon resources replacing oil.

we need to understand the environmental impacts inherent to different oils. best way to position america for success amid energy abundance is to generate information necessary to make wise decisions among many oil options. the truth is we know precious little about these new resources. the nation need reliable, consistent, detailed, open-source data about composition and operational elements of u.s. oils. significant information gaps have accompanied the nation's oil -- increased oil production. although epca was adopted in response so to a set of -- a specific set of oil supply problem, it can serve as a template for addressing some of the shortcomings that exist today as america struggles to manage the economic, geopolitical, and climate impacts of its new oil bounty. it will be important for policymakers to think comprehensively about the full range of oil issues. several epca -- merit careful review and updating. one, widely expanding oil data

collection, making this information publicly available. two, increasing the heavy-duty vehicle efficiency standards for trucks and marine vessels that move the oil and petroleum product that we're trying to consume less of at home. and three, revisiting oil accounting practices so that the s.e.c. is fully informed about oils that are on tap to bolster u.s. markets. america is one of the first in line to win the unconventional oil lottery. but despite newfound energy resources at home, the u.s. exists in an increasing lly interdependent world. as such, if we minimize consequences, america will be better positioned to charter a path others can follow. two questions require attention. first, to policymakers and the public have sufficient information about america's oil? unfortunately, they do not. ironically, there is more detailed open-source data about opec crudes than the oils in the balkan, permian, and eagleford.

in seeking to obtain and verify these needed oil data, we have encountered several obstacles from data inconsistencies to withheld data to government limitations on expanding oil reporting. i'd be happy to elaborate on any of these issues. the overarching concern, however, is oil markets can not function efficiently without transparent, high-quality information. question two -- what are the environmental risks these new oils pose? the carnegie endowment is developing an oil climate index that compares global oils with one another in terms of total green house gas impacts. together with stanford university and the university of calgary, we are modelling the entire oil value chain from where the oil comes out of the ground through to how the products are used. our preliminary findings based on 28 sample oils, global oils, are that oils green house gas footprints vary by at least 80% from one another. in other words, replacing a high

green house gas oil with a lower one could almost halve the impacts that green house gases for every barrel of oil. there are gassy oils like the balkan or nigeria, where gas associated with oil is flared or burned instead of separated or sold. heavy oils use more heat, steam, hydrogen through their value chains to use more bottom of the barrel products like petroleum coke, a coal substitute. watery oils, like those in california's san joaquin valley, where it takes a tremendous amount of energy to lift as much as 50 barrels of water for every one barrel of oil that you produce. and extreme oils like those in the gulf of mexico that are miles below the surface or those in the pete bogs in alberta. as one of the world's fastest growing oil producers, the u.s. has the opportunity and the responsibility to be a global leader in the energy sector.

a balanced energy policy informed by oil transparency must guide energy decision making in ways that satisfy u.s. consumers, strengthen the american economy, protect the climate, and enhance national and global security. in closing, a national discussion, one informed by reliable, open-source data about the composition, quality, and environmental profile of new oils will be key to making effective and sustainable decisions. thank you. >> thank you, miss gordon. i thank all of you for your testimony. at this time, i'll recognize myself for questions, and then we'll give every other member the opportunity as well. just from a practical aspect here, anytime you start talking about crude oil, most of the american people think about gasoline prices. that's why it's more volatile, i think, when you talk about

exporting crude oil than certainly natural gas or something like that. do any of you have an opinion on if you were at a rotary club how you would explain that exporting additional crude oil would not necessarily raise gasoline prices? mr. shimensky? >> mr. chairman, it's always a challenge. usually at those rotary club functions i get asked why gasoline prices are so high. lately i haven't gotten that question. >> right. >> the eia has tried to examine your question from the standpoint of how gasoline prices are set in the u.s. markets and what gasoline prices relate to. and what we found in a study that we published just a short while ago was that these two

benchmark kruds thcrudes that i about, one in the u.s., wti, and brent, is that gasoline prices historically tend to be much more closely related to brent crude oil prices than to the domestic benchmark. the second thing that we found was that u.s. gasoline prices tend to be more closely related to gasoline prices in markets like singapore and rotterdam in the global markets than to comparing let's say chicago prices with prices in the gulf coast! the conclusion that one would draw from that is that gasoline prices, because we are exporting and importing so much gasoline, are really set in the global markets. there's one market, gasoline

prices in the u.s. tend to reflect that markglobal market, that if exports of crude oil resulted in higher prices for west texas intermediate or crudes that are benchmarked to that would not have much impact on gasoline prices. >> i'm glad you mentioned we're already exporting gasoline anyway. so we're talking about -- >> quite a bit, actually. >> quite a bit. did you have a comment? i think how i would explain is that if you want to constrain volatility in the market, if you want to constrain rising gasoline prices, you should promote a very stable and growing production of crude oil in north america. >> right. >> and we have evidence that this is having a big effect. and that's the answer. as adam said, we're well integrated into the world oil market. what we can do is have a stable

growing production of crude oil outside of these more volatile areas. >> right. do you have a comment? >> if i could just add, mr. chairman, i think an easy way to look at this is since, as mr. shimensky said, gasoline prices are predominantly set in the international market, if we have a set volume of crude oil in that market and all of a sudden we put more oil into that market, adding to supply while demand stays relatively constant on the basis of kind of fundamental economics, more supply, constant demand, prices should come down. and then refiners buying that oil around the world will in theory if they wish to be competitive will lower their product, petroleum product prices including gasoline and hopefully for new england home heating fuel. i think that's the way i find sometimes trying to explain it seems to have say in it.

>> miss gordon, do you have a comment? >> i don't know that it would be easy for consumers to understand this, but because oils are so different, the oils that we are largely now set to refine, the heavier oils, don't preferentially make more gasoline, they make more diesel. so the oils that we're now looking to export, light tight oils, they do. they're lighter oils. they make more gasoline. so we might be getting ready to export the perfect oil to make more gasoline in order to keep and refine the oil that makes more diesel. it's not a consumer issue then because our consuming public doesn't use dee el. they use gasoline. it gets a little complicated here. the big question that lou raised is volatility. i think consumers need to understand in the future possibly not being explained high prices but volatile prices. volatility will really hurt america. we're large part producer and consumer of oil and product. if the markets become volatile, we'll hurt more than anyone else.

>> okay. well, my time has expired. mr. rush, you're recognized for five minutes. >> i want to thank you, mr. chairman. i share in the optimism of the panel. but there are some cautionary items, cautionary indications that i want to at least consider for the record. miss gordon, what type of impact would lifting the crude oil ban have on climate change? are these precautions or conditions that congress should consider? lift the ban on crude oil all together? >> it's a great question. and the reality is as my testimony stated, we just don't

know enough about these light type oils that are coming out of america. what we do know is like i said they're lighter oils. refineries are set to run heavier crudes. they produce more bottom of the barrel products. the heavier oils are generally more green house gas intensive. we're setting ourselves up to be a refiner of higher green house gas oils, which puts a bigger burden on america to control in terms of global climate agreements, control what we're doing when we're handing off our oil. so i think that there are real questions from a climate perspective. what are these oils and what are we giving away. >> is there any other panelists would like to comment on this? are there any other panelists that would like to comment on this? let me ask you, mr. evans, in your written testimony, you state that lifting the ban on crude oil exports would boost economic wages and employment training and overall the economic oils in the nation.

what in your opinion are potential downsides to removing the ban? >> i don't believe, congressman, that there are sizable downsides to lifting the ban. >> i don't believe there are possible down sides. we don't know completely the impact on green house gases. and a major study that brookings recently did in association with the economic consulting firm, we have some very detailed data in there on what we think will happen to employment, overall economic welfare for the nation and the numbers in various scenarios almost constantly positive. our study has been seconded. maybe a couple came out before us. but there have been five or six major studies done by ifc, done by -- some by the government that concluded the benefits far

outweigh any potential costs. so i guess i'll leave it at that. >> i want to ask the other panelists, do you have any comments regarding the economic impact on lifting the ban? >> i think whenever we go to a free trade alternative, you know, everybody here has a lot of training in economics. no one is going to be against free trade. we think it's a good thing. it's going to make the economy more efficient. but there will be dislocation here. i think some sectors -- some segments of the u.s. refining industry, particularly if we have this high production scenario, we'll find themselves in a less economically advantaged position. however, we have a very complex and advanced refining sector in the united states. the capacity to refine very

complex kinds of crudes are there. think we want -- as we go, if we go to lifting the ban on crude oil, we want to look and make sure, are we burdening the down stream sector with regulations? what is our best doing? what is ozone regulations doing? what is the permit doing? in other words, you know, also we need to look at some -- some kinds of adjustments. it's very tough. i understand. there will be adjustments. on balance, the economy will be better off. i think in the short term we can probably handle what's going on right now. it's really a more longer term problem. but i also think that probably immediately we should look very closely at the compensate issue which is starting to cause a hot of problems. >> congressman rush, let me just add that the reason that the u.s. is exporting gasoline from the gulf coast is that we really

have a surplus of gasoline. domestic demand for gasoline has been declining and is likely to continue to go down as autos become more efficient. and in a sense what refiners are doing is exporting the surplus product so that they can more efficiently fill the demand for other products in the u.s. market that are more valuable. so the export of gasoline may actually be helping keep overall product prices for u.s. consumers down. >> i want to thank you. i yield back. >> this time i recognize the gentleman from texas, mr. barton for five minutes. >> thank you. looking around the dais, mr. chairman, first of all, we want to welcome mr. flores. we see he's here. he's a new member of the committee. glad to have you here. mr. bud albright, staffer on the

committee. >> and mr. mullen. >> i didn't see him. from oklahoma. glad to have him here. i see mr. barrow over there. he's a member who's not going to be here next year. his state is the peach state. do we have a ban on exports of peaches? yes or no? okay. we have mr. mckinley up here. do we have a ban on the export of coal? we have miss caps from california. do we have a ban on the export of movies? i didn't think so. we got mr. pompeo and mr. terry. from the corn state. do we have a ban on the export on corn? [ inaudible ] i was saving that for last, mr. chairman. my point is that there are -- in a free market economy like the united states, there are almost no commodities or products that we have a ban on.

we are the free market nation in the world. they banned exports of crude oil to the united states in the and we retaliated by creating the strategic oil preserve and also requiring that no crude oil with few exceptions could be exported from the united states. that made some economic sense and some strategic sense in the 1970s. but this isn't the 1970s. now the key question or one of the key questions the chairman of the subcommittee has already asked, what would happen if we repealed the ban? what would happen to domestic gasoline prices? i haven't seen any study that says they would go up.

and, you know, the reverse question would be what would happen if we don't? what happens to domestic oil production in the near term, the midterm, and the long term if we keep the ban in place? now, the key issue there is the market for domestic crude oil. u.s. refinery capacity, i think, is around 12 million barrels a day. is that correct, mr. siminski? >> if you add in all the other things. domestic crude oil is getting close to 9 million barrels a day and you get to 12 million by adding in biofuels and -- >> i'm asking what the refinery capacity is. >> over 16 million barrels a day. >> it's over 16. >> yes, sir. >> okay. i didn't think it was that high. my point was going to be if we don't have a market in the united states for the crude oil

at our refineries, if you can't export it, you keep it in the ground. but if it's 16 million barrels, then we can increase domestic supply fairly significantly, and we just freeze out or push out imports from overseas. wouldn't that be correct? >> you raise an interesting point. many people look at the growth in domestic production and the flatness in demand and they envision a world where the u.s. is not importing any oil. but, in fact, the u.s. may continue to import oil simply to refine it in our very efficient refining system and sell those products back out into the global markets. >> well, mexico is finally freeing up their oil economy. and if they follow through with their constitutional change, you'll see a large number of

u.s. producers in exploration going down to mexico, and i would assume that there would be additional oil in mexico that could come up to the united states in the next five to six years, plus we've got canada, and i know this are issues on the environmental front with the canadian heavy oil. i guess -- i only have 22 seconds. if i had to look at this panel and you had to vote yes or no on repealing the ban, i think i have three yeses and a maybe. i'm going to ask miss gordon, i didn't sense that the carnegie institute is totally opposed to repealing the ban. i think your concern is transparency and information for environmental purposes. is that correct? >> yeah, i think we have a reprieve here because demand has really cooled off globally. so there's not much of a place to put a lot of oil right now. and that gives time to do the

due diligence that has to happen with information so we have a better sense of what's going to happen when we do change policy someday, because i do think we're headed toward more open markets, i mean, in general. but do remember, i should add, the oil market is one of the least efficient markets. there are so many reasons barriers to entry, barriers to exit, not enough information, externalities. there's far more efficiency in peach markets than in oil markets. so that's a big question. >> could i ask one more question? is it possible for these lighter shale oils that are being produced in the eagleford and up in north dakota, to be exported as refined products because they're so light and almost need no refining? >> they're really different from each other. the balkan oil is light nigerian crude. in fact, we've backed out a lot of nigerian crude since we began producing in the balkans. if we export balkans, we'll probably have implications for

nigerian and the north sea. the eagleford is really unofficial. it's much, much leiter, and it needs to have the continue den sates stripped out of it. even with the light type oil catego category, there's a lot of diversity we don't have the information about. >> thank you, mr. chairman. >> this time i recognize the gentleman from new jersey, mr. yarmuth, for five minutes. >> thank you, mr. chairman. thank you to the witnesses for their testimony and knowledge. i've learned a lot, but i'm still not sure where i am on this issue. and i'm curious, and we talked about the potential downside and while everything hooks wonderful right now, prices down, that would seem to be -- mitigate against worrying about a crisis. but isn't it entirely possible that we could return to a 1970s situation? i was a staffer here in the '70s and remember nose line -- thoss

as well. would it not be useful to have this contingency measure because whether it's international yr(oñ outbreak of war, terrorism, whatever it may be, that we have some way to protect our domestic supply in case of an emergency? as opposed to just saying we're going to worry about that when we get to it? miss gordon? >> so, i think because we're in this era of new oil and everything's changing, the risks are changing. we have the geopolitical risks on the one hand with many of the places abroad that have historically produced oil. then we have operational and environmental risks here we have to contend with. so we have new oil, new conditions, and then we have huge growth in china in terms of demand that's sporadic. it's not going to be, you know, red hot consistently. it's a market. and so we do tend to talk about oim at a moment in time maybe because it's sold on every corner, that it's as if this is

the condition that exists for all time. but the reality is it's very dynamic, and we could easily return with risk, differential risks, different consumption patterns. in america we're selling a lot more suvs right now. they're up tremendously. we're reversing our demand profile as adam said but not necessarily bound to that. >> so there's no guarantee with -- given the volatility of the market that if we eliminate the prohibition that we can have the kind of impact on prices that we would expect, that the prices will necessarily be lower. we can't guarantee that. >> yes, and in addition to what was said earlier where we will because we have the largest refining capacity, we will maintain imports of oil even, you know -- because we want to put product on the market. that's what industry does here. it's one of the big parts of industry. >> if i could just answer your question, you know, most of the oil we consume in the united states is in the transportation sector. and it seems to me that rather than maintain the ban on crude

oil exports we would be much wiser to have an accelerated program to use our vast natural gas reserves to a greater degree in transportation. there have been numerous studies -- you know, it would be a long-term effort, but if we could replace the diesel fuel that we use in our 18-wheel truck, some people say that would be another 1.8 million barrels a tay of oil we didn't use. if we can use natural gas and marine transportation on the great lakes and our major rivers, coastal trade, that's another major place we could save. and we have companies already experimenting with using lng and this railroad locomotives. so if we could reduce the use of oil in transport by relying on our vast natural gas, i think that would be a far more prudent policy than continuing the ban on crude oil exports. >> if i could just say one thing. you know, if we go back and look at the history of epca and everything we did, if you want to take one lesson out of that, we need policies which are

robust against uncertainty. and every time we try to guess or we think we know what the future looks like, nuclear power is going to be too cheap to meter or we're going to ban the use of natural gas and power plants, we really have a hard time getting this right. and nobody really -- we don't really know what the future looks like. but what we do know is that we do much better when we have policies that allow a lot of -- you know, a lot of the marketplace and individuals to adjust to changing circumstances, because once we put something in place here on capitol hill, it's really hard to fix it, you know in those of us who go way back remember, you know, we had dozens of small refiners. people remember this? we had dozens of these small refineries which came out of the arcane regulations, the price controls. and when it came time to decontrol crude oil prices it was really hard because we had

this political establishment of small refiners all over the country. so i think we have to keep in mind as we go forward that what the real lessons of this renaissance is, it was an open system. right? this all occurred on private land. the government -- the heavy handle of the government was really not trying to stop these guys. we didn't have to rely on federal land. and so as we go forward we ought to think hard about what kinds of strategies are likely to be more productive. >> thank you, mr. chairman. >> thank you, chairman, for this panel and hearing. doesn'ts of questions so i'm going to try to put them in some sense of order. the original epca i didn't know there was reporting requirements and more transparency.

following up on what congressman barton said, there's probably some truth to getting more information. truth to getting more information so that markus can operate more effectively. i appreciate those comments because there's different type of crude oil and that's going to be the major front of my question. but we also know refineries have made major investments based upon a world they perceive six years ago which is significantly changed today. from heavy crude to light sweet and the expansion. another thing that's not part of this debate is transportation cost and long pipelines versus what could actually happen in the future with all these more localized resources available is that you could see closer interaction between these new

fines and local, more local refineries. in a more localized system. mr. pukliar, i appreciate this statement because the need for production platform in a stable part of the world, i think, is really not just for what it does on hedging the risk, the volatile risk of pricing, kind of addressing my colleague from kentucky's question. but also internationally and i'm focused on eastern europe a lot of times and i understand energy extortion, and so importation of lmg which we passed through the house that we'd like to see for our allies in europe and eastern europe, i think this thing would be true on crude oil exports but you have to have a stable platform to be able to do that, hence the next kind of position.

because even in the map, they figure that you have on your testimony figure three, you have these major basins but there's probably more that are going to develop like the southern illinois basin, which now we've gone through the legislative process. but we've got the illinois basin. still got more deep water applications. we've got anwar debate, always there, the national petroleum reserve, the atlantic coast exploration, keystone xl debate. and here what i think is that, because i'm afraid we have this huge supply but we can't rely on government to set these parameters. we've got to let the markets do it. the markets will then send a signal, which of these oil basins are recoverable based upon the pricing of a barrel of crude oil? some of these may not be able to be now exploited because the cost of recovery is high.

but then in the case where there is a new change in world dynamics, then that cost might be available for continued exploration. do i make sense in any of that analysis? >> right now, there's a race going on between the lower evaluations and the advances of well productivity and technology. we're seeing some things, out there a few years. some things are very near in which, if you look at a traditional hydraulic faction, across the u.s., 40% of those frack jobs are very uneconomic in some ways or 40% of the perforation are not working but there's technologies developing now that are going to drastically, you couldn't have a high cost basin looking like it's doing too well right away. in a few years, things can change. and once again, we want strategies robust under the certainty.

retry to prescribe the future. we're going to be wrong. >> right, doctor in your testimony, you did state that decreasing oil exports will help lower the prices at the pump. that was part of your written testimony. >> lower gasoline prices, yes, sir. >> the other thing i want to ask because it's been raised, people think we'll do this and talked to by a lot of people, is there a difference, because really, except gordon started separating heavy, sour, and light/sweet. is there a difference, is there a credible argument in separating the crude oil price and easing the ban on one but not easing the ban on the other? and that will be my last question. if some people want to weigh in, i appreciate it. >> i just will add that i think that the time is coming that we'll have baskets of crude that are split much more on quality than on location.

>> i think the equipment will last generations. the market needs this information. so whether regulations follow or not, i think the idea of separating oils into these baskets which is somewhat down in the market right now is probably the wave of the future. >> the rest of your chicken, not going to answer that question. >> the gentlelady miss caps for five minutes. >> thank you mr. chairman and each of your witnesses for your testimony at this hearing. i also want to take a moment since it's, i believe our last hearing in this session of congress, to honor and acknowledge as i walked in the room i realize i'm walking into the john dingell room, the incredible service that this -- yes, i know. it is the john dingell room.

our colleague, former chairman under whose leadership i was first asked to be on the committee and also my colleague from california, ranking member, and my neighbor, mr. henry waxman for their incredible service to this committee and our nation. i know he stepped out, but i also want to bid farewell to our friend, john barreo from the peach state, who added much value to this committee as well. these are people who will be missed. the oil market, export market is complex. i picked that up from the hearing today. we need detailed accurate information, i believe, to conduct a proper assessment of increasing exports, yet miss gordon, in your testimony, you say accessing this information is difficult. in fact, you say we actually have more data, which i find quite stunning, about opec crude

oils than about some new american oils -- crude oils. my question for you to elaborate a bit is on that. why is this information so difficult to access? >> there are so many reasons why the information is not there. the first reason is that the late tide oils are the newest kids on the block so to speak, they haven't been around that long. in the 20 test models, we have venezuela oils. information from venezuela, uae. all over the world, indonesia but no oils from north dakota or texas, these light type oils. one of the big problems is that in order to get information on oil, you do an assay, a chemical fingerprint of the oil. everyone do assays different. you can't compare to one another. having more consistent reporting on information is one big

problem. another one, having met with d.o.e., is that apparently and i think mr. smincy could talk more about this, but the energy department can't collect data on oil freely. o.m.b. and i was kind of flabbergasted when i learned this, but o.m.b. said this is duplication of effort. energy submits data on oil. d.o.e. doesn't set recording requirements for oil. but when you read epca, there's room for it to happen but hasn't evolved that way. d.o.e. only gets what they want to report out, less information is reported out. the third i'll mention one of our partners tried to purchase data because there's data owned by these big oil consultantcies. after a year in the hundred thousands of dollars, they were told the data wasn't for sale because it's competitive.

they don't want the academic sector to compete with the consulting sector. so there are a lot of concerns when it comes to oil data, especially as now, more oils are out there. >> i wanted to use that last sentence to a segway of another kind of topic that might be appropriate now. any discussion of oil exports must also be considered in the context of our overall energy policy and the realities of crime change. you've done extensive work on the oil in the u.s. and preliminary research on the climate impacts of types of american crude oils that could be exported if the current man is lifted. given the transparency challenges you just driepescrib have you been able to complete this assessment with the data given to you? >> none of the oils we've been able to model, we have u.s. oils

around like gulf of mexico, mars, but we have no alaska north slope but none of the light type oils because data is just not available. >> so prepared to yield back for mr. chairman, but this lack of transparency is concerning not just for our assessment of oil export policy but for conducting proper oversight of the industry in general. if the industry is asking us to lift the export ban, i believe they need to provide the information that is so clearly needed to properly assess the very policy they're asking us to expand upon. i yield back. >> gentlelady yields back. mr. pitch for five minutes. >> thank you, mr. chairman. thank you for your testimony. i, too, remember the long lines in the '70s. what was said is after waiting for 45 minutes or an hour with your car idling, and the lines

backed up on the highway and some people just topping off and some people about to go empty, there were a lot of short tempers. and it was a very bad situation, wasting a lot of oil. gasoline, were studies ever made on how much waste there was with those long lines back in the '70s? mr. saminsky? >> i don't think the e.i.a. did but i think you're absolutely right, congressman. the whole idea behind the program, i think, made some sense at the time but the implementation of it left a lot to be desired. a lot of problems had to do with the availability of gasoline in different areas. it was based on the year ago use and as we got into the crisis, you didn't have enough, people in the prior year were all out

having vacations and outside of the cities. that's where all the gasoline went, but during the crisis, they were all in lines in the cities, so they couldn't get the gasoline to go out on their family holiday. it was a bit of a mess. >> yeah. >> so actually, i worked on this program a bit when i was in the department of energy. you cannot imagine the small changes, you know, people just think a refinery takes crude oil processing but they're blending dozens of components and trying to control the prices of all of these. and everyday, there was enormous misallocation shortages, the wrong kinds of mixes because the market was completely surpassed by the government price control system. i don't think you can find anybody looking at this program that wants to defend it. it was an unmitigated disaster. it substantially delayed our capacity to even adjust to the

crisis. >> and in addition, after waiting for 45 minutes or an hour, the station, many of them would run out of gas. you'd have to go out and come back on another day. the average family, as we've heard, can expect to save several hundred dollars a year if prices stay where they are. administrator saminsky, how can we maximize these benefits and sustain them over the long run? >> the benefit from household income is coming from lower oil prices. most of that coming in gasoline. the number of about $800 per household is right for $30 decline that's from average prices last year that would be sustained for about a year. those numbers could even be a little bit higher than that, depending on where oil prices settle out. t that is going to be a pretty

positive effect on ability of households to spend and i think we'll begin to see the positive impact of that on the economy, e.i.a., macroeconomy said if we had this $30 decline sustained for a year, it could add as much as 1% to the u.s. gdp. >> if the ban were lifted, what effect would it have on gas prices and how would it impact our refinery sector? do you want to continue? >> gasoline prices, again, if we stay at these levels, gasoline prices could be down almost 77 cents a gallon. again, that's a huge plus with gasoline prices averaging that much lower than the prior year. obviously, there will be some losers in the production.

producers are going to have lower income. this could affect venezuela and other countries that could lead to unrest there. i think the idea of policies, the outcomes and forecasts uncertain are huge. if you lost the oil production from venezuela because of social unrest there, you could see prices come back up again. i think in general, the -- when i think about about policies, e.i.a. is not a policy organization but i can describe the three components. what does it mean for the economy? what does it mean for the environment? what does it mean for national security? you were asking about national security issues. i would imagine a key thing in thinking about this is how do weigh those impacts from a policy standpoint? i think the strategic preserve is our key tool in security.

>> thank you. >> the gentleman from georgia, mr. barrow for five minutes. >> thank you, mr. chairman. and i hope i get my own five minutes to thank my colleague. i represent houston, texas. we have five refineries in east harris county but also, i have all my service companies. obviously, halliburton, you name it. baker hughes and groups like that. so i want to keep them working in the old patch but probably, this is the best time in my history we've seen the refinery margins where we're at. and that's what i wanted to ask mr. saminsky. typically, integrated refineries with production, they have refining but that's not their profit center. usually it's the production

side. we have three of the refineries also independent refineries. they're not integrated or majors. if you've seen, have you all done any research on the refining capacity? because i know the shutdown of the smaller refineries in and around the country, there's some concern over the years that even though we weren't producing as much crude as we needed right now but also losing refining capacity. have you all been given those numbers? >> we have a study under way on the ability of u.s. refineries to absorb this increase and that lighter oils that are being produced from the shale formations. we'll have that out, i think, sometime in the early part of next year. i think the general feeling is that you come back to the complexities of this, there are, if moving the export ban does

have impacts on different sectors in the economy and the independent refiner are very concerned about how they would come out in that analysis. >> in what happened in the '90s, because we weren't producing light or sweet in the united states, most of our refiners who were successful converted and i know one refinery about $2.5 billion to convert to do the heavier crude. have you all put any cost estimates on? >> that's going to be congressman, you're right in there. we should come up and brief you when we have this study done. we are going to have some estimates in there of what the costs are associated with adding the equipment needed to take care of this increase and lighter crudes and how fast those light kruds will be growing. what we do know is over the past, if you look back over the last decade, billions of dollars were invested in upgrading

refineries in texas, louisiana, and elsewhere on the gulf coast to process heavy crude oil and now we have a surplus of light crudes. it's created problems. >> i think the concern of the surplus of light crude because they're typically the shale plays and those shales are short lived. although cheaper to drill than the earlier ones. there's issues with are we going to have to reinvest for those refineries, $2.5 billion to handle heavier to lighter crude? >> they are upgrading a new construction project under way right now to allow the refiners to handle that. a lot of those are taking place in your district. >> has e.i.a. looked at the issues? because in the past, we typically use whatever we refined in our country, but now we're producing so much more, we're having the downstream

jobs. our exports. in fact, in houston, we're exporting just tons in the last few years of low sulfur diesel. because of the heavier crude, we get more diesel but the low sulfur diesel is actually improving the environment in the countries we're sending it to, in latin america particularly where they are. have you all looked at some of those issues and i'll ask if that's been looked at by our environmental community? has e.i.a. done that? >> that's going to be part of our study. so i look forward to the study. miss gordon, has that been any qualification of that, even though we're doing heavier crude or producing more diesel we don't use in our country, but it's also low sulfur because that helps with in the countries that are buying that from us now, compared to the diesel maybe coming from other parts of the world? >> yeah, certainly taking the

sulfur outi'u? will be fantastr health and for the environment. but a bigger question with the heavy oils is petroleum coke and what happens in the bottom of the barrels. when you put coking capacity, you remove the middle of the barrel and a lot more gasoline and diesel which is good for profit. and substance of petroleum coke which we increase. out of texas, the u.s. increased its petroleum exports to china like 70 fold in the last several years. so it's a coal substitute and it's worse than coal in terms of emissions. you know, it kind of cuts both ways. >> miss chairman, i know i'm over my time but i'd like to talk about petroleum coke when i get my time. >> ohio, five minutes. >> thank you, mr. chairman. as has been stated for the panelists being here today. it's really informational and

appreciate your time. if i could just kind of hit a few points, as we've been sitting here, i checked the start committee that west texas was selling the $60.70 when we started. and brent at 64.23 and dropped to 64 in the last few minutes. i think the discussion we're having is very informational. it was in the wall street journal this morning, the headline in one of the suggestions in the paper with the decreasing cost of oil from west texas, what that's doing in this country with the producers, especially out west. and of course in ohio and also in pennsylvania with our utica and shale that we're developing in our states especially for me in ohio. it's interesting and also, you're concerned because as the price drops, we're going to make sure that we can keep that production up and also keep

people out there producing. if i could just go to your testimony, i really found it interesting because on page five, you state that the u.s. crude imports have declined by 2.4 million barrels per day or 25%, the lowest since 1995. and the percentage of u.s. crude demand supply by imports fallen by 67% to 47%, lowest level since 1992. in the testimony you've been talking about today, especially about the oil coming in and that we're refining, how much, when that oil comes in, that we've imported goes back as an export, just out of curiosity as a product. if you'd like to take that and anybody else like to answer the question. >> the u.s. has nec product exports about 2 million barrels

a day. the gross amount of imports and exports are different than that. we're now kind of getting close to 4 million of exports but also importing. when you put it out, 2 million barrels a day and congressman green products. a lot of that export of product is coming from the gulf coast region of the u.s., going to countries in latin america and europe. the gasoline, one of the better exports that we have is gasoline and the reason for that, we just don't need it here in the u.s. it is needed in places in latin america. >> well, thank you. and if i could turn to mr. pugliarsi. i hope i pronounced your name

properly. we see the increase here. are there any regulatory or market barriers prevents our refiners out there right now from doing anything else to adapt to the new surges we're having? >> well, you know, i think the refining industry is a lot of a downstream processing sectors do face a pretty formidable regulatory environment. they also face a fuel constraints in like the renewable fuel standard. it's not that ethanol, for example, is a bad thing. useful to sector. it's the mandates that gives the problems. as demand shifts radically or the supply side shifts radically. the refiners are unable to adjust in a cost-effective way. so i think that, you know, as we go forward with this and look at

crude exports, we don't want to unnecessarily harm these high value added downstream processing centers. they have added a lot to the economy as well. we're not in favor of protection, but we are in favor of taking a hard look at the trade adjustments you need to do when you move into an export in export mode. >> thank you very much. i thank the panelists and mr. chairman. i yield back. this time the gentleman from california, mr. nirni for five minutes. >> thank you, mr. chairman. supposed that the u.s. becomes a reliable and consistent exporter of natural gas and crude oil. how much impact will our natural gas exports have on the geopolitical issues relative to how much impact our diplomatic and military policies have on

those geopolitical issues? does anyone care to take that? >> i could just say that because these oils when the relative bounds kind of trade as like, types of oil, as i've been talking about, you have to look at the geopolitics in the kinds of oil we're exporting. the light tide oil has backed nye jeern imports out of the u.s. we import now no oil from nigeria. that has a geopolitical impact, say, on nigeria. and i think even though oil is not used as a weapon, it can be something to counteract the peace keeping and the other efforts we have in these very fraj ill nations around the world. venezuela was mentioned. >> i'm thinking in particular of russia and mr. putin. will our exports have more

impact on his behavior than our military or diplomatic activities? >> it's a really good question but i think that russia is reeling from the price of oil. it's not our exports that's changing, that's $60 barrel oil changing what's going on in russia. that's a much bigger demand question. that's not about our exports. >> if i could weigh in on that, sir. the problem we have is twofold. we've had a lot of very, you know, i think proposals to do something to help ukraine with the crisis and other geopolitical events, but the reality is, of course, our oil and gas are owned by private companies and they are likely to ship the oil or gas, if we allowed it, to where the market gives them the greatest profit. right now although it's changing before us as i speak, you know,

it's always been assumed that the market for lng primarily would be in the far east because the premiums there have been much higher than in europe. although now we have lng prices crashing and asia down to low levels where it's even questionable whether we can deliver lng to some of the markets competitively by the time we have lng ready to go, outside contracts have already been signed. geopolitically, i think the issue of exports is extremely important. our allies in korea and japan and taiwan are very desirous to have the united states because they see china threatening sea lanes on all exports, not just oil and gas but coal. they're delighted and i think it does improve our diplomatic status to the extent that we send energy there. again, these are going to be

commercial choices made by the companies that own that oil and gas. >> that was a complicated question. >> it was very complicated. >> how much, whoever can answer this, how much do you see oil exports increase? how do you see oil exports increasing over time if we were to repeal the energy policy and conservation act? do we see a large bump or a slow increase? how do we see that playing out? >> well, eia, we tend to look at that in the annual energy outlooks which we do every year. we have that one out we hope sometime in late february or march. the answer to that, i think, probably lies more towards the lower end rather than the upper end. the reason i say that is that the kind of oil we have in

surplus here is light sweet crude. the market for that is not unlimited. so the question is how much of that could be put out on to the global markets before you saturated the global markets? something on the order of a million or million and a half barrels a day might be the number that would be exported. >> thank you, mr. chairman. i yield back. >> this time the gentleman from west virginia, mr. mckinley for five minutes. >> thank you, mr. chairman. it's interesting, the end of the session, this would have been more interesting perhaps earlier as some of the subjects we've gotten into have been particularly beneficial. i'm just with a series of question. after waiting an hour and a half, my question was answered by my predecessor. i wanted to get into the geopolitical, i think you've answer it in some respects but get into that deeper, but one of

the questions i wanted to ask you, who's asking for this ban to be lifted? >> well, the first groups are producers that have wanted to see the ban removed or those who are producing the lightest of the crude oil because that's being discounted the most and attractiveness of exporting that into the global markets is high, and so we've seen that coming from some of the independent producers in texas. >> okay. i'm also curious, before i get to my last question, i've got three or four questions here, but one would be is that back in towards the tail end of the bush administration, gas selling at 2.85 a gallon and then 3.50 or

almost $4. what caused that? why did it go from $1.88 to double in price? >> say that again. >> gas prices were $1.85 under the bush administration, what made them go double? >> the biggest thing, the overwhelmingly most important factor in gasoline pricing is what the price of crude oil is in the global markets. next biggest thing after that is probably the different levels of taxation and different states. >> that hasn't changed much. taxes haven't changed much. >> the crude oil prices -- >> the crude is down to $63 or something like this, okay, and where was it? >> it had been on average over $100. >> i understand but i haven't got seen the $1.85.

>> i think prices were lower. we had $40 oil. >> that's fine. that's what your answer is. get to $40. there is one more other that i think is controversial but if you look at it, you'll find that the mandates for biofuels being mixed with gasoline, we've seen ethanol prices go up very high in some of the markets. that's been a major contributor to the price of gasoline. >> my last question, less than two minutes. a small boutique refinery in west virginia and it fills a niche in the marketplace. what could be the impact if the export ban were lifted? what would be the impact?

22,000 barrels a day. >> in your area, probably very little. those refiners out in the mid continent where they have access to discounted wti benchmark crude would see their costs go up. >> okay, i think they're starting to tap into the utica shale gas. and then the utica to provide the petroleum and crude to tap into. you're thinking would be not affected. >> in your state, sir. >> well, they ship all over the country. >> right, but the question is what would the cost of feed stocks into that refinery in west virginia be and i would suspect that it wouldn't change very much. >> thank you, very much, i yield back my time. >> this time is the gentleman from texas, mr. green, five

minutes. >> thank you, mr. chairman. let me get back to the -- first, i ask to place a statement into the record. and i think it's no doubt that in fact the cbo report that was just released talked about the policy shift in exporting crude with pinch refiners, profit margins but harmed foreign oil producers. but let me go down the list about we are exporting oil now. but it fits the definition of recondensate. there's actually a mechanician where you get the light or sweet out of the ground, you run it through what i would call a limited refining process, but it fits the definition that we can export right now. and how does eia classify lease

condensate of that exporting? >> mr. green, there are at least four big ways of trying to define condensate. the way eia has historically done this is literally based on the location. if it's produced on an oil lease and is mixed back into theru ste condensate and measured it in barrels. >> is that the same definition as the department of commerce for export? >> the department of commerce is looking at it from a different standpoint and reportedly, the commerce department is now through letters to the individuals who asked for a ruling on it is allowing processed condensate. if you take this very light crude oil, process it, throw

away distillation tower, it would qualify as a product and products under u.s. law right now can be exported. >> okay. would it help to have a uniform definition for the government agencies, particularly if lawmakers wanted to craft better legislation to have one definition for condensate? >> we've been trying to, at eia, trying to understand the different definitions and i suspect that a one-size fits all might not actually work perfectly. we would still have at eia, for example, want to make sure that we are able to count this process to condensate so we don't double count how much of the material is in our system. and that's a complication of the existing rules. >> does eia track exports of

condensate production now, or production and exports, do you track any of that production? >> the export data is provided to eia by the customs people. so we do not have that. we do our own survey of imports, interestingly, you think about the history that's been brought up here today. we wanted to do our own survey of imports because that's what was really big and that's what was supposed to grow and we don't have a survey of exports. >> how readily available is that information? >> that information is actually available from the customs people and we have been working with them on speeding up eia's ability to get that data.

>> okay. dr. ebinger, i know your testimony in your briefing book "big beds and black swans" in early 2014, you had a section to lift the ban on u.s. oil exports. you stated under a period, exports in combination with increased invested infrastructure are expected generation income and taxes through the chain. do you think domestic transportation of oil is a major factor facing our sector? good example, limitations on pipelines? >> i think the fact we have not built some major pipelines, keystones being one of them, has certainly led to a more dangerous transportation system by rail, particularly, but also by truck and barge. a more expensive transportation system would be needed if we built pipelines. if, as a nation, we accept

unconventional oil and gas drilling, which i certainly do, we need the infrastructure as cost effectively as possible to get that to market. >> okay. mr. chairman, thank you. >> this time i recognize the man from kansas, mr. papeo for five minutes. >> thank you mr. chairman. i did a little work in the run up to this hearing to see which of you all predicted $63 oil on september 11, 2014. none of you did. you should know you should catch yourself among the many. i couldn't find anyone who did. i saw a few traders claimed they were in the market the right place. i imagine that only because as i hear you talking about more data and information in the hands of government and all that, i think if we unleash markets, glorious things will happen. so i've heard multiple things today. i've heard folks talk about an export ban lifting, seems right to me, as a good direction,

folks talk about the jones act. we proposed enormous costs on our refiners with the fuel standards and we've seen a government agency totally capable of dealing with the transition of what happened in the marketplace there. can't get a set of rules out to deal and tell folks what to build. based on some prediction, congress set some levels. congress said as we policy makers think about this, we should not be certain $63 is here for tomorrow, let alone for two months or three months. no one mentioned the greenhouse gas rules that are about to hit. america, no one mentioned cafe standards that have been had a dramatic impact on our transportation and uses for them. you mentioned transportation, gosh, if we could get there, i don't know what's standing between us and them. i couldn't tell you. natural gas prices and want to invest. the truth is, you have markets operating in a state of uncertainty trying to get to the

right outcome and we should not have the hubris to think we have any possibility of getting in front of that place, so as we think about the export ban, i think it's incredibly important that we don't lift an export ban in base because, gosh, today, we have a certain oil price in the low 60s range. i think we made the mistake of putting in place the 1970s and i think that's the kind of think policy makers should all consider. i want to ask you, mr. sminsky, what impacts oil prices. saudis changed the world in the last quarter. does that change how you think about the study you put out in any material way? >> i believe that that study would probably be still valid in terms of trying to understand what it is that relates the price of gasoline in the u.s. to the global markets for either crude oil or gasoline. you know, mr. pompeo, i think

your comment about, did eia predict $63 oil. no, we didn't. i would like to say, we talked every month we publish something that is actually worth thinking about. for everybody here. we use options market for crude oil to work backwards to what the confidence interval is on forecasts for crude oil prices. six months ago, that confidence interval got down to the low 60s. we have hit the bottom of the 95% confidence range for the committee here today, i just looked at numbers. for west texas intermediate, 95% confidence range, will it fall in there, is for april of the coming year is $50 to the low side and $90 to the high side. that's telling you that the

people who are in those markets -- >> who have real capital. >> they are not sure either. >> folks with real capital at risk. i will ask anyone who might want to answer this. i have read articles recently, articles -- pop news more than anything else, about whether opec still exists. if it is still the same force that -- when i was younger it could impact markets in material ways. we talked about how the markets have changed. does anybody care today want to say today that opec is dead? >> you know, i think market power -- market power by some big producers waxes and wanes. if you have enough production outside of these other low-cost, high-volume producers, their market power gets reduced. that's what you are seeing now.

the distribution of crude oil outside of the big players, which north america is a big force today, is undermining the capacity of other folks to charge higher prices. that's the reality of it. that's a huge benefit of this north american platform. that's why we ought to pay attention to how it performs, make sure we have a regulatory environment that doesn't hurt it. >> thank you. my time has expired. thank you, mr. chairman. >> recognize at this time the gentleman from new york for five minutes. >> thank you. thank you very much, mr. chairman. you know, last week i moved my office. we hadn't moved in ten years. so we were throwing out all kinds of things. there was this huge chart which said, the world according to oil. it either shrank or increased

the map of different countries based on the powerhouse of oil. it's interesting, because that was probably about 15 to 20 years old. the united states was very, very tiny. saudi arabia, venezuela were big. i couldn't help thinking if we did that map today how different it would be. i think that's a good thing. you were asked about the geo-political impact of it. as the ranking member of the foreign affairs committee, i care very much about geo-political aspects of it. i like the idea of countering mr. putin. european countries are reluctant to stand up to him, because they need his oil. if they could buy our oil, they might actually develop a backbone. so i have looked at this in a totally different approach than i looked at it before. but everything, of course, still

is a balancing act. i care about the environment. we want to make sure that we can continue to export and increase the export. and i think it's a balance. so i want to say, dr. ebinger, i read the report which finds that lifting the ban would boost u.s. economic growth. larry somers called for lifting the ban. department of commerce has granted licenses during the past year to a few oil companies to export a relatively small amount of an ultra light crude, as mr. green mentioned. i believe it comes from shale. please correct me if i'm wrong. therefore, increased production would mean more fracking, would

it not? it would? >> yes. >> among the companies exporting this are pioneer natural resources and enterprise product partners. which shale places are they get it from? >> eagle ford. >> where did it go? are there existing refineries in friendly parts of the world that would take and refine this crude? >> i think i can answer. i think it went into the far east, probably korea, maybe singapore market. i don't have -- the department of commerce has a different policy towards handling data than eia. this is considered proprietary information. i don't think it has been publically available. >> as i mention -- >> i could add, it's petrochemical feed stock. it's going to -- it's not going to refining. it's going to making

petrochemicals. the far east makes sense. >> thank you. i'm asking these questions because obviously in addition to economics, there are environmental considerations and geo-political considerations. i think the whole thing is a balance. but i do think that this is something that we should look at very seriously. it makes sense to me. again, because i think the united states obviously being a world power has to be concerned with geo-politics of it. i know when we are trying to get some of our allies in europe, germany and other countries to stand up to put rn ain and his aggression to ukraine, there was reluctance because they rely on russia for their energy resources. i can't help but thinking if they relied on us or if we were available, we could exert more

pressure. and i think that would be an important policy goal of the united states. it has to be balanced with environmental concerns and other concerns as well. thank you all. thank you, mr. chairman. >> gentleman yields back. right now the gentleman from nebraska for five minutes. >> thank you. one of the reasons i ran for congress 16 years ago was the high level of reliance on foreign fuel to fuel our economy and wanted to change that. i'm pleased to see that we are down to 33%. we're only 33% of our fuel needs or oil is imported now. in a geo-political sense, why do we still have 33% import of oil

into our country? i will start with mr. sieminski. >> it's -- what we are talking about mostly today is oil. within a year and a half the u.s. is likely to be a net exporter of natural gas. we are already a net exporter of coal. we don't really import very much electricity. a little bit of that comes from quebec and canada. so on the oil side, we're a net exporter of oil products. the only thing we import is crude oil. those numbers will come down if you say, well, do you want that to go to zero? the answer would be, not necessarily. >> that's the ultimate question. can we should and should we? >> particularly, venezuelan oil bothers me. do we have a geo-political responsibility to allow some importation of venezuelan oil?

>> i don't -- i will stay away from the policy decision of what we would want to do with venezuela or not. i would say that venezuela is the top of eia's list of what could go wrong in the global markets. it could push prices up. you have iranian sanction issues. you have the isis problems in iraq. maybe opec will at some point decide to reduce production. you could have difficulties in russia even. i mean, there's lots of things that could make prices go up. prices could come down, too. what really triggered prices coming down i believe over the course of the last few months was a combination of the unexpected recovery of oil production in libya, at the same time that the economy in china was slowing down and demand forecasts began to recede. in that background of increasing u.s. oil production, the combination of those things was a tipping point and changed

everybody's mind about what the future looked like. >> mr. pugliaresi -- >> one of the things i would encourage the members to do is look at this through a north american lens. when you put canada in the mix -- >> absolutely. >> we really don't like this self-sufficiency approach to thinking about energy security. we really say, look, we want this platform to be productive. u.s., canada, large -- >> and mexico. let's think of it as a north american dependence. >> it may be efficient. there may be efficient solutions for the platform which allows both exports and imports. because refining configurations are all different kinds. we have a lot of very heavy capital invested in processing heavy crude. so that heavy crude ought to come down to -- from canada and get processed where it's -- that's where it's most valuable. >> that makes sense to me. so