>> thank you, arthur and the institute for having me today. who doesn't like paying $2.24 for a gallon of gasoline? that's today's national average price down 1.09 last year. low gas prices act distributed to every american.

a stiptypical family could save $1100. they provide greater economic relief to low income households and senior citizens on fixed incomes. even better they do not require a dime of taxpayer money. no one has to wrestle this tax cuts. low prices patrolling are spending power. residential heating down $1.33 residential propane down $1.40. every dollar consumer save while fueling their cars and heating their home is one they can use

to purchase other goods and services. this is all great news for american consumers but not every one is celebrating lower energy prices. crude is below break even prices. russia iran and venezuela need brent crude oil prices well past $100 per barrel to balance their budget. mostly because brent crude prices have plummeted by 50% during the same time. on monday brent crude traded at $57 per barrel. that's $58 less than its peak. russia needs brent to trade

around $107. ie venezuela needs prices to go to $151. around 50% of its annual budget from the oil and gas industry. the russian ruble lurched to final prices. it's fallen more than 50% since the start of the year. as much as 75% of iran. at today's prices the economy's are also in a tail spin.

with oil revenue splashed in half they are less able to pay for services they need to ensure social order and maintain regime stability. they're in weaking positions with negotiating with the u.s. over their military aggression nuclear ambitions and other provocative positions. their power correlates with oil markets and declines as policy prices fall. u.s. producers facing challenging economics to market. they remain largely competitive and not under as much duress.

ihs report found 80% of domestic production anticipated in 2015 will break even between $50 and $69 per barrel of wti. on monday wti crude traded at $53 per barrel. that's $55 less than the peak price of $108 of june of last year. american energy producers are repositionre repositions their operations. they are delaying capital investment shutting down productions of higher costing existing wells. they are refocusing their attention. as of last friday the total number of oil and natural gas drilling rigs fell to 1,456.

that's down 17.8% from a year ago and the lowest level in five years. energy companies are scaling back capital expenditures in 2015. this means layoffs and they will not just be in the oil patch. hotels, transportation, restaurant, construction could all take a hit if this low oil price environment exists. >> lower oil prices are in large part the function of booming u.s. oil production which is increased by 4 million barrels per day over the last six years. producers need to reduce their costs. >> on the other hand we also

have energy producers who are challenged in a low oil price environment. we have a lot of workers being laid off. how can washington help? mostly by getting out of the way. a good place to look for cost savings is producing the expense expensive burden and red tape. that would be like deciding to cancel a long needed bridge repair because one's morning commute was liegtser than normal.

the keystone xl pipeline is a long term project that would operate well beyond the low oil price environment. that was nearly three times the number of aemmendments that were voted on. many of those amendments were offered by democrats and nine democrats voted for the legislature. the pipeline would transport 830,000 barrels of oil a day. president obama has delayed making a decision on this pipeline for more than six years. during that time the projects costs have increased by 48% from

$5.4 billion to $8 billion. this is exactly the kind of unnecessary and burdensome cost that mismanaged energy infrastructure permitting can impose on energy producers. open federal land to oil productions, the federal government manages roughly 640 million acres of surface land. approximately 28% of the 2.3 billion acres of land in the united states. the federal estate extends to emergency and mineral resources low indicated underground and offshore offshore. the federal government only leased 2.8% of on shore and offshore federal lands for

energy reduction in fiscal year 2014. this was not been accident. president obama has utilized designation authorities under the national wilderness system, the national trail system, the antiquityies act and other programs and laws to block energy reduction. on federal land the president controls from 2009 to 2013. by contrast crude oil production has increased by 61% on state and private lands. despite his repeated attempts the president cannot claim credit for america's shale oil revolution and the lower gasoline prices it's brought to consumers. these game changing developments have happened in spite of these

policies, not because of them. i should know too that the federal government has great difficulty effectively administering existing federally protected land. combined maintenance backlog of the four federal land management agencies total as much as $22.5 billion. we ought focus on federally protective land before we designate new ones. according to the department of interiors inspector general last year. it took an average of 228 calendars days or about 7.5

months to process an apd during fiscal year 2012. it's another example where permit applications are routinely delayed adding unnecessary and burdensome costs for emergency producers. last december the congress passed and the president did sign into law the blm permit law and improvement to address the backlog. senator john barasso sponsored the legislation which six republicans and six democrats also co-sponsored. a small persuading the president not to veto every energy regulatory reform.

we need to stop unnecessary burdens sm burdensome regulations. this would be down from the bush administration. it would impose costs of $15 billion per year on the nation. that's not including california. the national association of manufacturers warns this new ozone regulation threatens to be the most expensive ever imposed on industry in america. the ozone standard will push large swaths of the country to

nonattainment with national ambient air quality. refining operations, manufacturing developments agriculture operations and economic growth. crude oil experts could also help producers sure up the economics of their domestic production by giving them access to foreign markets. this is a topic that's just starting to be discussed. there's been several studies this have projected positive economic benefits to the u.s. of crude oil exports were to occur. the refining community has some questions about what that policy might mean for them. on the hill it's an issue that need increasing attention. these are some examples of the regulatory burdens that can add

unnecessary and burdensome costs to energy producers or remove them. there are plenty of others. proposed hydraulic fracturing. endangered species act. national monument. the five year offshore oil and gas leasing plan just to name a few. the out look for oil prices is uncertain. you heard that from our previous speakers. one closing point i think cannot be overemphasized, energy producers and infrastructure developers plan their projects over long term arising. the federal government should not implement policies according to short term snapshots of oil markets. oil prices are not guaranteed to stay at levels. they could move up if supply falls, demand increases or both.

if our economic growth picks up speed, demand could increase. in either case oil prices could rise. on tuesday the energy information administration estimated brent crude will rise from $57 to $75 in 2016. the price correction will cause the north american supply party to make a pause. it will not bring it to an end. what is now unfolding as the 8th oil price decline as 37% during

the past 30 years. relatively price sharp rises followed those drops. as consumers, we all like low oil and gasoline prices. there's a lot of uncertainty about the future for oil prices. what we can be sure of is that the more cost competitive energy producers can operate within a low oil price environment the more likely they can sustain production that helps bring us those low prices. we have tremendous opportunity to better position our energy producers, our energy consumers our energy policy. thank you for your attention. i look forward to the discussion. >> thank you matt. this is the point where i exercise my perogative.

i think it will be more interesting and maybe even more entertaining if we open up the discussion to questions first. i'll reserve my final big question for the end. if we have time left. if you have questions for our panelist singly or as a group, raise your hand, stand up. someone will come to you and if you can just speak into the microphone and please identify yourself and any institutional affiliation you care to disclose. down here.

>> i'd like to ask whether or not it will decrease future exploration exploration. canada, mexico, russia have huge reserves. do you have any comments on what we can look for in the future on that? >> we have started to see some declines in some of the highest cost jurisdictions and as well more caution among explorers. fourth quarter things are coming

on down. we're getting a sense of what they're seeing. globally i think a lot of the projects seem to be longer duration and oftentimes add some element of state sponsorship. it's harder to get a handle. in canada that's what weave've seen. in the united states we have seen it dropping. we have similarly a decline in capital expenditure. projects for the companies still remain highly contingent on volatility. the projects are typically longer. it's a one to window in order to get them going. it's highly flexible highly adaptive. >> just to add a quick data

point. we just signed announcement from shell and bp that they cut spending by $40 billion and layoffs of around 100,000 people in the industry. companies are definitely reacting to the lower prices and either shutting in production or reducing investment in certain projects. >> i think that's a big question mark for a lot of analysts. what kind of efficiencies are energy producers going to be able to achieve in this low price environment to operate at lower prices? that's a big question mark. i think it will be a fascinating thing to watch going forward. >> he was a cto, he says these

low prices are healthy for the industry. they force more in terms of the way technology is utilized. they force higher marginal costs. the less producers are out of market. better use of technology for the industry and effect lower cost of production for industry overall. >> there's also kind of paradoxical relationship.

prices in cutting back or exploration or ramping up when the price goes up. what that mean ss is they have the ability to affect prices and provide a price support that larger retail, big producers and conventional producers use to their advantage of funding long term projects knowing that if price reaches at a level shell production will bounce down. in way supporting the others with continued growth and development. >> other questions.

>> oil prices slow down. >> i love what tesla has been doing that gives you a lot of room for charging much higher prices than the average 15000 to 20,000 dollar car buyers able to stomach. i think vehicle electrify indication is a fantastic technology if you ever driven a tesla you know what i'm talking about. these cars are incredible to drive. they're a lot of fun to drive. when you're looking at spreading it, there's two questions. one is the development of the technology and the second is the movement of the technology into the mass market. that's all about price. that's all about the battery price. that's all about if you're

looking at hybrids as opposed to pure electrics. the price of the hybridization of the system. i think there's a lot of room for growth in this sector of the market. it's going to take a long time. for that reason we should applauds the companies that are working on this and remove any regulatory barriers that stand in their way in the u.s. and other parts of the world. it's important not to focus on e lek electrification as the sole market. if you look at liquid fuels made from coal, natural gas, and here i'm thinking of alcohol fuels which in china has been

increasing. if we look at under $100 extra for an all theutomaker to open the car. who will is made from coal and natural gas. if we look at how we can expect the market to move going forward, so that automakers have a strong incentive to open their fleets to fuel choice enabling vehicles then we can expect that we will first see a lot of gasoline flex vehicles and down the road as battery costs go down, we'll see more flex fuel plug in hybrid vehicles and it's a big market with lots of different applications. there's also going to be room for pure electrics as well.

>> i'm going to take your question and reserve it up to matt. a lot of growth in electric automobiles in the country has been sustained by one subsidies but also by tax incentives. i think tesla being a classic example. what's move with sustaining those kind of incenturysencentives and what do do you foresee would be the impact? forget about the issue of lower oil prices but the other impact and that is the way in which these kinds of subsidies have pushed that market forward. >> well i think, first of all, certainly the republican conference is interested in all the above energy strategy

including technologies like e lekelectric vehicles. we some members that are real leaders on e lek trilectric vehicles. there's a really healthy debate within our conference as to what vehicle technology should look like going forward. i think taking a step back our conference and quite a few democrats are comfortable focusing on the research and development aspects of any of these technologies. you have a lot of people who become concern with capture of federal agencies with picking winners and losers. with forcing technologies into

the commercial space that aren't yet ready for the commercial space. i think a lot of people agree that one of the major innovations that cannot only help e leklectric vehicles is renewable storage. there was an interesting report maybe last year by i.t.i.f. that policy makers should focus less on commercial deployment and more on research and development. this is coming from a group that typically would be for a commercial deployment policies. i thought that was an interesting shift on the more democratic side of the aisle or from a think tank. i would suspect that the energy committee chairwoman will certainly be looking at policies

focused on research and development. she's promoted those in the past, probably will in the future and that's where i'd look for action on our side. >> can i add one quick comment? >> sure. >> if you're buying a $100,000 tesla a tax credit isn't going to make all that much of a difference. if would ask for a less expensive paint job or something like that. you make yourself more immune. >> an also to changes. very good point. >> one other thing i might add. these discussions on capital hill also there's a debate about how to do them whether to do them in targeted way or not. a lot of people like to get fundamental tax reform done. do you do address tax credits

for e lekelectric vehicles? do you do it as a rifle shot approach? that's another question for all these types of technologies when the government is looking at tax credits for them. >> more questions? >> they come into be market relatively quickly because it doesn't take two, three years to get going but also to exit relatively quickly because their wells are shorter and if you don't keep investing you're going to draw down your production. all of that taken together implies that for the future we should see much more table oil

prices and that some of the things that we have seen in the past in these very rapid swings in oil because of supply won't be characteristic of the oil market in the future. i was wondering what the panelist thought of that theory. >> i think that's the hope. the hope is there's a new and more adaptive oil production system in the united states. it's not a stable that's offered to large global oil company. the big question is whether or not there will be an abilities or the financing exploration production mechanism that's been operating at a sis systemic

level to continue.is systemic level to continue.s systemic level to continue. systemic level to continue.systemic level to continue. there's a brand new oil production system in the united states. the one which you able to characterized. given the fact that the system is only a couple of years old only a number of years old we really are not certain how it's going to react to the kind of volatility that we have seen and a new price area that had existed when the technology first began to be deployed. i don't think there's an answer but i think the hope is the system that's been oerptsperating for the last number of years will continue to do so and operate in the manner described.

>> i'm going to give this question a shot. that's because we talk about u.s. shale and the shale revolution. we're really talking about two different revolutions, aren't we. we're talking about the oil. my question that i'm goij to pose taking gabe's point, i'm going to ask you, is it perhaps the way in which the shale revolution will provide us with a certain kind of cushion with regard to crisis which i think is from large swings up or down. is the real cushion maybe not in shale production, shale production oil but in shale production of natural gas? >> i really do think that's the

case. if we do the right things if we open our cars to fuel competition, natural gas, the shale production of natural gas could be the game changer in the global market. right now it goes into the electricity sector. natural gas is competing against coal. it's competing against nuclear power. we want the force between natural gas and oil. not natural gas prices in asia because they defer around the world. i'm looking at natural gas prices here. we want them to be used as a lever against oil. when we think about this, if we do that, that will be fantastic for the shale producers.

right now i'm shut in a lot of dry production even before prices plummeted. even a year ago it wasn't economic to produce a lot of gas. it was not economic. we want to see a lot more of the gas production for that to happen you have to have tremendous increase in demand and for that to happen you really want to open the transportation fuel market. we can't ignore the motivations of the imperatives the of over actors around the world. the they like balanced budgets. they're not going to keep burning through the cash reserves for ever. we may consider those goals to

be. they have a very strong motivation to keep their heads attached to their necks. they need to keep massive salaries going to the government employees and most saudi citizens work for government. they need to keep subsidies for food and everything else. they need to keep spending lots and lots of money. they need a much higher price of oil as m a, ttatt showed us. we can't ignore that fact. the other thing we can't ignore when we think about hoping for stablts in this market, we simply cannot ignore the black swans. it would be folly to do that. we can't ignore the fact that the middest east is the craziest

region in the world right now and will likely be for the foreseeable future. >> i'm going to come back now to my question. shale revolution, is it really two revolutions and are we going to see in the process the kind of two stage process in which the loyal sort of fade and rise of natural gas driven energy economy. matt pennsylvania, westmoreland county, allegheny county, what's the picture? >> i currently work for senator john brasser from wyoming. he has oil and natural gas. we view both of these as

important fuels. we believe they're going to provide geopolitical events and use them for both of those purposes. i think when you're talk antbout the competition between oil and natural gas it's an interesting question. it will evolve over time. one thing i would caution. it's not a caution as much as something to consider they're obviously a lot of competing demand centers now for natural gas. a lot of people want a piece of natural gas going forward whether it's the electric sector and the transportation sector, manufacturing sector and we believe that the market should sort out natural gases going

forward. we would we believe natchural gas is expanseive that we can probably fill most of those needs would you tell us putting too much upward pressure on prices. do i see it as a replacement for oil as a transportation fuel, not any time soon. that's not anything that is being discussed in congress for sure. >> i'm going to leave us time for one more quick question. down here in the front. >> daidsvid with the union of concerned scientists. i wanted to bring up one thing. ann was talking about issues that can't be ignored.

in a long discussion about energy and oil i wanted to ask about the influence that environmental considerations climate change may have on energy policy and the thinking that's going on around energy policy. matt, this is more directed at you. i'm from wyoming so you can say hello to the senator for me. looking at what you went through here some of these policies they toends be devoid of thinking around the influence on the environment. how long is the the gop going to continue talking about energy policy but avoiding looking at the elephant in the room, if you will which is the continuing accumulation of carbon in the atmosphere and those sorts of

things and what are the relationships that need to be considered between policy making and environmental stewardship? >> the republican conference like the democratic conference wants clean air, clean water, clean land. i think everyone can agree on that. we believe there are environmental regulations in place that provide us with that. the carbon question is a separate question from the criteria. in terms of carbon emissions there is some sort of a wide range of thought within the republican conference. if you follow the keystone pipeline bill you saw there were several amendment votes that demonstrated to varying degrees that people not only on the republican side but the democratic side are on these issues. in general i think everyone agrees the climate is changing. beyond that i think that there is a difference of opinion in

terms of how much man contributes to climate change and how important and urgent it is for us to act. another point is should the u.s. act unilaterally or should it not. as it is today we're acting unilateral unilaterally. the president is acting unilaterally without congress's consent. the american people have rejected international climate change policy repeatedly since they rejected president clinton's btu tax in the early '90s. we still don't have consensus on these issues as a public much less a congress. beyond that, when you look at the price, the price and the cost to american consumers american households, energy consumers, manufacturers economic development, all of

these things, you have to weigh those with the potential benefits of carbon emissions reduction strategies. you have to weigh what are other countries going to do in response to what we're doing. >> i'm sorry. i promised ann the last on this and we're going to wrap up. >> i came back from china. if you think about developing asia and you understand that developing asia cares about breathing clean air, it doesn't care about what the climate is going to be like in 50 years. when we talk about climate, we talk about i, the big bad guy in the room is coal. if the world tries to stop china or india from using coal, you're placing the priority of keeping the planet in spaces over the priority of lifting, allowing hundreds of millions of people to lift themselves out of a

poverty that doesn't allow them to cook two meals a day. i don't think that's right. the lowest cost way to produce electricity around the world is coal. pro preventing people from using that is just wrong. the united states shouldn't have any hand in supporting that. >> on that uncontroversial and highly ambiguous statement, i am going to have to wrap this up. thank you again audience for coming. thank you all so c-span audience. let's thank our panel. [ applause ] transportation secretary an tony fox. he talks about the structure and

how to fund highways. this sunday on q and a, film maker thomas alan harris explores how african-americans have been portrayed in photo graphic images. >> her brown breaking book about black photographers. i was aware there was this other narrative as well in which black people were constructed, post slavery and before as something other than human. it was part of the marketing of photographs and stereotypes.

in many ways haunting us in terms of ways we see ourselves and the way we see others. general john campbell testified at hearing about planned troop withdrawal. arizona senator john mccain chairs this 2 hour hearing. >> good morning. committee meets today to sever testimony on afghanistan. i want to thank general campbell, the commanders of the resolution port mission and u.s. forces afghanistan for appearing before us today about security conditions on the ground, the development of the afghan national security forces and the

way forward. general, we've been blessed by a serious of great military leaders of our forces and allied forces in afghanistan and you are a worthy successor to those outstanding leaders in my view. the troop draw down is under white house review. as the white house deliberates the current plan is set to reduce the number of u.s. troops in afghanistan to about 5500 beginning in the middle of this year's fighting season. the plan was first announced by president obama in may 2014 before it was known that the afghan presidential transition would require almost six months to conclude before the appearance of isis on the afghan battlefield and become pakistan

operations sent 200,000 into afghanistan. these illustrate the major liabilities of a calendar based approach and highlight the need for a condition based approach. like our national military strategy written in 2012 president obama's calendar based troop draw down plan for afghanistan no longer accurately reflects the facts and conditions on the ground. like the president's policy against isil, the president's afghanistan policy wrecks of strategic disconnect providing a list of goals or preferences but precluding the means necessary to achieve them. perhaps it's time for the president to exercise strategic patience not in the sense he's used the phrase but as our witnesses yesterday agreed. form u.s. ambassador afghanistan james cunningham having just

served in kabul and left in december said i think under the circumstances the timeline is probably too short and the rate of withdrawal is too steep. former ambassador to iraq and afghanistan said i hope we will take the right decisions based on conditions and not on calendars. our presence in afghanistan will be reduced to kabul. presently in only one location one that retreated from the north, east and south of afghanistan will relinquish

sharif to the drug runners and to abandon kandahar to the taliban. we have seen what fills that vacuum in syria and iraq. i think our former director put it into perspective how we should look at afghanistan. i quote should the american people think this is a hopeless? the last 13 years have showed us that the counter terrorism fight and protecting the homeland in this region is not hopeless. we've been very successful at stopping attacks from the region. i would flip it around from a homeland security perspective, i think it's close to hopeless to think that we can have that same success without some ongoing presence in the region.

reducing do ae inging to a quote, normal embassy presence. by if i canning a date to draw down to a certain number and to draw down to basically an office and an embassy tells our adversaries how long they have to hold out until they have the field to themselves. i know of no man more respected than ambassador ryan crocker. if we have learned anything from iraq, it should be that wars do not end just because politicians say so. we cannot let the taliban, al qaeda and isis conquer afghanistan. they would destabilize the region especially by undermining the security of a nuclear armed pakistan. i want to thank general campbell

for testifying today. i thank him for his leadership. i look forward to hearing his assessments of conditions on the ground, development of afghan forces and the plan for the way forward. senator reed. >> thank you very much. let me join you in welcoming general campbell. thank you for your service to the nation. beginning in the 504. since you took command of the u.s. forces in afghanistan last august, afghanistan has entered what ambassador cunningham call called a pivotal period. in a recent public opinion survey two-thirds of the afghan's poll want u.s. and coalition troops to stay and train the afghan forces.

even as u.s. and coalition forces have gone down to post combat levels in afghanistan. we would be interested in your assessment whether you currently have the forces you feel you need to carry out these two missions. we're also seeking your best military judgment this morning on what further reductions you would recommend for u.s. forces in afghanistan and under what condition. at yesterday's hearing ambassador warned the consequences can be as great or greater than the consequences of engagement or intervention in the first place. i share the concern with many on this committee that any future reductions in u.s. force levels in afghanistan should be based on the security conditions at time of the proposed reductions taking into account the capabilities of afghan security forces. we would also be interested in your views on the full range of

challenges you face including the progress of the afghan security forces and building key enablers such as logistics and air lift. the afghanistan/pakistan security relationship including border coordination and the reports of a growing isis presence in afghanistan. again, thank you for your service to the nation. >> general campbell. >> chairman mccain thank you very much for the opportunity to appear before you today. i'm honored to lead and represent the men and women of the forces in afghanistan. thank you for your steadfast support. do to your leadership and commitment they are the best trained, equipped the nation has deployed.

i like to pay tribute to our military families. in many ways our frequent absences from home are harder on them than on us. i like to recognize the over 2200 servicemen and women killed this action in afghanistan and the over 20,000 plus wounded. each day we stride to bring meaning to their sacrifices. we honor their memories and loved ones by continuing to build a secure and stable afghanistan and by protecting our own homeland. over 13 years have passed since 9/11 attacks. we haven't forgotten why we came to afghanistan and why we remain. ensure another terrorist attack has not occurred. it's been seven months since

appeared before this committee and much has changed. afghanistan, the resdwron, thegion and coalition have undergone transitions. most have been positive for us. i'd like to emphasize a few today in other words to place our current campaign in context and reaffirm the conditions exist for us to achieve our objectives. in september, afghanistan completed the first peaceful democratic transition in history. although prolonged this transition was still a monumental achievement. it represented the achievement to a democratic open society. the difference between a new national government and its predecessor is night and day. our partnership is strong.

we have a radified security agreement and a nato status agreement. dynamics within the region continue to evolve as well. nowhere is this more efvident than in the pakistan relationship. senior pakistani officials recognize they can no longer make the distinction between good and bad terrorists. in the wake of this tragedy the blame game between both countries have stopped. i've witnessed sub stanstantive changes. positive exchanges between core commanders occurred in kandahar.

last week six afghan army cadets are attending the pakistan military academy. this wasn't happening before. particularly to address extremist sanctuaries on both sides of the border. i remain optimistic that both countries are working toward a more productive relationship. the enemy remains in a state of flux too. constantly pressured by the nsf, suffering from dissension in their own ranks. in a desperate attempt to remain relevant they're failing to win over the afghan population. they're killing innocent civilians and it's time to lay down their arms and rebuild an afghan nation.

the possible rise of isil is a new development.