the second issue is that frankly, the literature survey indicated that the lack of systematic characterization also didn't always make it clear what actually was being loaded. >> okay. well -- >> so we have to work on both of those. >> there's obviously tremendous concern in the communities and the first responders. >> and secretary fox, again, is equally eager to resolve this, and we will be cost sharing this work. >> thank you. i'd like to ask you about the nuclear negotiations between the p5 plus 1 and iran you might know something about. the negotiated framework provides the basis for final agreement, and you have talked about how the framework blocks iran's overt paths to a bomb, both the uranium route and the plutonium route, but the blocking -- the blocking the

covert path is in question and more challenging. and while the framework argument spells out an extensive and intrusive inspection regime over the entire supply chain for iran's nuclear program, there still will be concerns that iran would cheat and break out toward a new bomb, toward a bomb. but given all the various restrictions and inspections that are in place throughout the supply chain, iran would have to cheat in more than one way and not get caught. so my question is, can you talk about all the ways that iran would have to cheat in order to get around the terms of the agreement and set up a secret uranium enrichment program? >> sure. that's a big question. >> can you answer it in the five remaining? >> right. but i think you've already put your finger on it in the sense

that the transparency and verification elements that will be put in place in an agreement first of all, are unmatched to those in any other situation. in terms of their comprehensiveness and intrusiveness. but specifically because of the scope of the activities they would have to manage, succeed at an entire supply chain from uranium source all the way through all the processing of uranium to the manufacture of centrifuges outside of the iaea purview. they would have to be able to avoid various kinds of sampling and surveillance activities. it would be quite an

achievement. and so i feel that these verification measures are extremely strong and as we have said, special measures like the uranium supply chain surveillance will be in place for 25 years. so it would be quite a long period for observing whether or not iran, in fact wants and has only a peaceful program. >> thank you for your answer and thank you, madam chair. obviously, as we go forward to june 30th and right beyond that, all this will be front and center. thank you. >> thank you. >> senator. >> thank you madam chair. i want to go down the path that senator manchion had regarding coal. the u.s. produces about a billion tons of coal per year. in looking at the global

numbers, it's about 8 billion tons annually. so we represent about 12% of the world's coal production. said another way, 88% of the coal production in the world occurs outside of the united states. and it looks like, projection in the next 10 to 20 years, coal production globally will only increase, plus or minus. as you know, coal is an important fuel for electricity generation in montana. in fact, more than 50% of our electricity in montana comes from coal. i believe the national number is -- the round number is around 40%. it also provides good-paying jobs jobs for monmontanans. it provides $120 million in tax revenues for our state which supports our schools our infrastructure. it also powers midwest utilities. gary peters the other new freshman senator, one of the new

13 new freshmen senators from michigan mentions it powers our automobile manufacturing sector. so we are the saudi arabia of coal, globally speaking. we have more coal reserves than any other nation. in fact, montana has the greatest coal reserves of any state in the united states. i'm just concerned in looking at the review in trying to make sure we achieve the right balance here of the all of the above energy portfolio clearly a state like montana, we have bright skies. we have solar potential. we have tremendous water resources and hydropower. we have great wind potential. but we also have oil, natural gas and importantly coal. there are two export terminals important to my state that are currently under review by the u.s. army corps, the gateway pacific terminal and the millen yul bulk terminal. i was recently out with a member of the boilermaker union there in montana a tribal member,

looked at the importance of looking at coal exports. and lastly looking at the broader environmental picture montana coal or u.s. coal we actually have cleaner coal than many other countries around the world. so my question is -- and i welcome the mention in the report through your lng exports as discussed earlier in the transmission corridors, but where do you see the priority looking at coal exports given that the global coal production's going to increase over the next decade plus? i just don't see much emphasis or thought relating to coal exports. where do you see that in our broader strategy? >> well, senator coal exports are not, frankly, something in the department of energy's purview -- in fact, i believe a lot of the -- well, the army corps often has a role, but i

think a lot of it also is state permitting and state eiss, et cetera. i do want to note that the -- you mentioned the amount of coal in china of course uses roughly half of the world's coal use. and we expect that they will be peaking their coal use relatively soon. but still, a lot of coal being used. we, of course, believe that carbon capture and sequestration and often with eor is critical. i do want to note that the department of energy will be hosting the international carbon sequestration leadership forum in montana. i think in august i believe it is. and we'll be sure to get you that information for that meeting. >> well thank you.

and i know your review mentions the administration's federal infrastructure project permitting dashboard and the review recommends expanding an online project tracking system. i guess as we look at the broader energy picture and given that coal is still the number one source of electricity in america, it's number one and 51% is certainly in montana, i would like to ask you to consider perhaps adding tracking coal export projects as we look at the broader national energy infrastructure as a part of that equation. i think it's going to -- i think we all agree we want to continue to work to improve the outcomes here in terms of coal and coal-fired electricity. but the reality is it's our number one source of electricity and needs to be an important part of the portfolio. >> we can look at that. i think coal exports are roughly 100 million tons, i believe. it's quite a large number. >> yeah and we look at south korea, taiwan japan, they're

relying on other countries like indonesia and australia. and back to this point, 88% of coal productionen its outside the united states. we have a chance to continue to grow jobs, tax revenue by expanding our coal exports, and i think it's a way to keep electricity prices lower as well as create jobs and tax revenues for our infrastructure. >> i actually have just now was handed some of the words that we have on that. actually the east coast ports are alone are shipping about 70 million tons. and the companies -- it says here, quote, companies that own and manage export terminals continue with long-range plans for expansion focused on the potential for continued demand in europe, asia and south america america. so these are data that we'll look at. >> i'm glad to see the east coast, just turn your attention to the west. senator barrasso here from wyoming, we have tremendous opportunities right now between wyoming and montana here,

looking at west coast opportunities. and getting back to where is the expansion occurring? over in asia. west coast terminals become very, very important. >> understood. and i recognize the low sulfur content. >> thank you. >> yeah. >> thank you, madam chair. secretary, one of the areas i'm pretty excited about right now just because we're seeing such rapid change is the area of power storage where capability is increasing at a pretty good clip. costs are coming down quite quickly as well. and i'm wondering if you could take a few minutes to talk a little bit about what you see as d.o.e.'s role in accelerating this technology sector that could really change the way we think about energy, change our generation needs, really facilitate time shifting and move us forward to a very, very different kind of grid than sort of what we've experienced in the past.

>> thank you, senator. yeah storage certainly could be a game changer. as you sea, costs are coming down across the board. utility scale storage, distributed storage, which is actually very interesting. >> sure. >> and then of course, transportation storage systems, batteries, which of course might also be grid connected in the future. so we are working on all of those. arpa e, for example has had strong support in this area. we have a hub that we have established at argan national laboratory, across the board with novel chemistries, et cetera, to reduce costs. and we are including storage in a lot of our system modeling activities to see exactly how storage can help us achieve our goals in ways that might otherwise be much more complicated. if i may put in a plug, i think

the -- we did do a report at senator wyden's request about a year and a half ago, i think on large-scale storage and integration into the grid. and that's very important. i'd like to add, however, that the issue of consumer-level storage combined with distributed generation is getting to look extremely interesting and can be yet another challenge to the utility business model that we have to -- that we have to look at. >> i think that's quite clear. i'm sort of encouraging utilities to get ahead of this and make some decisions about incorporating these things into their business model because if they just look at saying no or making it more team to put distributed generation on their homes, distributed solar -- distributed storage at their homes, you know you could see a

very unstable or business model moving forward. >> yes. >> it kind of brings up the issue of rate making. and i want to ask you a related question because both the cost the photovoltaic panels coming down very quickly plus the energy storage changes that we're seeing in the distributed market are fueling a lot of change. and i think one of the things we need to see is the ability of states to make very accurate decisions about the costs and benefits, both sides of the ledger of those things being brought onto the grid. and i wanted to ask you if you think that state regulators have the tools that they need to adequately quantify both sides of the ledger, both the benefits and the costs of distributed generation and distributed storage so that they can make accurate rate cases. and is this an area where possibly the labs might be able to help states accurately assess

those costs and benefits? >> i think there's a long way to go. and in fact, one of the major recommendations -- major, again one of the many recommendations, i should say, i guess in the qer was that we really need to work on getting better valuation algorithms for all kinds of services that are being provided in the grid including, of course, in the distribution system, which you were referring to in effect. the -- and so you alluded to the issue of distributed solar for example, and we know what's going on with the arguments involving net metering and value to utilities. and i think you know, on the one hand there is a real issue of how do you value the connectivity that is still there? but on the other hand, how do you value the benefits to the overall grid system from either distributed generation or

efficiency programs? in fact another issue as you know, another court issue is this question of how do demand side programs propagate back to rto and iso considerations and regulation. so this is a critical problem, and we certainly identified it. we didn't exactly put the solutions forward, but i think that's something to work on. and i think your idea maybe of getting a lab focused on this would be good, particularly in that we have also proposed one of the major, quotes, down payments that we have in our fy '16 budget proposal to congress is the grid modernization. now, the grid modernization program we put forward is not simply about you know, syncro phasers on the high-voltage lines. it includes grant programs and includes a whole set of issues. so we could take that on. >> i look forward to working

with you on that and i think now is the time because we're seeing a lot of policy decisions made with a very meager amount of data. and the more data we have the more direction we have the better those policy decisions will be. >> if you have some specific ideas and directions we'd love to get together and talk about them. >> fantastic. thank you. >> critical issue. >> yeah, secretary, nice to see you. i was pleased to see an emphasis upon lng export terminals. as you know, two parishes in louisiana, kind of ground zero for that sort of thing. >> mm-hmm. >> and the original qer i'm told had increased funding to dredge the ship channel which will be so important if two tankers are going to go side by side, that sort of thing. but then i'm told that omb kind of pulled funding out. now, of course i'm representing the state with lots of harbors. i'm looking at the harbor maintenance trust fund which has

more than enough money to pay for all this, and it's not happening. so any thoughts as to why when the money's sitting there, we're not emphasizing using the dollars that are raised in order to increase the potential of the infrastructure that you stressed so wisely in your qer? >> well you apparently have seen the cartoon that we had in terms of the calcasieu channel and certainly the issue of keeping up with our inland waterways, problems in this case the dredging issues in that channel are obviously very important. all i can say is that i think the administration is committed to trying to accelerate those.

and two, can we have some transparency as to their assumptions because it's such a complicated project?

in terms of some nuclear projects, they do a lot of complex projects. >> i can see nuclear projects for a defense vehicle for example, a defense project but that would be quite different from this. >> first of all, of course, it's a unique project. so no one has looked specifically at this project other than d.o.e. and the contractors. i want to say when i looked into this job i made it very clear that i wanted to be transparent but also straightforward and data driven. and sometimes the results aren't so pretty but when we looked internally at d.u.e. this last year, we came out with a full

life cycle cost north of $30 billion. that in fact led to the idea of them going out for an independent contractor to look at that. the increase -- >> $30 billion in addition to that which was spent or $30 billion which was spent. >> it was north of 30 -- in that case, it was including the 4 to 5 that had already been spent. you know, that scale. two points about the aerospace, one is that they put in a lot of risk management contingency number one. number two is that the charge was included a cap on the appropriations spending annual appropriations spending that we viewed as being reasonable. now, the trouble was then that cap -- and this has been our problem right from the beginning, that cap then spreads

the project out so long that it builds up. informally, we have looked at the implications of allowing a higher appropriations -- annual appropriations cap and that does lower the life cycle cost significantly, but it's still in the high $30 billion, the high $30 billion. and i want to emphasize, that's not just the mock's plant. partly we're talking apples and oranges. the plant itself is only one part of a much bigger project including how you get the pits down into plutonium oxide and, of course, the operating costs over decades. so i want to clarify that's what -- let's call it the high 30s or $40 billion. >> i'm over time but i look forward to that briefing, thank you. >> okay. >> if i get a second shot, i'll take a shot on something else. >> okay. >> thank you madam chair.

first, mr. secretary, i want to thank you for your role in the iran negotiations. there's an extraordinary article, i think it was in "the new york times" recently about the role the department of energy played in analyzing the various proposealproposals. >> the labs. >> and it strikes me as fortuitous and the extreme that at the moment we are under these particular negotiations, we have a nuclear physicist in charge of the department of energy. i want to go to an appalling chart on page 226 of the report. i'm sure you know what i'm talking about. it's the differential in gas -- natural gas prices between new england and the rest of the country. 2-7 is the number of the chart. this is an infrastructure problem. and i just think it's something -- it's absolutely urgent for our region.

we went into natural gas in a big way, as you know starting in about the year 2000. now 50 to 60% of our electricity comes from natural gas. a lot of people like myself switched to natural gas to heat our homes. and last winter, winter before last, we had the highest natural gas prices in the world. and this shows us that almost double the u.s. rate. so i just hope that the department can be aggressive and forward-leaning in helping the governors, the delegation, the utilities to solve this problem. it's a pipeline problem. it's not a gas problem as you know. i think it's going to take an all of the above kind of strategy in terms of permitting and ts ait's a really urgent problem for the region. i assume awe gree. >> yes. in fact, the very first field hearings that we had for the qer were in new england specifically

driven by the gas pipeline issue. the representatives of all six governors were part of that meeting. and frankly the remarks that they made were such that the governors felt that they kind of were going to have this under control and would take care of it. in fact, i understand that next year, in 2016, there will be a substantial expansion of capacity taking gas from the marcellus, at least into kind of the boston area through there. but getting up farther north is a challenge there. i don't know how this will turn out, and i'm happy to work with you, senator king. >> well this is the problem with our system. we're either federal or state. we don't have regional entities and i think this is a case where we're not asking for federal

intervention, but we're asking for a federal quarterback, in a sense. >> yes. >> i think you can help to convene and move this process forward. >> and we are happy to do that. again, i think the issues for the southern part of new england look like they're coming under control probably next year. i don't know, but a good discussion. there are discussions about getting marcellus gas up to canada. >> right. >> and that might provide an opportunity for moving gas to northern new england. >> that brings me to my next question. there is a discussion about reversing the maritime pipeline which runs from eastern maine from massachusetts to nova scotia, reversing it and then exporting the natural gas from canada which would mean it would be technically not under the national interest review. i would hope that you would consider, as that project moves forward or the discussions, inserting a requirement that that gas be divertible during times of peak demand rather than going to canada, that there be a

provision that during peak demand, it could be retained in the region. we can discuss this further, but i hope you'll think about it. >> there certainly will be a national interest determination. >> good. and i commend that issue to you. quickly, i want to associate myself with the comments of senator hinrich about distributed energy and storage. i recently rewatched "the graduate." and the guy in that movie says "plastic," famously, "plastics." i would say if it were today, he'd say storage, energy storage. that's going to be a huge issue. i think one of the things you can do, and i think one of the troublesome issues and this is a national security issue s it seems to me, and it's also sort of a private rights, personal rights interest to have energy generated at your house. but the challenge is what's the

right number for the grid charge for backup and capacity? and it's got to be sufficient so that other rate payors aren't bearing the cost but it also can't be so high as to unreasonably burden this nacent development which is very important which i think is going to happen anyway. i think another area where you could be very helpful to us is to have your smart people thinking about what would be the formula for determining a reasonable backup charge or a reasonable capacity, however you characterize it. and finally, to really help us start thinking about i think, we've got to get to the point of realtime time and date metering and there's great value to the grid if solar is on at 4:00 in the afternoon. there's not so much value if it's 10:00 in the morning, how to figure out those kinds of

issues so that the compensation to the homeowner is fair and reasonable and also provides the proper incentives for that power being generated when we most need it. >> again that's the whole issue of the valuation which we need to look at desperately. and it's going to become more and more critical including for what i would call especially maybe semirural areas that have a grid and distribution system, and yet if as people go, perhaps off the grid because storage becomes useful obviously that then, spreads the cost over a smaller population. and it can be a real issue. so i think we have a real challenge as we look through what is an opportunity of the new technology possibilities and yet the transition from our current model is going to have some real strains in the system. >> thank you. >> yeah. >> thank you. mr. secretary, thank you for

your work on the iran negotiations. thank you, madam chair. >> thank you, senator king. secretary, i understand in response to questions from both senator gardner and senator barrasso where they probed a little bit on the issue of oil export. you said for purposes of this qer, you didn't go into that. and i understand -- i understand why. we're talking about infrastructure. but i also understand that this is one of those connects or nexus where if you -- if you have policy decisions that are made with infrastructure today as it is in place you're probably not going to be prepared for tomorrow and recognizing when we're talking about the issue of oil exports and what that might do for increased production domestically, bringing on new sources of supply which will then require additional infrastructure, that there is a

connection there. i understand why you would defer on a question like this but i do think that as we are talking about an energy infrastructure and policies for the country going forward, we need to be looking at the united states it

is our partners to the south and north, and it's that north american security and integration. and you spoke a little bit more

a little bit in previous responses about what we're doing to collect and share data. i think that that's critically important. but our reality is is we're still looking at these permitting delays for cross-border pipelines. obviously keystone xl is something that is out there in the news but it's not just keystone xl. it is so much more that we have going between our borders to the north and to the south. can you elaborate just a little bit more on how we really achieve what i think you and i would agree is critical not only to the united states but to our partners, mexico and canada as well? how do we get there? because right now we can't even get moving with a simple swap between canada -- excuse me, between the united states and

mexico for our heavy -- for their -- for our light for their heavy. >> right. well, i think, first of all, this may sound like a very, you know vanilla answer, but i think one of the issues is we need to start a much stronger dialogue with both countries than we have had. in fact, i was kind of shocked, frankly, when i -- >> when you say start, we've all assumed that we've been having these dialogues. >> okay maybe start was not quite the right word but i was trying to give you the impression that it's been nowhere near as robust as it should be. >> i would agree. >> frankly i was shocked, as i was about to say when i went to ottawa last year, it was apparently the first time the secretary of energy had been to canada in well over a decade. which was kind of surprising. we have now agreed among the three energy ministers of the three countries that we will have at least a -- at least an annual trilateral energy

meeting. for example, the data agreement we signed last december, we also met together actually in houston this past week and had a panel together. so part of it is we do have to have that discussion identifying issues. i can assure you that issues like with mexico the swap were raised, and i will be part of that discussion in the add many administration to at least discuss that decision. i think it's a very important decision. we have just set up a joint task force that i will chair on the -- i do chair on the american side with mexico. and in fact, we'll be in mexico in may meeting with both the energy and the environment ministers. so i think we are -- and the qer's been part of that frankly, has really been picking up the pace of this dialogue. so i think we're mapping out a whole bunch of questions now

that we need to address. and i want to make some progress in the next year and a half on this. i might add, by the way, the mexican delegation, a subject that we've talked about before in a different context, but they, for example, also raised a desire to work closely together on something we have not worked on together which is methane hydrates, another issue. so i think we're getting an agenda mapped out, and now the issue is to really go forward. >> well, i would certainly encourage the administration to be aggressive with this. we talk about it and to hear you say that we haven't had a secretary of energy visit canada in a decade is really stunning, yeah. >> it was crazy. >> we can do better than this. thank you. senator cantwell. >> thank you madam chair. mr. secretary, i had to step out for a moment, but i know that several members have been talking about the grid in general. i mean, of this quadrennial review, the key recommendation

for the immediate focus is about infrastructure, and the grid is a big part of that, is that right? >> oh, yes, absolutely. one of our four kind of major core areas. >> right. so part of my question is we've in previous legislation did a lot of focus for states to help us in discussing where to go on grid modernization and try to get various schematics in place and microgrid systems and figuring out how to get those microgrids connect to the larger grid. and then, obviously, frequent -- the issue of cybersecurity becoming a larger issue, and that's mentioned in the report as well. and obviously d.o.e. plays a major role in this. what are the schematics that you think that we should be looking at, you know, on the grid? what kind of r&d should we be doing? maybe you want to talk a little bit -- i almost wanted to ask you before about why transform

transformers are so important. maybe explain that a little bit. but clearly there are approaches we could take as a federal entity to push further on where the grid needs to go. and you have done a good job in the report of combining the elements of different types of energy sources. obviously, i don't think it's called out so specifically in the report, but to me the biggest advent here is just the notion of distributed generation. the same kind of distributed generation that the internet brought us is bringing us distributed generation opportunities for energy which means, then, you know, again, it becomes a platform play. but what do you think are the schematics that we need to do? so how would you approach this next phase of working on grid modernization? >> well, on the r&d side that you mentioned, i mean you know, in broad strokes, i think the much more aggressive

introduction and utilization of i.t. with the grid is absolutely critical. just, again, as an anecdote last week when we were going to release the qer, we were in the control room and we saw where the data are coming in from these syncro phaser measurements which is a wonderful new technology. but the fact is ift had not been integrated yet. so we have a long way to go to fully benefit i.t. and that's both for the transmission system high-voltage system and distribution system. secondly, of course, the more we introduce i.t., the more we have to address the cyber vulnerabilities. that goes hand in hand. so that's a second major area. a third major krar --area -- >> well, isn't it more with so

many transactions and e-commerce and everything living along the line, if we don't harden the electricity grid or make it redundant in various ways that we're going to be susceptible, is that right? >> yeah. so we need the cyber protection of the grid so that it, in turn is available to support all the other commerce -- electronic commerce that we have. a third area, you touched upon it, is actually i would say is integrating the ideas of distributed generation and microgrids. again, as one example, of a project that helped shape some of our thinking in terms of the resiliency recommendations, we cost shares with the state of new jersey, a design of a so-called microgrid except it's not so micro. like 50 to even more megawatts of distributed generation.

in a microgrid to protect to make resilient a critical transportation corridor, we put in relatively small funds to do the design work, and then they were successful in getting essentially a post-sandy d.o.e. grant, hundreds of millions of dollars, to implement it. so the both the architecture gd and microgrids is important. but also this idea of leveraging our funds to then have big infrastructure projects done is a good model that we use here. so those are important. on transformers, the idea is that these really large transformers typically to step down from very high voltage to a lower voltage tend to be probably more than they need to be. they tend to be rather unique. and very -- if you have a problem -- very hard to replace. they cost millions of dollars each. it may say six months to replace

it. and you've got a big problem. so that's why we're thinking of working with utilities to see if we can't have a private/public partnership to have a more uniform way of having backups for key transformers. >> well i think efficiency screams out in your report that say things for all of us. and i hope that we'll take your recommendations and go one step further. what is it that grid investment will get us juxtaposed to ignoring it and having cyber threats or ignoring it and thinking about the climate impacts that we saw devastate substations and everything else. we clearly are spending billions of dollars in aftermath repairs. and we can be smarter about that. >> and there's a nice graph in there also that shows that over the last decade of dramatically

increasing in terms of outages is the impact of extreme weather. >> yeah. >> it has just grown enormously. >> thank you. >> yeah. >> senator. >> thank you madam chairman. i actually want to pick up on a question that you just posed. mr. secretary, thanks for coming to north dakota's part of the qer process. appreciate it very much. the qer recognizes the growth and importance of energy development in places like my state of north dakota and elsewhere as well as the need to update and expand our energy incentral structure as building a plan for this country, but it also discusses the importance of partnering with our friends and allies, canada and mexico. how do you expect that we're going to build a relationship -- a better relationship on energy, with canada if we don't approve the keystone xl pipeline? >> well again, the qvr nor i were going to come in on any specific project but we do note

that, first of all, pipelines we already have more than 70 pipelines across the border. and -- >> is that making an argument for or against it? >> it was a completely neutral statement of data. i'm a very data-driven person. and i believe 74 is the exact number, in fact. and also i'll just add in terms of working with canada that we have right now more than four gig ga gigawatts of applications for high-voltage transmission lines to bring hydro down. one of those champlain hudson which just got its final permits. my point is we have a big energy relationship with canada. we want to grow it more. that's independent of any specific project. >> along those lines i'm working on a bipartisan legislation. it's the north american energy infrastructure act. and it's designed to do what you just said, help build energy

infrastructure so that we can work with canada and mexico. north america has an incredible opportunity here. all forms of energy. so we're talking not just pipelines but also transmission lines, rail and road all in the right mix, efficiently and cost effectively and safely. >> i would just add to your list waterways as well. >> waterways, too. is that something you'd be willing to help work on? >> absolutely, i'd be happy to -- to chat, as we always do. >> thank you. i mean again it's not just transmission and pipeline but we've got railroads out there that are working to build more rail. we need capacity in all these areas and not only just for energy. and that's one of the things that qer talks about are those constraints. so how can you help us advance this legislation? how can you help us knock down some of these regulatory barriers so we can build this

infra infra infrastructure. we've got to get them through the military restrains. >> again, i would be happy to work with you, senator hogan but part already also in the way, maybe helping out as a gateway to other agencies as well. because clearly responsibilities for the issues that you're addressing are spread across multiple agencies. the department of energy has relatively little -- you know, we do the presidential determination for electricity lines, but obviously not for other kinds of transporters. >> and it would be great if maybe you would link efforts so we could streamline the process. maybe that's a good role for d.o.e. do that's certainly we could certainly discuss. absolutely. in the same sense that we were the executive secretary for this qe qer. >> i'd like to switch to another item that i'm thinking i didn't get to watch all the testimony, but i think perhaps the chairman brought up oil export.

this is an important issue. in many respects. not only in terms of our economic growth and building our energy industry here at home but also in helping provide more supply, reduce the price at the pump. give me your position on oil export and how we should approach lifting the oil export ban. >> my position is that that's a responsibility of the department of commerce, but i'll make a few observations. which i did last week in houston at the conference. and this is not dispositive in any way about whether we should or should not or how we should deal with exports. it's a bigger discussion. but i do think in that discussion, it's very important to have it in the context of, you know the ground truth today that we still import 7 million

barrels of oil per day. that's not again, say yes or no on the question that you posed, but we should remember in contrast to lng where we are and soon will be more than self-sufficient, we remain large importers of crude and still significant supporters of net petroleum products. that's a reality. the issue in the end becomes the one that you did point out. would -- would a lifting of exports result in a significant increase increase. i think that's a question that's not often enough focused on in terms of analysis and certainly it's probably the case. but today with what's happening with oil prices, et cetera, it

might be a hard case to make that one would see a huge response in terms of production. but that's the question to address. >> what i would ask, mr. secretary, was that just as you worked with us on the lng exportive legislation that we have a real opportunity to pass and your effort has been significant and important in that effort. i would ask for that same help and willingness to work together on the oil export ban. >> i'd be happy to do that. again, with the pro vice maybe help make improvements to other parts of the administration. >> thank you. >> thank you, secretary moniz and know that last week we had very interesting discussion here with mr. saminsky, talking about the impact of iran's sanctions

and that by not removing the oil export ban we keep in place or we look forward to continuing that conversation. >> i might add that you probably discussed, that eia has done a whole series of reports that will culminate in june of relevancy to the export discussion. >> we're looking forward to those as well. let's go to senator franken. >> thank you, madam chair. i would just put a word in for caution on the level of export of lng. minnesota produces no lng, and we like to keep the costs down. so for generation of electricity, for manufacturing, for heating. so there are, i believe, the

energy information agency has said that it would lead to cost rises in the united states if we do export and especially if cost rises in the united states if we do export and especially extort a significant -- export a significant amount. mr. secretary, i'd like to talk about renewable energy production op indian lands. our tribes in minnesota and elsewhere have tremendous renewable resources. i mean if you've ever gone to arizona you know that there's tremendous solar there. with distributed energy as a goal and micro grids as a goal i would like to see the energy

team up with indian energy to pilot programs there for microgrids and for distributed energy. because it would create jobs in the indian country and also be a wonderful place for us to pilot programs, you know, cutting edge technology and to see where that leads. so i would just recommend to you, thinking about indian -- you know when senator king talked about storage as the word they use in the graduate now for plastics, it wouldn't be because the whole point of that line was to make fun of that guy. storage is really cool. and really cutting edge. so as a former satirist, i can

tell you that today no, storage would not be used instead of plastics. so i take tremendous issue with the senator from maine. >> where have you gone senator dimaggio. >> that's a reference to the sound track of "the graduate" and for those of us of certain age. i also want to ask a little bit about -- so would you look into that, is what i'm saying? >> i would love to collaborate on that. and also by the indian country and alaskan native villages et cetera, i'm going to ask for some help, in fact. you know we have a program for indian energy and i think it's very effective in terms of what it does with a very limited budget. in fact, it's authorized only with a cap on its budget. however, we do have a proposal

in the budget they would like to bring to your attention, actually you and the chair, which is we requested -- to be honest, it was not funded in the house mark -- $11 million for a loan guarantee program for indian energy, alaska native villages. and the idea there is while it's $11 million of credit subsidy, it probably could leverage like $100 million of actual projects, which is way above the budget that we have for indian energy. so i would be happy to come and discuss that in more detail and work through, i think what we could do there. and the idea would be sub mega watt projects. >> as the chair and i know the funding levels for indian and native peoples is incredibly low.

and i really believe combining power that the chairwoman and i agree, you know, are enthusiastic about that also. so that's biomass very often. and so those kind of distributed energy -- i also just, since i'm running out of time, just want to touch on methane and the importance of capturing it. and so because of the greenhouse effect of methane is so much greater than that of co2, that we need to really look -- capture that. >> right. and in our work, including in the qer, we have two focus areas for due. there's other focus areas in terms of the production but we look at the tnd infrastructure and on the national gas

distribution side we have just a tremendous amount of old, you know cast iron pipe and bare steel. it's both a safety and a climate challenge. we propose a program to fundamentally to support low income house holds as access rated replacement programs are absorbed into rates. so that's an example of what we want to do there for both safety and environmental reasons. in addition, we're working on compressors which are the biggest loss point on the natural gas transmission system. >> thank you. thank you, madam chair. >> we look forward to working with you on the indian energy issues. senator kas ki. >> i'm about to ask a bunch of questions i don't know to answer to. >> we don't either. >> i hope you do.

but if you say you don't i'll accept that. what has been in the news lately is the uranium 1 sale to russia. it may not be uranium 1, but the canadian company that gave contribution to the clinton foundation. they had uranium mining rights across the world including the western united states and subsequently sold to a russian concern. and there's a certain scandal involved. i'm not here to discuss the scandal. what i am interested in -- and i think it's arm z that currently has these holdings. what percent of activity mind u.s. uranium resources are controlled by the russian concern? do you know that? >> i do not. i wasn't aware of any, to be honest. but i don't know the answer. i'll look into that. i don't know the issue. i'm sorry. yeah. >> okay. okay. then if you don't know the issue

it may not work for any of these, because the second question would be i understand again, that the russians now claim to control a significant portion of world uranium deposits in which case can they choose to increase price by limiting supply. again i ask this for no other reason than i think there's national security issues at stake. >> again, i'll have to look at this. i'm happy to get back to you. however, it's a litting surprising in the sense that i believe the largest reserves are in kazakhstan and the second largest are australian. >> they own those too. they combined with the south african firm and purchased australian and ka zack firms. this is in a "the new york times" article. >> u didn't see it.

>> but they now own reserves in the western united states which i gather are being exported to canada the mined material even though it's not allowed for uranium 1 but the trucking company is allowed to export. so it seemed like a loophole. i'll ask these for the record since you don't know the answers. it seems of incredible importance to our national security and to your energy security. that's why i ask. >> i'll look into it sir. >> thank you. >> thank you senator cassidy. we're just about to the noon hour. i've just got a couple of question questions for you and one follows on your discussion with senator franken about what the office of indian energy is doing. and i think we have seen some good things. i'll look forward to discussing this loan guarantee with you a little bit more. i think we recognize that in

places like alaska and in going back to the discussion about how we partner with canada and some of our infrastructure issues we know that heat is the biggest energy challenge in the north not necessarily electricity. so recognizing that the qar is looking to partner with canada on energy delivery to remote areas, this is something i want to work with you on. i want to try to explore some of the different delivery systems that you're talking about there, whether it's space heating efficient design housing technologies. i was up in the territory with secretary of state on friday. you realize how isolated these communities are, even communities of significant size and significant resource. but the challenges they face

they also are exclusively powered by diesel. >> and expensive. >> extraordinarily expensive. so how we deal with this. and we've got so much to learn from one another. and this is where i think we have certain advantages coming at us as we take over the chair of the arctic counsel, how we can be partnering with our northern neighbors and understanding the best technologies that are out there. but i would encourage us to look at what we have, developing in alaska, whether it's the cold climate housing research center, the innovative technologies that have been coming itout of there in regards to sustainable design. we really do have some remarkable models. and so this is something that i encourage us to really -- we'll partner with you on, but we have some key opportunities. the final issue that i want to

bring up relating to alaska is the recommendations -- there's two of them. one is the remote community renewable energy partnership. and the other is this coordination with canada. and again i'm pleased with the direction that we're looking there but want to know that we're working together in this. but with regards to the remote community renewable energy partnership, the qer states that the state department with its partnership will construct a high penetration wind diesel hybrid system in a rural arctic community. now it suggests that it's one project that they're looking to help build out. but when you take into account what we've done in the state of alaska since 2008, we've invested more than $247 million to 275 renewable energy projects

across the state through our state's renewable energy grant fund. we funded $5.5 million to 20 emerging energy technology projects, spent more than $600 million on making homes for energy efficient. it's been a total of $850 million that the state has invested with its expertise and just all that it's doing. so i'm hoping that when we're reading what's coming it of the qer it is -- it's not just limited to a single project that you're looking at with the remote community renewable energy partnership, but again looking to how we can building off what the state has already done, is continuing to do, but really develop a stronger partnership there. >> yeah. and again i would welcome that. and i think as you know we do have -- i think in anchorage is

where they're located a person from enrail and a person from natl there. and they might be good conduits for looking at how the state programs and what we do could be synced up. >> we'll work together. >> we do have those people based in alaska. >> yeah. and my last question then for you is regarding spent nuclear fuel. very little in the qer about nuclear energy and really nothing about the back end of the fuel cycle. we have been working on this and i truly appreciate how you have intersected with not only senator cantwell and myself but senators alexander and feinstein on this issue. but why didn't, why didn't we address this in the qer? >> well again the qer was on

infrastructure and moving energy around as opposed to the concern nuclear power. i think you're correct. we could have put together in there in terms of transportation of spent fuel for example. we do have in our budget request for fy 16 $6.9 million, i think, to specifically address the transportation questions of spent fuel, including the kinds of rail casts you would need, et cetera. so that's in there. but otherwise yeah, we did not address that in the qer. but again, i'm happy to keep talking about that including the storage options and the transportation option, developing consent based processes and looking at the defense waste path ways that we can now, that we can now pursue. it's a full agenda.

>> it is. >> and i look forward to working on that. >> it is a full agenda and we're going to be having a hearing on it on our neck waste legislation in the next month and a half or so. we look forward to your comments on that. >> great. >> obviously a great deal that you have presented through this qer. we appreciate that. but again, i think it's going to be incumbent on us, you and your team and d.o.e. and those of us here at the committee and on the house side as well to really figure out how do we move forward with this how do we keep up the level of engagement how do we make sure this is more than just talk. because the need is to clearly there that we are limiting ourselves, we are limiting our economic opportunities, we are limiting our potential as a nation when we don't focus on a

longer term view of our energy infrastructure. if we can't move it around to where the people are, if we can't do it safely and in an environmentally responsible way and a cost effective way, the rest of the system just doesn't work. so work with us to make sure that we've got a real action plan moving forward and i look forward to that. >> we are very eager. and in fact we have also -- it's not in the plan but we can share this, come back and talk about what our recommendations in the plan -- you know which ones could we pursue with you know, current authorities in the administration and which ones -- and that's relatively few, versus all of those that we'll need action in this body. and so i have no interest in having a wonderful monument on a library shelf as opposed to an implementation plan. and we will be turning now both

to implementation issues of qer 1 and starting to think about the second round of qer. there was clearly only one sies of the overall picture. if i can repeat something i said earlier on within following on what you said, that the decisions that we take i think will be important for shaping the energy system for decades. but the decisions we don't take will be equally important. doing nothing is not neutral in this business. >> i agree. and it ought not be an option either. we look forward to working with you. senator cantwell? >> i know we're closing out as we get to the noon hour. i just again want to thank the secretary for the report and heading that up in coordination with other agencies. i certainly appreciate the climate goals that are in the report as well. more specifically want to work with you on -- i think it was something like 1 million people

currently work in energy transmission but we think there will be an additional 1.5 million by 2030. that's the need. i have no doubt that we need to skill up a lot of the american workforce if we're going to meet that demand and that goal. it's, as you said, i.t., meeting the grid and it's an exciting opportunity. but i think at the base level there's a lot of work to do, whether that's through d.o.e. or inner agency work or apprentice programs or many other things. but i think skilling the workforce that we need for the things that we say we want to do is going to be a critical aspect of meeting the needs of the future. >> we have formed not so long ago a jobs strategy council at d.o.e. under the leadership of dave foster. be delighted to have him come up and meet with you and your staff

and or with others. i think making some real progress in a number of issues including the veteran hiring into the arena. they're involved in all kinds of issues in terms of driving a jobs agenda for energy. >> thank you. >> thank you very much. with that we stand adjourned. >> thank you. thank you. coming up here on c-span3 at 10:00 a.m. eastern, live coverage of a hearing before the house oversight committee on how a small guy ro kopter entered restricted air space and landed on the west lawn of the capitol a couple of weeks ago. and later on c-span, a joint conference to hear from the

prime minister of japan, shinzo abe. we'll have that line at 11:00. house transportation committee chair bill shuster while speaking at the national journal today took questions about his his relationship with an aviation lobbyist would affect his ability to head the committee. he says he's gone above and beyond what the rules require but the law requires to make sure we're doing things appropriately. the pennsylvania congressman was at the journal to talk about what he hopes can happen with the highway bill. this is about 50 minutes. good morning. welcome. i'm poppy macdonald and i want to thank you for joining us this

morning. thank you for joining us. so we can have your full attention, ask you to please silence your cell phones we would real lie appreciate it. we encourage your comments your questions and your feedback this morning via twitter facebook or instagram using #njconversation. for those of you wishing to ask questions, please submit your questions to the moderator via twitter using #askvj. in addition to featuring chairs of the congressional committees like this morning, these conversations will feature senate leadership, cabinet secretaries and other high level government officials and presidential candidates. we're so pleased that the honorable bill shuster has joined us this morning. as you probably all know, representative shuster is the chairman of the house transportation and

infrastructure committee. this is his second term as chairman of one of the largest committees in congress. since coming to congress in 2001, he has been a member of the transportation committee and has played an important role in transportation policy. ladies and gentlemen, chairman bill shuster. [ applause ] >> thank you very much poppy. thanks for having me back. i was just talking to fawn backstage. the last time we were here we both kind of shrugged our shoulders. it was three years ago. it's been a while. time flies when you're having fun. i look out and see a lot of the usual suspects that show up when i'm talking about transportation issues. ail have to warn you ald i told fawn, she said what are you going to say in your opening remarks. it's probably a lot of what you've heard me talking about in the past couple of years. here it goes. i really appreciate the opportunity to talk to the

media, the folks like you that care deeply about transportation because i think we all know that it's a quality of life issue. it's about creating jobs it's about creating convenience. it's about getting us to and from, getting the products to and from to make sure we have them on our shelves and wet get to your families, to the playground, wherever we're going in the country. i look out at every crowd and i say, we're all in the transportation business. everybody today was touched by the transportation business. everybody in the room obviously, but even back home when mom and dad are getting the carton or milk out this morning, that got to the house through the transportation system. it's critical that we pay attention to it. i believe that there's a federal responsibility as i've said to this room and many others over the years. article 1 section 8 is pretty cloer for me that there's a role for the federal government not to do it all but to be a partner

with the states and the local government to make sure that we're connecting this country. what we've tried to do over the last couple of years in the committee is work on a bipartisan basis. that's always my goal to start out sitting down with my colleagues across the aisle and try to develop a common ground where we can move forward. u think historically that's been the committee's history, sitting down, working things out. we continue to do that every day. peter defaz yo is a good partner, somebody that is very smart and he's been around this town for more than two decades. we knows where all of the bodies are buried when it comes to transportation. me knows what was tried before. it's good to have somebody like that you can work with. peter is passionate. as you might have saw the article that fawn wrote i said he rants on the house floor. i probably shouldn't have said rant but peter is very passionate. when you sit down with him, you can work with him. the priorities for the committee are first of all surface transportation bill which we're

working through. it looks as though we're going to have to do a short term patch to get to a longer term bill and we're working closely with the leadership and with paul ryan to figure out how to do that short term patch and then move on to a longer term bill. i feel fairly confident, though that we're going to get a long term bill because both sides of the aisle, both sides of the capitol and both sides of pennsylvania avenue want a long term bill. as i travel this country and as members travel back to their districts and their states, that's what they hear. we must have a long term bill. that's the goal. again we need to continue that federal partnership. i spent a week in -- not a week but a couple of days in any district with four or five secretaries of transportation from around the country to raise the awareness and talk about the need for the readfederal partnership. i've yet to have one single governor ask me to send it all back to the states. they know it's a responsibility

that needs to have something at the federal level again to make sure we're connected. as i said, as we move through the bill we want to empower the states and local governments to be able to move faster. map 21 did a lot of that. we're waiting to see how that rolls out. some has. public/private partnerships we need to focus on. having an intelligent hit until the bill. talking about the cars the transportation of the future. not that we deal with regulating those cars, that comes in under other committees' jurisdiction but how do we build roads that we're going to build in the next five to ten years that have cars and trucks with this technology on it, driveless vehicles. accelerating product delivery streamlining and focusing on freight movement in this country is critical. that should be the focus of where the federal money goes. we got to find a way to pay for it that doesn't add to the

deficit and the debt. second major legislation that i'm focused on is faa legislation legislation. we're losing our lead in the world, whether it's manufacturing, airline service, component manufacturers, we have to make sure that our government is out there able to push the ball forward, help them get out f their way so they can continue that lead in the world. when you look at the airline industry we're moving towards a billion passengers in the next several years. a billion passengers flying around the country and flying around the world. i believe we're going to need to do something that's transformational. makes it so that when our manufacturers are looking for certifications on aircraft or components that it moves much faster. again we can't allow the rest of the world to be moving faster than we are. we need to modernize the air traffic control system which is a big part of what we should be

doing. next general which we've been working on for the last ten years, we spent $6 billion and we have very little to show for it. at the same time verizon over that last 10 years as upgrated its operating system four times. while we here at the faa can't move forward on much of anything. stakeholders have lost their confidence in the faa bureaucracy and again i think we're seeing all of the groups out there saying -- we've spent the last 16, 18 months talking to everybody about the need for transformation transformation, about the need for change at faa. we're all in agreement, all the stakeholders are in agreement that there's a problem. we're trying to figure out what the solution and figuring out how we can move forward in a bipartisan way and making sure that the stakeholders are at the table helping us craft a good bill. on the committee we have a very busy agenda. we passed the passenger rail bill in march. i hope to see senate action on

that. we passed at a committee last week a fema reform bill. we're going to have on the floor this week waters of the united states, piece of legislation to try to stop the epa from putting out a rule that i believe will be very, very bad for the economy. we introduced a coast guard bill last week. and then next year we hope to do in this congress another resources bill and of course a pipeline safety bill with authorization will need to be done in the next several months and we're working on gsa reform. a lot is on our plate but i believe if we work together we can accomplish a lot of the things that will make america a better place the transportation system will be vastly improved as well as some of these government agencies being reformed that will be positive for not only the country but the products -- not the products but the services they provide. again thank you all very much for having me here toads and i look forward to hearing your questions. [ applause ]

>> great. thank you, mr. chairman. joining the chairman at this time is fawn johnson. she's a correspondent with national journal. fawn covers nick policy issues such as gun control, transportation and education. johnson is a long time student of washington, d.c. politics with more than a decade of experience covering congress and the administration. fawn johnson, ladies and gentlemen. >> thank you, poppy. i have an ipad right here with -- weight foraiting for your questions. we probably all have the same question so i'm going to try to ask them and then we'll get to q and a. keep sending them along. mr. chairman thank you for joining us. i realize we're boring compared to the protesters outside of the supreme court. thank you for being here any way. you touched on this briefly, the most immediate problem facing the congress.

i counted 33 days until the highway trust fund authority expires. and you mention in your remarks that we're going to need some sort of extension. how long do you think we will need for your committee and the ways and means committee to work out a long term bill. >> just like doing the long term bill, the patch is driven by the amount of money we find. we're hoping to do several month to give the ways and means committee to then do a bill. paul ryan wants to do tax reform and that's where i believe he'll be able to come up with the dollar to do a long term bill. so again the timing, working with ways and means working with leadership. we're right now developing. no decisions have been made to exactly how long. >> what's your preference? >> i want to go several months. get us through -- i think it's important to get us through the construction season. >> okay. >> it's like texas and florida. construction season lasts basically all year. but states like pennsylvania, wisconsin have a shorter window.

making sure we get through the construction season. >> and in the immediate future there needs to be an extension on the floor. >> right. >> you guys are out next week i believe. >> correct. >> so you need to come back and have something ready to go that can get through if senate relatively quickly. >> correct. >> what's the time frame on that? are we going to be seeing some sort of countdown to the 31st as probably many people in the room have seen many times? >> sounds like the countdown has already started. >> yes. >> not that many legislative days. >> right. >> so we are out next week. we're back for two weeks and then we allowed more memorial day, 22nd. it's going to have to be the second, third week. again, we're working with the senate talking with senator inhofe and senator boxer. senator inhofe i'm not sure what he said but e he would like a shorter term. >> he told me that he wanted it to be before the end of the fiscal year. that sound like it's not enough

time i would think for you to come up with a robust tax package. >> that doesn't get it through the entire construction season. pennsylvania still needs to go another month or so before they start to slow down. >> and so let's also talk a little bit about -- i already have one question from our listeners here about how long is long term when it comes to a bill? we've got to deal with the extension, but then what do we do next in. >> i believe five to six years is a long term bill. that's my goal and what we're working towards. like i said, besides the aisle of both house and senate were they're both talking about a long term bill. >> would bit the same level of funding? more? less? what are you looking at? >> i'm nudging paul ryan as best i can to do more but it's going to be at least the same levels. and what i learned, giving people the choice more money and a shorter term bill and less

money and a longer bill. everybody wants that certainty. >> let's talk a little bit -- we talked a little bit about this when we had a private interview about the tax debate that's come around us. >> sure. >> we know that we can't do something as big and ambitious as the kind of thing that dave camp has proposed. but in order to actually make a -- move forward in terms of tax reform that doesn't actually hamper any other changes in the future, there needs to be something more than just a small tweak on overseas taxes as you and i talked about. how do you see this playing out? you must be working closely with paul ryan to figure this out. whatever number he comes up with is going to determine how long you can do a -- >> correct. >> -- a bill. so what are you looking at?

what do you expect to have happen in terms of the tax conversation? >> well, and i believe you know, i read the papers. everybody is talking about some sort of tax reform, president, senate, house. so i think obviously it ooh not going to be the large big reform that dave camp was working on. but there's the opportunity out there to do some smaller things on tax reform. and that's where it will come in that -- again it's up to paul to figure out exactly where the dollars are and to do a five or six-year bill. we need between 70 and $90 billion to make that happen. in our conversations he's working hard hard on trying to figure that out. >> one of the things i've observed after having covered this for a while is the kinds of policy conversations, most everybody agrees on the need for some sort of robust surface transportation bill and the policy around that. so really the question is how do you pay for it. >> right. >> but are there any outstanding policy issues that you guys are

working on or that you expect to include in a bill once you get the funding structure put together? >> yes. focusing on freight the freight corridors in the country which also carry passengers. but having a focus -- taking the focus back because this's really what the system was set up to do. and making -- giving the states more ability to move quicker move faster and look at what we did in map 21 and see how the department is implementing those reforms. >> right. >> some of them we think are going in the right way, some of them we have concerns about and we'll have to tweak those. >> do you have in examples? >> there's a couple out there. one is making sure that the reports are done not consecutively, but at the same time. they're all coming together concurrently. that's starting to happen. but we want to make sure it moves forward. one of the things we put in there, the review process. two states california and texas are taking over the reform

process. when i say they're taking it over they're going to have to do the same as what the federal government does but the states are going to do it. the texas director of transportation was traveling with me in pennsylvania and they've only had it for a couple of months but he feels confident they're going to be able to speed that process us which is going to make a big difference in building roads in texas. >> and you also talked in your remarks about a technology title. >> yes. >> that's brand new. you want to give us a little detail on that? >> sure. i had the opportunity to ride in a driverless vehicle. when you see the technology -- >> it was documented on the web cam, if i remember correctly. >> i've rid nn three of them. one in pennsylvania they brought the same car down to washington which was a little more intense. >> they can't be worse than the drivers here. >> well the car was pretty cautious so the driver had to get aggressive to get the car in traffic. but still --

>> we need type a drivers of those cars. >> when they start talking to each other i think we're going to bring courtesy back to the driving public. >> i don't know. it's terrifying to think about. anyway i'm sorry. i'm derailing the conversation. the kek nolg title. >> these cars are coming. they tell me probably in seven years you'll be able to buy in the showroom a high end car. it will cost you $15,000 extra to get a car that will drive itself. and in 20 years the 75% of the sfleet fleet will be able to talk to each other. is there anything different we have to do? kwlont i don't have the answer. pennsylvania has contracted with carnegie melon to do a three-year study on how do we build roads to take these cars to be able to interact with these cars. is it different materials? does

the paint need to be different so the sensors pick up on it? i don't know the answer. but that's what we need to study to understand. when we build a road in the next five to ten years, it's going to have a driverless vehicle on it in our lifetime. >> are there other stakeholders that need to be consulted in that process? are there sooints parts of the government that are not in the transportation department that should be weighing in on some of the rules and regulations that are coming out? >> absolutely. the electronics cityindustry, we've talked to people in the silicon valley. they're involved and engaged in what is going to happen. they're going to have to deal -- when the cars and technologies are built they will be energy and commerce committee that deal with the actual regs on those things. but getting on the highway and how we build these roads they're very interested in. >> it's the forward thinking part of the bill. >> exactly. >> there's one question from our audience on surface that i don't

want to forget and then we'll move on. the question is do we know what the offsets are for the short term stopgap that we have? >> no. >> i had been in the sense that we're looking al $8 billion to $10 billion if you wanted to do something by the end of the calendar year. >> it's about $10 billion. we don't know the actual offset. >> i feel like we've run out of the gimmicks. >> it's tough. >> to be announced later. let's move on to faa. >> sure. >> because i'm putting this in order of the things that are coming up that you have to deal with. faa expires at the end of fiscal year. you've talked a little bit about your faa plan. can you give a little more detail? >> you and i talked about this. what you would like to have the faa transformed into. >> i can't give you the detail because we haven't gotten to the detail part. what we've spent the last 18

months now, if my math is right, starting this conversation with the stakeholders. and i think we've had every stakeholder group in a round table, in a listening session to try to figure out, you know, what they think the problems are. as i said in any talk earlier, everybody agrees there's a problem. now we have to figure out the solution. that's why we spent time looking at what do other people around the world do. and there are all of the industrialized countries, as well as there are 50 tote whole have taken the air traffic controller organization out of government -- >> completely. >> well -- >> or almost. >> if you're going to qualify that. you have germany that's taken it out and formed a wholly-owned corporation wholly owned by the german federal government. you have the german with a pure for profit air traffic control system that acts like a utility would act.

the canadians have what is a nonfor profit corporation that's operates like a co-op and they all have some benefits to them. but we're the largest system in the world so we've got to figure out -- is there a model out there we can use to help us scale us. >> right. >> that's what we're going through the conversations right now with all all of the stakeholders. >> i had been under the impression that your national thought that the nonprofit model ala canada or something like that is something you're most interested in. am i getting that right? >> i think that's a fair statement. when you look at the metrics on what each do. first of all, safety is paramount. that has to be our number one priority. they're very safe. and how we go through and what scale is best for the united states. what system works best. it's going to take the stakeholders all at the table. i can assure you that if we do an faa reauthorization, not everyone will get what they want

and people will be okay. it's going to be very tough, very difficult to do. >> i can preface this by saying i did back-to-back interviews with you and mr. defaz yo one day and then the next day talking about the specific issue as the two of you are in the middle of negotiations. you know, he is i think a little -- he's got questions about a nonprofit because i think he -- there are many number -- i can go into it but i probably will get it wrong. he's a really smart guy. but he has talked about how -- the idea of a government corporation ala fannie mae is -- >> i would never use fannie mae as the example. >> exactly. so my question is what if you don't get there? what if the two of you -- because the two of you really do need to agree if you're going to actually transform the faa. so is there going to be a winner and a loser here? not saying that you're up

against one another. but -- >> it's going to be up -- peter and i can have our disagreements. but the stakeholders out there have to be really engaged in this. and across the board from the air traffic controllers they went through 23 extensions three years out a pay raise, sequestration and government shutdown. they always seem to get hammered. they've had it with the system and they want to do something different. you're going to have to have the manufacturers, when you talk about the certification program, we've got to fix it. we've got a manufacturer of a business jet they told me they are three years ahead of their competition to get their jet out, three years ahead. that gives them a huge competitive advantage. but the faa at every step slows it down. we've got to stop that. they're going to go to other countries and manufacture these things but they get certified faster. we've got a drone industry that's starting to -- they're going to end up in foreign countries if we don't figure out

how to make sure our air space is safe for them and they can manufacture. and the airlines have to be at the table, the airports. everybody has got to be at the table. the way our system works nobody is going to get up from the table and go this is perfect. >> talk a little bit about how that works. i was, and probably a lot of us were at the aerolunch when the president of napca gave a speech. the place was packed. people were listening closely to what he was having to say. his concern was making sure that there's full funding because sequestration and these temporary extensions are just killing them. how do you -- you've rattled off ten different stakeholder groups that are going to have their own priorities. how does it work for you guys to be able to come up with something that's workable and that you can also pass before september? >> it's going to be very difficult. i've said that before.

but -- >> that's a good answer. >> -- when you start out with everybody saying there's a problem -- >> right. >> i think we're going to be able to figure a path way forward which we haven't done yet. i think it's important that we're all talking together. as you mentioned all of the stakeholders there, general aviation is a key stakeholder and others. but those are very important to the process because if you look -- this is nothing new that i'm trying to do. this was tried under the clinton administration, it was tried under the bush administration. something very similar. and they got cross ways with a couple of stakeholders and it didn't move forward. in fact we had a hearing. i think i told you we had a hearing with the clinton administration former bush administration, reagan administration all these folks were giving their testimony and one of the senior democrats said i've been to this hearing before

but it was to years ago. these are the same people saying the same thing they were 20 years ago. >> a few more wrinkles. >> we've got to a point where we're going to be able to do something. it's just, as i said, figuring out the sweet spot. >> and can you talk a little bit about how you work with stakeholders generally? i mean i have noticed and i have written that the transportation community is -- well we all know each other pretty well. so how does it work, just kind of on a practical basis. >> having the round tables are absolutely critical. and again, having meeting with the stakeholders one on one to understand what their concerns are, what their priorities are. making sure that we're not only republicans in the room talking about but having democrats in the room talking about it with them. so we all can hear you know, the coming right from the stakeholders, this is a concern or this is something we think is good. and you know i looked a how we

did worda -- >> that's the water resources bill. well everyone in this room knows what that is. but this is a much bigger bite at the apple i think. >> absolutely. >> there's more stakeholder. when we're talking about the transportation committee, we need to talk about an issue that's been on a lot of people's mind. but you've been dating a lobbyist for the airline industry, a former shil staffer, very well thought of. but the airline industry has a huge stake in the faa bill. can you tell us what that's about and how you've been coping with that as it's been a little bit now. >> i've been very transparent. and one of the things is it's a personal and private relationship. but i think i've gone above and beyond what the rules require, what the law requires to make sure that, you know, we're doing things appropriately. and you know, that's -- i know a

lot of people in the town that are lobbyists. i think we can do these things as professionals. >> i know a lot of people in town that are lobbyists as well. a lot of people here are lobbyists. did you ever think about rekuzing yourself from aviation and what's your reasoning beyond that in. >> no. as i said i've gone above and beyond what the rules require. i think people in this town know my integrity level. i'm going to be at the table. i got a lot of stakeholders. i guarantee you people are going to walk away from this bill going, it's pretty good. it's not perfect. >> then you know that's the best you can do in. >> that's the way the system is set up. 230 years in the country i can't imagine there's a legislature that walks out after a bill passes and says this is perfect. it just doesn't happen. we're looking for the good. >> this is something that has --

especially when we're talking about the surface transportation issue, aviation has its own little world. but that the people who deal in the industry work for a closely together in part because the system is heavily regulated and because there's government money on the table. so can you -- i know that you have spent some time trying to invite other people into that circle. i mean you grew up in it just because of your you know, your family. but what have you done to try and expand the circle so to speak so you can have different voices come in, so you can have other voices that didn't speak worda. >> again bringing them in and making sure that their voice is heard. and i think if you talk to the people in the water resources industry, you talk to the people in the maritime coast guard industry across the board i've

listened to everybody. because again, tht is not going to be about one stakeholder. it's going to be about how you get the 15, 12, whatever the number of stakeholders together to say okay we can support this. i think you saw the senate do on an stb bill, the railroad industry is much smaller. and they were able to work it out that the railroad said okay we can live with this. >> that dovetails nicely into the next topic. you've already passed an amtrak bill on the house side and we're waiting to see what happens in the senate. there's some thought that their stb bill and your akmtrak bill can come together in. >> probably won't merge. i know there's a lot of folks over there that care about amtrak. that's something we're waiting to see. they haven't passed an -- or the

stb -- yeah, they passed something out -- >> i think if i remember -- probably somebody here knows better than i do. i believe there's a big passed out of committee that's not on the floor. >> i believe that's correct. the senate confuses me in general. >> it confuses everybody. >> i think they're working on something on both of those issues and it's something we're going to have to take a look at. >> but the thing about that i'm interested in this particular amtrak bill took the policy a little further than others have in the past particularly in terms of trying to isolate and make the infrastructure investment go into the northeast corridor and then we still don't know quite what's going to happen with the long term routes which tend not to make money. >> right. >> so where would you like the see amtrak go? do you think it should still have fed call subsidies? >> it won't survive without them. but my goal is in working closely with jeff denim we had a bipartisan bill again that

came out of the committee with the ranking member on the subcommittee to push the reforms amtrak to really make them run like a business. there's been a number of reforms tried to happen at amtrak. i think one of the key things we put in this bill was to break out the different lines as business units to see exactly how much it's losing. >> right. >> because my guess is, if you go to amtrak, you couldn't figure out their balance sheet or their income statement because again they're not operating as clearly as they should be. the northeast corridor makes a profit. those dollars should go back in the northeast corridor and then we figure out other ways to generate the dollars to make those other lines again hopefully get to break even. i think part of what's changed in the last ten years since i've been here is the states now they really are interested in amtrak and being a partner with amtrak. they're willing to spend state dollars to upgrade the system. so i think that's something that

we need to push. again these long term lines maybe if you're looking at them as a business, maybe there's the model out there that you can change. >> have you seen one that works with the long term lines? >> not at this point. >> yeah. and i'm sure that you know -- >> doesn't mean there can't be. there's other things to do out there. but you have to understand the problem. >> you were telling me maybe charge a little more for the parts of routes. >> well, i ride on the keystone corridor harrisburg to philadelphia. i thought they were going to make a profit. they're close to making a profit. and the state controls what the cost of the ticket is. and i have been pushing them to raise the price of the ticket not because i necessarily want people to pay a little more but it's still a great value if it's 20% more. if you're riding the train you don't have to deal with the philadelphia traffic. you're more productive. don't have to pay tolls and gas. people i believe will pay more money to ride on those trains.

>> and one of the things that i particularly enjoyed about thinking about the amtrak bill and the transportation committee is that you know i think you've lost 100 votes from republicans. the republicans who don't ever want to see amtrak be. >> right. >> this is a dynamic that happens particularly among in your caucus. where you continually have to say we need a federal role in transportation, we need to fund it. and some of them you're never going to convince. but others you might be able to. so how do you talk to your caucus and particularly some of the new members what may not be old-timers like you and me on this and trying to explain to them certain things might be important? why it's important to keep funding surface transportation at the current levels? >> right. first i talk to them about the need and the responsibility of the federal government. but i think that i've hopefully develop a relationship of trust

and integrity with my colleagues that i understand if somebody is oppose to it that's fine. but again, if i tell them something that i'm going to do or not going to do they can pretty much count on that. and i think that's critical when you're dealing with both sides of the aisle, that they know that you're an honest broker. you say what you -- if you say you're going to do something, you're going to do it. and if you say you can't do it then they trust me that it's not possible to get it through. >> do you have any examples of sort of the novice misunderstanding about the infrastructure system of the country that can be with a little bit of just back and forth can be easily moved? >> i think there's not only novice but very experienced members that don't understand the role of the federal government in the transportation system. and i always put it back in historical context. it's in the constitution. this country has been -- whether

it's the inland waterway system the ports the harbors at the federal level needs to be involved to make sure we're connected. and peter always bring us up this picture -- >> the demolition one, right. >> oklahoma and kansas decided to build this border. kansas built it and it stopped at the oklahoma border. oklahoma didn't have the funds to do it. that's the reason we need ooh federal rule to make sure you can go from coast to coast or northern board tore southern border. some states just won't do what's needed to be done. >> do you get tired of having to make that speech? >> no. quite frankly i enjoy it. i love being able to quote adam smith. he said the three things government should do, provide you can security, produce justice and promote commerce. i don't know how much clearer that can be. and it's adam smith saying it

not bill shuster. >> it makes you sound cool in the sort of class president sort of thing. >> a lot of the colleagues on my side of the aisle claim adam smith as the founder of our economic system. that's what he said. if he came here today i'm sure he would say the same thing. >> well so we are hitting the point at which we have questions coming. i have a few on my twitter feed but i could use more. so if you guys -- if i'm not covering everything, just tweet to #asknj. that would be great. but there's one -- i'm going to have to read it because i'm not sure i actually understand it. i think this is the energy department, but i could be wrong, qer suggested a public private methods to fund maritime infrastructure projects. has the committee considered this? >> i'm not sure. >> sorry. well this is one i do understand. so when we're talking about the

surface transportation bill, there has been some effort on the part of earl bloomen hower comes to mind bringing in a gas tax increase. that's been continualeally a no from leadership gop. is there something that can be done with the gas tax to try to help get you to your long term bill or is it really off the table in. >> when you have the president and the leadership of both houses at different times different parties saying no then it's very very difficult. and so i'm for what's possible. and i don't think at this point that's possible. but i do believe that after we get done and the president sign as five-year bill, the stakeholders and members of congress that care about it have to really start figuring out and start to, start to try to move

the country in a way, how do we fund this. what's acceptable to the american people. what can pass in congress. but you know, i look at the state of pennsylvania and it took them three years at this kind of grass media campaign, educating citizens educating members, took three years. they fixed their funding levels and i think there's a lot of states that have done that, but it takes time and effort to do that, and we are at a point now where it's not possible to do a long term fix but that has to be job one as soon as we get the long term bill signed. >> right. do you think that there's -- so let's fast forward, the reason why i think you're going to get a long term bill because you have no other choice. i think if there was an easy solution that you probably wouldn't, but so fast forward to the end of this, you know fiscal year calendar year, you know, right after this you start going, do you start to look at things like vehicle

miles traveled? the -- basically the replacement for the gas tax and charging people for miles they spend on the highway? >> i think that's something you have to look at. i think the technology part of it scares the heck out of a lot of people. >> right. >> i don't believe that's something the american people want to happen but how do you make it fair, for instance, the electric cars pay nothing. >> right. >> so those are the things we have to have a discussion about, and, you know, what's palatable to the american people what's simple to the american people? right now, what we collect at the pump, yes, something like 1100 people we have to -- organizations that collects that. you know, pennsylvania took it from the pump to the barrel of oil to the well having issues, and that reduces that so they are efficient. if you're going to expand to collect from every american it's going to be 250 i don't know how many people drive car,

there's -- going to 400 million making it very difficult. i appreciate the confidence we'll get something done, and that reminds me of winston churchill, americans always do the right thing after they exhausted every other option. i think we're to that point. >> yeah. and, i mean, did you think when you took this over you would find yourself in deep conversations about tax reform? >> not really. i knew there was some -- that we had to deal with the mechanism, but, yeah, again, it's been good. it's paul ryan's a smart guy, and i learned something from him every time i talk to him. >> i have a question from your former staff director who is now the chief of the pittsburgh of port of pittsburgh or something. he wants to know what you learned on the road show in pennsylvania? for those who don't know, a bus trip that you took --

>> right, two days basically. >> around talking to people because he worked for you. >> right. we had secretaries of transportation of north carolina, south carolina, oklahoma, and texas, and i think the most -- i believed it before, but they believe the federal government has a role as a partner should maintain that role as a partner, and, you know, talking to a state like texas, sometimes, you know people sometimes think texas thinks they are their own country already. >> aren't they? i thought they were. >> they have these ports that stuff goes in and out does not all come from texas or stay in texas, and so the executive director actually, former marine general, he was absolutely adamant, as were all the others, and there were republicans coming from republican governors, conservative states, and they absolutely said federal

rule laz to be maintained and there's not a system worthy of the nation, it rained once threatening every time we were off the bus but held off. >> pictures must have been amazing. >> so this is, i believe this is a question the water way users supporting a tax increase, but how do you make sure the funds are appropriated as authorized? hope i got that right. >> yeah. got to talk to the appropriators on that. but they did. they raised the user fee from 20 cents to 29 cents. in the water resources bill, we changed some of the way the money's spent to not put so much of the funds towards the project on the mississippi or on the

ohio river and those dollars can flow to other areas of need. >> that can happen, you don't do anything in the authorization bill? >> we put the language in there, the appropriators have to adhere to itment the other thing is we changed the inland harbor trust fund, half was not going to anything, putting it in the lock box, and offset against other spending and what we've put in the bill is they are going to inch that up, and i believe chairman rogers is doing just that. he's inching that up so we have hope for one day to have a trust fund that's 100% going to the ports and harbors in the country. >> so here's another question on emt, odometers we have the

standard things of cars, do we need new technology you think in order to move away from the gas tax is a better way to put it. >> it becomes a very difficult issue on privacy and things like that, same with new technology, and so, again those are the discussions we're going to have to have to figure out you know what the american people are willing to do when it comes to doing that. >> what about a barrel tax? >> well, yeah, that's what pennsylvania did, what virginia d put up a percentage on the barrel. that increased -- >> in some ways that backs it up rather than brings the users down to the miles driven. i mean, it's -- it's the same concept. >> similar concept, that's true. they did it in pennsylvania. giving them $2.5 and $3 billion in the next four or five years, so they've filled their hole in their transportation funding, and, again that's the other thing i learned from the four or five dots i traveled with. we did our share.

the federal government has to step up. >> well okay. speaking of dod secretaries talk about how you are engaging with secretary fox who, from i understand, has had very good conversations with you has he asked for anything in part? he wants something long term and robust, and they proposed 478 billion, not getting that. >> didn't pay for it. small detail. >> right. that the two of you can do to make sure that when you get the green light, everybody's on the same page so that you can make it happen? >> sure. i think that the thing nothing specifically asked for except keep streamlining and doing those things that make it easier for me as a secretary to push these things out. i know he's done a good job of doing what he can do down at dot to streamline things. he's constantly pushing on

people to get it done. that's important. we've had a number of discussions on reauthorization, and he's very interested in changing the system. >> well, and so i mean you mentioned at the beginning in your remarks at the beginning of the interview that there's parts of 21 that you're looking at. >> right. >> seeing if it needs to be tweaked. is there anything you have, in your conversations with secretary fox that is helping or hurting them from -- in the current law that they might be able to just move a little in your next go around? >> nothing to point to directly. again, as i mentioned earlier, this are areas that we want to expand upon. we tried in the last map 21, that if a state has a process, a -- it's an equal process environmental review process equal to or greater than the federal government's, it doesn't have to go through the federal. >> oh, okay.

>> senator boxer didn't want it. she's got her state -- her state has thee most stringent strict, difficult review process to go through in probably the world. doesn't make sense to make states go through two processes. >> might ask again. see if senator boxer changed her mind. >> senator inhofe is now the ranking member. >> she could still change her mind. we appreciate the time you took to talk to us. audience does as well, appreciate it, and good luck with everything. >> thanks. [ applause ] coming up on c-span3 at 10:00 a.m. eastern, live coverage of a hearing of the oversight committee how a helicopter entered restricted air space. later, a joint meeting of congress to hear from the prime

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