coordination today? >> so i think the most important word -- and thank you senator, is the last one today. i don't think we were there five or seven years ago. we have a ways to go but the progress has been extraordinary in how we do this. the way the global fund functions, we fund many governments directly and that actually has brought an enormous amount of accountability. i'll never forget the president in rwanda said this is the first time someone held us accountable. in the past we gave money and measured it on how much money we gave and now it's results. you have to report results down to the site level. we're investing heavily in data and data management systems. it's really hard to steal money if you have to show results. it's much easier to say i did some things. it's drilling down that accountability and data recording down to the site level. we layers and layers of investigative approaches that look at how every dollar is

used. and the reality is sometimes it does go in the wrong place. but we find it collectively, and then we bring people to justice, either through the -- and people are actually going to jail for first time for corruption in the health system. in many countries around the world. there's actually really exciting to see -- this is something that these health programs we don't talk about much has driven accountability in a way that really never existed before. >> doctor let me ask you a different version of that question. we should really care about corruption when our dollars are on the ground. but we should frankly care just as much when our dollars aren't on the ground because we won't need to use as much money if the systems aren't efficiently run. in those cases who's the right government entity to try to build that capacity? is it our global health dollars or should those be reserved for programs or other pieces of the

state department who are more in the business of working with governments at large to make them more accountable and less corrupt? >> the great thing about what dr. diebold just talked about is how that is integrate d at the site of the state department. the u.s. government has ambassadors in each of these countries. being able to get him data that takes the quality of the work at the site the cost of delivering those services and integrates them in a three-way analysis and then compares the other sites and partners. you can clearly then see what sites are out of range. what sites are out of range because they are doing more work with less dollars and high quality and which sites are out of range because it's costing more for a low quality product. then we send people in to actually go to the sites and define each of those issue. and then the ambassador takes it forward. we're doing this in partnership with the global fund starting

with countries where we share impact in 40 countries. and that same system can be taken into countries where the u.s. government is providing still a third of the dollars through the global fund where there may not be a program. >> you were a little optimistic on your ability to work with local governments. that's not always the story we hear. how much does it matter whether you have a local governance structure that is efficient, relatively low on the corruption scale? i would imagine that you look very carefully at those factors when you're thinking about where to put your dollars and your programming. >> yes, that's why i go back to this wholistic approach to aid and assistance. in the peace plan, promote reconciliation e is equip ethical leaders because we believe corruption is one of the

big five problems in the world along with poverty and disease and illiteracy and conflict. so you have to deal with all of them at the same time. you can't just deal with poverty. you have to deal with corruption. you can't just deal with corruption. you have to deal with education and all of these together. i found in working with local governments around the world most important thing first is just listen to not assume that i know what i know about the country. when i go into the country the first thing i do is take a yellow clip board and sit down and listen and listening to their culture and their values and listening to what they are saying. i'm not coming in and automatically imposing something because i want to find out what do you need? there's a verse in the bible that says when you go in the village, find the man of peace, that's why we named it the peace plan. the peace person in any culture or corporation -- i found them in nations and found them in businesses and local, you find

the man of peace and the peace that they are influential and open to work with you. those are the two characteristics and they don't have to be a christian. when jesus told them to find a man of peace there weren't christians yesterday. he said go find the man of peace. i found men of peace who are muslims and atheists and straight and gay. they are willing to work with you and they are influential. if you find those kind of people, then you start with the man of peace and you can expand. i think it starts with listening. >> i think that's a wonderful way to think about this. one of the points i'm trying to make here mr. chairman, is that when we look at the money that we spend and the benefit that's acued to global health, we shouldn't just look at the accounts labeled global health. when you are running policeman programs that build men of peace and promote their ability to have influence. whether or not that's a health

line item or not that builds better local health systems. so as we're reviewing the budget at large just important to pay attention to the fact that sometimes the titles and line items don't necessarily translate there end line benefit. thank you, mr. chairman. >> thank you all for participating in the hearing. i think each in your own way advanced the cause of protecting this program which is i'm completely dedicated to because i can see how close we are and the damage to be done if we back off now. and new cycle full of bad news most of the time, maybe we'll get five seconds of good news from what you've had to say today. one thing i learned, if we get extra money we'll go in the data collection business and to all of you god bless. you represent the best not only in our country but the best in mankind. you'll have a friend in this committee. this committee stands in recess, we'll keep the record open for

questions until the close of business friday, may 15th. >> be human, aids is here, no

need to push it under the carpet. it can be solved and we should talk about it. >> thank you so much. >> can i get a picture? you want to help. here we go, ready. >> one more right here. >> one more please, guys.

>> thank you so much. >> over here please. >> thank you very much. >> move a little closer. everybody straight on, right. >> thank you.

we do have more live coverage coming up this afternoon on c-span3 as the senate small business committee

will look at imported seafood and legislation that requires foreign labor laws to meet u.s. standards. that starts at 2:30 eastern. this coming sunday, mother's day, beginning at noon eastern c-span will present the children and grandchildren of the america's first families paying tribute to first ladies and remembering life in the white house. caroline kennedy bush daughters and others. here's margaret hoover on her great grandmother first lady lou hoover. >> you don't know that she was the first first lady ever to invite an african-american woman to tea. and it caused a tremendous scandal. it was called the deprees incident. she was the wife of congressman depriest an african-american couple and it was the tradition first ladies always invited the member of congress's wives to tea. they are quakers and socially

progressive in the context on this issue. they knew it would be a scandal or it could be a scandal. they tried to handle it in the right way but decided to go ahead with it because this would be a good move for the country. and it did create an outrage. to make her feel better my great grandfather invited her husband to the white house. this is the first time an african-american was invited to white house publicly teddy roosevelt invited booker t. washington but it was a secret meeting. >> and we'll have more of this conversation with children and grandchildren of first families talking about first ladies tonight starting at 8:00 eastern on c-span. next, energy secretary ernest moniz, billions to improve pipe lines and energy storage

capacity, the secretary appeared before the senate energy committee last week. >> welcome to the committee. hearing will now come to order. we're here this morning to review the first installment of the quad drenial energy review the qer around here. we're pleased to have secretary moniz back before the committee. this is your second time so far this year. we greatly appreciate not only the public engagement but the time that i know you give each of us as you come to either discuss issues in our offices or through your frequent phone calls. i appreciate that engagement and that reach out. i think it is -- it's very helpful. secretary moniz oversaw the development of this report at the department of energy and again, i think many of us have

had an opportunity to have a little bit of discussion on this report but this morning is our opportunity as a committee to review it. in the united states we take it for granted that when we flip a switch the lights turn on and our devices charge up when we plug them into the wall that when we pull off the side of the road to fill up at a gas station when we're on a family trip that everything works. we live in a country that has abundant resources and innovative technologies that make our way of life and standard of living the envy of many around the world. we should be proud of the tremendous progress that has been made but also recognize that nothing is guaranteed to stay this way. that's particularly true when it comes to energy infrastructure, which i think we will all acknowledge is facing serious challenges across the country right now. we regularly focus on opportunities to improve energy

infrastructure in this committee. already this year we've held hearings on innovation related to the electric grid increased oil production, our opportunities in the arctic and the importance of pipeline infrastructure infrastructure. i think today's hearing is a good next step here. the qer looks at our nation's infrastructure at the critical time. many are aging and in urgent need of modernization. we've seen dramatic increases in energy production and oil and gas and market penetration of variable power generation is on the rise and the stress placed on our systems increased faster than it can be addressed. the qer makes a number of recommendations to alleviate these current deficiencies. in many cases the solution is new spending, adding up to potentially billions of dollars. but i think it's important to note that the vast majority of the nation's infrastructure is privately owned and sustained and improved by private

investment. at the same time, i understand that advancing our energy instra structure will require funding within our constrained budgets. so to regulations particularly those that hold back projects and private investments, we have to keep that in mind as we seek to find a better balance as i go out and talk to folks in alaska or anywhere in the country, so many of the business interests are talking about infrastructure and where we are. they say what we really need is some level of certainty. we want some level of certainty so that we can go ahead and make these substantial investments. now, as we are here to discuss infrastructure today i do think it is relevant to point out that the keystone xl pipeline has been delayed over 2400 days. we have in my state a critically important piece of

infrastructure, the trans alaska pipeline system, it's something that i worry about and recognize that without insuring that that pipeline has the resources that it carries, it is a piece of infrastructure that could face declining health and strength and it's something that i worry about. it's one thing to write a report outlining infrastructure challenges but another to set up pro actively to solve them every day. any modernization of energy policy should in my view visit the de facto ban of oil exports. the qer is too light in that regard. i was pleased to see it recognize the unique issues that impact the arctic and valuable role the united states can play as chair of the arctic council. i was with secretary kerry on

friday as we were up. but understanding our role as an arctic nation there is key and i appreciate the focus being given. we know we have significant infrastructure challenges and know we're going to have to work together to solve them. that goes for the members of this committee as well as we work on a broad energy bill noting the infrastructure is one of our key titles within that bill. it goes for congress and administration as well, working together here. we can use the qer as a reference piece or template to weigh ideas and discover potential solutions for energy bill and we've discussed that with the secretary. and secretary as you face -- with you as the face and focus behind the effort i do think that we've got an opportunity to make considerable progress on infrastructure issues as we move forward with that. i thank you for your leadership on that. i look forward to you outlining the terms of the report this morning.

with that i turn to senator cantwell. >> thank you for holding this hearing on transforming energy infra infrastructure and thank secretary moniz for all he does should havinging back and forth must be a wide breadth of focus. thank you very much. this hear is particularly important because infrastructure is the link of the components of our national energy system and increasingly complex. it's independent and is in need of an upgrade. as we begin the legislative process of crafting what we hope will be a bipartisan energy bill it is essential to have a good grasp about the data and existing analysis of the infrastructure that supports these systems. the need for reliable and efficient supplies of energy is becoming closely intertwinned with our economic growth and competitiveness. it's even more important we understand the infrastructure deliveries of the commodities.

there's been a surge in the amount of crude oil in the last five years. in a five-year period starting from 2009 there was an increase of roughly 4,400%. this trend had a number of implications, crude oil now competes with other commodities, more traditional transportation by rail which causes delays in delivery of crops and agricultural products to market. the report explicitly states these recent unexpected shifts in supply and demand for rail service resulted in disruption to shipments exceeding even those caused by hurricane katrina. the department of agriculture marketing service concluded that quote, the current rail service problem has exceeded previous events in magnitude and duration, including hurricane katrina which caused major disruptions throughout the entire agricultural

transportation network. >> a number of high profile incidents have also underscored major safety concerns and point to the need for us to revisit existing structures. as the quadrennial review notes, increased the need more monitoring and setting requirements for tank cars. back here we have all of the oil and rail industries pointing fingers at one another. some asking serious questions about agencies and organizations within the department of transportation like the hazardous material and i want to submit an article for the record that was just written last week about hazardous into the record. but i want to thank you secretary moniz helping to bring data to bart on the policy questions. it is clear our work is not done. the department of transportation

federal regulatory commission must understand high rail congestion may be affecting the delivery of energy and ago agriculture commodities and safety implications. obviously outdated and aging infrastructure carries safety risks and we also have to talk about barriers to entries for new technology. investing in infrastructure yum grades enables the best benefits to increase efficiency and recreate jobs, in fact projections indicate by 2030 the energy sector will employ 1.5 million workers and changes in the electricity sector particularly affect the types and energy jobs. new technology jobs -- i'm glad to see that was part of the report. older business models will change and our economy will involve the electricity business must keep pace with the innovation and continue to be efficient and flexible and

advanced. and this work is important because our grid i believe is a platform, a platform for products and services of technology not unl in the united states of america but electricity all around the globe. i was struck yesterday by the report that solar lamps were the only public lighting sources initially available in parts of nepal after the tragic earthquake and avalanche this weekend. new technologies play a role here and at home and making sure that our energy systems are resilient and more security. obviously here in the u.s. we have been working with laboratories and developing process that reform investment strategies. in terms of electricity sector we know that obviously different states and different geographic priorities and different mixes of energy but it's my hope we can accelerate the modernization by ensuring best practices and

innovation driven ground up approaches can be implemented. as the review also notes most of our nation's transmission storage and infrastructure is owned and operated by the private sector. that's wian important aspect of accelerating new technology is a private sector partnership that is called for in the report. in 2008 edison electricity institute estimated by 2030 the u.s. electrical utility industry would need to make a total infrastructure investment of $1.5 trillion to $2 trillion. that was the range. analysis conclude by the administration suggest that natural gas interstate pipeline investment will range between 39 and 52 billion between the similar time period and depending on overall natural gas demand. what is the cost of doing nothing? between 2013 and 2012, an

estimated 679 widespread power outages occurred due to severe weather which cost the economy $16 billion each year between 2013 -- 2003 and 2013. so as i mentioned, the political report talks about spills and leaks and explosions from both oil and gas pipe lines. that we've incurred costs on. investments that promote innovative solutions and enhanced resilience yens and reliability and security clearlilyclearly ly have huge benefits. thanks very much for keeping our focus on what we need to do to take advantage of our energy resources but make them work better for the future years ahead. thank you. >> thank you, senator cantwell now we turn to the honor secretary moniz for your

comments this morning. we look forward to series of questions after. welcome. >> thank you, distinguished members of the community. i appreciate the opportunity to discuss the quadrennial energy review and thank you for the patience of the committee in terms of scheduling of this hearing. i am going to ask for your indulgence to make a slight detour picking up on what senator cantwell said about other missions, i want to say a little bit about the accomplishments about the department of energy in the last several weeks. we have many missions nuclear security energy science, waste management and cleanup and i wanted to know that in the last four weeks as you saw, our laboratories, et cetera, have been a major support in the iran negotiations. on energy we're here today to discuss the qer. on science, we just completed

the announcement which is the next big step on super computing on the way to exoscale and on the waste side the important decision to pursue defense waste in a targeted way. i wanted to say that this department is doing work in a whole broad range of areas and i think with great accomplishments. >> i don't know that means energy is at the center of all things or earnie moniz. >> no, this is the department. i just couldn't pass that up. qer, last week administration released the first installment and focused on energy transmission storage and distribution including the huge network of pipes and waterways, railroads and other facilities that are really the back bone of our energy systems. the qer comes at a time as the

sheriff said, pretty dramatic energy revolution in our country. and we are reaping tremendous benefits but also seeing challenges to our infrastructure for storing and distributing these energy supplies and infrastructure developed decades ago for a different energy world. these new challenges require us to modernize and transform the energy infrastructure and meet competitiveness goals for the next decade and for the century. with that in mind president obama established this qer task force. it had 22 agencies involved. just demonstrating the breadth of the equities in the energy system. co-chaired out of -- by the director of the office of science and technology policy, and domestic policy council, special assistant to the president for energy and climate and department of energy was the

secretary and performed or commissioned an extensive number of technical and scientific analyses. our office of energy policy and systems analysis did much of the heavy lifting for this qer. we undertook an open transparent process involving experts and stake holders and included 14 public meetings around the country. and also a meeting in canada and discussions with our mexico compatriots. we released the final document a week ago and that's available on the web. the first installment provides policy makers we think with a road map for meeting again our key energy objectives and there are several themes covered including jobs, environment infrastructure sighting and importantly the integration of north american energy markets. let me highlight a few recommendations, for example, on

resilience clearly a national priority, resilience reliability, safety and security of our infrastructure. we recommend establishing a competitive program of targeted funding to accelerate pipeline replacement and enhanced maintenance programs for natural gas distribution systems. another by the way very big ticket facing our country by a quarter trillion dollars over the next decades and supporting the updating and expansion of state energy assurance plans and then establishing a competitive grant program to promote innovative solutions from the states for enhancing energy infrastructure resilience yens and reliability. that competitive program to move the needle would ultimately require 3 to $5 billion over a recommend looking at and mitigating the risks associated with the loss of large transformers. we make recommendations in

modernizing the electric grid. once again a strong em if a significance on providing financial assistance to promote and integrate investment plans or for reliability affordability and efficiency and lower carbon generation are two state planning grant programs we recommend in our fy 16 budget, $63 million combined for those activities. we promote grid modernization, but only a down payment on what we estimate to be a $3.5 billion need of federal expenditures to help with grid modernization. a few other recommendations i'll touch on importantly we need investments to optimize the petroleum reserve of both to upgrade it, maintenance distribution capacity but also recommend with congress a

revisiting of authorities to reflect modern oil markets. we look at associated infrastructures and for example support a new program of competitively awarded grants for assets such as key interconnectors from our energy intensive ports. we feel this is very important, not very expensive but very important activity to address critical energy data gaps in rail transport of energy commodities and supplies. we support alternative funding mechanisms for our water ways. and we strongly emphasize collaborating with our canadian and mexican counterparts for example in what is already proving to be a successful enteg race of how we collect and share energy data. to conclude, the administration's budget request as i indicated does include a down payment on some of the key recommendations but clearly to

move forward we'll need a bipartisan commitment to modernize the nation's energy infrastructure. we look forward to working with members of this committee and also congress to take the next steps as i pointed out earlier, we are today living with the infrastructure decisions and investments made decades ago and similarly the next generation will look at our decisions taken and those not taken for how we shape the energy infrastructure and system in the decades ago. thank you chairman murkowski, i look forward to our discussion. zbls thank you mr. secretary. again, appreciate your leadership on this and the opportunity to work with you going forward. this is a big report. there's a lot in it. there is as much to consider but we see a lot of good thoughtful

reports with much to consider that come before us here in the congress. and one complaint that many of us have is that we -- this is not directed at you but we see these good strong solid reports but then there's no follow through with legislative proposals coming out of the administration. one example is the energy trust fund from last congress. i had proposed it. the president actually noted it in one of his state of the unions, we never really saw something happen from that. so the question very broadly is how do you envision a plan for engagement with this committee, with the congress, on the qer beyond this hearing? are you looking for input from members of congress here? are you going to send

legislative text? how do you view moving forward from a broader perspective? >> madam chair, if i may give a little historical perspective, i was co-chair of the president's council of advisers science and technology task force that recommended doing the qer a few years ago. and as we were contemplating this we met with many members of congress. and it was interesting we thought that many of the members emphasized their interest in this qer because they felt that a process that brought together many agencies that have so much energy equities to the congress which frankly while we have -- just like we have department of energy we have a committee on energy but many other committees having equities in this that this might provide a good basis for the kind of discussion that we need for more comprehensive look. we now have the product, i

believe it could really help us in our administration congress. both chamber both sides of the aisle discussion, so i certainly and i know many of my colleagues now that we have what we hope can be a road map for much of our discussion want to engage in that discussion certainly in both chambers. >> i would encourage you to do that. as you know we're looking on this side to build an energy reform bill that is broader and comprehensive in scope and many of the proposals that you were outlining, qer, i think we can look to. i know on the house side they are doing the same but that's going to take a level of active engagement and we're going to need your leadership. >> totally prepared for that and would be eager to engage in those discussions. >> let me tell you about a specific infrastructure project.

as you know, we have extraordinary quantities of natural gas in alaska but what we lack right now is the infrastructure to move that natural gas to market. this week we have the mr. abe from japan here in washington, d.c. and believe me, alaskans would love to spread the natural gas to asia and japan but it is a huge project we're looking at a project upwards of $65 billion world class in its scope really unparalleled. you have mentioned before this committee and to me that the process for evaluating the license for the alaskan lng project is kind of at a different category if you will, for projects in the lower 48. can you just again assure me

that you are pursuing a conditional license for the alaska lng project and that in this process going forward that this project is receiving your full attention? >> yes, i'm happy to repeat that. we view again the moving the natural gas in alaska is very different proposition from that in the lower 48. the costs are enormous to move it to an export facility so we will -- we are looking at this in a separate way, two points. what we have already proved the free trade agreement part, we are actively looking at the nonfda part for a conditional approval. it's different from our lower 48 approach but the conditions -- the special factors merit that and we are following through on

that. >> appreciate that. let's go to senator cantwell. >> mr. secretary i have so many questions, i might have to submit some for the record but -- i want to start by this crude by rail and agriculturish issue that was outlined and the fact it is displaying product in the marketplace right now. we were discussing this in the commerce committee as well. since this report is such a comprehensive agency approach, what are the next steps in trying to deal with that? and what specifically are you doing at the department of energy on the volatility issue and giving us analysis about that and what would the timeline be for that? >> okay thank you for the question. first of all, with regard to the commodity issue, in terms of -- frankly there's been very sparse data available. and the eia has already now

launched a program collaborating with the department of transportation to get data on the movement of energy commodities, oil ethanol, et cetera, but we would like to also -- and we recommend -- a collaboration with other departments, including usda and others to have a more unified commodity database. by the way, i should have said coal as well particularly in the energy sector, oil, ethanol coal movements, but as you said, there's a competition often right now for moving multiple commodities an we would like to get a multiagency approach to that. with regard to the oil by rail specifically, we are collaborating with dot, we have already put out from -- what was really a literature survey, a most comprehensive literature survey so far in terms of

properties of different oils most especially the type oil that is the focus of lots concern. that first report a literature survey, only publicly available literature, had interesting findings, including the need for much more systemic systemized collection of characterization data of crudes. it did suggest that that the data that will review did not imply that any one property of the oil would determine what would happen in terms of combustibility of an accident. it recommended a major project which secretary fox and i agreed to co-fund which is now being launched against seniya, probably take two years to exercise -- to get through the full research program that will

include really research into the characterization, how one samples and where one samples with a focus on what the implications will be for testing and then understanding how crude oil properties affect things like come bustibility. >> it's not something to ignore, you're undertaking more research because you are concerned? >> absolutely, absolutely. >> can i ask you about transformers? >> can i say one last thing? a lot of experience in looking at kbustibility and come bugs. >> transformers are obviously a key component here. what are your thoughts on how we get more information in transformers? >> well, we are -- so we recommend completing basically

the analysis that is there and then depending upon the results talking about a public private partnership to move towards a reserve. when we released the energy review last week with the vice president in philadelphia, we visited peco, a major utility which is actually on the technology forefront in many cases, and there for example a large utility like that has its own reserve capacity with transformers but we need a systemized review and different kinds of utility structures and different places, our pma has done a study for example specifically on how they might support a transformer reserve. we have to pull all of this together over the next months and come back to the congress with what might be a step, the congress and private sector in terms of what might be the most

effective path forward. >> senator gardner. >> thank you, madam chair and for hosting this here today. welcome back secretary moniz. a couple of questions, i have to head to the floor shortly. in the energy review you laid out four clear requirements one. requirements was to review the adequatecy of existing and legislative actions and recommend additional executive and legislative actions as appropriate. i believe the chair cited one of those areas where we could have more energy policy driving action is the issue of lng exports. did the qer take into account or look at or will a result of it be discussions of crude oil exports or perhaps administrative action policy contributions of crude oil exports? >> the qer was really specifically focused on the infrastructure as opposed to that kind of policy issue.

so it is not really go into that in detail. >> when it comes to modernizing the electric grid one of the examples how it's taken too long for permitting in some areas to pursue modernizing and extending the grid in susquehanna sub station of pennsylvania to new jersey, there was a need for 145-mile transmission line. it will be in service this spring but took a total of eight years for that service line to come into service. so we have to have this adequate safeguards in place when it comes to making sure we're protecting the environment, but what do you think congress can do to make sure these barriers are reduced so we can move forward in a more timely fashion? >> first of all, i think we are making progress and the rapid response transmission team for example, has maybe not with the speed always desired but it has managed to get three projects to

the permit stage including the one you mentioned and there are three others now in the permitting stage and so for example, on a trans west express project, we expect the eis to be out very, very soon. and that project going into operation in 2017. i think we do have a set of authorities and set of administration institutions to try to stream line but it's also clear that there are obstacles often put up and i know there are discussions in the congress and in fact senator hinrich is looking at things like backstop authorities. we're happy to work again on the whole issue of expediting these projects. >> i look forward to working with you. i have more questions on microlabs but i'll leave that to senator hinrich to continue that

conversation. thank you. >> thank you. >> thank you, madam chairman thank you, mr. secretary for your service to our great country. i appreciate very much what you do and being here today. >> thank you. >> speaking of the qer, i know when they went through this review they were talking about basically they didn't maul the potential for significant near term changes due to the clean cloud power plant. it did perform stress tests using accelerated nuclear retirement scenario from the annual energy outlook 2014. since we in west virginia don't have nuclear generation, this is less relevant for its needs and potential for infrastructure requirements for coal plants and retirements that may result from the cpp. will the doe be willing to perform its stress test modeling for tsnd transmission storage

and electric transmission and the results of the analysis? my main concern is basically reliability of the system right now. we're taking a lot of coal fired plants off and not coming back online. we're going to have a lot of capacity. and if the lines are not energized or we don't have the reliability we could be in serious problems. that is what we're concerned about. i didn't know if you were looking at that or willing to relook at that. >> there were a set of analyses relevant to the question but maybe not the precise scenario and i would be happy to have our staffs get together and define a scenario that might answer your specific questions and needs but i will say again that we have had a number of analyses of relevance. for example, one of the issues related to your question is the question of natural gas

transmission line capacity. that was looked at and the conclusion was that first of all there has been a substantial build out of that over the last decade. it is quite a bit of reserve capacity there and so in concludes there was with regard to the natural gas transmission capacity, we're not looking at a need for a major kind of national big buildout from what we have. there will be regional needs targeted around specific supplies -- >> one question if i may. you know a lot of these power plants we have coal fired plants are not in areas where there's oil or enhanced oil recovery possibilities. are you all looking at transporting or pipe lines to contribute co 2 into those areas to get enhanced recovery. >> co2 pipe lines specifically we have recommendations in the qer and i might add, the administration has --

>> the ohio valley west virginia and tennessee and pennsylvania, all of the area -- >> in general we need to collect the co2 for and i would note that the administration has put forward roughly a $5 billion incentive proposal around carbon capture and sequestration and one of the interesting features of it is -- and its analysis i'd be happy to share with you and the committee -- if that one looks at, as a base case, an ultra super critical new coal plant with the appropriate amount of carbon capture, the incentive structure in the administration proposal would essentially equalize the cost of going into deep enhanced oil recovery and that could be relevant where you don't have the eor easily available.

>> well, and officially i'd asked if you would come and you were so gracious to say that we can work that out and explain to all of our utilities and providers, as far as our miners, of what the future may look like for them and how we best apply their skills to the needs of the nation's energy demand. the country is still going to depend an awful lot on coal production as far as the energy produced. >> the administration's projections continue to have coal, with a somewhat lower but with a substantial share of electricity for quite some time. and in fact, another document that we're putting together, a memo i'd be happy to share, is one that talks about the whole variety of programs we have on

coal, and that includes the tax incentives i just mentioned. it includes the $8 billion solicitation that we now have on the loan program for fossil projects with lowered emissions. clearly r&d. we have also out of the department of labor worker community transition programs. so we have a whole variety of programs. and we probably need to pull those together in a coherent way, and i'd be happy to share that with the committee. >> i'd love to have that and we look forward to west virginia to explain it to the good people of my state. >> great. what's a good time? >> as soon as you can get there. >> all right. thank you. >> senator. >> thank you, madam chairman. as we had a chance to visit earlier, mr. secretary, it was a nice article in today's "usa today," energy progress has room to grow. for those that might have missed this in "politico," ernest moniz, rock star. >> i hadn't seen that. i wish i still hadn't.

>> i make this unanimous consent to make this part of the record. >> only the picture to be part of the record. >> thank you. i do have a couple questions because the quadrennial energy report states that it is essential to promote more timely permitting decisions and explains that there's a gap between typical permitting times for energy generation and production sources and a much longer time for midstream energy infrastructure. the report goes on to say that legal requirements for the permitting and review of major infrastructure projects have created complex processes that in some cases have taken years or longer to complete. so i'm glad that the administration is acknowledging that the federal permitting process is broken. but i do have concerns about some of the recommendations to fix it. the administration recommends more permitting fees, more

coordination among federal agencies, more public engagement, but it really -- the administration doesn't make mention of establishing deadlines for permit decisions. it doesn't mention repealing duplicative permitting regulations. it doesn't mention limiting lawsuits which slow the permitting process. so, you know, with all due respect, do we really believe that more money and coordination and engagement is also that's necessary to resolve the delays in the federal permitting process? >> no, i certainly don't. and going, in fact, by the way to your opening statement, senator barrasso, opening words, i'm going to say that over these last years, we've kind of seen a shift where often the infrastructure time has now become the long pole in the tent, for shifting of the energy system, which is kind of a reversal a little bit of what it used to be. so i think we need to address these things. and we are trying to do that within our existing authorities, but i want to point out that things like litigation, we cannot stop litigation. it's not a question of just

federal authorities. the states play an enormous role. and of course, the more that we get into the issues of kind of semicontinental scale, let's say transmission lines that cross multiple states without all of the states being beneficiaries, the obvious problems emerge, and that's what we are seeing in terms of multiple delays. clearly, the issue of moving on corridors, for example, is set back often by the courts in respect to states' options. again, we'd love to work with you and other members on that, but we are trying to expedite within the t.i.p. program for western within 1222 authorities, where we do expect some progress this year, but it's slow in coming. >> another thing that quadrennial energy review calls

for is integrating north american energy markets. it explains that energy system integration is in the long-term interest of the united states, canada and mexico. states the integration of these markets creates economies of scale to attract private investment, lower capital costs, reduces energy costs for consumers. it also says mexico's energy reforms present an opportunity to increase energy trade with the united states and enhance energy security for the region. so i'm pleased the administration recognizes the benefits of increasing trade in energy resources. again, the administration seems to really not have the ambition or the courage to achieve the stated goals, specifically a policy which would allow crude oil exports to mexico. this is especially disappointing given bipartisan lawmakers in the house and senate have called on president obama to do just that. if the administration is serious about integrating north american energy markets, shouldn't we allow crude oil exports to mexico?

>> first of all, we share, apparently, the focus on the importance of north american energy. and the mexican energy reforms, i want to emphasize not only in the hydrocarbon sector but in the electricity sector, i think are really important and open up much more chance for us to be integrated on infrastructure and on energy trade and energy trade, even two years ago, was already north of $200 billion among the three countries. now, clearly in the qer, we did not address any specific project. and the question of oil exports is, as you well know, is in the department of commerce hands. but i think that in light of the -- of the energy reform in particular, revisiting those questions is quite appropriate. and as you know, the mexicans have also proposed for our consideration a swap concept of light and heavy oil. so i think these are all areas of active consideration. >> thank you. just finally, and i'll have to submit written questions, mr. secretary. last week i wrote to you about

the former deputy secretary of energy, daniel pottiman. i expressed my concern about his appointment to the board of directors of a group of commodities, trader, and just have concerns about that and hope to get a quick timely response from you regarding that letter. so thank you, madam chair. >> i can say your and the concern of other members brought to our attention has certainly led us to, you know, make sure all people in the department are aware, as is he, of the rules in terms of interaction. >> thank you. thank you, madam chairman. >> thank you, senator barrasso. as we're discussing prompt replies, i am informed by my staff that some of the qfrs that we had submitted at the budget hearing several months ago have

not yet been responded to by d.o.e. if you could just rattle the cage there, i would appreciate it. >> i did that last week. >> thank you. thank you. let's go to senator franken. >> thank -- thank you, madam chair. >> we have an interagency process to go through. anyway, but i apologize for that. i want to be prompt with that. >> thank you, madam chair. thank you, secretary moniz. in response to senator cantwell, you touched on the properties and characteristics of tidal oil specifically and specifically the characteristic of combustibility, and we've seen these crude-by-rail accidents that have led to some pretty spectacular explosions and in some cases tragedy, 47 people killed in quebec during an accident. so let me ask about a very specific property which is vapor pressure.

it causes, i understand it, by liquid, natural gases -- >> ngls. >> -- yeah, that are particularly explosive. as you may know on april 1st, north dakota -- or since then has been requiring vapor pressure bakken crude to be limited to 13.7 pounds per square inch before it's loaded into the railcars, but the big explosion in west virginia, the vapor pressure of that oil was at 13.9 psi. my question is whether the department of energy is working with the department of transportation in order to access the safety benefits of lowering crude oil vapor pressure before it's loaded onto trains. >> yes. so that is one of the specific focus areas of the work that i alluded to earlier that our lab has carried out and will carry

out. but again, the early indications are that no one property seems to be directly correlated to the combustibility issues, but that will be researched much more in the next year, and then there will be specific combustion tests done in accident scenarios to test this out. 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 manchin 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 for montanans. 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 millennial 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 production is 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. 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 proposals. >> 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 it's a really urgent problem for the region. i assume you agree. >> 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 nascent 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 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 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, it 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 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 infrastructure 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 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 infrastructure. we've got to get them through the regulatory 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 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. 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 issue and 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. help make some of the linkages to other parts of the administration. >> thank you. >> thank you secretary moniz. and know that last week we had very interesting discussion here talking about the impact of iran sanctions and that effectively by not removing the oil export ban we keep in place -- or we impose domestic sanctions on u.s. oil. look forward to continuing that conversation. >> i might add that you probably discussed, but that eia has done a whole series of reports that will culminate in june, analyses of renllevance to the oil export

discussion. >> 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 cost down so for generation of electricity, for manufacturing for heating some there are i believe energy information agency has said that it would lead to cost rises in the united states if we do export and especially export a significant amount. mr. secretary, i'd like to talk about renewable energy production on indian lands. our tribes in minnesota and elsewhere have tremendous

renewable energy resources. in minnesota biomass and wind and solar, too. but -- 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 joe dimaggio. >> that's a reference to the sound track of "the graduate" for those of us of a 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 -- on ind yand energy and 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 very often for indian and native peoples is incredibly low. and i really believe combining power is something that the chairwoman and i agree -- you know, are enthusiastic about and 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 households and low accelerated 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. >> 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 have 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 actively mined 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 little bit surprising in the sense that, i believe the largest

reserves are in it kazakhstan and the second-largest are i believe australia. >> they own those too. uranium 1 had holdings they combined with a south african firm and they purchased australian and kazak reserves. i think actually the uranium 1 then purchase. this is in a "new york times" article. >> i 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. again, it just seems of incredible importance to our national security and to our energy security. so 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 quick questions for you. 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.