need to make sure the environmental requirements are met so if the bill, if the proposal would curtail that then obviously i would not support it. >> are you familiar with what's called federal nepa small handle issues? >> no, i'm not. >> if federal small handle issues relate to how much federal control should be exercised over private projects, specifically whether full nepa review is required when the federal agents control only a small segment in otherwise private project courts determined if an otherwise private project cannot proceed without federal permits, then federal agencies are required to satisfy nepa requirements. mr. secretary is it possible for cross border project to proceed without a presidential permit under current law now? >> i really better check that with my general counsel.

i would have thought not, but -- >> my concern is that we have been trying to set a standard in this bill in previous legislation on cross border electric transmission, natural gas pipelines, and crude oil pipelines. in this case, department of energy would have the authority over electric transmission. >> wires. >> and whether department of energy would use the nepa process to approve those cross border. >> again, my assumption is that again, the two principles are there, environmental impact the nepa process, certainly for the part of the united states, and the determination of public interest. those are the two requirements and two principles i would uphold. >> i am out of time. i appreciate, under d.o.e. if we pass this bill with this particular section in it would have that authority and i wanted to see what the

regulatory process would be in the d.o.e. >> i would be happy to discuss that. >> the time is expired. are you saying it under that section it would not require nepa review? >> it does require nepa review. that's what i was wondering. there's been confusion on the legislation we've done separately that nepa review is not required. i want to make sure folks understand it is in this bill. >> it is. >> it was in the previous bill we passed out of the house last session. >> right. >> on cross border issues not just for d.o.e. thank you. >> i recognize the gentleman from illinois mr. shimkus. >> thank you. your department was really developed and instituted based upon our nuclear heritage as you know. and also focused on our nuclear future. you have to deal with a lot of

legacy issues, not part of the hearing, but the introduction is to let you know i appreciate the support i receive from your professionals down at savannah river which i visited yesterday and the contractors there and they took good care of me and i just want to put that on the record. now to the qer, it devotes an entire chapter to improve north american energy integration, but makes no mention of issues belying permitting in general or keystone xl pipeline in particular, some of the questions mr. green was alluding to. do you agree that, and i quote ad hoc or siloed permitting process, closed quotation as the qer puts it, creates significant uncertainty? >> yes it certainly can in many cases. >> has the inability to render a

decision on keystone pipeline impacted other energy projects in canada? do you know? >> i am not aware of it. >> can you check back with us? obviously there might be otherwise i wouldn't be asking this question. >> well only in the sense that olive seen discussions about other pipelines to take out things east or west, for example. >> right. i think the public and as a whole, i don't think they really -- sometimes i put up the transmission system on a map just to identify how many cross border pipelines and transmission lines we already have, both north and south. >> i think it is like 74 pipelines or something. >> right. and obviously curious if we have problems with one and the debate is will we have problems with the future or is this

uncertainty slowing down the process. and so part of the legislation which the chairman is pointing to talks about this cross border energy infrastructure language. in the committees energy, diplomacy discussion draft, would it attempt to address unnecessary delays in permitting of cross border pipelines and transmission lines have you looked at this and is there room for improvement when we're talking about pipelines or wires? >> well obviously as was stated, the pipelines as you know are not in our jurisdiction, the wires are, and i think it is going pretty straightforwardly. i might add that just the projects discussed in the last five years for new transmission lines would total about 5 gig a watts of capacity coming into

the northeast. >> we had a hearing a week ago i think on really the natural gas desert of the new england states, we had the governor of maine here which would address pipeline infrastructure and probably cross border also with them. i mean, i think a lot of people would shake their head understanding we still heat with fuel oil in some major states in our union where access to natural gas pipelines might help them transition, especially with the abundance we seem to have having now with our production. >> if i may just. >> you may. >> a week and a half ago we did approve for potential fta reexport a project to canada, natural gas project. >> the energy diplomacy discussion draft also talks about improving the process for

permitting major energy projects. do you agree it would bring greater clarity and predictability to the process and help in the diplomacy part? >> clarify if we did what? >> the balancing impacts with environmental consideration action especially in energy diplomacy, shimkus is lithuanian, people have heard that, i toured the l and g terminal energy diplomacy for friends around the world, whether japan or eastern european countries is critical to give them choices of energy. so the question is cost benefit analysis, how can you expedite it. your quadrennial review addresses this a little bit. >> again as i said earlier the whole issue of energy security is -- we are looking at in a broader sense than the traditional way, and by the way maybe not here but if you would

like, we would be happy to come to your office and talk about work on ukraine specifically. >> that would be of great interest to many members. >> we are trying to expedite these positions. >> this time the chair recognizes miss castro for five minutes. >> thank you, mr. chairman, good morning, mr. secretary. i would like to you elaborate on transmission storage distribution beyond what you've already testified to because america's energy infrastructure is aging, it is not well matched with the new sources of supply, it is exposed to increasingly dangerous extreme weather events associated with climate change such as sea level rise. in my neck of the woods we are concerned about more intense electrical storms, drought and wildfires. i know you're sensitive to the potential for cyber and physical attacks as well. and part of america's policy now is to encourage the new clean

energy supplies and greater energy efficiency such as the availability of rooftop solar that holds great promise for powering households and businesses across the country, and growing energy efficiency sector that will rely on smart meters, smart grid, distributed generation. these run completely counter to the traditional electric utility model. you testified already about energy assurance grants for states. maybe you need to go into greater detail on the micro grids. i never heard of a sink row phaser. what else must we be looking for to modernize america's grid and infrastructure going forward? >> well, in terms of the grid including both the transmission and distribution systems i think one major themis that we need to

really push forward on what we barely started, and that is real integration of technology into the grid and associated requirements to take the data to be analyzed of course, sink row phasers are part of that, we can discuss that another time. sensors, control systems, coupling information technology into distributed information so the grid can respond quickly if there's something developing on the reliability side for example. so that really is the over arching theme, more and more information technology integration into that system. that does of course potentially exacerbate another thing you mentioned cyber risk that we have to stay ahead of. i would say there i might add that under the leadership of our deputy secretary we had

something called the energy sector coordinating council which has eei and a number of ceos that meet three times a year to discuss these kinds of risks to the infrastructure, to the grids especially. on the grid there are some other issues besides those i mention such as the role of potentially d.c. long distance d.c. transmission where that's more prevalent in other parts of the world now, but again, i.t.is where to go. >> would local businesses be able to tap into this? >> there's still a lot of program design to do we would be happy to talk with the members about that. i think the was he we envision

is through the states, hoping the states would be competitive working with localities and tribes in the appropriate states, for example, but that's all detailed program design. >> i hope you would open it up to local collaboratives, regional collaboratives. you have recalcitrant states, unwritten policy in florida you can't even say climate change, that doesn't bode well to compete for grants. >> we will take that under consideration. it has been raised before in terms of cities. >> there's been some discussion about experts of oil and gas. you used a number how much is america importing in petroleum and gas. >> close to 7 million barrels a day of crude oil, although we are now exporters of 2.5 million barrels of oil products.

so net imports are maybe $4.5 million. >> doesn't the export heavy focus run counter to america's policy imperative to reduce carbon pollution? >> as i said frankly i think in our current situation where we are still major importers relaxation of export is probably likely to more or less swap around oil qualities in different places as opposed to lead to tremendous or increased production and demand. that's my view. >> so you do not think that exporting additional carbon fuels would exacerbate the problem of carbon pollution? >> the key is even as we are producing more and this debate is going on in terms of exports, i think the important thing is,

and we satisfy this keep your eye on the ball for reducing oil dependence. and that means we are aggressive on efficient vehicles, we are aggressive in terms of developing low carbon fuel alternatives like next generation bio fuels, and aggressive supporting the move toward electrification of vehicles with clean electricity supplying the vehicles. >> the gentle lady i'm sorry go ahead. >> if we are succeeding in the last five, i forget, some number of years maybe a decade, even as our population has increased as our gdp increased 13% we decreased petroleum fuel use. >> gentle lady's time is

expired. gentleman from pennsylvania, mr. pits. >> thank you. the chairman mentioned the interest in ukraine and the meetings there with ukrainian parliament, getting resources there, you said you're doing a lot with ukraine. would you care to elaborate please? >> i would be pleased to. starting in middle of 2014 the g-7 energy ministers together with eu met to discuss energy security issues and that included specifically the russian ukraine situation. out of that came commitment to work with ukraine for that winter. so d.o.e. led a team of several u.s. agencies and canadian

experts that went to ukraine several times and guided them to a winter contingency plan for energy. so that occurred. including by the way a tabletop exercise at the level of deputy prime minister. then we are back there helping them again look forward to next winter, but other things as well. for example, we pointed out the dependence not only on natural gas but on russian nuclear fuel. you may have seen now that's led to westinghouse now has a contract to be a fuel supplier for the russian reactors in ukraine. this has caught the attention of some. breaking a monopoly again. so we are working in a number of ways to help ukraine on the energy situation. >> thank you. the department of energy has made progress on a few l and g

export applications, but fact of the matter is more than 30 applications still await final decision from d.o.e. i realize you decided to reconfigure the process to allow to go first with the environmental review, but the process as a whole remains complicated, unpredictable, especially for u.s. allies unfamiliar with the process. my question is when will d.o.e. finalize its economic study of exports in the 12 to 20 billion cubic feet per day range. >> i can't give you an exact date but i expect it quite soon. i mean i don't think it is going to be an impediment because today we are 8 and a half bcf a day. >> would trans-pacific

partnership or transatlantic trade and investment partnership lead the way for those approvals? >> that would depend on the specifics of how it is negotiated but it may very well provide fta status to more countries in which place approval is more or less automatic, although i would caution because this statement is also often raised with regard to t-tip and europe that the reality is that the market prices probably have a bigger impact than whether you're labeled fta or non-fta. >> do you support the provisions in the draft that give d.o.e. 60 days to act on an application following the environmental review? >> we made our statements clear on that, particularly in a hearing in the senate that we frankly find it unnecessary.

we have been acting quite quickly. it is workable. we can work with it. but we don't think it is necessary. >> u.s. oil production has risen rapidly the last several years, imports are falling. in fact, only one quarter of petroleum consumed in the u.s. is imported from foreign countries, which is the lowest level in 30 years. when asked about lifting the ban on oil exports, you made the point that the u.s. still imports oil, which is a fact. but given our role in the global market, would it make sense to import and export oil? >> again, we need -- i imagine we are going to meet our needs. right now if we export a barrel we will import a barrel to replace it. so as i said earlier the only real issue in terms of exports is whether that would lead to any material increase of production as opposed to just in

effect swapping oil. there could be some issues in terms of oil quality. for example the mexicans have specifically petitioned for a swap in which we would send light oil to mexico in return for heavier oil coming back. that's an example of a swap. but i have to say it is not as though we have not been able to absorb all of the oil production today in the united states, so -- >> recognize mr. capps for five minutes. >> thank you for holding the hearing and thank you, mr. secretary, for your testimony. the discussion of our nation's energy infrastructure is very important and the as is the administration's work on the quadrennial review. i am particularly interested in the pipeline safety aspect of

it. over my years on this committee, i have referenced very many times this santa barbara oil spill of 1969. that had tremendous national and local ramifications, giving rise to the environmental movement and changing how the nation views the environment and oil development. sadly, santa barbara community was recently hit with another terrible oil spill along the coast. on may 19th more than 100,000 gallons of crude oil spilled from ruptured plains all american pipeline on the treasured coast. north of santa barbara. the oil quickly flowed under the highway, onto the beach, and into the ocean where the oil slick spread south for miles along the coastline. while the exact cause of the spill are still being investigated, it is clear that woe fully inadequate safety standards played a significant role. it turns out the plains all

american pipeline is the only federally regulated pipeline in santa barbara county. also the only transmission pipeline in the county that does not have an automatic shut off valve built into the system and this is not a coincidence. every other comparable oil pipeline in santa barbara county has a shut off valve because the county required it. the federal pipeline and hazardous safety administration does not make this requirement of pipeline operators. while an automatic shut off valve may not have prevented the spill, it certainly could have minimized it. plains was actually allowed to squirrel away tens of millions of dollars into what they called a contingency fund for when their pipeline would inevitably fail, yet they weren't required to spend a fraction of that amount on installing basic spill prevention technologies. this to me defies common sense and cannot be allowed to continue. this is just one example of lax

safety standards. my constituents are understandably angry and i share their anger. with all due respect for my seat mate, mr. green, who appropriately isn't here now, oil and gas development at its core is dangerous and dirty business. the mere fact that plains and other companies have oil spill contingency funds shows that there's no such thing as a safe pipeline. spills do happen and they will continue to happen as long as we depend on fossil fuel for energy needs. we obviously can't end this dependence overnight, but we clearly need to take bigger and boulder actions to achieve the clean energy future we all know is needed. secretary moniz, i appreciate the president and yours strong commitment to renewable energy. we can't build a clean energy future without modernizing infrastructure and preparing for new challenges but we must do

everything in our power to ensure this infrastructure is as safe as possible. congress has repeatedly directed to strengthen standards and they have done very little. the qer specifically mentions a draft rule investment that would help strengthen some of the standards, but they first began taking comment on this rule five years ago and nothing has been published so far. in 2011 congress enacted legislation explicitly directing them to issue a rule requiring automatic shut off valves on new pipelines by january last year. still not a proposal let alone a final rule. i find this really inexcusable. d.o.e. does not have direct control over this agency, transportation does, or rule making, but what's the point of replacing aging pipeline and building new ones if they are all built using ineffective and

outdated safety standards. the pipeline that burst in my district was not even 30 years old, so age is clearly not the only factor. my question for you, mr. secretary, and i appreciate if you can get back to me, i have taken most of the time, but what is the administration going to do to ensure, there's a lot of attention focused on this topic, to ensure a new pipeline infrastructure is as safe as possible. >> again as you said, they're in department of transportation and i am happy to talk with secretary fox and get back to you. but obviously the qer focus is we've got to rebuild infrastructure in a way that is reliable and resilient. this is an example of resilience, having the kinds of safety systems in place. that maybe cannot avoid but dramatically limit impacts, so this is just part of why we need this discussion. >> thank you very much. >> thank you. >> the gentleman from ohio

mr. latta for five minutes. >> thank you mr. chairman mr. secretary, welcome back to the committee. always good to have you here. if i could follow up with the gentleman from pennsylvania mr. fitz was asking, you mentioned the swap for light versus heavy with mexico. maybe some folks may not understand why you would have to have a swap. why is that that you have to swap light for heavy crude? >> i mentioned that's what the mexicans have petitioned for. currently we do not have authorities for exporting oil directly to mexico, so they -- my understanding, this isn't d.o.e., but my understanding is they asked for this idea of a swap, under consideration. i believe at department of commerce. >> thanks very much. another issue not only has this subcommittee taken up but

especially the telecom subcommittee in regards to cyber attacks, physical attacks that could occur to our infrastructure in this country. something of growing concern and great concern we all have as to what could happen. the committee discussion draft for energy reliability and security provides the secretary of energy the authority to take emergency measures to protect the power system from grid security emergency. are you generally supportive of d.o.e. having grid security emergency authority? >> well, i believe we have the authorities but only under emergency conditions. >> let me ask what other grid security recommendations do you make to the committee we should consider at this time? >> well, i don't know what's appropriate for statutory direction, i think utilities on physical security, many of them have taken significant steps since the california incident,

they're not always advertised for obvious reasons but they have been doing that. similarly by the way many of the utilities, but the reason we need to complete a study on the transformer issues whether it is because of physical attack or just you know, wear and tear a number of utilities have moved in terms of their backup there but it is not uniform. of course we have very different utility structures organizational structures different for ious or co-ops. that's an example where maybe after a study of statutory action could be called for in terms of how do we provide appropriate resilience to the low probability but high consequence of not having access to big transformers.

>> let me ask this, how concerned are you about electromagnetic pulse against the grid system? >> that's another risk that we identified. there are studies on that national academy has studied that. i would say it is once again an example of probably low probability but significance consequence possibility. >> and you say low probability, what% probability -- >> i am not giving a number, just say it is low. but again, there has been hardening done by many to keep transformers, et cetera. >> thank you. could you explain the importance of information shaving and public private partnerships as relates to security of the electric grid? >> i'm sorry? >> could you explain the importance of information sharing and public private partnerships as relates to securing the electric grid? >> i think that's very

important. once again, energy sector coordinating council that the deputy secretary heads is part of that public, private partnership. by the way i have to say groups like eei have been excellent partners in that. in terms of information sharing just one particular example, there's a lot of information sharing in terms of reliable operations, et cetera. one area i would highlight that this council does is including through providing selective security clearances sharing cyber threat data with the private sector. >> and finally, the short period of time i have, analyzing recent power plant retirements the qer mentions market factors low cost of natural gas and changing prices and driving factors behind retirements. would you agree environmental

regulations like the air toxin standard proposed clean air power plan played a role in electric generating units? >> certainly things like mercury restrictions raise costs that's always the cost calculation. but again by far the dominant issue over the last years is gas prices of 2.50. even the variable cost is beat by natural gas combined cycle. >> mr. chairman my time expired. >> the chair recognizes the gentleman from vermont, mr. welch. >> i have one comment and four questions. i will go lick ety split and i will ask all four so you can answer them. the comment, you are praised for being a great secretary of energy, sideline as nuclear negotiator. i don't think people know that you do the best imitation of louie tiant, his windup and

pitch. the members should ask for a demonstration. >> look to god. >> the whole thing. but the questions. one, the committee is doing great work on energy efficiency energy efficiency in vermont has been fully embraced and it led to our transmission company being able to avoid $400 million in expenses associated with transmission lines. i want your comment on what we can do as a committee and federal government can do to get benefits and avoid cost. second, we have been trying to get real time information on electricity rates in new england in significant part because our rates are very high. your department has been helpful trying to get real time information in all the states and canada and mexico, but has been having real challenges in actually getting that information. i am curious to know what you find as the reason why it is so

tough to get that and what the department can do to help reduce electricity bills for new englanders. third, this is a smaller issue but quite important. we have some bio mass stove manufacturers and standards evolve. one of those stove companies, hearthstone, they're having a hard time getting basically an answer on what the standards are so they can comply. they have a great product, but if they don't get a real definition of the standard, makes it tough for them to stay in the market. has been having an awful hard time with that. small company but important job and real jobs to vermonters. and finally net metering, you have to have that for efficiency, on the other hand it has impact on the economic model. vermont has gone in a different

direction than most states led by the biggest utility to embrace and promote expansion in that metering. what could we do at the federal government to help that process that's going to help deploy energy efficiency but also deal with the economic realities of many of our big power producers. thank you. >> well thank you, mr. welch. four questions. actually the third question on emission standards of bio mass stoves is something we will get back to you on because i don't know the answer right now. that's one we can take care of. on energy efficiency and vermont, well, as you know i was in vermont with the delegation and vermont has done a fabulous job in terms of efficiency with novel novel business models for supplying energy. but i would say the main thing, the recommendation in the qer,

relevance to that, and to a certain extent to the net metering discussion as well is that we need to develop and the d.o.e., we will start really delving into this much more, we need to devise a better way of valuing the services that can be provided in the electricity system efficiency storage, diversity, capacity, power quality. there are all these issues, when we had the traditional business model and it was basically one way from a central plant to a house, kind of got lumped together. with more diversity, with storage coming in in some cases, distributor generation we know energy efficiency this involves another hot issue now in the

courts, to what extent does end use efficiency come back all the way to the wholesale market which is engagement. i think this issue of valuing all of the services is really core and that's something that we want to over the next months really work hard on. that's something that needs dialogue with the members. that's i think a critical recommendation. in terms of electricity prices and real time prices i would note that the eia has in fact not so long ago launched a new product which has much more real time data being collected from the isos, rtos, and combined together so one can research it and one can understand how prices are moving. >> gentleman's time expired.

recognize the gentleman from west virginia, mr. mckinley for five. >> thank you, mr. chairman. thank you again for coming for us. last week during the break i returned to west virginia and was on overload of negative information coming at us in west virginia. the first newspaper i got when i got back was dark day for miners. they just announced that 2268 coal mining jobs were lost. 2268 families now are looking for jobs as a result of this. soon thereafter, another power plant closed down, cameron power plant, even though ferk testified that the concern we have is they're going to have rolling blackouts in the midwest

if we don't start replacing the power plants but we're continuing to shut the power plants down. another one went on to say just in one community, one small community that they're going to lose $61 million in wages as a result of this. so i'm dealing with all of this crisis. when you add the additional losses, 2268, now we are up to -- i believe the chairman mentioned it earlier today that we have now lost in west virginia 45% of our coal miners are unemployed since 2012. just in three years. three years, 45% of our coal miners are looking for work. now, i went friday and met with the coal association and i could see there they said there's going to be further contraction because of policies that are happening nationally so they're

concerned about what's going on. this loss of cameron and other power plants challenges you. the grid stability that we have, this dependability. it also -- but it is not, it goes beyond that, you know that what about property taxes? what about the local income tax people are going to pay? you can take away the power plant, but now you're effecting the schools, you're effecting how the community operates with this happening. my first question two questions would be what would you suggest to the coal industry to reverse the decline? >> well mr. mckinley first of all, of course we all feel for whatever reason when there are major disruptions in communities, it is obviously something that we need to pay attention to and administration

does have some programs to look at some training particularly in overlap areas with natural gas production power plus plan that's been put forward but i recognize that these don't address 45% of a work force, so they help in the right direction but they certainly do not solve the problem. >> keep in mind, too, mr. secretary, you know that coal miners are average age in their 50s. what are we going to retrain them? the second question since unfortunately you don't have a quick answer either on this is how to stop the hemorrhaging but the second question so if you're sitting in the kitchen with this 55-year-old that just lost his job, he has been working 30 years in a coal mine, what do you tell him? >> look again look i am

completely with you. this is a very difficult -- it is very difficult. in the end it is about having to try to produce some other economic opportunities, revitalization, some retraining and -- >> but these are real you understand, these are real people that lost their job. >> i understand. and the following is not on the right time scale for you. i said previously in front of this committee as well that we do have many programs many different kinds of programs that are addressing the issue of a future of coal, even in a low carbon world, but that's not going to solve that gentleman's problem tomorrow, i completely agree. >> what do we tell them? he has a mortgage payment, health care bills. what are we doing for him? >> the key has to be economic development and providing other opportunities and i might mention, mr. mckinley i am happy to say here that recently

senator man chen asked me to come to west to join him and you and come to west virginia and try to understand the situation and what we can do. >> thank you, mr. secretary. >> at this time recognize the gentleman from new york mr. engel for five minutes. >> thank you very much, mr. chairman secretary moniz and thank you for all of your good work. reappreciate it. i would like to join everyone in a -- >> i'm having a hard time hearing you. >> i'll do this. this is better. generally not so hard to hear new yorkers talk. i'll try to talk a little louder and not slur my words. i want to applaud your efforts and the efforts of everybody involved in producing the first report of the task force. it establishes a sensible blueprint making our electric

grid for resilient and to identify and improve vulnerabilities in our current energy energy transmission distribution system. as you know superstorm sandy swept through my district in october of 2012, knocking out power to 8 million people and causing several fuel supply and distribution problems. some new yorkers in my district waited for more than two weeks for their lights to turn on and struggled the whole time to keep their families safe and warm. i'm particularly focused on the availability of our grid and energy transmission and distribution system to with stand future shocks and also to recover quickly from any outage that might occur. so could you please discuss how we're better prepared toads than we were for a storm like sandy and how the suggestions in the qer would build on the improvements we've made, please

on the establishment of a northeast reserve and the potential expansion of distributed generation through the rev initiative in new york. >> thank you. well first on the regional gasoline reserve, as you know, that has been established with a million barrels distributed in three locations from the new york harbor area up to portland, maine. and that compliment to the heating oil reserve that was established some years back. i might point out that one of the recommendations by the way which i would put in front of the committee is that it would be very useful if the authorities for using those reserves could be harmonized because they're quite different and this would not help in terms of a coordinated response in terms of an issue. so that is -- that successfully

put in place it is paid for as well for four and a half years of operation. and i might add we are currently now about a third of the way through to using the remainder of the money to repurchase 4.2 million barrels of crude oil to go back into the reserve. because we took out 5 million. so it will be 4.2 crude 1 million gasoline and 4.5 years of operations of the reserve. secondly, with regard to the grid and resiliency, again i'd like to highlight what we consider to be one of the most important recommendations and that is the -- actually, two recommendations. one is to support in our fy 16 budget request state assurance

grants to allow planning for hardening infrastructure. and then -- this is a case we have to find out working with you, how to raise the revenue, how to raise the resources. but to establish several billion dollars for competitive resiliency projects. that would include things like microgrids. but designed for resiliency of the energy system. >> thank you. let me ask one more question. the qer report also recommends way to further integrate the energy infrastructures of u.s. canada and mexico and the idea is to enhance market opportunities and sustainability. some transmission lines already send hydropower from quebec to the northeast united states and the potential exists obviously for more capacity on more tran mission lines in the region. could you talk about what role

if any these transmission lines should play in our future. >> one that was approved recently was the champlain hudson line this would take power to new york hydropower. and there are a variety of projects for four to five giga watts of additional hydropower that could be available to the northeast and upper midwest. this obviously would be clean energy and to meet our needs. >> thank you. thank you mr. secretary, thank you mr. chairman. >> the chair now recognizes the gentleman from virginia mr. griffith for five minutes. >> thank you very much. i do appreciate that. let me reference the comments made by mr. mckinley of west virginia. we've had hundreds of layoffs in my district alone. of course in my neighboring

state of west virginia and kentucky there have been thousands. and it has been devastating. you reference natural gas in relationship to the closing of some of the coal fired power plants as one of the factors. it is one of the factors. the regulations coming in. yesterday we closed down the facility in any district. it was pay for by the rate payers wouldn't cost them any additional. i was only being used at this point for the peak periods. that's now gone. the clinch river facility in any district had three electric generation power plants. they are converting two of the three over to natural gas. however, the third one is not going to be converted. and the two-thirds that used to be there will produce half of the electricity. i'm just concerned that in the peak periods of use, now that they're gone, how are they going to be replaced in southwest va v

and other parts of the ap footprint? >> of course i don't know well enough the exact geography and the distribution of power plants. clearly if i talk more broadly, one of the issues clear sli the continuing buildout of the tran mission system, power around effectively. and i might say i was a little surprised frankly with the data that came out in the qer that the spending on transmission in the country has actually reached 14, $15 billion per year with a continue use increase basically over the last ten to 15 years. so we actually don't think that like any significant increase in resources will be required. the issue will be to make sure that the lines are configured of course to make sure that energy gets to all of the various

places. >> and i get that and that brings up natural gas pipelines in talking about all of this. they're building them in any district with great opposition from many people who don't like the pipeline concept. they're also building them in districts just north of mine. pipelines are going ever where. i noticed in the qer you note the need for pipeline replacements and that you suggest a doe run grant to allow states to receive funds to aid in improvements of the pipeline infrastructure. i support um proving our current system. i'm interested in learning more about the details. what new authorities do you all think you need at d.o.e. in order to create the program and will you be providing language to the committee so has we can see about putting that into the appropriate bill? how do you envision the d.o.e. replacement program working,

where would -- how would the funding get to the existing states? would it be the existing funding or are you going to come up with new funding? where is the money going to come from, what's the time line? i would be glad to go back and review them but i don't want my time to run out. >> let me make several point. first of all on the resource issue, we were very clear that we do put -- we had about a half a billion dollars proposed in the fy 16 budget to address various qer recommendations. but there were another $15 billion of need identified which we were very clear, we have to have a discussion in terms of where can those resources come from. that's even many years. but still -- so specifically the funding for the acceleration of natural gas distribution infrastructure replacement is not in our budget. that's one of those cases.

we have in the past of course had many examples of raising resources in various ways for major infrastructure projects. i think that's the discussion we need to have with the congress. are we prepared to find these mechanisms for a significant push on energy and infrastructure. >> as we transition and use more natural gas, it would seem that at soim point that funding is going to have to come forward which means it's going to be passed on to the rate pair and yet another expense added on to one of their energy bills. >> what we're seeing today -- by the way, at least for these years i have a place in d.c. and on my bill there is a specific surcharge on there for replacement of the natural gas distribution pipe. what we're saying is we think this needs to be accelerated. i'll be clear.

i guess it's washington gas, whoever it is, the surcharge is for a 40-year replacement program. well, that seems like an awfully long time. so what we're arguing is we need to shorten these -- utilities are typically doing this. many decades to keep the rate hit low. we're saying, geez we need to accelerate this. what we're proposing is funding that would go to help low income households absorb the rate hit. >> gentleman's time expired. at this time recognize the gentleman from ohio mr. johnson for five minutes. >> thank you, mr. chairman and thank you mr. secretary for being here with us again today. at the risk of piling on i want to associate myself also with the concerns already mentioned regarding the coal industry.

my district is a state and hef sli dependent for the reliable affordable energy but also for the jobs that it represents. you know i was on a trip to europe just a couple of weeks ago and one of the one of the statements that one of our european colleagues in the energy sector made was that you know, over the last 20 years or so they have led america in shutting down much of their coal industry in an effort to reduce their carbon emissions. some of the european countries, when we asked them what their energy profile looked like, they're returning to a higher percentage of a use of coal. when i questioned them about that, i said why is that the case and how do you think you're going to be able to reach this 40% reduction by 2030. and this official said, look,

we've learned, our rate pairs our businesses and residential customers have learned -- have said they are no longer willing to pay the exorbitant high prices for energy. you know, the idea is you make coal so expense uf by taxing the carbon emissions that renewables and other alternative forms of energy are more economically attractive. they're going back to coal. i don't know why america, mr. secretary, why we have to learn this lesson the hard way, that coal still provides the most reliable affordable energy on the planet. and so let me get off of this subject because i have some others i want to talk to you about. you expressed a willingness to come to west virginia with senator manchin and representative mckinley. can you swing through ohio for the same time. >> be grad to do that. >> i would love to take you to talk to some of our coal mining

coal operators and some of the manufacturers who are being asked to idle their plants because there's not enough energy on the grid to meet the peak demand. and that's today. that doesn't count for what's coming. >> if i may make a suggestion that might be useful. we have a very, very excellent person named dave foster who is really, really the creator of our job strategy council. perhaps a meeting with those of you with kind of appalachian connections in coal to brainstorm about what may be other ways of going. i would be happy to do that. >> can you help facilitate that that. >> good. my office will be in touch. >> terncertainly the two f 0 you and mr. mckinley would be among those. >> i'd like to do that. in march william o'keefe, the ceo of marshal institute penned an editorial in the washington times where he notes that the

council's economic report for 2015 details the beneficial effects of l and g exports. that would bring domestic employment and geopolitical energy and industry and the environment. he makes the point that unless we act soon we're going to lose many of these benefits. he says, while the american policymakers procrastinate, other countries are stepping up to meet these needs. the united states has an incentive not to wait. our window of opportunity is closing. so with that in mind, what are your thoughts not only on l and g exports. but are there any specific steps and policies we should be putting in place today to realize this opportunity before it's lost? >> well i have to say first of all, that we are no pros krast nating. again, we have -- now we have approved -- this is separate from the conditional approval we

made last week for the alaska project. that's a separate gas source. but for the lower 48 we've approved roughly 8.5 billion cubic feet per day to nonfree trade agreement countries. we have no other applications to work on at the moment. and just to give a scale, i mean the largest l and g exporter is at about 10 billion cubic feet per tad. >> i hear you, mr. secretary. why does the rest to have world, why are they still urging america to get into the l and g export market on a global basis? why does the rest of the world and the oil and gas industry think that we're not participating in the global export program? >> i think first of all there is a lot of mis -- they're sitting there with 12, $15 gas and they

see us at $2.50 and they think that looks good. when youed a $6 or $7 for the supply chain it's not going to be be our prices. the fact is if you look at the economy studies that have been done, not by d.o.e. by others in terms of what they expect to be a real export market, very few of them come in above say 10 bcf a day given competition in various parts of the world. all i know is that's for the private sector to sort out. we have approved we have studies that take us up to a potential 12 bcf per day. earlier i was pointed out. we've commissioned another study that would look at 20 bcf per day. but in the meantime, we've approved 8.5.

the projects are being built. the first cargos will get on the water probably the beginning of 2016. and then we're going to start exporting. another issue is -- and a lot of our european friends say, you know they want the gas. i might just point out as an aside, no value judgments, there are a lot of a lot of places in the world that don't want to develop their own indigenous resources but would like ours. that's fine. but we do not direct where cargos go. we approved export licenses to nonfda countries and those are commercial contracts. frankly it's a constitutional issue in terms of us not doing that. >> i would submit to our committee and to the secretary, there's a big disconnect somewhere.

because the experts tell us that our price is going to rise when we get into the global export market. we haven't seen that. we've heard that the global market price is going to come down. we haven't seen that. so i don't know where the disconnect is. but there's a big disconnect somewhere. >> thank you. at this time i'm going to recognize the gentleman from missouri, mr. long for five minutes. >> thank you, mr. chairman. and m. secretary the discussion draft provides the department of energy with some new responsibilities beyond your current mission. for example, we direct the department to study the feasibility of establishing a federal strategic transformer reserve and arm the department of energy with new authority to address certain grid security emergencies, which i think is foremost in everyone's mind as far as grid security. do you believe the department of energy has the expertise and the

capability to meet these new duties? >> well, yes, sir. first of all, on the transformer reserve, we are moving forward to study that. we have one study already from our western organization. but we're moving forward on that. and will, depending on the study, engage in the appropriate public/private partnership to make sure we're secured. with regard to grid security emergencies, again we already do a lot of this. we work under the fema umbrella. we are the lead agency for energy infrastructure. and so for example, you may have read about the typhoon going through guam a couple of weeks ago. we had a person in guam as part of the fema response for energy

infrastructure. with we're already doing this. now additional authorities could be helpful. >> okay. in your testimony you mentioned that one of the key energy objectives is enhancing energy ability. what impact do you have that the proposed clean power plant will have on energy reliability and transmission issues? >> well, again, first of all, we do -- we analyze these issues but of course we don't have a final rule yet to know how to analyze it. but what we've done to date and what we have done in terms of technical analysis around the proposal of last year again suggests that reliability will be quite manageable. but we have to wait to get the final rule before we can really do -- >> so you don't think the proposed plan will have a big effect? >> as i mentioned earlier, one example of something that we

did, there was an issue around the projected significant increase of natural gas for the power sector versus coal. and when we looked at the infrastructure issues of the gas delivery we just did not find that there was likely to be any significant challenge. there would be some work to do but not a significant challenge. >> with mr. griffith from virginia a while ago, you had a discussion about money to the states and things. and with this quadrennial energy review recommend providing state financial assistance, which i think you all spoke about a few minutes ago, in grants and investment plans for electric liability and efficiency. can you discuss a little bit of some of the criteria, regardless of where the money is coming from. we know there's a shortage of money. can you discuss some of the money that the department of energy will require for the

states to receive the financial assistance assuming there would be money there? >> the money issue is relevant and i must say i was very disappointed in the appropriate yagss mark which does not provide any funding for either the reliability or the assurance grants which i think is short side to be perfectly honest. i think the states need to have this kind of planning capability. we would provide technical assistance. now in terms of program design, that remains to be done. but what we envision will be ultimately proposals around things like micro grids, for example, for reliability and resilience. we would see again the integration of i.t. and smart grids as provading those services. and as i said, we hope in the

reliability and assurance arenas to have funding for competitive coast shared grants. >> would the criteria be the same from state to state or would it change across the country? >> i think the criteria it still remains to be worked out completely. but the criteria would be around enhanced reliability. that's the criteria. >> my question is whether it would be the same from state to state across the country or whether different states would face different criteria. >> the same criteria but the way the projects would be structured would look different depending upon the regional and state services. >> at this time i'm going to recognize the gentleman from texas, mr. flores. i really appreciate you taking the leadership with the republican study group on the forum of exports and having an opportunity to examine that for

today. >> thank you, chairman. i hope secretary moniz will send someone to the discussion this afternoon. i want to talk about exports like my friend mr. barton did. one of the things you talked about is that one of the good reasons for the ability to have oil exports is because you have a better matching of the qualities of grades that are needed by the refineries and different gee graphical areas around the world. and you didn't go quite far enough, i don't think, because one of the things that happens when you have that better matching is you have economic efficiency and economic efficiency releases additional capital and that additional capital, based on my experience with 30 years in the business would go back into reinvestment which stimulates production. next time you're answering that question, if you go through the economic cycle i think it would be helpful. the next thing has to do with, i guess ride call it a safety valve question. as you know there are multiple

versions of proposals for oil exports out there. and some of them include giving the president the authority -- the ability to suspend oil exports in the situation where we had some sort of an energy crisis or if it's deemed international interest or to be able to use the strategic petroleum reserve under those same circumstances. and so with those two safety valve features in place doesn't that make it more compelling to allow oil exports? >> well again, obviously the more flexibilities are always welcome. but i think the fundamentals of the oil export question are those that we discussed earlier. and i agree with you of course in terms of your economic argument. >> okay. one of the things that ruz interesting about timing is while you were -- your agency and others were working on the qer, the administration was also

involved in negotiations with iran. and in early april your agency estimated that with a deal in place and a sanctions lifted iran might start selling us a stockpile of 30 billion barrels or more this year. this would come at a time when we already have a global glut of crude oil. what analysis if any have d.o.e. performed to better understand the implications of the entry of iranian oil on the global markets on global supply and demand -- global supply and prices rather. >> first of all you stated the basic conclusion that one would see over some year or two years, certainly several hundred thousand barrels per day probably of increased production. that would go into the 95 billion barrel a day or so pool.

the -- there are so many uncertainties in that time scale, in particular on the demand side. for example a recovery european economy would put substantial then pressure on supply side. clearly the nuclear negotiation is quite independent of that dynamic. that's about nuclear weapons issues that we think are important to block. >> i do understand the independent nature of the two discussions. however, the impact is the same. so i mean the outcomes are the same. >> it's also supply and demand. >> exactly. exactly. and so i guess under these circumstances, doesn't it seem like the president would have an increasingly difficult time justifying lifting the sanctions on iranian oil at the same time keeping the sanctions on domestic oil in place where

domestic oil can't be old abroad. >> we import 78 billion a day of crude oil. we're not an net exporter. we're an importer. >> we're on trackton to be an exporter. >> that's quite a few years away. even if you add in oil products, we're still at 4.5 million barrel as day. >> no additional questions. thank you. >> this time recognize the gentleman from oklahoma, mr. mullen for five minutes. >> thank you, mr. chairman. and secretary, thank you for being with us again today. i know i believe this is the second time you've been in front of this panel >> more than that. >> well, i mean this year. and if i'm not mistaken at least this is the second time you and i have had the opportunity to visit. and last time we spoke we talked about the lack of infrastructure with the power plants as far as

the coal fire plants that are coming down. we have a report from southwest power pole there's going to be 12,900 mega watts lost just in their area. and just while ago when you were being questioned i believe by mr. long you said that you didn't see any significant challenges to meet those needs. but yet, where is the power going to come from? if we're going to lose 12,000 just in my region, then where is the extra power going to be -- going to be made? where is it going to be produced? the gas lines aren't there. we are seeing four years to take a permit to simply get a permit to install a gas line. unless there's power plants that are being built that i'm not aware of in my region, then i believe there is going to be a significant challenge to meet the power needs. >> well again first of all,

let me emphasize that i did state that what we have seen to date. but we of course await a final rule. secondly, of course, demand -- now i'm talking nationally not in any particular specific region. >> but specifically speaking, the coal fire plants are in a specific region. >> sure. every plant -- >> i understand that. but we have 12,900 mega watts being lost in one region. and you said that you didn't see any significant challenges in meeting those needs. where is that extra power going to come from. >> first of all i made it clear when i discussed the natural gas transmission pipes. there will be local issues that have to be resolved in some places with new infrastructure. but if you look -- again all i can do is look at the broad picture nationally and note that

first of all, electricity demand nationally is not going up. it's essentially flat. we're build significant amount of natural gas and wind in particular capacity. >> so it's okay because -- >> it has plenty of wind. >> but it's okay to bring the power down because we don't need it right now? i mean that's like saying -- >> i did not say that. all i said was we are building substantial capacity even as our demand is flat. and secondly -- >> we're losing power. you're saying we're building significant capacity? what are we build it in? wind cannot replace what we have here. you can have miles and miles and miles of wind farms which we have in oklahoma which i frankly don't think is very pretty. i think it leaves a lot bigger footprint than anything else. but we're losing 12,900 megawatts in one area.

i'm going back to what you said with the gentleman from missouri when you said you don't see significant challenges meeting those needs. so what i think i hear you saying correct me if i'm wrong, that it's okay that we lose it because our increase for electricity isn't -- the need isn't there so it's okay that we lose it. is that what i'm understanding? >> no. what i'm saying is that -- first of all we have about 68,000 megawatts of wind. but what i'm saying is there will obviously all of the local planning authorities will have to be planning. but at the level we're not seeing the likelihood of enormous challenges. we're being cautious. we have to wait for the final rule to come into place. >> you're moving guard with it. mr. secretary you're over the department of energy and you're saying that the local areas need to get together. what is d.o.e.'s specific plan

to meet this need? is there not a need? just saying we're going to let them go down and let everybody else figure it out, it's not our problem? >> the private sector obviously build power plants. >> but you guys are the ones that pick winners and losers. >> no. >> yeah it is because you said coal is going out, wind is the new thing. >> obviously there's a responsibility of government whether statutory or regulatory to set certain rules of the road in terms of environmental protection. second set ra eket cetera. so -- >> so if i'm hearing it correctly, there is no plan. we're going to drop the power and let everybody else figure it out. >> the gentleman's time has expired. >> no more or no less of a plan that there has been. >> mr. pompeo of kansas is

recognized for five minutes. >> thank you for your patience today. we're getting close to the end and a lot of the questions have been asked. do you believe that the american taxpayer has received good value for the tens of billions of dollars that have been spent on carbon captured technologies today? yes or no. >> well first of all i don't think there's tens of billions of dollars. so it's quite a bit less than that. >> whatever the number is, do you think we've gotten good value for that? >> i think the answer is yes it swrould proved to have been very well spent. >> we disagree. yes or no. do you agree with the french foreign minister who said that the global climate change agreement should be worded in a way that does not require congressional approval? yes or no. >> i'm not aware of that statement. >> so do you think -- i'll ask it more zrektdirectly.

>> currently obviously the climate action plan that we're executing is based on administrative authorities to get an economy wide approach would require legislation. >> the government that you're a part of is negotiating an greet at this year, intends to enter into an agreement. they've made it clear. do you believe that the agreement that the united states enters into ought to be submitted for congressional approval? >> i think we need to see what the nature of the agreement is. there are many agreements -- >> so i can't get you to say yes that you think a climate agreement should be approved by congress? >> i think it depends -- >> i'll take it as a no. it seems to me that the only country you're currently advocating to export crude oil is iran. is that right? >> excuse me. >> you're sitting in negotiations that saying with ear going to free up the iranians to export their crude products but you won't advocate

for americans to be able to export their crude products. >> the situations are different we're a large importer. >> the situations are identical. it would benefit each country greatly to be able to access their products and sell their products around the world and both consumer ast and exporters would benefit in both countries if it's opened up. do you agree with that or disagree? >> obviously for iran -- >> it's a simple question mr. secretary. it's not a trick question. >> if iran has sanctions lifted, it helps their economy. >> and it would help ours too. >> i said earlier the only issue on oil exports in the united states of large scale relevance is whether or not there is a is a significant increase in as a result. in the current oil market that might be a difficult case to make.

>> you think no more supply will be lost. we've been through that. in 18 months there will be a new president, maybe not a new secretary of energy. one never knows. your qer was prepared based on this president's vision of greenhouse gases, their impact around the world and america's role. the next president comes in and has a different view with respect to that. tell me what remains of the value of the qer work that you did. >> essentially all of it. the qer is really aimed clearly at facilitating more clean energy but it's about energy security resilience of the insfra structure. it's about energy north american energy. it's got huge -- for the energy infrastructure independent of the climate issues. >> yeah, i just -- when i stare

at it i see the analysis. we don't disagree there. but it seems to me that most of what was in the qer was aimed at the intervention in the marketplace. you have several reference to classic market failure. i think much of the conclusions in the qer about how that infrastructure will be ultimately billed out and who determines which infrastructure will be built out is -- i just think -- i think it was a wonderful exercise. i'm glad we did the work with respect to infrastructure. the conclusions of the qer will need to be visited immediately with the next amendment. >> the gentleman yields back. that concludes the questions.

we have one additional member mr. cramer of north dakota who is not on this particular subcommittee but we's been so focused on this issues that he sat with us and we're going to give him the opportunity to ask five minutes of questions. >> thank you mr. chairman. you know what it does only take one good north da cotan to represent the states. so i thank the members. and i also want to thank you, mr. secretary, not only for being here but for at least agreeing to if not joyfully, i think you're a joyful person to holding one of the listening sessions in north dakota. it was a late request and a late addition to the agenda for you and secretary fox and others. i thoroughly enjoyed the time you were out there. i notice in the qer there's a lot of reference to things you learned last year in north dakota especially as pertains to the transportation sector and some of the challenges

particularly reflect rd the challenges for the railroads that move multi. commodities adds you know. you heard quite clearly and i think again indicated in the report quite clearly that there were challenges. but at the same time one of the things i want to do is bring the record up to date a little bit. last august we were following on two record winters and two bumper crops two seasons in a row that sfrand the infrastructure for agricultural commodities. one of the bigger challenges is the fact not om was it a record crop but it was a late harvest due to weather. it was also late and a very wet harvest. tluz with a consolidation of all of those commodities and the additional, you know, moisture creating other transportation problems, like the movement of propane for example for grain drying. that perfect storm created

incredible stress on the infrastructure. and along with of course, 700,000 or so barrels per day of oil being moved by rail. so there's a fair bit of -- there was a lot of criticism last august. there's a bit of that reflected in the report. but just in the last ten months the storm has shifteds. i want to stress those points and encourage you and the team to continue to monitor it on a regular basis. some of the things that were identified worked. the stp's weekly, the requirement for the weekly reports for example by the class 1 railroads has been helpful in transparency allowed better planning. a warmer winter with a more traditional harvest season and frankly lower commodity prices have created more normalcy. and during which time -- i can be the railroad's worst nightmare but i also want to

acknowledge when they have done their part. and vi to say for bnsf our largest railroad by far, they're invested mightily in locomotive cars certainly double tracking much of the region and the midwest. i want to encourage you to remain flexible and update the report regularly to acknowledge that this robust infrastructure does exist. it's my hope and expectation that that additional robust rail infra infrastructure enhances all commodities. i think it's worth noting because of the stp reports we've noticed that they are pretty well caught up caught up to the point where there's extra capacity and much like the electrical grid, it doesn't hurt to have a little extra capacity. but it also creates opportunity for growth. so you know, i would only

probably ask that you know if we comment on my comments if you would like to but again appreciate my appreciation for your attention to the issues. >> thank you. we certainly appreciate it, your participation in the hearing in north dakota along with your senate colleagues. first of all, i think you've put your finger on really what was the main driver of our discussion on this subject in the qer and that was the need for more data. to be perfectly honest the railroads have not always been the most transparent in terms of data data availability. and that's been improved. the issues around coal have been relieved. there are other issues as we know in terms of oil by rail that are being addressed and i might say that the -- with the department of transportation we have now launched the next phase of the study of relevance to

crude properties and rail. it will take about 18 months before we're ready with that. but anyway, i think you're absolutely right. we've had some progress on the data front and that allows an eia is playing a role in there as well. >> yes, they are. >> it's great. >> thank you. thank you again, mr. chairman. >> thank you. and that concludes the first panel. secretary moniz, thank you very much for your testimony and answers to our questions. we look forward to continuing to work with you on many pressing issues as we move forward. thanks again for your leadership. and mr. rush will be notifying you formation of the fan club and we'll be getting together with that soon. >> thank you, mr. chairman. >> we have a meeting relatively soon. >> okay. >> and there will be a huge crowd there.

>> topics included claimant change cross border in infrastructure. this is an hour.

-- also active statewide association of county commissioners, outstanding commissioner who am very pleased could travel down from pennsylvania to be with us today. thank you, mr. chairman. >> thank you for being with us. once again i want to thank all of you. we really look forward to your testimony. and i'm sorry there was such a delay in your testifying. we had to reschedule a little

bit. but mr. do zer, i think you came the longest distance from germany, and i think you were in the german parliament at the time. and you're a professor also at the university. and so we generally appreciate your making this effort. and i'm going to recognize you to start off with for five minutes. and then after everyone has concluded, we'll have some questions for some of you. so mr. dozer, you're recognized for five minutes. >> i was director general of the office of the chancellor. this is where my gray hair come

from. and then i was appointed three times to the german parliaments commission of inquiry. we have that in germany. you can appointed to parliament without the right to vote. in the u.s. i studied in spokane, washington at gonzaga university, then i stayed for a longer period at the harvard law school. i later taught at five u.s. universities, the last time in dallas at texas. in houston, i'm a member of the advisory board of the association of independent petroleum negotiations. a month ago i published a laerjer study of international cooperation in global energy affairs. mr. chairman the year of abundance as you say opens up new opportunities of leadership for the united states and the

world is looking at the united states. the reminds us also at least me, that energy is not just about energy, it's about foreign affairs. it's about national security it's about finances. but ultimately energy has its own characteristics and dynamics. and this is my first major point. foreign affairs national security and also issues such as trade must be folded into the fabrics of energy politics and not the other way around. this is also my view as regards climate change. energy politics mr. chairman and when i look at your draft on energy diplomacy energy politics also cause for arrangements of its own when it comes to international cooperation. title three of the present bill represents an innovative modern

approach also from an international point of view. this may even be strengthened by a transatlantic trade and investment partnership. trade is just one aspect of energy. recent events -- this has been addressed this morning in russia ukraine europe in general, have yurn lined that energy independence will require safe energy supplies and will require political foresight and a robust long term strategy. together we must understand the nature of that issue. europe -- this is not well known. europe as a whole, will become more vulnerable as our resources dwindle in particular in norway. this is europe as a whole. the forum as proposed in your bill will serve to provide a common basis. but i propose that we go further

and establish a more advanced concept which i called the transatlantic energy agenda. we need to update and broaden existing arrangements. we have long standing arrangements for cooperation in foreign affairs in national security in agriculture for example. for energy, arrangements of this kind, i think it ought to change. we need more exchange. we need better exchange. we knead to know what we're doing and we need exchange about best practice. america's abundance leads itself to strengthening relationships. in europe we have particular experience in this respect. since 2009 the european union has the confidence to deal with the establishment of a single market but the member states have retained their sovereign power to determine the energy

mix. the frerj made sure that no one touches their right to work with atomic power. this is a very complex jurisdictional situation we have in europe. we now have a set of rules promoting competition in europe with liberalization. we have less progress -- this is of interest here so far with regard to internal and cross border connections to overcome isolated domestic market ps. key concept which has been worked out in the last 24 months has been the idea of project of common interest as it's called. the new rules -- i think this is of interest here, for a much more rapid process of approving permits. so far that time, don't be astonished took about ten years or more to have a permit for a transport arrangement.

this is not going down to 3.5 yeeshs at a maximum, according to the new law. also member states now must introduce one step authorities instead of the multitude of institutional arrangements we've had so far. now the funds needed for a single energy market will be considerable, but i think the advantage will justify the costs. costs in terms of secure supply new infrastructure urgently needed, more options for the customers, more better position negotiating position on the international endeavor when you negotiate with russia or the opec or venz way ra laezuelavenezuela. the larger your market, the better it is. it might help to emulate a

unfied energy strategy. mr. chairman, i conclude, in the past energy issues have at times been a bone of contention between the united states and europe. sometimes of bitter contention title 3 has the promise and hallmarks of a new year of cooperation with tangible benefits on both sides of the atlantic. thank you very much for attention. i very much appreciate this opportunity to express my views before your important committee. thank you very much. >> thank you dr. dolzer. our next witness is the president of the bipartisan policy center and thank you very much for being with us and you're recognized for five minute. >> thank you very much chairman whitfield, mr. rush and the resilient members of the committee. it's a pleasure to join ru on this important discussion. my testimony can be summarized into three main points.

first, i want to strengthen north america energy collaboration. they're realistic goals that must be vigorously pursued and not taken for granted. my second point is that increased north american cooperation is a critical component of a larger effort to promote economic growth to sufficient markets withen enhance north mark's role and project u.s. power and global interest. and our third point is we must seize the opportunity the translate that streng of abundance and not allow this strength to result in unintended complacency. this committee and congress has the challenge of managing success which is a new problem when it comes to our nation and i think it creates real opportunities that we need to discuss. let me begin by saying a little bit about the energy

collaboration. i believe the provisions in this are all essential to achieving the promise of north american energy security. the opportunities are particularly pronounced in the case of mexico. u.s. companies have much to gain in increased trade with mexico, it's hard to overstate the production to the mexican relationship. after years of decline energy production is responsible for a third of mexican government's overall activities. if modernization efforts success, energy production could be a significant driver of mexican development and opportunity. irp occasions are broad. we believe we must reform our nation's broken immigration system. while this is not the place to discuss this challenges of protecting the southern border there is no question that improved economic opportunity in

mexico is an essential component of successful and lasting immigration reform. let me turn down to the issue of siting. while technology improved dramatically, the permitting policies date back to 1950s and 1960s. we commend the committee's effort to make the cross board process more transparent than predictable. political judgment in crafting this provision to exempt the still pending keystone decision. it is time to have a broad based bipartisan energy debate that is beyond keystone and encouraging to see the committee working diligently to avoid focus on the agreements agreements. i'd like to move to the second point which is a focus on the component that north america plays in the larger global picture. our nation made good progress of

late. but current restrictions on crude oil are undermining our commitment to sufficient markets, deminutish our ability to promote free trade. i cannot build upon mr. barton's site of studies expect to agree that there is a space of andalyses that conclude it will continue to exert downward pressure. my final point is on the challenge of how we use this abundance to promote the long term sustainability and security needs. there's a broad critique of the abundance agenda that must be grappled with. the concern is that stable low cost supplies of oil and gas are undermining investment. the nation and the world will require in the next century to meet global demands, protect our security interest and to confront the risks of climate

change. this concern leads to different policy pathways. the bipartisan policy center believes center believes action must be taken to confront climate change but reject the idea that we have to pursue a low carbon future by undermining barriers to the resurgence of oil and gas production. perpetuating the markets and creating bottlenecks to hope to reduce fossil fuels is not an effective strategy, and if anything, it results in increased emissions. instead, as we vigorously pursue benefits of abundance, we have to be determined in conducting research and creating incentives to developing and commercializing the next generation of energy breakthroughs through storage to utility scale solarew lore, biofuel and array of energy saving technologies. we have to find ways to encourage greater investment despite low price environment. america's renaissance has given us the gift of time. the question before the

committee in congress is what do we do with this time? in closing the bipartisan policy center looks forward to continue to work with the committee as you build and architecture for abundance that enhances security and confronts domestic and global environmental threats. thank you. >> thank you and our next witness who is already been introduced but is mr. scott martin, a county commissioner of lancaster county, pennsylvania, thank you for being with us and you're registered. >> it's lancaster. >> what did i say? >> you said lancaster. we'll have to work on that one. >> i'll let you and mr. pits work that out. but thanks. >> you're welcome, mr. chairman and members of the subcommittee it's an honor to be here. i serve on the board of commissioners, and the united states must work to develop a coherent logical and clear national energy strategy. i applaud the chairman for ark

terkture of abundance to stimulate a wide ranging and bipartisan debate for the need of a long term energy agenda based on economic development, common sense regulations a modern and safe energy infrastructure, greater efficiencies, increased exports especially with lng to support our foreign policy goals and environmental sensitivity minimal government involvement, and utilization of free market economic principles. there's many positive developments in energy however, that's numerous challenges and issues that urgently need to be addressed. longer we wait to address and solve the issues make them more difficult, expensive, and complicated, and controversial. one of the most pressing priorities is energy indpeps. of course, energy independence can be achieved with only new and acquirable sources, the infrastructure exists, the environment is not hostile capital is available to finance the expansion in domestic and international markets.

thankfully due to fracturing known as fracking and discovery of vast new reserves, america is now the world's largest natural gas producer. as they should, energy prices have been decreasing. the united states is increasingly able to export large amounts of lng around the world and especially to european countries. the volatile and tense situation in ukraine can demonstrates why we have to build the keystone pipeline, increase facility and work to expedite the building of pipelines and compressor stations. as noted above, a significant improvement is the use of fracking and extracting natural gas from shale. the use of fracking in pennsylvania and the construction of necessary infrastructures had widespread and significant economic development impacts. some of these include 96% of new energy hires from the appalachian area 45,000 new building trade jobs in that same region, 243,000 new energy jobs in pennsylvania over $1 billion

invested by the shale industry in road and infrastructure improvements, and including grants to community college and trade schools to train the workers needed by extraction companies in the region with an average core wage of 68,000 a year. this increase shale gas production in pennsylvania is also saved the average pennsylvania family between $1200 to $2,000 annually in energy savings costs. businesses and other institutional energy users benefitted from the greatly increased availability of cheap, natural gas. the pennsylvania national guard and army reserve components the garden spot public school district, and the shady maple companies all in our area have experienced significant savings in their energy bills after switching to natural gas. cheaper energy will further develop an industrial and manufacturing renaissance in america. in brief, lower energy costs create more income and greater aggregate demand, decreased

transportation costs lead to lower prices and american prices are globally competitive. the domestic oil and gas reeve lugs is only successful long term if the nis pipe looibs are quickly built and brought online. the williams company proposed to build an 180-mile interstate pipeline from northern pennsylvania and connect it to the main u.s. gas pipeline from texas to the northeast. the actual connection point would be in southern lancaster county. 37 miles go through my county, that's a $2.6 billion economic impact throughout the construction of this project. williams is cooperative and easy to work with, various concerns have come up. over 100 route changes more than half the original route had been made based on stake holder input. they are committed to making the pipelines open access so potential customers can directly access the pipeline. as you imagine, a project this size generates controversy and

opposition. one early controversy was proposed routing of the pipeline through an environmental sensitive area parallel to the river. the board of commissioners is working with local organizations went to williams to express strong concerns regarding the route. williams found a new route and completely moved away from the sensitive areas. they did so with native american sites and water source areas. the county has five significant pipelines running through our county. many property owners are not even aware of the pipelines that crosses their land. based upon discussions with local farmers having existing pipelines on their property, williams including with their major u.s. pipeline, has been very responsive to their needs. lancaster county is one of the leaders in agriculture production, not only in pennsylvania, but across the country. we also preserve more farmland than any other county in the united states with over 100,000 acres preserved. needless to say, the county ordnances that govern farmland preservation program allowed

pipelines pipelines. since november 20 14, two elections where it was in a de facto manner in the ballot and voter were clear in rejecting efforts to stop the proposed pipeline including have two townships adopt a community based ordnance to declear that federal and state laws do not apply in these municipalities. voters recognize this pipeline represents the greatest good is served. in closing, i emphasize how incredibly important the on going energy revolution is to the future of the united states and the world while renewables, greater efficiencies, clean coal, next generation nuclear and smart grids are vitally important and virtually unlimited supply of clean recoverable natural gas from shale that lead americans to the future. thank you. >> thank you mr. martin. next witness is mr. gerald vice president of upstream research and consulting. and thank you for being with us.

you are recognized for five minutes. >> thank you, mr. chairman. members, thank you for having me here -- >> did you turn your microphone on. >> i'll do that. does that come across? okay. mr. chairman, members thank you very much. pleased to be in front of you today because in my world, which is -- >> forgive me for interrupting. can you take ms. cassidy's microphone and try that one? thank you very much. again, my apologies. i hope this does not eat into my five minutes here. mr. chairman, members, thank you. i'm very pleased to be here today because the world that i usually am in is the business world and the exploration and production business.

i'm a geologist, been in the business for 30 years. you decide whether that makes me objective or not in the business, but i'm fairly knowledgeable and representing the work analysis, and experience of my colleagues at my company. i want to talk about competitiveness of the sector, and more than the volumes that have been produced, supplies from shale, just as important for you to think about is the competitive of the energy industry here, and the reason is that it means costs and reaction to market conditions. for example, looking at this period with many benefits for the economy, consumers et cetera, at one point clearly perhaps the saudis, others, thought the u.s. oil industry was a phenomena of high oil

prices. that is not the case. in other words, many thought that this industry the shale oil and gas industry could survive only with high oil and gas prices. that is not the case. this is one of the points today. by the way, we had low natural gas prices for about six years right now, and shale gas production has sustained, in fact, grown. that's critically important. and why is that so important? because when if comes to thinking about energy diplomacy the idea that we can export the volumes that we have because we will match or meet their internal requirements is not just about volumes. what we're really exporting is competitiveness. i want to make that point is that anything you might consider in terms of the energy diplomacy objectives or goals, which are actually quite admirable they will be sustainable and viable as long as this competitiveness exists because it's not just

offering to send supplies somewhere. the market place is what is pulling them. whether it's ukraine or parts of europe or mexico as i'll talk about next year a great example. they would not be doing this if these supplies were from u.s. shores were not competitive in a lower priced alternative to other factors. and this is particularly important because if we define very simply what energy security is which is really we would argue reliable supply at affordable prices. let's take mexico. right now, there's a lot of interest in mexico because of the opening of the enp sector exploration production because of over 70 years of monopoly of the state oil company going to be reversed, but that's actually not the biggest issue going on. the bigger issue is that fact

that mexico imports a lot more natural gas for the united states. the committee knows they import 2 billion cubic feet a day. that number could go up to 5 or 6 billion cubic feet a day within the next ten years. it's a bigger impact because two things. one, all this will drive much more gas fire power generation if reforms work in the midstream and downstream in mexico and we hope they will. that should result in lower energy prices for the entire economy. we don't know yet if it's 10% lower, to% low30% lower, but the impact on that on the mexican economy competitiveness, this is the big picture. it's not so much the oil side is what i'm trying to say. it's the gas side and what we're about to do right there. that's an important factor. now, it is said, and it is quite true, that mexico has substantial natural gas resources, but in this case the

decision they made was if they tried to develop their own natural gas resources right now, it's so expensive that it made far more sense to import less expensive u.s. natural gas. that's a choice for competition. it's a choice for competitiveness, and, again, if you want to look at it from an energy policy program for the u.s., a tremendous success because as this goes forward that competitiveness, that lower price in efficiency is what is going to have a larger impact on the mexican economy in a huge contributor to what has already been troubled at times but a very successful u.s.-mexican relationship, so that's the arguments i want to put in front of you, that one, shale production is not a high priced phenomena. also intrinsic to the supply volumes we have is the competitiveness of that. one, if it's part of u.s. energy

diplomacy initiative, then that competitiveness needs to continue. that's going to undergird all of that in order to be successful. timely, u.s. infrastructure processes of regulations naturally, have to be equally competitive in order to allow this to be sustained. thank you very much for giving me the time. >> thank you and the next witness is alison cassidy, director of domestic energy policy for the center of american progress, and thank you very much for being with us and you're recognized for five minutes. >> thank you, chairman whitfield, ranking member rush and members of the subcommittee thank you for the opportunity to testify today. i'm director of the domestic energy. this is a nonprofit organization dedicated to improving the lives of americans through progressive ideas and action. before i jump into my more specific comments on the energy

diplomacy section of the draft i would like to highlight a topic that is not a subject of today's hearing, but i think should be and that is climate change, which, to me, is thee most urgent and challenging energy diplomacy issue of our time. climate change has become a priority in international relations because the climate science is so clear. a failure to act on climate change risks severe irreversible impacts on a global scale. as the committee considers the nation's energy policy and its interaction with the rest of the world, cap urges you to put climate change front and center of any policy you development. we can no longer afford to separate energy policy from climate policy. so with that introduction context in mind, i'll jump into a few thoughts on section 3104 of discussion of the draft about cross border energy projects. as you know under current law, entities wanting to construct or operate cross borderlines are

required to obtain a presidential permit. this section of the bill eliminates that requirement and instead requires the relevant federal agency to issue a ser tiff cant of crossing that is, unless the agency finds the cross border segment of the projects is not in the public interest of the united states, and i have a few concerns about this approach. first, the new process presumes that the project is in the public interest, placing the burden of proof on concerned stake holders to demonstrate it is not rather than asking the apply captain to make the affirmative case that it is. second, under the new process, the applicant needs federal approval for the portion of the project that physically crosses the u.s. border, even if the project itself spans hundreds of miles. finally, it omits review to just the cross border section of the project. this makes little sense because we know these projects have environmental impacts well beyond the border.

for a truly transcontinental project like a pipeline running through numerous states down to the gulf coast the current permits process is the only venue for the public and stake holders to examine and understand the potential impacts of the whole project that's under consideration. under the process established by the bill the review would be fragmented, state by state, and no one other than the project applicant would ever examine the project as a whole. i also have a few concerns about section 3106, the export section. this section sets a 30-day deadline upon completion of environmental review for the d.o.e. to issue a final decision for any organization to submit natural gas to a nonfree trade country. the united states is well on track to become a net exporter of natural gas. to date they issued final authorizations to six facilities

to export up to 8.6 billion cubic feet per day of lng, more than 10 % of daily u.s. natural gas consumption on top of what we already export to free trade countries like mexico. the existing d.o.e. permitting system appears to be working. it puzzles me, therefore, why we need a bill that seeks to fast track new d.o.e. approvals. to be clear, cap does not oppose lng exports in principle, but we have concerns about placing an artificial deadline on agency review of permit applications. congress should not preclude d.o.e. from taking the time it needs to make a consider and well-informed decision particularly on the most difficult projects. the stakes are simply too high for natural gas consumers here in the united states. last year the energy information administration concluded that increased lng exports lead to increased natural gas prices, and these