positive consequences and at this point i'd say that our energy policy and systems analysis office did a heroic job in marshalling this huge qer forward. on your first question and culture, et cetera, i might add that there's a wonderful expression by peter drucker, the famous management consultant, we can change rules but it's hard to change culture. but i think we are certainly making advances, certainly on the issue of minorities and energy and if you know otherwise, i'd like to discuss it with you. i do see enthusiasm going forward. argan, for example, one of their initiatives is in terms of making sure that minority businesses are quite aware of the opportunities for procurement. we also have a leader in our place-based initiatives. a good example is working with southwest louisiana with the enormous construction going on

driven by natural gas for training minorities to get some of those jobs. in terms of research collaborations, another example would be our jefferson lab working closely with hampton university. i mentioned the interns already. we're going to keep pushing on all of these fronts and i want to work with you on that and if you find problems, let me know because i will be sure to -- >> i certainly will, mr. secretary. >> okay. thank you. >> secondly, on the qer and the possibility of legislation, let me say that i certainly share the driver of this, which is that i think -- and by the way, the initial reaction to the qer, including in this hearing, i think it suggests that institutionalizing this could really be very important for continuing a bipartisan administration congress discussion. so i'm happy to work with both chambers in terms of how that might go forward. i would say that the department of energy in this first installment clearly did provide kind of the analytical horsepower for it. but i do want to note that the

executive office of the president also played a crucial role in being able to convene 22 agencies to come together to work on it. so, anyway, we'd be happy to discuss that further. >> okay. my time has expired. this time right now is the gentleman from michigan, mr. upton, for five minutes. >> thank you again, mr. chairman. mr. secretary, in my opening i spoke about the willingness to work with you and your committee on qer recommendations and we look forward to that. receiving technical assistance on some of the other sections of the bill as well. one of the areas that i wanted to zero in on is sproule. as i noticed in your response to the committee yesterday, it was established in 1975 and it's the largest government petroleum reserve in the world.el it's been used successfully on multiple occasions to respond to different types of energy supply

disruptions. but it is now 2015 and global and domestic oil markets have changed significantly. we would all recognize that and receiving technical assistance on some of the other sections of the bill as well. one of the areas that i wanted to zero in on is sproule. as i noticed in your response to the committee yesterday, it was established in 1975 and it's the largest government petroleum reserve in the world. it's been used successfully on multiple occasions to respond to different types of energy supply disruptions. but it is now 2015 and global and domestic oil markets have changed significantly. we would all recognize that and sproule needs to be modernized.

the committee recently voted to draw down a limited amount of sproll oil to pay for our 21st century cure package beginning in 2018. as you conduct the ongoing study to recognize the new study going forward, would you support an additional change that would allow the president to draw down in self-surplus crude oil in order to use the funds to pay for operations in maintenance in line with the d.o.e. budget request and modernization plans? in other words, using what we call mandatory savings had for needed improvements that have to take place in the number of years? and i would imagine that would be a pretty small drawdown. >> mr. chairman, first of all, as you know, i have considerable concern about using the sproule for anything other than energy security and resilience issues for which it is intended. now, the issue of, first of all, of what is or might be called surplus is really part of the

study going on because we understand there are certain iae requirements but that might not be the metric for us to use. that's the first thing. secondly, we did identify, of course, in the sproule -- in the qer, excuse me -- needs right now for modernizing the sproule for -- well, there is issues of maintenance. there are issues of modernization and, in particular, issues of addressing distribution systems for getting sproule oil onto water, in particular, in an emergency. clearly, what you've proposed is if one were to do that, it would be being used, i would argue, for the energy security intent of the petroleum reserve. >> so, as you know, the qer recommends more flexibility and anticipatory authority to initiate a sproule drawdown. >> the motivation for recommending anticipatory

authority is not motivated by a desire to use the sproule to manipulate the oil prices. the current anticipatory authorities are highly restrictive, up to 30 million barrels and only if that keeps you above 500 million barrels. so there are issues there and we feel that, should a larger drawdown be required or if the sproule were at 500 million barrels, one shouldn't have to wait to see the consequences on consumers of a spike in global oil prices before one can act. so i think that's the spirit as opposed to manipulating oil prices. >> the qer discusses the last time spoure had a release in reaction to libya was in 2011. seems like yesterday but it was in 2011. since then, the supply has greatly changed, for sure, as demonstrated in the test sale this last year. if there is an interruption somewhere in the world that doesn't impact the supply to u.s. refiners, would it make any sense at all to export sproule crude? >> once again, i would say that that should be part of the study -- studies, really, that are going on. but i might say that it's hard to see how a major global disruption would avoid impacting

our imports. because again, we still import 7 billion barrels a day. only because with a major disruption, even if that -- let's say country -- is not directly importing to us right now, there would probably be a redistribution of the market that would impact our imports. nevertheless, hypothetically, if that were the case, i think there would still be an issue of putting sproule out would have the effect of backing out imports that would equilibrate in the market. >> my time is up. >> gentleman from new jersey, mr. pallone, for five minutes. >> thank you, mr. chairman. secretary, climate change, as you know, is real and we're already feeling its effects across the country, the damaging impacts range from heatwaves and droughts to increased wildfires and everyone is affected. i'm concerned about impacts of extreme weather events and sea level rise under already problems that we have with our energy infrastructure. so my question is, the qer

outlines a number of findings in this area. but i might say that it's hard to see how a major global disruption would avoid impacting our imports. because again, we still import 7 billion barrels a day. only because with a major disruption, even if that -- let's say country -- is not directly importing to us right now, there would probably be a redistribution of the market that would impact our imports. nevertheless, hypothetically, if that were the case, i think there would still be an issue of putting sproule out would have the effect of backing out imports that would equilibrate in the market. >> my time is up. >> gentleman from new jersey,

mr. pallone, for five minutes. >> thank you, mr. chairman. secretary, climate change, as you know, is real and we're already feeling its effects across the country, the damaging impacts range from heatwaves and droughts to increased wildfires and everyone is affected. i'm concerned about impacts of extreme weather events and sea level rise under already problems that we have with our energy infrastructure. so my question is, the qer outlines a number of findings in this area. how is your energy transmission and storage and distribution vulnerable to the impacts of climate change? >> thank you, mr. pallone -- chairman pallone. first of all, as the data in the qer show, we have been seeing increasing impacts probably impacting the economy on in the last decade and with the rising sea level, the effects of storms, major tropical storms,

for example, are amplified. so we feel it is very important now to address the hardening of these infrastructures, not only coastal but coastal is one major issue. that's why we recommend a joint set of initiatives. one is to provide energy assurance grants for states to do planning and to provide a basis for the states to then compete for what we recommend as a several billion dollar opportunity for these kinds of activities. i'll give you one example. it happens to be in new jersey. it was not out of the recommendations here but in new jersey there was the case where we cost shared with the state a study on implementation of a very significant microgrid to protect electrified transportation corridors. the state then used that study to compete for sandy recovery money and, in fact, several

hundred million dollars to implement that. that's the kind of thing. do these studies, get technical assistance and then have the opportunity to move forward with cost sharing major resilience in projects. >> i appreciate your mentioning our new jersey grant because, you know, obviously we did have a lot of vulnerabilities during superstorm sandy. we saw a breakdown of infrastructure and services in terms of water supply. in terms of the grant program that is going to promote innovative solutions for resilience and reliability and security, just give me a little more information about how that program would work. i know you mentioned the new jersey program but what other kinds of projects would be eligible for those grants? >> well, it could be, again, any

kind of project that hardens infrastructure. the electric grid is -- has clearly shown vulnerability to storms. so it could be things that, like i mentioned with microgrids, it could be the use of advanced technologies. i could mention some things like synchro phasers to prevent a blackout, for example. one of the recommendations that we have in there is to expand analyses of what -- the different kinds of regional product reserves might do. now, this is a case where, again, in the northeast in new jersey, we've already moved there. but there are issues in california, there are issues in the southeast. there could be issues in the upper midwest and so we recommend that and there could be opportunities there for new resiliency projects. >> all right. thanks a lot.

i do want to applaud you for your efforts to strengthen, you know, these vulnerable and critical energy infrastructures, especially in the face of global climate change. so thanks again. thank you, mr. chairman. >> at this time -- >> if i might just add, this is an example of the importance of the broader view of energy security, including resilience of our infrastructure. >> exactly. thank you. >> thank you. >> at this time, recognize the gentleman from texas, mr. martin, for five minutes. >> thank you, mr. chairman and mr. secretary welcome back. mr. rush and you seem to have a mutual admiration relationship going on. >> do not get jealous. >> what? >> do not get jealous. >> well, i wouldn't go quite so

far as superstar but my daughter has a saying that she learned in college when something's really cool, it's money. and i would say -- it's money. when you say it's money, it means that, man, that's hot and it's cool and it's right on the bean. i would say moniz is money. so not superstar but money. now, you know what i'm going -- i'm going to i have go you a chance to show just how money you are. what do you think i'm going to ask you right now? >> i don't know but i'm covering my wallet. >> you heard the chairman's opening statement. he talked about oil exports and, as you well know, mr. secretary, back in the '70s we had the opec embargo and this committee and the congress passed legislation, most of which has been repealed. we had price controls on the well head natural gas prices, price controls on crude oil, we

had even retail price controls on gasoline. we limited what natural gas could be used for. that's all been repealed. the only thing that hasn't been repealed is the ban on crude oil exports. now, the u.s. is number one in the world in oil production, over 10 million barrels a day. the world use s moniz moniz quadrennial. >> he has to be. >> what are redoing for him? >> the key has to be economic development and providing other opportunities. and i might just mention, mr. mckinley, i'm happy to say here that recently senator manchin

asked me to come to west virginia and i would be happy to join him and you and come to west virginia and try to understand the situation and what we can do. >> i think the key issue, mr. martin, is whether or not in a country like ours that still imports 7 million barrels a day, the question would be whether that did or did not stimulate any appreciable additional production. that would be the issue in terms of global price. internally there wouldn't be an issue on how rents were shared between refiners and producers, but in terms of the economy wide, the real issue is whether there's more production and certainly in today's market it is hard to imagine that

happening. in a future market -- >> i am not a harvard economics professor. >> nor am i. >> but i did go to graduate school, you want to talk about sharing of rents, our refiners are taking those rents and putting them in their pockets. they're not sharing those with the retail consumers. if we let the producers have the option of putting that oil on the world market, the consumer in the united states could potentially benefit from oil prices going down. i think you'll agree with me that retail gas prices are basically set based on the world price for crude. you'll agree with that. >> absolutely, yes, confirm that. >> so i have a list here of studies where they've looked at what the price, what would has been to the price in the united states in retail for gasoline. and brookings institute, resource for the future, foreign relations, center for global energy policy at columbia university, energy policy research institute, aspen

institute, progressive policy institute, icf international heritage foundation, american council for capital formation, congressional budget office, energy information administration, general accounting office, federal reserve bank have all concluded that if we allowed our oil to be exported, there would be no increase in domestic price for gasoline and in most cases it might go down. now those aren't oil company hacks. those are bipartisan usually i would say objective institutes. are you aware? you have to be aware of some of those studies. >> yes. i think they're all in agreement with the fundamentals that again the issue is whether or not such a move would lead to an increase of production of any appreciable magnitude. if it doesn't, there's essentially no impact on price.

>> my time is expired, but if you'll send one of your crack aides to the republican study committee taskforce on energy seminar this afternoon, you'll hear four or five experts all say if we allow our oil to be exported, u.s. production will stabilize and probably go up. >> that's the key issue, i think we all agree on the facts. >> the document does recognize legislative actions. would you elaborate on one or two important ones? >> well, certainly, i think one of the important ones as i mentioned is this issue of providing funding particularly

for states to compete for good projects that will provide a resiliency of infrastructure. i think that's an important one. another one is we!zgñço:áxoc

but also distributed storage at the household or commercial enterprise level to be another game-changer, particularly in terms of distributing generation enablement. >> are we close to having the technology available.

>> the technology is available. it is the cost. and we probably need a factor of two to three reduction in the cost to make it widespread available. >> thank you. do you feel that the regional grid reliability would be put at risk by the clean power plan? >> well, we don't see any evidence in our analysis yet that this could not be handled in another way. for example we did an analysis in terms of the natural gas structure because of the issues of the gas used in the power sector and that found that while one would probably have some regional issues to develop, that there was -- it was not like we needed a massive program because we actually have been building out that infrastructure pretty substantially for the last 15 years and frankly it is over capacity so we don't see that as -- you know as a particularly difficult issue.

>> any way to -- what would be the best way to deal with the regional question you just referred to as the liability. >> i think it would be in the normal process, as the supply distribution is understood in this region, the companies would go through the usual furk process for interstate gas transmission pipes. >> well there seems to be a patch of transmission across the stakeholders for transmission permitting processes. do you believe that the rapid response transmission team has been effective and should its role be expanded in. >> i believe that it is -- i would say that i think it has really gained traction. in my view i'll be honest i think it is slow getting going but now i think the wheel preapplication standardization has come into play and i do

think we need to keep up the pace and if anything strengthen it. yes. >> i yield back. >> and recognize the gentleman from texas mr. olson for five minutes. >> i thank the chair and welcome sect monis. my first question is about the federal power act under section 2002-c, you can order a power plant to stay running during a grid crisis. in following your order, the plant might squeak past the filter permits. unfairly, that plant can be fined and sued by others for doing so. one regulator says go, another says stop. that plant has to decide whether they want to acquiesce in a power shortage maybe a blackout, or cut a check for breaking the permit for just a

few days, maybe a few hours. i have a bipartisan bill with representative doyle and green to fix this and the energy package we are working on. this is not about a company rubbing rough shod over environmental laws we're talking about daying or hours in a crisis. the other week furk and nurk endorsed our bill. your predecessor secretary chu told me in this committee he is quote, unquote, very supportive of the idea. the bill has passed this committee three times now and the whole house, and the 112th and 113th congress. and so my question for you is can i count on your support in the 114th congress, will you be very supportive of the bill like your predecessor? >> mr. olson thank you. you've asked me this question

before and let me say that the answer is basically yes. i know our d.o.e. staff has worked with both sides on this and i think we're quite comfortable with it. thank you. >> great. thank you for that clarification. as you know my home state of texas has half of our southern boardern. over 1200 miles with our neighbors with mexico and we know how important that relationship is with trade. and your q.e.r. points out we trades tens of billions of dollars of trade with mexico each year. >> 65. >> 65. i like that even better. and texas power lines out of erkot come from our neighbors from the south mexico. and those lines preventing rolling blackouts and brown outs in fall -- i'm sorry in the spring of early winter of 2011 and august of that same year. my question is, we know this --

we know that oil and gas -- those shale plates don't stop at the southern border. in mexico -- it is reforming its energy economy. i think those opportunities will expand in the future. you're q.e.r. will address the top of north american energy. the trade will be critical in the years ahead. any question is can you please tell me what you see for the top trades for north american energy and where this relationship is headed. >> in particular i would say last week, i spent four -- i want to emphasize work days in mexico with western hemisphere and other energy ministers. the energy reform in mexico i think offers tremendous

opportunities for us. clearly in the hydrocarbon sector, we know that. our companies are going to mexico in the current auctions. and are prepared to offer lots of technical assistance to get engaged in the shale plays as well. however, in discussions with ministers joaquin, the energy ministers of mexico he emphasized something that i agree with and that is the reform of the electricity sengt -- sector may offer new opportunities because the reform i think will bring our systems of regulation and standards much more into alignment as we have with canada where we have a completely integrated electricity system. and we are looking forward to that. it is going to be a major focus. we have a by lateral working group that i chair on the american side with the multi agency group with the ministers

of environment in mexico, mr. huerta and then i am one of the chairs of the u.s. mexico canada trilateral and we are well along into a trilateral data cooperation. and just last week we had a release that went out that i'll be happy to get to you where the three of us announced we're going to expand the operation with a full agenda laid out that will include emissions and hydrocarbon production and energy infrastructure issues so it is a very active -- >> thank you, for my time. [ inaudible ] the petra nova project and thompson texas the whole world, come down and see

it. you'll love. i yield back. >> mr. green for five minutes. >> thank you mr. chairman. mr. secretary. you'll get an overdose of texas. i see my colleague joe barton is not here but i don't know if members heard his mom passed away last week. so i just wanted to express regret to joe. mr. secretary, welcome back. according to d.o.e. website for projects that cross the border d.o.e. must comply with environmental consequences of proposed projects. mr. secretary, are you familiar with that requirement? >> yes. >> when makes cross border requirements the d.o.e. adhere to guidelines set forth by the council of environmental quality. >> uh-huh. >> does this include cumulative direct impacts. >> i'm sorry, modify the question. >> when the making of the

decisions, the dough, the guidelines set forth by c.e.u. and you said des but does that include cumulative and impacks. does the need for process include that. >> i guess i'm not quite sure if that is part of the peppa process or not. >> i mean -- >> clearly there are in general when we make public interest determinations cumulative impacts are part of that. >> okay. c.e.q. requires environmental impact for actions affecting the quality of human environment. is reasonable to conclude that dough would require an environment on impact for across border project in nis. >> yes. >> would it include a cross border project for a major forward action. >> yes. >> i'm getting down to the

whole -- >> yes. all right. >> ceq has determined that nippa can't be avoided by segregating a promgect. so that means a project coming across from texas to mexico not just across border crossing but the project itself, would dough decision making on cross border segments of a cross border project require compliance with neppa. >> certainly. we always require neppa compliance. >> the discussion draft in the bill would eliminate the permit process and grant cross border process for electric rules to implement the granted decision making. is it reasonable to conclude that the new regulations would include neppa requirements about the cross border project? >> let me take a step back.

i think there are two principals that we would insist upon. one is proper environmental review. and secondly would be a judgment this is in the public interest. those are the two basic principals. >> there is language in section 3104 that would limit the department's ability to fully require with nippa requirements. do you believe that language is needed? >> well, again clearly i think we need to make sure that the environment requirements are met. so it is a bill -- if the proposal would curtail that, then obviously i would not support it. >> are you familiar with what is called the federal nippa small handle issues? >> no, i'm not. >> okay. if federal small handle issues relate to how much federal

control should be exercised over a project and if federal agents control only a small segment and otherwise a private project, courts have determined if an otherwise private project cannot proceed without federal permits and forward agents are required to satisfy projects and it is possible to proceed without a presidential permit under current law now? >> i really had better check that with my general counsel i would have thought not but i'm -- >> my concern is we've been trying to set a standard in this bill in previous legislation on cross border electric transmission and natural gas pipeline and crude oil pipelines and in this case the department of energy would have the authority over electric

transmission and whether the department of energy would use the nippa process to approve the cross border -- >> well again my assumption is that the true principals are there, the environmental impact which is the nippa process certainly for the part in the united states, and the determination of public interest. those are the two requirements and the two principals that i would uphold. >> i'm out of time but i appreciate -- i know dough, if we pass this bill would have that authority and i want to see what the regulatory process would be with doe. >> gentleman's time is expired. are you saying under 3104 our legislation would not require a nippa review? >> it does require a nippa review. >> okay. >> that is what i was wondering. because is confusion that nippa review is not required. and i want to make sure folks

understand that it is. >> it is required. >> it was in the previous bill out of the house last session on cross border issues. not just for doe. thank you. >> thank you for clarifying. at this time i recognize the gentleman from illinois for five minutes. >> thank you, mr. secretary welcome. your department18]iñ really was developed and instituted based upon our nuclear heritage, as you know, and focused on our nuclear future and you have to deal with the legacy issues that is not part of the hearing but the introduction is just to let you know i appreciate the support i received from your professionals down at son anna river which i visited yesterday and the contractor there. and they took good care of me. and i just want to put that on the record. the -- now to the qer. the qer devoted a chapter to

promoting north american energy integration but makes no mention of issues belying cross border permitting in general or the keystone xl pipeline in general, some of the questions i think mr. green was alluding to. do you agree that the quote ad hoc or siloed permitting process, closed quote algs, as the qer puts it created significant uncertainty. >> yes, it certainly can, in many cases. >> has the ability to render a decision on keystone pipeline impacts other energy projects in canada? >> i'm not aware of it. >> and can you check back with us? obviously there might be. otherwise i wouldn't be asking this question? >> only in the sense that obviously i have seen discussed 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 realize -- sometimes i put the 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 we have problems with one and the debate is will we have problems with the future or is this uncertainty kind of slowed down the process. the cross -- and so part of the legislation which the chairman is pointing to talks about this cross border energy infrastructure language. and the committee's energy diplomacy discuss draft would attempt to permit the 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 always stated, the pipelines as you know were not in our jurisdiction, the wires are and i think it is going pretty state forwardly. i might add that just the projects discussed over the last five years for new transmission lines would total about 5 gigawatts of additional capacity coming into the northeast. >> and we had a hearing a week ago i think on really the desert -- the natural gas desert of the new england states. we had the governor of maine here which would address obviously pipeline infrastructure and probably cross border also, with them. i mean i think a lot of people would kind of shake their head understanding that 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 that we seem to be having now with our production. >> if i may just -- >> you may. >> about a week and a half ago we did approve for potential fta reexport a project to canada. a natural gas project. >> the energy diplomacy discussion draft also talks about improving the process for permitting major energy projects. do you agree that it would bring greater clarity and predictability to the process and help in this energy diplomacy part. >> can you clarify? if we did what, exactly. >> well the coordination of cite era balancing developmental impacts with energy. especially in lithuania, people

have heard that before, i've toured the l&g terminal, and our friends around the world, whether it is japan or whether this is the eastern european countries, it is critical to give them choices of energy. and so the question is cost-benefit analysis and how can you expedite and i think your quadrennial review addresses this a little bit. >> well as i said earlier, the whole energy we are looking at it in a broader sense and if not here we would be happy to come to your office and come to your office and discuss ukraine. >> that would be a great idea. >> we could discuss those issues. >> we recognize the chairwoman. >> i would like to talk about

beyond what you have testified to because america's energy infrastructure is aging and not well matched with the new sources of supply it is exposed to increasingly danger extreme weather events associated with climate change such as sea level rise. in my neck of the woods we're concerned about electrical storms and drought and wildfires and i know you are sensitive to the attention for cyber and physical attacks as well. and part of america's policy is to encourage greater energy efficiency such as the availability of rooftop solar that shows great promise for households and businesses across the country and our growing energy efficiency sector that will rely on smart meertz and smart grid but these run counter to the traditional electric

utility model. now you've testified already today about, well, energy assurance grants for states, maybe you need to go into greater detail in the micro grids, i've never heard of a sank row -- sync row fader and what else should we look for to to modernize america going forward. >> in terms of the grid, the transmission and distribution systems, one major theme is that we need to push forward on what we just barely started and that is real integration of information technology into the grid and all of the associated requirements to take the data, to be an allized of course the sync row phasers are part of that and we can discuss that another time but sensors, control systems, coupling information technology, into

distributed decision-making so the grid can respond quickly if there is something developing on the reliability side, for example example. so that is the overarching team more and more information technology integration into that system. that does, of course potentially exacerbate what you talked about the cyber risk that we have to stay ahead of. and i would say there i just might add under the leadership of our deputy secretary we head something called the energy sector coordinating council which has eei and a number of ceos that meet three times a year to discuss these kind of risks to the infrastructure to the grids especially. on the grid there are some other issues besides those i mentioned such as the role of potentially

d.c. -- long-term distance d.c. transmission, where that is much more plaintiff lense than other parts of the -- prevalent than other parts of the world by i.t. >> and back on your ashushs grants are they open only to states but can local businesses be able to tap -- >> think there is still a lot of program design to do and we would be happy to talk with the members about that. i think the wayer envisioning it is through the states and hoping for the states to be competitive to work with localities and tribes in the states for example example. but that is a detailed program design. >> i hope you would open it it up to recalcitrant states and in florida right now you can't even say climate change and that doesn't bode well to compete for

those grants. >> okay. we'll take that under consideration. >> great. >> it has been raised before in terms of cities wanting to be direct applicants. >> absolutely. and there is some discussion about experts of oil and gas. you've used a number today. how much right now is america importing of petroleum and gas. >> 7 billion barrels a day of crude oil but exporters of 2.5 million barrels so our net imports are maybe 4.5 million barrels. >> doesn't the export heavy focus run counter to america's policy and imperative to reduce carbon pollution? >> well, as i said, frankly i think in our current situation where we are still major importers, relaxation of export

is probably likely than more or less swapping around different oil qualities in different places as opposed to leading to tremendously increased production or demand. that is my view. >> so you do not think that exporting additional carbon fuels would exacerbate the problem of carbon pollution across -- >> i think the key is as we are producing more and the debate is going on in terms of exports. >> i think the important is we satisfy this is 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 biofuels and supporting the move toward electrification of feels with

clean electricity supplying those vehicles. >> the ladies time. but go ahead. >> and if you look at it we are, i think succeeding, for example, in the last, i think five -- some number of years, maybe a decade even as our population has increased as our gdp has increased 13% we have decreased petroleum fuel use time has expired at this time we recognize the gentleman from pennsylvania mr. pitts for five minutes. >> thank you. chairman upton mentioned his interest in ukraine and the e.u. and getting resources over there. you said something that you're doing a lot with ukraine. would you care to elaborate, please. >> i would be pleased to. the -- starting in middle of

2014, the g-7 energy ministers together with the e.u. met to discuss energy security issues and that included specifically the russia-ukraine situation. out of that came a commitment to work with the ukraine for that winter and so d.o.e. led a team of several u.s. agencies plus 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 table top exercise at the level of the deputy prime minister. then we are back there helping them again looking forward to next winter. but other things as well. for example, we pointed out the

dependence not only on natural gas but on russia nuclear fuel. and you have seen that has led to westing house now has a contract to be a fuel supplier for the russian reactors in krairn. this has caught the attention of some breaking a monopoly. so we are working in a number of ways to help kraun on the energy -- ukraine on the energy situation. >> thank you. the department of energy has made a little progress on the few department of energy applications but still 30 applications await process from the d.o.e. and i realize you decided to reconfigure the process to awill you ferc to go further and it is difficult for allies that are unfamiliar with

the doe and ferc and when will you follow on with the study of the 12 to 20 billion feet range? >> i can't give you an update but i think it is quite soon. i don't think it is an impediment because today we are at 8.5 i think bcf per day approved for nonfda countries. >> would the trans-pacific or the translauk trade partnership trade the way for l and g partnership approvals. >> i think that is -- it may well provide status to more countries in which case at 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 it that the market prices probably have a bigger impact whether you are labelled fda or nop fta. >> did you support the draft which give d.o.e. 60 days to act following the ferc environmental review. >> we made our statement clear on that. particularly here in a hearing in the senate that we frankly find it unnecessary. we have been -- we've been acting quite quickly. it is workable. we've said it is workable. we can work with it. but we don't think it is necessary. >> u.s. oil production has risen rapidly in the last seven years and imports are falling. in fact only about one quarter of the petroleum consumed in the u.s. is imported from foreign countries which is the low elf level in 30 years. when asked about lifting the ban

on oil exports you made the point that the u.s. still imports fact but given our role in the global market would it make sense to import and export oil. >> well, again, we need -- i imagine we're going to meet our needs. and so if we -- right now if we export a barrel we're going to import a barrel to replace it. so as i said earlier the only reel issue in terms of exports is whether that would lead to an increase of production as opposed to in effect swapping oil. there could be issues there 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 is 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. it has been -- so, any way. >> thank you. my time has expired. >> at this time recognize the gentle lady from california miss caps for five minutes. >> thank you mr. chairman for holding this hearing and thank you mr. secretary for your testimony. the discussion of our nation's energy infrastructure is important as is the work on the quadrennial review. and i'm interested in the pipeline safety aspect of it. over my years on this committee i've referred many times the oil spill of 1969. that oil spill had tremendous local and national ramifications, giving birth to our modern environmental movement and changing much the way our nation as a whole has viewed the environment and oil development. sadly the santa barbara raw community was hit with another

terrible spill. on may 19th crude oil spilled from the plains all american pipeline along the treasured gaffeota coast north of santa barbara raw. it flows under the highway and on to the beach and into the ocean where the oil slick spread south along the coastline. while the exact causes are being investigated it is clear that whoafully inadequate standards have played a significant role it. turns out it is the only federally regulated pipeline and the only transmission pipeline in the county that does not have an automatic shutoff valve built into the system and this is not a coincidence. every other comparable pipeline has an automatic shut ofl valve but the federal pipeline and hazardous safety materials

association does not make this requirement of pipeline operators. while an automatic shutoff valve may not have prevented the spill it could have minimized it. plains was allowed to squirrel away tens of millions of dollars into a contingency fund for when the pipeline would inevitably fail and yet they weren't required to spent a fraction of that amount on basic spill prevention technology. this defies common sense and cannot be allowed to continue and that is just one example of lacking 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 right 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 there is

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 our energy needs. we cannot end this dependence overnight but we clearly need to take bigger and bolder actions to address the cleaner future that we all know is needed. secretary moniz, i appreciate the president and your energy for a clean energy future without preparing for new challenges about with you must do everything in ow power to make sure we have safe as possible. korgs has directed fim za to strengthen standards and the rules and development that would help strengthen some of the standars but fim za began taking comment on this rule five years ago and nothing has been

published so far and in 2011 congress enacted legislation explicitly directing fim za to issue a rule to have automatic shutoff valves and still not a proposal let alone a final rule. i find this really inexcusable. i know doe does not have direct control over this agency transportation does, or rule making but what is the point of replacing aging pipelines and building new ones if they are built using ineffective safety standards. the pipeline that burst in my district was not even 30 years old so age is not the only factor here. and mr. secretary, my question to you and if you could get back to me because i've taken my time, but what can the agency do now, there is a lot of attention on this topic to make sure a new pipeline infrastructure is as safe as possible. >> again, as you said fim saw

isn't in the department of transportation and i'll be happy to talk with secretary fox and get back to you. but obviously the qer focus is we have to rebuild infrastructure in a way that is reliable and resilient and this is an example of resilience by having the safety systems in place that cannot avoid but limit the impacts. so this is just part of why we need this discussion i think. >> thank you very much. >> thank you. >> this time recognize the gentleman from ohio mr. latta for five minutes. >> thank you mr. chairman and mr. secretary. welcome back to the committee. it is always good to have you here. if i could just follow up with what the gentleman from mr. pennsylvania, mr. pits was asking, and you mentioned about the swap for light versus heavy with mexico maybe some folks might not understand why you would have to have a swap. why is that? that you have to swap light for

heavy crude. >> i just mentioned that is what the mexicans have petitioned for. because i think in the currently -- we do not have authorities for exporting oil directly to mexico so they recommend -- so my understanding is it didn't doe, but my understanding is they asked this idea for a swap which is under consideration at department of commerce, i believe. >> thanks very much and another issue that this committee has taken up and the telecom sub-committee but the cyber attacks in this country and it is a growing concern and a great concern that we can have as to what could happen. and we drafted for the department of secretary to prevent from grid securities. are you supportive of the doe

having grid security emergency authority? >> well, as i said i believe we have the authorities, but social under emergency conditions. >> let me ask, what other grid security recommendations would you make to this committee that we should considerate this time? >> well, i don't know what is appropriate for statutory direction. but i think the utilities for example, on physical security many of them have taken significant steps since the california incident. they are 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 a physical attack or just wear and tear a number of utilities have really moved in terms of their back up, but

it is not uniform. and of course we have very, very different utility structures organizational structures so it is different for iuo verse you co-ops, et cetera. and so that is an skanl pell where maybe after a study some statutory action could be called for in terms of how do we provide appropriate resilience to the low probability but very high consequences of not having access to big transformers. >> let me ask this how concerned are you about elect know magnetic pulses against the grid system? >> well that is another risk that we identified. there are studies on that the national academy has studied that. i would say it is once again an example of probably a low probability but significant consequence possibility. there has been --

>> when you say low probability what% probability. >> i'm not going to give a number but let's say it is low. but again there has been hardening done by many to key transformers, et cetera. >> okay. thank you. could you explain the importance of information sharing and public-private partnerships as it relates to securing the electric grid. >> i'm sorry. >> could you explain the importance of information sharing and public-private sharing as it relates to the grid. >> i think that is very important. once again, the energy sector coordinating council that our deputy secretary heads as part of that public-private partnerships and groups like eei has been excellent partners in that. in terms of information sharing just one particular example there is a lot of information sharing in terms of reliable operations, et cetera.

but one area i would -- highlight that this council does is including through providing selective security clearances, sharing cyber threat data with the private sector. >> okay. and finally, the very short period of time i have analyzing present power plantk12ñ retirements the que shows low market [ inaudible ] behind the retirements and would you agree that environmental regulations like the air toxic standard and the [ inaudible ] played a role in the retiring generation units. >> certainly mercury unit restrictions raise the cost and again by the far the dominant issue has been gas prices of $2.50 and special forrin

efficient coal plants even the cost is beat by national combined cycle. >> thank you. mr. chairman my time expired. i yield back. >> we yield back. the chairman from vermont. mr. welch. >> i have one comment and four questions and i'll go lickedy split and i'll ask all four of them. you've been commented as a great nuclear energy of secretary. but you do the best of louie teon and i think all members should ask for a demonstration. >> including the look to god. >> the look to god. >> the whole thing. but the questions one, the committee has been doing great work on energy and suv and in vermont it has been embraced and led to our transmission company developco avoid $400 million

avoid and i want to know what we can do to avoid the benefit of avoided cost. and second we've been trying to get realtime information on rates in new england because our rates are very high and your department has been helpful trying to get realtime information in all of the states and canada and mexico but has been having real challenges in actually getting that information. and i'm curious to know, what you find is the reasons why it is so tough to get that and what the department and ferc can do to reduce the electricity bills for new englanders. and third, this is small but important. we have biomass stove manufacturers and the standards evolve. one of the stove companies is harj stone and they are having a hard time getting basically an answer on what the standards are so that they can comply.

so i need -- >> for efficiency. >> right. they have a great product but if they don't get a definition of what the standard is, he is having a hard time. a small but an important company for jobs to vermonters. and net metering, this has an impact on the economic model. vermont has gone in a different direction than most states led by green power, our biggest utility to embrace and promote expansion in meteoring and what with we do at the federal government to help the process to help deblowing energy efficiency and deal with the economic realities that many of our big power producers have. thank you. >> well thank you mr. welch.

so the four questions. the third question on the emission questions of biomass stoves is something we'll get back to you on because i don't know the answer right now but that is one we can take care of. the energy efficiency in vermont, well again, and as you know i was in vermont with the delegation and vermont has done a fabulous job in terms of efficiency with novel business models for supplying energy. but i would say there, the main thing, the recommendation in the qer, of relevance to that and to a certain extent to the net metering discussion as well is we need to develop and the doe, we will delve into this much more, we need to device a much better way of valuing all of the services that can be provided in electricity system.

efficiency storage diversity, capacity power quality. there are all of these issues. and when we had the traditional business model and it was bake isly one way from a central plant to a house, well it kind of all got lumped together. but now with much more diversity, with storage coming in distributed generation we know that energy efficiency this involves another hot issue right now in the courts is to what extent does inuse efficiency come back to the wholesale market which ferc is engage the in so i think this issue of valuing all of the services is really core and that is something that we want to, over the next months, really work hard on. and that is something that needs dialogue with the -- with the

members. so that is i think, an absolutely critical recommendation. and in terms of electricity and realtime prices i would note that the eia has not so long ago launched a new product which has much more real-time data being collected from the issos and the rto's combined together so one can research it and understand how prices are moving. >> gentleman's time is expired. recognize the gentleman from west virginia, mr. mckinley for five. >> thank you, mr. chairman. thank you again for coming before us. in the last weerk, during that 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 there was dark day for minors. they just announced that 2268 coal mining lost 2268 families now are looking for jobs as a result of this. and then soon thereafter we got another power plant closed down, the camera power plant even though ferk said and testified before us is that the concern we'll 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. and then another one went on to say in one small community that they are 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, these 2268,

now we're up to and i -- and i believe the chairman mentioned it earlier today we have lost in west virginia 45% of our coal miners are unemployed since 2012. just in three years -- three years, we've lost -- 45% of our coal miners are looking for work. and i met with the coal association, they said there will be further contraction as a result of policies and other things that are happening nationally. so they are very concerned about what is gooding on-- going on. the loss of the camera and others, you know -- the challenge and the depend ability, but it goes beyond that. you know that. and that is what about the property taxes? what about the local income tax that people will pay? you can take away the power plant but now you're affecting

the schools. you're affecting how our community operates with that happening. so my first question of two questions is what would you suggest to the coal industry to reverse this decline? >> well, mr. mckinley first of all, 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 retraining, particularly in the overlap areas with natural gas production the power plus plan that has been put forward but i recognize that these don't address a 45% of a work force. so they have help in the right direction, but they special do not quote, unquote, solve the problem.

>> keep in mind too mr. secretary, coal miners, average age is in their 50s. so what are we going to retrain them. and unfortunately you don't have a quick answer either as to how to stop the hemorrhaging. and so the second question if you are sitting if the kitchen with this 55-year-old that just lost his job, he's been working 30 years in a coal mine, what do you tell him? >> well look again -- look i'm completely with you. this is very difficult. it is very difficult. i think in the end, it is about having to try to produce some other economic opportunities. revitalization some retraining -- >> but you understand these are real people that have lost their job. >> yes i understand. >> and the following is not on the right time scale for you.

but i've said in front of this committee as well, we do have many programs many different kinds of programs that are addressing the issue of a future of coal, even in a low car bob world but that won't solve that gentleman's problem tomorrow. i completely agree with that. >> so in the 23 -- what do we tell him? he has a mortgage payment and a health care bill? what are we doing for him? >> the key has to be economic development and providing other opportunities. and i might just mention mr. mckinley, i'm happy to say here, that recently, senator manchin asked me to come to west virginia and i would be happy 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. engle, for five minutes. >> thank you very much, mr. chairman and secretary, monis, and thank you for your good work

and so many good things. we really appreciate it. i would like to join everyone in applauding your efforts. >> i'm having a hard time hearing you. >> i will do this. this is better. generally not so hard to hear new yorkers talk. i'll try to talk louder and not slur any words. i want to applaud your efforts and the efforts of everybody involved in producing the first report of the qer task force. i believe it really established a sensible blue print, making our electric grid more resilient and to identify and improve vulnerabilities in our current energy transmission distribution system. as you know, superstorm sandy swept through my district in october 2012 knocking out power to over 8 million people and causing fuel supply and distribution problems.

some new yorkers in my district waited for than two weeks for lights to turn back on and struggled to keep their families safe and warm and so i'm focused on our grid and our 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 today than we were in 2012 for a storm like sandy and how to build upon the improvements we made and in particular on a northeast reserve and the expansion of distribution 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 complement 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 are 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 4.5 years of operation. and i might add we are currently now about a third of the way through to reusing the remainder of the money to repurchase 4.2 million barrels of crude oil to ga back to the reserve because we took out 5 million so

it will be 4.2 crude and 1 million gasoline and 4.5 years of operation at the reserve. the -- secondly, with regard to the grid and resiliency, again, i would like to highlight what we consider to be one of the mo and that is -- actually, two recommendations, one is to support in our fy '16 budget request state assurance grants to allow planning for hardening infrastructure and then -- and 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 include things like micro grids but designed for

resiliency of the energy system. >> thank you. let me ask one more question. the qer report also recommends ways to further integrate the infrastructures of the u.s., and mexico and the idea is to enhance market opportunities and security and sustainability. some transmission lines already send hydropower from quebec to the northeast united states and the potential exists, obviously for more capacity and more transmission lines in the region. could you please talk about what role, if any these transmission lines should play in our energy future? >> i think these are very important. of course, one that was approved recently was the champlain hudson line that would take power to new york from -- hydropower. and there are a variety of projects for 4 to 5 gigawatts of

additional hideydropower, this would mean clean energy to meet our needs. >> thank you, mr. secretary. >> the chair recognizes the gentleman from virginia, mr. griffith, for five minutes. >> thank you very much mr. chairman. 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 is one of the factors. of course, it is one of the factors, but the regulations coming in also yesterday we closed down the glen lynn facility in my district. it was paid for by the rate payers.

wouldn't cost them any additional. it was only being used at this point for peak periods. that's now gone. the clinch river facility in my 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 about 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 virginia and other parts of the a.p. footprint? >> well, 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 clearly is the continuing buildout of the transmission system power around effective will i. i might say i was a little bit surprised 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 continuous increase basically over the last 10 to 15 years. so we actually don't think thatww 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. >> i get that. that brings up natural gas pipelines in talking about all of this and they're building them in my district with great opposition from many people who don't like the pipeline concept. they're also building them in a district just north of mine. pipelines are going everywhere. i noticed in the qer, you note the need for pipeline replacements for existing pipelines and you suggest a

doe-run grant program that allows to aid in improvements to pipeline infrastructure. i support improving our current system for existing pipelines. i'm interested in learning more about the details. what new authorities do you all think you need at doe or do you want at d.o.e. in order to create this program and will you be providing language to the committee so that we can see about putting that into the appropriate bill. how do you envision the d.o.e. replacement program work inging? how would the funding get to the states? existing funding or new funding? where is the money going to come from? what's the timeline and how would the states apply, et cetera. i'll throw them all at you at once. >> i'll have to get back to you with a lot of the detail. but let me make several points. on the resource issue we're very

clear that we do put -- we had about a half 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 over many years but still. so specifically, the funding for the acceleration of natural gas distribution infrastructure replacement is not in our bupt. so that's one of those cases. and 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 infrastructure. >> and as we transition then and we use more natural gas then it would seem that at some point

that funding is going to have to come forward, which means it's going to be passed on to the rate payer and yet another expense added on to one of their energy bills. >> right. what we've seen today, by the way, i have -- at least for these years i have a place in d.c. and my bill there is a specific surcharge on there for replacement of the natural gas distribution pipe. what we are saying is we think this needs to be accelerated. i'll be clear. the i guess it's washington gas, i don't know, 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 -- you tillties are typically doing this, many many decades to keep the rate hit low. we're saying, geez we need to accelerate this. and what we are proposing is

funding that would go to help low-income households absorb the rate hit. >> gentlemen's time has 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 district and a state heavily dependent upon the coal industry not only for reliable energy, affordable energy but also the jobs that it represents. you know, i was on a trip to europe just a couple of weeks ago, and 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 but some of those european countries, when we ask them what their energy profile looked like, they're returning to a higher percentage of a use of coal. and 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 payers our businesses and our 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 expensive by taxing the carbon emissions that renewables and other alternative forms are 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. 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 at the same time? >> we can try to do that. >> and i'd 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 even 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 the creator of our job strategy

council. perhaps a meeting with those of you with kind of appalachian connections and coal, just to brainstorm around what might be other ways of going. i'd be happy to do that. >> can you help facilitate that? >> yes. >> good. my office will be in touch. >> the two of you and mr. mckinley would be among those. >> all right. we'd like to do that. let me move quickly to these other questions. in march william o'keefe, the ceo of marshall institute penned an editorial in the "washington times t "t where he notes the council of economic advisers annual economic report for 2015 details the beneficial effects for lng exports that l and g exports would bring for the energy industry and the environment. he also maked 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 & 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? >> i have to say, first of all, we are not procrastinating. again, we have -- now we have approved -- and this is separate from the conditional approval we made last week for the alaska project because that's a separate gas source. but for the lower 48. we've approved roughly 8 1/2 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 lng exporter in the world is gunnar and

they're at about 10 billion cubic feet per day. >> i hear you, mr. secretary. then why does the rest of the world -- why are they still urging america to get into the lng export market on a global basis? why does the rest of the world and the oil and gas industry thing that we're not participating in the global export? >> i think that, first of all, there is a lot of misunderstanding, to be honest. number one. number two clearly they're sitting there with 12 $15 gas and they see us at 2.50 and they thing that looks pretty good. now, of course, by the time it reaches them when you add $6 or $7 for the supply chain it's not going to be our prices but still beats their prices. so clearly they have an interest. they want to see that. well, the fact is that if you look at the economic 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 come in above 10 pcf per day give the 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 bshl 12 bcf a day. earlier was pointed out we commissioned another study that would look at 12 bcf per day. but we've approved 8 1/2. the projects are being built. the first cargoes will get on the water probably the beginning of 2016. and number one we'll start export exporting. another issue 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

places in the world that don't want to develop their own indigenous resources but would like ours. okay, well, that's fine. but we do not direct where cargoes go. we approve export licenses to non-fda countries. and those are commercial contracts. frankly, it's a constitutional issue in terms of not doing that. >> mr. chairman, my time has expired. i would submit to the committee and 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 will come down, we haven't seen that. there's a big disconnect somewhere. >> thank you. this time we'll recognize the gentleman from missouri, mr. long, for five minutes.

>> thank you, mr. chairman. and mr. secretary, the discussion graft provides the department of energy with some new responsibilities beyond your current mission. for example, we directed the department to conduct 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 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

we'll, depending on the study, engage then in the appropriate private/public partnership. with regard to grid security emergencies, 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, i think it was? well, we had a person in guam as part of the fema response for energy infrastructure. we're already doing this now. additional authorities could be helpful. >> okay. in your testimony you mention that one of the objectives is enhancing reliability. what impact do you think 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 we don't have a final rule yet to know how to analyze it. but what we've done to date and in terms of technical analysis around the proposal of last year again suggests that the liability will be quite manageable, butúbpe we have to wait to get the final rule before we can really do the -- >> so you don't thing the proposed plan will have a big effect? >> well, 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 look 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. >> we with mr. griffiths 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 and grants an investment plans for electric reliability and efficiency. can you discuss a little bit of some of the criteria regardless of where the money's coming from because we know there's a shortage of money but can you discuss some of the criteria the department of energy will require for the states to receive this financial assistance? assuming, again, there would be money there. >> the money issue is relevant and i must say i was very disappointed in the appropriations mark which did not provide any funding for either the reliability or the assurance grants, which i think is short-sighted, to be perfectly honest because i think the states need to have this kind of planning

capability. we would provide technical assistance. 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 providing those services and, as i said, we hope in the reliability and assurance arenas to then have funding for competitive competitive grants. >> would it be same from state to state or change across the country? >> i think the criteria while that still remains to be worked out completely but the criteria would be around enhanced reliability and resilience. that's the criteria. >> i understand that, but my question was 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 very different depending upon the regional and state resources. >> okay. i'm past my time. so if i had any time i yield back. >> at this time i'll recognize the gentleman from texas, mr. fr flores. but want to thank you for taking the leadership on the forum for oil exports and have an opportunity to examine that more thoroughly today. you're recognized for five minutes. >> i hope secretary moniz will send someone to the discussion this afternoon. of course, 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 explorts is because you0h> a better matching of the qualities of grades that are needed by the refineries and different geographical areas around the world. 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 the production. so next time you're answering that question, go all the way through that economic cycle, i think that it would be helpful. the next thing has to do with -- i guess i call it a safety valve question. you know there are multiple versions of proposals for oil exports out there. 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 in the national interests or to be able to use the petroleum reserve under the same circumstances. with those two safety valve

features in place doesn't that make it more compelling to allow oil exports? >> well again obviously more flexibilities are always welcome. but i think the fundamentals of oil export question are those that we discussed earlier, i think, and i agree with you of course, in terms of your economic argument. >> okay. one of the things that was interesting about timing is while 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 a deal with -- with a deal in place and the sanctions lifted, iran might start selling us a stockpile of 30 million barrels or more later this year and raise its output by 700,000 barrels a day by the end of 2016. this would come at a time when we already have a global glut of crude oil. my first question is this --

what analysis if any has d.o.e. performed to understand the implications of iranian oil 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 million barrel a day or so pool. there are so many uncertainties in that time scale. in particular on the demand side. for example, a recovering european economy would put substantial 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. >> well, it's all supply and demand. >> exactly. exactly. 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 sold abroad? >> well, i think the big difference is we import several million barrels a day in crude oil. we're not a net exporter. we're an importer. >> right. but we're on track to be in a position to export. so it makes sense to lift the sanctions. >> that's quite a few years away. we're still -- even if you add in oil products, we're still at 4.5 million barrels a day. >> no additional questions,

thank you. i yield back. >> this time i recognize the gentleman from oklahoma, mr. /÷z !:xuá for0! five minutes. >> thank you mr. chairman. and secretary, thank you for being with us again todlpp÷ñ i know -- i believe this is the second time you'vek been in front of this panel. >> more than that. >> well, i mean, this year, if i'm not mistaken. at least this is the second time you and i had an opportunity to visit. the last time we spoke, we talked about the lack of infrastructure with the power plants as far as the coal-fired plants that are coming down. we have a report from southwest power there will be 12,900 megawatts loss just in their area. just a 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 made? where will it be produced? the gas lines aren't g/(:there.4c;x÷ we're seeing four years a permit to just 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 needs9]0z2j o cf1 o >> well, zeábrñagain, first of all, let me emphasize: date but we await a final rule. secondly?+kñrof course, l33e)y'd -- now, i'm !áey in a particular significant rnl. >> but they're specifically a! speaking, the coal-fired plants are in a specific region. >> sure.

you said you didn't see any significant challenges in meeting those needs. where is that extra power going to come from? >> first of all, ioñ made it very clear that the same -- when i discussed the natural gas transmission pipes. have to be resolved in some places with new infrastructure. all i can do is look at the broad picture and electricity demand nationally is not going up. it's essentiallyu4a-g#ñ flat. we're building a significant amount of natural gas and wind in particular capacity. >> so it's okay because the number of -- >> oklahoma by the way has plenty of wind. >> but it's okay to bring the power down because we don't need it right now? >> i did not say that. all i said was we are building

substantial capacity even as our demand is flat. >> we're losing power. what are we building it in? because 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 we do from anything else, but that's another topic. 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 ay if we lose it because our increase for"élg j÷ electricity, the neev+zk$i isn't tho;ñ so it's okay that we lose it. is that what i'm understanding? >> no. what i'm saying is first of all, we have about 68000 megawatts of wind.

but what i'm saying is that there will obviously all the local planning authorities will have to be planning, but at the macral level, we're not seeing the likelihood of enormous challenges. we're being cautious. rule to come in÷o a2 >> but you guys are already moving forward with it. mr. secretary you're over the department of energy and you're saying that the local communities, local areas need to get together. what is d.o.e.'s specific plab 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, builds the 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 thing. >> obviously there's the

responsibility of government whether statutory or regulatory to set certain rules of the road in terms of environmental protection et cetera. the private sector and typically state regulatory bodies then respond to that. so -- >> so i'm hearing correctly there is no plan. we're going to just drop the power and let everybody else figure it óout. >> ñp the gentleman's time has expire expired. >> i yield back. >> there's no less plan than there always has been. >> thank you mr. chairman. thank you for your patience today. been with us a long time. we're getting towards the end. a lot of the questions have been asked. maybe i'll open the aperture a little bit. starting with this. do you believe that the american taxpayer has received good value for the tense of billions of dollars that have been spent on carbon captured technologies, federal dollars that;t+e)bzk have been spent on carbon captured technologyies today, yes or no?

>> i don't think that it's u of billions of dollars. >> whatever is number, good value for that? >> the answer is yes, it will prove to have been very well spent. >> i think they left more like slender than success o we disagree. do you agree with the french foreign minister who has said that the global climate change agreement being negotiated this year should be worded in a way that does not require congressional approval, yes or no? >> i'm not aware of that statement. >> so i'll ask it more directly. >> if i may say, the currently -- obviously the climate action plan that we're executing is based on administrative authorities to get an economy-wide approach but it would eventually require legislation. >> the government that you're part of is negotiating an agreement this year at the end of the year, intends to enter into an agreement that made that clear. do you believe that the agreement that the united states enters into ought to be submitted ciíó3- congressional

approval? >> we need to see what the nature of this agreement is. there are many agreementsñx -- >> so i get you to say yes you&q be approved by congress? >> it depends on the nature -- >> i'll take that as a no. today you had a lot of information about crude exports. the only country you'reñçy advocating to export crude is iran? >> excuse me. >> we're going to free up the iranians to export their crude products but you won'tf4 advocate for americans to be able to ry export their crude products? >> as i said earlier, the situations are completely different. we're a large importer. >> the situations are identical. its>é5ngrt would benefit each done greatly to be able to access foreign markets and sell their products at market prices around the globe and both consumers and exporters would benefit from those in both countries if they're opened up. do you agree with that or disagree? >> see, obviously for --

>> it's a simple question, mr. secretary, not a trick question. >> if sanctions are lifted it helps their economy. >> and it would help ours. >> on the nuclear weapons side. as i said earlier, the only issue on ilexports in the united states of large scale relevance is whether or not there is a significant increase in production as a result and i've said in the current oil market that may be a difficult case to make. >> you don't believe in supply and demand when it comes to crude exports. you think no more supply will be launched. so we've been through that. in 18 months there will be a new president although maybe not a new secretary of energy. one never knows. you're qer was prepared based on this president's vision of greenhouse gases, their impact around the world and america's role in diminishing them. if 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 all did? >> essentially allñv]f$ñ of it. the /xqer is really aimed clearly at facilitating more clean energy, but it's about energy security resilience of our infrastructure.m÷ it's about energy, north american energy. it's got huge implications for energy infrastructure independent of the climate issues. >> yeah, i jus w3t have a different view of what's in the qer. when i stare at it i see the analysis and i appreciate that i agree with yourmñ analysis of the requirements for infrastructure, we don't disagree there. but most of the qer was aimed at federal intervention in the marketplace. you made several references to classic market failure with respect to public ñênálrgtáip r(t&háhp &hc%

i think much of the conclusions in the qer about how$e6÷ñ thazo"i infrastructure will be ultimately billed out and who decide which infrastructure?[éq#u(q built out isbm u8 heavily dependent on this president's"d plan for climate change. i just think it was a wonderful exercise, i'm glad we did the work with respect to infrastructure but the conclusions drawn on2/soñ the qer will need to be visited immediately with the next administration. with that i yield back. >> that concludes our questions. we have one additional member though, mr. kramer of north dakota who is a member, he's not on this particular subcommitteepicf1 o but he's been so focused on these issues íñemz that he sat here for 2 1/2 hours with us and we're going to give him the opportunity to ask five minutes of questions. >> well, thank you mr. chairman and thanks to my colleagues for the indulgence. it does"@ only take one dakotan to represent the entire state. i spread myself fairly thin, mr. secretary. i thank the members, i also mr.

secretary want to thank you not only for being here but for at least agreeing to, if not joyfully, although i think you're a joyful person, to holding one of the listening sessions in north dakota. i know it was a late request and a late addition to the agenda for you and secretary fox and others but i thoroughly enjoyed the time that you were out there. i notice in the qer there's a lot of reference to the things that you learned last august in north dakota especially as it pertains to the transportation infrastructure and some of the challenges particularly reflected are the challenges for the railroads that move multiple commodities, as you know. and you heard quite clearly and i think again indicated in the report quite clearly that there were challenges, but at the same time i think 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 strained the infrastructure for sure for agricultural commodities. one of the more bigger challenges was the fact that not only was it a record crop for a bumper crop butéo it was akkpáe harvest due to weather. it was late and a very wet harvest. there was a consolidation of all those commodities and the additional 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, lígrúfíx 700,000 barrels per day of oil being moved by rail. so there's a fair bit of -- there was a lot of criticism last august a fair bitu of that reflected in the report. but just n the last tent3y qó months the storm has sort of shifted, i think. i want to stress some of those points but also encourage you and the team to continue to

monitor it on a very

and update the report to acknowledge that this robust infrastructure does exist. and that actuallykjg88f enhances all commodities. i think it's worth noting that because of the reports that weêo%!ñy they're pretty well caught up. not just pretty well caught up but there's extra capacity. much like the electrical grid it doesn't hurt to have a little extra capacity, but it also creates opport.ñ'ky[û for growth. probably ask that for you to comment on my comments if you'd like to but again express my appreciation for your attention to the issues. >> well, thank you. we certainly appreciate "m> /93it. your participation in the qer field hearing in north dakotay'd along with your senate 3c colleagues, first of all i think you've put your finger on what was the main driver of our

discussion on the subject in the qer and that wasjofx- theqv need[p more data. the railroads have not been9át most transparent in terms of data availability. and i think that's certainly been improved and certainly the issues around coal, for example, have been certainly relieved. there are other issues, as we know, in terms of oil by rail that are being addressed. i might say that 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, yes. >> so it's great. >> thank you. thank you again mr. chairman. >> thank you, that concludes the