sometimes adding bills that are very well supported to an existing negotiated package, that would be my concern, senator hatch, and others that adding the mens rea at this point may disrupt the ability to pass this legislation, which is, frankly, is, hangs on a very, very thin precipice on whether it will succeed or fail. >> well, i'll just add it may pass without support if we don't do something about mens rea, because i think that is essential to any criminal action. and, by the way, it could come into play in these matters as well. i think you'd have to admit that. >> i've learned to never underestimate you, senator hatch, and your ability in the senate. i do appreciate that it is a significant issue that the senators highlighted. you are absolutely right to highlight that and i would really look forward to working with this congress on that

issue. >> we appreciate your comments. we appreciate every one of you for being here. and we're sorry it's so late and had to be at this particular time. i had to make it back from utah so i could be here. but we want to thank each and every one of you for your testimony. it's been, it's been very important to all of us up here. with that, we'll, we'll recess until further notice.

all persons having business before the honorable, the supreme court of the united states are admonished to draw near and give their attention. >> we have not seen a court overturn a law that was passed by congress on an economic issue like health care, at least since lockner. >> the case in lockner is whether a majority rule, a state legislature can take away your life and liberty without due process, and the court ru rules.

i think it's a wonderful decision. >> we look at lockner v. new york. the bake shop act was passed restricting the work hours to 60 hours per week. bakery owner joe hef lockner violated that law and was fined $50. refusing to pay, he took his case all the way to the supreme court. find out why lochner is one of the most controversial decisions in history as we discuss this with randy barnett and author of the book "restoring the lost constitution", and paul kens author of lochnerv. new york. landmark cases. live monday on c-span, c-span 3 and c-span radio. this sunday night, on q&a,

amy chosic chae iic shares her experiences from hillary clinton's 2008 campaign and compares it to now. >> i wasn't in a senior role, and i also, you know, when you're traveling all the time, i got to know the people that traveled with her. i feel like i got to know her pretty well because she'd come back on the plane and talk to us. but at the same time, i didn't have the same sort of sources that the campaign and high level people that i have now. and whether that's a function of being of the times or a function of just being in a more senior role. >> sunday night at 8:00 eastern and pacific on c-span's q&a. hillary clinton testified before the house benghazi committee, which is investigating the 2012 terrorist attack on the u.s. consulate in benghazi, libya. the first half of her eight-hour testimony airs on saturday at

noon. the second half on sunday at noon. all on c-span. as a preview. we'll watch an exchange from the hearing between congressman lynn westmoreland and hillary clinton. >> you say chris stevens was a friend of yours. he asked numerous of times for extra protection. and if i had been mr. steve ps, and i think anybody out there, anybody watching this would agree, if i had been mr. stevens, and i'd had a relationship with you, and i had requested 20 or more times for additional security to protect, not only my life but the people that were there with me, i would have gotten in touch with you some way. i would have let you know that i was in danger and that the situation had deteriorated to a point i needed you to do something. did he even have your personal

e-mail? >> congressman, i, i do not believe that he had my personal e-mail. he had the e-mail, and he had the direct line to everybody that he'd worked with for years. he been posted with officials in the state department. he had gone through difficult challenging, dangerous assignments together. he was in constant contact with people. yes, he and the people working for him asked for more security. some of those requests were approved. others were not. we are obviously looking to learn what more we could do. because it was not only about benghazi. it was also about the embassy in tripoli. and i think it's fair to say that, you know, chris asked for what he and his people requested because he thought that it would be helpful. but he never said to anybody in

the state department, you know what? we just can't keep doing this. we just can't, we can't stay there. he was in constant contact with, you know, people on my staff, other officials in the state department. and, you know, i did have an opportunity to talk with him and about the substance of the policy. but with respect to security, he took those requests where they belonged. he took them to the security professionals, and i have to add, congressman, the diplomatic security professionals are among the best in the world. i would put them up against anybody. and i just cannot allow any comment to be in the record, in any way, criticizing or disparaging them. they have kept americans safe in two wars and in a lot of other really terrible situations over the last many years. i trusted them with my life. you trust them with yours when you're on codels. they deserve better, and they

deserve all the support that the congress can give them, because they're doing a really hard job really well. >> ma'am, all i can say is that they missed something here, and we lost four americans. >> again, tune in saturday and sunday at 12:00 eastern to watch all of hillary clinton's testimony before the house benghazi committee. that's on our companion network c-span. now a hearing on modernizing the strategic petroleum reserve. from the senate energy and natural resources committee, this is two and a half hours. >> got a lot of ground to cover this morning. we've got a couple excellent

panels of witnesses. so let us begin this morning. we're honored and pleased to once again have before the committee the secretary of energy, dr.erdr. ernest moniz. back in july i prepared for the committee a report on the strategic petroleum reserve, a turbulent world in defense of the strategic petroleum reserve. if i must say so myself, it's pretty darn good. [ laughter ] and i would commend it to you all if you have not yet had an opportunity to read it. we have some pretty unparalleled opportunities here in the united states with regards to our oil and our oil production. and well, it is good and strong,

i think it is important that we be ever vigilant in this area. opec's capacity has fallen. unplanned production outages persist in iraq, in libya and elsewhere, and further trouble always seems to lurk just over the horizon. the strategic petroleum reserve remains critical to our nation's energy security, and it is an asset. and you will hear me repeat, as often as i possibly can that this is about a national security asset. and i think it's important that we focus on the energy security aspect of it. it is an insurance policy, absolutely. it's a source of leverage and stability for us from a geopolitical perspective, absolutely. and while i believe it should be modernized, i think the question that many of us have asked is

what exactly does modernization really mean. and i'm going to make four brief points this morning in that direction. the administration proposes some $2 billion in new funding for spr life extension projects and to improve marine distribution capability. i think that these proposals merit careful consideration by the committee. i look forward to hearing from secretary moniz as he makes the case on these. i had an opportunity in july to tour one of our strategic petroleum reserves, and i think ensuring operational effecti effectiveness of the reserve should be a first priority for us. we should not let these lapse into disrepair so that they cannot fulfill the purpose which is intended, and, again, taking us back to energy security. second, the administration is also studying the creation of petroleum product reserves on the west coast. this is pad five, and on the east coast, pad one.

i'm not opposed in principle to building additional product reserves, but i do have reservations about them. they have a much shorter shelf life than crude, and a much more direct impact on the american consumer. guarding against the use of the spr for political purposes i think should be an enduring concern for all of us. and third, i'm also not opposed in principle to revising the emergency release authorities as the administration and some of my colleagues have proposed, but generally, i am wary of proposals that expand the power and ability of the federal government to intervene in the free market. any sort of preemptive release clause must be very carefully examined and while the quadrennial review discusses this proposal, i don't think that the administration has at this point in time made a convincing case for new authority. so i look forward to new discussion on that as well. but, i think final point, and i raise this in the white paper that we released in july,

strategic petroleum reserve doesn't necessarily exist in vacuum. in alaska, at that is another vital piece of infrastructure. and it, too, is important to our national security. and we are seeing it decline. we've got the resources in our state to ensure that it does remain. when we talk about energy security, our focus should be broad in evaluating our energy security, pursuing all of our options, including further increases in domestic production. so i'm going to close my comments, again, by reiterating that we call it the strategic petroleum reserve for a reason. and as the name suggests, we hope never to use it. we hope to use it as that strategic reserve. but we keep it around for good

reason. in the event that something happens, if there is an event, whether it's in the streets of hormuz or wherever it may be. in case world slips, and we find ourselves in need, we need to know that this strategic asset, this national energy security asset is there. and, i have said before that it would be a mistake to treat the reserve as anything but a reserve. it is not an atm for new spending or a vestige of our national energy policy. if we begin to treat it as that, i think we risk selling at the wrong team, at the wrong price and losing its substantial benefits. so, again, looking forward to good discussion about energy security in this context and look forward to not only the comments from the secretary but our second panel as well. and with that, i will turn to the ranking member. >> thank you madam chair and for

holding this hearing on modernization of the strategic petroleum reserve. i want to thank secretary moniz and the others for joining us. i especially want to thank the secretary for his leadership on the quadrennial review. in july, this committee successfully reported about the modernization act on a bipartisan basis, and you and i had many discussions about the pieces of that legislation, but i think there was one thing we could easily agree on, and that was the importance of the strategic petroleum reserve. 40 years ago, we created the strategic petroleum reserve to prevent crude oil supply disruptions, and that's precisely what happened in 1973. a 1975 law that created the strategic petroleum reserve, specifically authorized the president to draw down if he or she determined there was interruption in the supply

services. it hasn't changed then and nor should it now. the strategic reserve is important federal asset. we need it just as much today as we did then. so perhaps the energy markets that we've seen with volatility over the last decade point to that, or the global oil markets may have changed, but so has the nature of the threat to the infrastructure, which is so key to our economic and national security. we make commitments to the international energy program, supply interrungs could happen at any time, whether it's a response to volatility somewhere else in the world or a natural disaster like hurricanes. we are seeing increasing frequency in devastation to our critical energy infrastructure. so you just never know when the oil in the strategic petroleum reserve will be needed. even with the ouu.s. being an o producer today, we need to have emergency crude oil contingency plans.

there are several immediate and medium term risks capable of loss, such as an attack on middle east supply routes, weather events or what would be severe disruptions originating in places like nigeria or venezuela. and even if these situations, some of them could result in disruptions or triggering a draw down. our colleagues on the committee are quite familiar with the findings of the quadrennial review. challenges remain in maximizing the security benefits of our resources in ways that enhance our competitiveness and minimize the environmental impacts of their use. this network of the oil distribution has changed significantly. the quadrennial review explains that the ability to protect the u.s. from severe economic impacts in the event of supply emergency or association, like a spike in price, has been

diminished by infrastructure congestion. literally the congestion of too much product not being able to get the product to market where we want and when we want. in fact, the department of energy did a test sale in 2014 and identified a series of challenges with distribution. investments are needed to modernize the spr to make sure that they have the ability to respond. >> the spr is in need of $2 billion worth of repairs and upgrades. it is estimated that those $2 billion of modernization can help save the u.s. economy approximately $200 billion in the event of a sustained large oil supply disruption. so we will hear from the secretary about some of these issues, about the fact that the salt caverns were built in the 1930s, and some of them raise questions about their integrity. i know two of them have been taken off line. some of the welds are more than 60 years old, and we need to invest in above-ground infrastructure, issues like

brine disposal, power distribution systems, physical security, all the things that will help us respond to an emergency, and because pipelines have essentially reversed direction since the flow of spro being built 40 years ago, that's where this comes in and the strategy of how are we going to deal with that congestion to make sure we can get product into the market so it would have the intended impact we want it to have. so, again, i thank the secretary for his work on the quadrennial review, a long process, but a very good road map for telling us what we need to do to improve our infrastructure, not just on the spro but on other issues as well. so i thank the chair for having this important hearing. >> thank you, senate esenator. at this time we will turn to dr. earnest moniz. welcome to the committee, and we look forward to hearing from you about this very important national energy security asset.

>> thank you. i have submitted a fairly detailed testimony. so i will just make a few summary comments here to open up the discussion. clearly we need an energy security policy based on 21st century energy market changes, challenges, vulnerabilities and needs. it's key, key components in modernized spr, configured to enable appropriate draw down. infrastructure, reliability, including emergency response and a broader concept of energy security to include our international engagements, our allies and partners. i'll touch on the latter two points very briefly and make a few more comments on the petroleum reserve. so it's our nation's, as you have said, both of you, it's our nation's most central federal energy asset and it should be treated as such. some have concluded that selling

large volumes of oil from the spro for purposes not related to energy security will have no or little impacts on its energy security benefits, and i do not subscribe to those views. in fact, i believe the spro remains an extremely powerful and valuable security tool. as we evaluate the energy security of the spro. you must take into account several factors, including, this is particularly relevant to 1975, the changed nature of oil markets since the spro was established. we are linked to the global market. and we are exposed to global prices. and, including disruption-driven global price spikes. and these historically have had significant economic impact. even if there is little direct impact on our imports today. secondly, our international commitments, not only our obligation of 90 days import protection, but also another

international obligation, which is based on oil use, not oil imports, and that is our obligation based upon the last data to provide 43.5% of the amount of a total coordinated oecd response to a disruption. so, again, i think it's important to emphasize that we have an import obligation and an oil-use dependant obligation. and the use to pass the spro. the 2014 test sale did identify a gap between the draw down and distribution capacities. much of that is driven by what's happened in the last several years in terms of the changed scale and geography of our oil production. and to address disruption scenarios, a key need would be our, the ability to get spro oil onto the water to supply coastal

refineri refineries. changing markets of international commitments are not the only concern with the spro. like much of our publicly-supported infrastructure, the spro needs investment to maximize its value. in this case, funding in three distinct areas. the budget cuts it in half. unfortunately, the house and senate appropriation bills marks. if enact would not support that. we might be going in the wrong direction. secondly life extension, almost 40 years old and some caverns much older than that. the spro needs a significant life extension program to ensure its effectiveness for decades to come in areas of oil transfer and security. and third, modernization. we need to modernize the spro to

accommodate the different locations and volumes of domestic oil production and changes in global oil markets. the qer examined what the spro would need to protect the u.s. economy in a supply emergency. about $2 million are needed. and about $1.2 billion for modernization. such as dedicated marine terminals to respond quickly in emergencies. the return on these could be huge as a study out of oak ridge suggests that adding 2 million barrels per day distribution capacity could save our economy in a major disruption tens of billions of dollars, up to $200 billion. depending on the nature of the disruption. so we need a robust spro to guard against the economic harm of such a major, major disruption. and this is not theoretical. if we look at many events in the

middle east, including just last week, the russian military intervention in syria, adding another element of geopolitical uncertainty in that entire region. just to finish with a couple of words on energy infrastructure resiliency and reliability, this was discussed extensively in the qer. this is challenging on existing infrastructure is not always well-matched to our supplies. we have aging facilities prone to failure. we have climate change impacts that we must guard against. which putmany facilities at risk. and of course we have enhanced concerns about cyber and physical attacks that could take a heavy toll. the qer had over 60 recommendations for addressing infrastructure needs. finally, just end by saying a collective approach to energy security in the international sphere is what we need today. the situation in ukraine and growing european dependence on a

dominant supplier of energy is what stimulated a lot of discussion within the g-7 plus eu. i've just returned from the g-20 energy ministers meeting in istanbul where this dialog continues. and the reality is that this is an important and sensitive time in this arena. it's a time when we are, in fact, encouraging other major countries to build up their petroleum reserves to work collective with ours. and so i think we need to be very careful about the signals we send today in terms of collective energy security. i appreciate the opportunity to come here and look forward to the discussion and to working further with the committee. >> thank you, mr. secretary. your concluding words are the ones i find most intriguing. here you are over in, in europe, you're in istanbul at the g-20. you are working in this collaborative, this collective

approach that you've been talking about with our g-7, our eu allies, and the focus is on improving energy security from a broader perspective. you come home from that meeting, and the discussion here is the congress is looking to take money, sell-off -- well, not take money -- but sell-off parts of that strategic reserve that we are encouraging other nations to participate in. to, again, build out and enhance this collective energy security. tell me how this works. when the united states is trying to persuade china, trying to persuade india to participate in these international energy security conversations. isn't it a little bit hypocritical for us, as a country, to be saying, come on

in, and yet we are basically treating our energy security asset as, as the cash machine here. >> well, of course, we are, as you know, and as called for in prukt of your committee, we are carrying out a strategy eck study, which we expect to finish next may, basically in terms of what we need to do in terms of the size and the authorities of the petroleum reserve. now without those, i'm not going to tack about a specific size, but the fact is that, as i said, the markets are totally different today than they were in the '70s. the real issue is a major disruption that leads to a substantial price excursion, which affects all of us. and that's why we are working

with china, and by the way, the collaboration is excellent. they have come and visited our spro. we have visit to their developing spro in november. they are building up towards a 500 million barrel petroleum reserve in china. india is building up reserves as well. so, again e as i sa, as i said this is a time of considerable geopolitical uncertainty, and we need a unified collective response to the economic risks we would all face. >> i would certainly hope we would all agree we need a consistent response, too. and we can't just ask them to move forward in this collective approach, well, at the same time we are weakening our own energy security cushion, if you will. now appreciate you saying you can't comment on the right sizing of the spro at this point in time. you're going through the studies. i was walked through all of the

varied layers of analysis that will be part of that review. but wouldn't it be premature for us to be selling off portions of the reserve before we have that considered analysis, before we really know what the right size is, before we really understand how aspects of this modernization need to proceed? >> well, i would certainly assume that's why congress has asked us to do this study was to be able to have a detailed and significant analysis, and this analysis is being performed with many, both analytical companies and universities to bring together, a, i think the first really integrated strategic look in a very, very long time. >> and a very necessary --

>> and we would certainly like to have that answer. >> a very necessary review. i think it's something that we asked for for a reason, and i would certainly hope that we would take advantage of this considered review before we weaken our ability to utilize the recommendations that come with this. and right now we've got a mind-set here in this congress, and i, unfortunately, even with your, your guidance here, even within the administration that says we need this money now, because we need to spend it on a transportation bill, and if we don't spend it on a transportation bill, somebody's looking at it on the house side. they've already identified for research in the health care world. we are looking at this as nothing more than a cash machine at a time when we're looking for

more money. and i think this is wrong. and i think this is irresponsible. and i believe very, very strongly that what we need to do is make sure that as we move to modernize, as we move to make sure that we have that strong energy asset we don't erode our ability to utilize it in the time of an emergency, when we don't know what's going on. we don't know what may come next. but we know that if we drained it out, and we don't have the flexibility to move when we need it, then there's going to be a lot of fingers pointing, saying, where'd it go? so i think part of what we're trying to ascertain here is what is it that we need, and how can we be smart with this as our, as our energy asset. senator? >> thank you, madam chair and mr. secretary on your work on

the document. explain why the 90-day requirement shouldn't be the only consideration we're looking at when we're talking about modernization. >> >> well, senator, the 90 days is certainly an obligation based on imports, but, as i said, we also have an international obligation based upon use, and that is the 43.5% of draw-down capacity for a coordinated response. but secondly, beyond the international obligations, i just believe it's in our best interest to have a very strong petroleum reserve. that is what gives us the flexibility to respond, if there is a very major disruption. and we have, we have had brainstorming sessions, workshops with external experts, looking at what are the risks of major disruptions, and they

certainly are there. major disruption perhaps more than 3 million barrels per year, for example suddenly disrupted. and by the way, the risk of multiple disruptions, because things could be linked. so, as i said, that has the expected impact of a major price spike in those cases. we in a situation with a diminished global reserve capacity. and, and so it's, it's being able to use government stocks in a rapid way that could ameliorate the economic harm we could face. >> and do you think the president should have new authority in this area? >> well, we have said in the qer, and raised the issue of a variety of authorities. some of them are very specific, such as with the two product reserves, they have very, very different authorities for use, and we think that should be

harmonized within the petroleum reserve. but then there are more, bigger policy issues, such as had how one defines what a major disruption is, in the sense of having the ability to respond when there is likely to be a major price spike, as opposed to after there's been a major price spike. so these are the kind of policy issues that i think we need to discuss in terms of looking at authorities appropriate to what is now a genuine global market in contrast to the market of the 1970s. >> and in the quadrennial review, you also talked about, and we had a couple of votes here in committee about commodity congestion, the inability for people to even get product, utilities to even get product, based on the competing commodity needs. so i think the quadrennial review does a pretty good job of outlining the fact that we need

to improve there as well. i mean, i wish people here would swim in their own lanes when it comes to these things, but usually that's not how the legislative process works, but clearly we have to do both, is that correct? we have to improve, the fact that utilities in minnesota had requirements to serve, their consumers could not get their coal supply to them due to commodity congestion on the market. it's getting the oil and other commodities to market takes an infrastructure improvement and a modernization of the spro, is that correct? >> there is a congestion issue as far as the gulf of mexico. but that issue as you say is much, much broader than that in terms of our energy infrastructure. and i believe the rest of it's a

progress, for example, the train congestion. i met with one of the major railroads, bnsf, and seen the steps they're taking to try not to have a repeat. but the fact is we haven't yet caught up to the incredible increase in our gas and oil production from new geographies. we have large crops all coming together to lead to some congestion. so in the qer, in addition to specific energy infrastructure, we also had recommendations, because it was an administration-wide document. so we had shared infrastructures that all commodities use as part of the focus as well. >> thank you, thank you, madam chair. >> welcome back. and, as you talk about the role that energy plays in our national security, global security. in your testimony you advocate for an expanded view of energy

security that broadly encompasses the needs of the united states, our allies and trading partners. you go on to say the crisis in ukraine highlighted the vulnerability of our european allies for increasing reliance on a single dominant supplier for much of its energy supplies. you explained it's not only true with natural gas but also crude oil. your words. >> you cite the european commission's findings. and the eu refining capacity is increasingly in the hands of russian owners. i wonder why it seems to be dithering when it comes to crude oil experts. you agree the u.s. crude oil exports would benefit our trading partners? >> i think it's important that we do distinguish, you had this discussion before, i think, in

terms of the natural gag and oil situations in the united states being quite different in natural gas we are of course, we with some canadian imports, we are essentially self-sufficient. and our export, will very shortly start the exports with l and g out of the lower 48. oil is still very different where we are a 7 million a day importer. so the specific issue raised, as you well know, it's the responsibility of the department of commerce to make that policy judgment. but it's also true that recent studies, including the last summary study ever of the eia show that the impacts for the next ten years or so are likely to be pretty, pretty modest, to

put it mildly, in terms of exports. >> because i guess i'd ask if that's your litmus test, if crude oil imports have to get to zero or near zero before the administration would support crude oil exports. we all know that much of our nation's refining capacity, really, was built to handle heavy crudes that are imported from outside the united states, not what's being produced in the united states right now as a result of technological improvements and fracking. but is that your litmus test? we have to get to zero of imports before we can export? which is essentially a different product? >> no, sir. i did not say that. and the, of course, we should emphasize again, we are exporting. i think it's now 4 million barrels, maybe a bit more, of product. and that goes to south america and europe. so they are getting the benefit of our increased production.

that's the first point. i've forgotten my second point now. okay. maybe -- >> it's just last month the white house secretary said we won't support legislation like the one that's been put forward by the republicans, but last week the senate banking commission accepted something by a democrat. so it doesn't seem the administration supports efforts to move this bill, according to the white house spokesperson. does the obama administration oppose all legislative efforts to repeal this crude oil ban? >> by the way, i thought of my other point. >> oh, good. >> which was on the additional production of light oil. the fact is, that when you look at spreads wti, louisiana light, it's hard to argue that there's been a lot of production being

hemmed in by current, current rules. the, secondly, i would note again, congress is responsible and they have taken two steps. one was the ruling on lightly processed high api oil, to be exported as a product, and secondly more recently the approval of the swap with mexico of light for heavy. so i think commerce has taken steps to address this, and it's in there, on their desk in terms of further steps. >> when you talk about production hemmed in, that means jobs lost in the united states in the oil industry for people who are out there working trying to make a living, put food on the table. >> the evidence today is that this is not occurring. the eia's analysis would say that if there were substantially greater production in the united states, somewhere up north of

12, then there might become an impact there. but right now the evidence does not suggest a major -- >> the pipeline running from russia to germany under the baltic sea circumvents eastern europe. i understand a number of eastern european leaders have expressed opposition to expanding that. what if any steps is this administration taking to stop the expansion of nordstream? >> we are working with our european colleagues, both at the national level and at the european commission level. the european commission has made it very clear in their energy security plan that they are looking for diversification of supply, which the nordstream would not do. so we have been advocates, and frankly, to answer your question, yes, these were discussed a few days ago in, with the g-20. so we remained, for example very

strong advocates of getting caspian gas, it needs additional interconnections, greece to bulgaria, et cetera. and in addition, we're very interested and don't have a direct role, but we maintain the discussions in terms of the production and monday etization. those are the issues that add to diversity of supply and would increase european energy security. >> thank you, madam chairman. >> and thank you, secretary for being here and appreciate your input. sir, you just mentioned, we have about 7 million barrels a day of imports that we depend on. and that's going to stay, i think the iaea has forecasted 14

million in the future. >> of crude oil. >> your predecessor, secretary chu was here. i said since we have known reserve tons of coal and two barrels of oil can be produced from one ton of coal. that is about 500 million barrels of reserves. and i think saudi arabia only has about 260 million barrels of reserv reserves. sooner or later we're going to have to use the resources we have. if you use that and with bio stock. he believed that would be a reduction in carbon footprint. do you feel the same about that? if we would advance that type of technology. and the only thing we're considering is asking for a pilot project to show that we can do it. >> first of all, i think the interesting technology prospect

would be coal with carbon capture and potentially buy/mib feedstock together could become carbon neutral or negative, potentially, in terms of the biomass part. so these are, these kinds of conversion technologies are researched. right now, as with the number of technologies, there's a ways to go in terms of cost. >> i'm thinking of the investment -- >> on the research side, on the research side, i think this is the kind of potential, you know, home run that -- >> as you now, it would be very interested in using and developing this pilot project with the doe, because we think down the road, with the balkan and all of that leveling out, we're going to have to have an energy policy here that doesn't make us more dependent on foreign oil. >> i might also add that the,

our military has also been interested in exploring this technology. >> and they, i think they've used it in b-52s and found it worked extremely well, if not better than the conventional fuel. >> making the fuel as a perfectly replaceable fuel is certainly possible. >> i would hope -- >> so we can talk about that. >> i hope that you would consider that. because the whole state of west virginia will ten continue to de heavy lifting if you will help us, work with us. on the export of crude, i know my concern was this with the export of crude. it's hard to go home and explain why we would be exporting when basically the prices here can be so volatile. but the more you look into it, i thought if we did it from a strategic standpoint, and i think in legislation that the chairman has been moving, it makes a lot of sense to me, and i support it wholeheartedly that moves it strategically and gives the president to use a trigger and basically stop the export if

the oil price spike here and the price goes up. would not being advantageous to us? strategically, i mean, if you look at exports strategically. >> well, again, to repeat, we are signet importers of crude oil. we are importers of crude oil. and we are major exporters of oil products. the, so the issue is for example if i take the mexico situation, there, as i said earlier, the congress approved a swap for light for heavy. so it was a question of grade. in this case, because the mexican refineries are quite short of light, of light oil.

so that's a case where there was a good match between, between a swap, okay? but also, as i said earlier, the reality is, in terms of the big picture, the current oil market analysis does not suggest that there is an inability, for example, of the american refining system to handle the light oil. at least at today's production levels. so, again, the eia analysis really requires season impact only when the production gets significantly larger. and you see that in terms of the spreads of the various prices. as far as price goes, by the way, it's again worth repeating, another eia result of i forget, maybe six months ago, part of the series of five that the congress requested, and that it showed pretty clearly that our domestic product prices, like gasoline, are linked to the global price, and not to the domestic price of say, wti.

>> thank you so much. team time's running out, and i would just say the state of west virginia would be very interested in of partnering up with bio and coal. and we think would be an advantage for our country and make us independent, very much e independent of foreign oil. >> i'll point out, just to point out, we could do a lot for train congestion, moving crops to market by building the keystone xl pipeline. i don't know why we don't, but nonetheless, that's a political decision. you, in your testimony repeatedly refer to the relative sea level rise in the central part of the gulf coast, which is louisiana. and i emphasize the relative, because it is subsidence, as you

point out in your testimony, much more so than it is rising sea levels, so just to put it on record, would you agree that we should take whatever step weis can to make louisiana's coastline more resilient so that as these l and g export facilities are being built they're not going to get wiped out as you mentioned on page 13 or the refinery capacity you spoke of going down after hurricane katrina were preserved, even in the wake of another storm? is that a fair statement? >> absolutely. the gulf, is, as you know, absolutely critical energy hub for the whole country, and the coastline issues, the storm surge issues are very, very important for the gulf, and therefore, i think, for the country's energy system. >> thank you for saying that. i'll point out that both senator can't well's statement as well as the department of interiors would take the money that louisiana is slated to receive

under the go mesa program which has to be used for coastal reclamation, it removes the resources needed to increase that resilience that you, several times in your testimony point the national importance thereof. so thank you for -- didn't mean to set you up on that, but it just so flows. it just so flows, it's just like i can't understand why people concerned about sea level rise are taking resources away from louisiana which are so critical to our nation's infrastructure. next, one of the things, in the eia report, there's been spreads as much as $20 in the relatively recent past between brent and wti. as we know, louisiana light sweep typically sells at a premium to brent. when you say significantly, it's not astronomic. it goes up to 13.5 million

barrels per day by 2025, which would actually be a reasonable increase. we have a certain capability to do that. and it does point out that if we did so, and we exported oil, gasoline prices would fall for the american consumer, so we have to point out that if we lift the export ban, gasoline prices fall. and i'm not sure that was, that may have been a little bit lost. you didn't intend to obfuscate that. but it may have been a little lost in what you said. >> i do want to emphasize, again, the 13.5 million barrels per day was in the high resource case. the high resource case without a low price is the one where one got a significant, about a 400,000 barrel a day impact, as i recall. >> but i'll also point out -- >> only in the high case. >> and i think it's the aspen

institute and echoed by larry summers that said if we allow oil exports we could increase the american gdp by as much as 1% by 2020, resulting in hundreds of thousands of jobs. since those are the blue collar workers who are independently of the decreased price of gasoline, so i'll point out that again, aspen institute, larry summers both tallying that we could increase gdp by 1%, and that would be really good for the average american family right now. granted it might happen just because of market conditions, but if it does occur, wilier gasoline prices, create more american jobs, it seems like something we should be doing. let me ask one more thing. and this is purely out of curiosity. chris smith, i think it was testified to energy and commerce last april and made a statement which i don't quite follow. that the of spr of, says the

impacts of overall supply disruption of global oil markets would have the same effect on domestic petroleum product prices regardless of u.s. import levels of whether or not u.s. refineries import crude oil from disrupted countries. now i'm all for the spro, but i have to admit i raid that in preparation for the defense, what's the purpose of the spro if there's no lessening of the impact upon us. you follow what i'm saying? i can show you the quote. it's from chris smith's, he is the assistant secretary. i know you know. >> i would have to discuss his quote with chris smith, but let me just say that the, again, the issue of a spro use in the current market could be very important even in some

scenarios, or major disruption where the disruption is not to our direct imports. >> i get that it's global. >> kweed vae to have incremental barrels from the spro get in there to back out some of those imports so that the global market can be rebalanced. so i'm not sure if that's what he was discussing or not. >> yeah. it just seemed like counter to the whole thing. but we'll give of this quote. and if you can get back to us. >> okay. >> thank y'all. >> thank you, madam chair. thank you for holding this hearing, and i couldn't agree with you more in your comments about as well as our ranking member about the fact that the spro should be kept for energy security and infrastructure investments, and the idea of doing one off for some other deal makes absolutely no sense. so thank you very much for holding the hearing, and let me also say that i think this really is a long game.

i think we would all agree with the fact that when we look at energy security, it's about the long game, and whether it's the strategy eck patric petroleum r if it's how we expedite l and g exports or ending restrictions on u.s. exports of crude oil, these all really are the long game for us in terms of our country and where we go. just one comment, and i don't know, mr. secretary if you'd want to respond to this. but it seems interesting to me that we're talking about selling off reserves right now when prices are so low. it seems like from a purely financial standpoint, taxpayer dollars standpoint, that we would want to be selling off reserves when prices are high, not when they are low. it seems like even from a financial standpoint this doesn't make any sense. i don't know if you have analyzed it from that standpoint, but. >> well, i would just observe that with the 2014 test sale i

would say we sold high and bought low. >> yes. my point, okay. well, let me ask something slightly different on energy security, but i have, very important piece of this as we look at all of our infrastructure. and that's something that has impacted michigan very directly, and that's the safety of our pipelines. and particularly in the area of oil pipelines. weave've had, as ah know, a devastating pipeline break and at pun point, $2.2 million to clean up the kalamazoo river. it was a disaster. and now we have a situation where we are very, very concerned. people all over michigan. the state is concerned, about a 62-year-old pipeline that runs under the mackinaw straits that connects lake michigan and lake

huron that if in fact there was a break would devastate the great lakes, 20% of the world's freshwater. there have been a number of different models that have been done of what this would mean. but it's devastating. so senator peters and i have introduced legislation to address the safety concerns around the pipelines that run throughout the great lakes, both under the water as well as along the waterline. and i understand that accelerating natural gas pipeline replacements is one of the 60 actions of the quadrennial energy review recommendations as it relates to enhancing energy infrastructure. and i know that there is direct safety oversight as relates to oil pipelines, but is there an opportunity for the department of energy to help modernize as well as improve the safety of oil pipelines? because it's going to serve no

one if we have these pipelines braking, whether it's from a safety standpoint, environmental standpoint or from an energy security standpoint. >> well, i think you've, obviously, raised a critical question in terms of the aging of a lot of our energy infrastructure.