interaction, as those benefited as a result. the international trade dimension, given the ongoing trade talks with europe and asia is just beginning to be understood. from today's vantage point, i believe national security will be enhanced by our strength and posture on energy trade. we cannot let short-term thinking distracts us from the long haul. gasoline prices will fluctuate. we know that and see it every year. there will be variations across the united states due to a constellation of variables, including infrastructure challenges, differing tax structures across states, different inefficiencies and other aspects of the nation's refining and distribution system. regional variations in prices are still ultimately variations on global prices. lifting the ban is about production, jobs. the international energy agency

has warned that maintaing the ban may result in de-celebrating or shut in production, which would be to the detriment of the nation's livelihood. so many things to chew on. many things to carry forward. we have a panel in front of us that i think is clearly knowledgeable and poised to speak to the issues if i think we will gain from the input this morning. -- and i think we will gain from her input -- their input this morning. i thank them for being here and allowing us to have the opportunity on this important discussion. >> thank you for the thoughtful statement. without the committee being hit by one of those politicfacts, i am told this is the first hearing in 25 years on this topic, so given that and the fact that we have more than 10%, a number of senators indicated they would like to make a short statement.

>> i did not want to interrupt the ranking member, but when she was talking about where we have come in the past few years and production, i thank senator hoven. while as governor he did all kinds of things to make sure the balkan was developed there, he did not discover the oil there. i just want to point that out, but if you would please discover some oil in minnesota, it would be most welcome. [laughter] >> you need to talk to our guest harold hamm, and he may do that yet. >> let me just go back and forth. is there a colleague on the other side you would like to

make a quick comment? i know a lot of you are under a time crunch. is there a colleague who wanted a minute or two? >> senator hoven. >> i would like to welcome harold hamm who has been a pioneer in the balkan. senator franken not too far off when he talks about discovering oil. he did not discover it but certainly was a pioneer in discovering the methods, including hydraulic fracturing and directional drilling and developing the methods in a way that made that oil recoverable in billions of barrels and leading an energy renaissance in the country, so by way of introduction i am pleased to welcome harold hamm this morning. >> thank you. i very much enjoyed my visit to north dakota as well and that -- appreciate your giving that

opportunity. >> i think for the purposes we have an excellent panel this morning. i want to thank you and senator mikulski for such a thoughtful opening statement. i will submit my statement for the record, but i want to say we are witnessing an energy revolution in the country today. reducing more energy at home here than we had in decades. to translate that into numbers, the eia predicts the u.s. will average 8.5 million barrels of oil per day in production, one million more than the average in 2013, and most importantly, very near the record of 9.6 million barrels per day last achieved in 1970. that is why we are having the hearing today, and i think the testimony that mr. hamm and others will provide is this number could be increased substantially based on new technologies, new opportunities that will benefit not just the

exploration of production companies in which many hail from louisiana but also the land owners, the oil supply and gas suppliers and the general manufacturers that make products completely unrelated to oil and gas and employee a great deal of americans that are experiencing additional supply potentially, stable prices and reasonable prices. i will put the rest of my statement in the record. most importantly, i think we need to get on the record what the refineries are conditioned -- positioned to process today and the kind of crude being produced and the mismatch there. we have to be very aware and sensitive of the investments that have been made by the refineries. i'm really looking forward to

the testimony, particularly the users that use the tremendous amount of fuel and have important aspects for us to consider. thank you. >> going to the other side, anyone on the other side who wanted to make a brief comment? >> thank you, mr. chairman. i want to thank you and senator michalski for holding this historic hearing today. i cannot help but think that we would not have had this discussion and the changes you have been able to develop to make us more secure. i can only think about the discussions that we are having about exports where we were going to import a couple of years ago. that part of this will play into this. i think you have put it so succinctly that basically a

sweet spot. i can only think about 150 years ago, what the coal industry did making the steel that made the ships and the industrial revolution. so many people have forgotten about. and what they are still depending on from the state and where we would be if we would have sent that product out of the market. there is a balance to be had, and i think we are able to find that. i would like to introduce that into the statement for more details. i thank all of you for what you have done and contributed. >> thank you for holding this meeting. i read a book called "breakout."

it is about pioneers of the future and he truly is one and goes into the epic battle that will decide america's fate and a lot of it has to do with energy resources, availability, production and the new technology that has made it possible. i want to thank you for your leadership in bringing this group together. >> thank you, mr. chairman. i will try to be brief as possible. two issues that i want to make sure are addressed. those are the issues of safety and price. i am not saying you cannot have oil transported safely but a report is being released today. we had a huge fire. certainly we have had incidednts. if you think of the north dakota and export opportunities and where that will go on rail and

how we address safety issues, and to me that is a very important issue. i certainly believe it is a global market and global price. i definitely think we can do more to police the markets to make sure the manipulation of oil futures does not affect the day-to-day price of oil which is not a part of today's discussion but a little bit more about the banking industry and how many more people have their fingers in the oil futures pot which they are really not taking delivery for an end user. my point is the price issue for those in the pacific northwest, we have had some of the highest gas prices in the nation constantly. so we will pay attention to that.

so when we gave a back of the envelope recommendation, it says that consumers can pay as much as much as five-$.10 more per gallon if it is listed. i know the chairman and ranking member will get back to me up some point in time but this is the issue. we know oil markets and energy supplies will be tight in the future. how do we best police them so they are functioning and how we protect consumers in delivering the most cost-effective resources so our economy can continue to grow. so i think the chairman for the indulgence today. a historic occasion and letting us have historic inputs before the witnesses so thank you for that. >> thank you for that. i appreciate you holding a hearing. it is historically are talking about this. we have not really had a discussion because we have not had a reason to, and now we do because of hydraulic fracking and the shale.

i would think more controversial a year ago that it is now because we have found ourselves in a situation where it looks like we can afford to export and still help manufacturers and places like ohio achieved what is happening, which is unbelievable. it is a revolution in the sense that we are finding more natural gas and prices are low. manufacturers are coming back and adding jobs because they are seeing there will be a long-term and stable price. on the issue of oil, the one thing i would love to hear today is whether the price of the pump is determined through the global market, because i appreciate what the senator said and made some good points. we also hear in effect what

happens at the pump in ohio and around the country that is affected by the global marketplace. we see that. there is an issue overseas where there is no disruption of supply and we see the prices go up. i would like to see that -- more about that and how it differs from natural gas in terms of the market and what it can ultimately mean for consumers. finally, since the senator talked about the sweet spot, i would like to hear more about what could be done in terms of the swap with mexico that has been suggested by some folks where we would export light, sweet crude in exchange for heavy crudes and whether that makes sense. it may not be a wholesale lifting of the export ban at this point but maybe an opportunity to enhance competitiveness in this country and make sure we have the right balance of energy resources in the context of the revolution that has put the united states in a position to be more

competitive across the board. those are the things i would love to hear today in the conversation. really appreciate the witnesses being here. we have a great panel. >> we are going on a long time here, so i will try to be brief. a lot of bottled up ideas. i want to remind my colleagues that one of the reasons we are having this conversation, one reason the market has changed so much is because of the technology that has been developed. horizontal drilling and also hydraulic fracturing. much of the basic research came out of our laboratories. my point is after several years of declining budgets and sequestration, i think it is incredibly important for us to realize that things we consider mature and industries that have been around a long time can be radically changed by our investment in basic research and

we need you to make sure we did not lose sight of that. >> very good. >> i will feel left out if i do not say something so i will say something. [laughter] thank you, mr. chairman, always so kind and gracious. having the opportunity to go to midland, texas recently to see the results and impact of hydraulic fracturing and horizontal drilling is quite remarkable, especially when you look back over the history of 2004-2005 and 2006 and we were in a plateau and the end was coming very soon. the reality of it is george mitchell perhaps invested a lot of resources and took amazing risk to get us in a country where we could have a larger conversation at some point in the near future about the impact.

one thing we recognized is as we become more aggressive, i think it puts the middle east competitors to have very serious conversation to look at their own budgets and revenues. i think it does more for the national security than we really articulated in the past several years. >> thank you. any others? >> thank you, mr. chairman. i wanted to talk a little bit in which the context i will look of the testimony and think about the input. i mentioned it at the hearing quite recently. in wisconsin family and business owners have had one issue on their minds, and that is the cost and availability of propane. it is an especially cold winter in wisconsin this year, and for

many people who have for years relied upon a study propane supply, this year they are unable to find fuel to fill their tanks and regional suppliers have been depleted. prices have risen from two dollars $.20 per gallon to over six dollars per gallon. it has risen in just three weeks. this is really devastating and very frightening for thousands of families across wisconsin and i am hopeful the committee will take a close look at how we can solve the problem and figure out how we can prevent it from ever happening again. in addition to tight domestic supplies, this season we have witnessed a fairly dramatic increase in propane exports. in fact, in the past three months the export industry has nearly tripled exports.

this should inform the larger discussion about another fuel that is considerable to the economy. -- critical to our economy. consumer supply protections are a serious part of any debate about the future of crude oil exports. let me just add one other issue. i do not know if i will get a chance to stay long enough to ask questions so i will suggest one area of interest. one of the major shortages has been as a result of infrastructure changes. pipelines that have served the region for decades have been repurposed for new oil fields. these infrastructure pressures will only increase. so all part of the contexts in

which i will be viewing today's discussion. again, i very much appreciate the conversation today. >> i think we're ready to go to witnesses and guests. any other comments from the other side? all right, let's go forward then. chief executive officer. senior vice president of fuel optimization for delta. university of california davis, director of climate at the center for american progress. we welcome all of you. we will make your prepared statements part of the record. i think you can see there is great interest among the senators and will have plenty of questions. welcome.

>> is it on now? all right, good morning. my name is harold hamm. i serve as chief executive officer of continental resources. we do not have refineries. it is an honor to address you today on this critical subject of crude oil exports. whether blueberries or oil, restrictions have hampered the market. we need to lift this restriction sooner rather than later. the ceo of a company that developed the first field ever drilled with horizontal drilling and the largest holder and most active driller, is in a unique

position to be one of the first to be american energy independence for years ago. -- three years ago. today i see firsthand what is necessary to continue the oil and gas renaissance and achieve energy independence. in 2011 they put a stake in the ground and predicted energy independence by 2020. america's energy independent oil and natural gas drillers have made this a reality. as a result, we can today marked the recent four year anniversary of the oil embargo. ending oil scarcity in america

and along with it, ending a shortsighted regulation passed at same time. this is the price of energy and brought about unintended consequences. one law banned the use of natural gas as a fuel and mandated u.s. power plants to switch to coal. we understand what has happened. legislators have repealed and let expire the post-embargo regulations. the energy policy and conservation act of 1975 and the export act of 1979, which banned crude oil exports. this led to the creation of the export restriction no longer reflects the economic reality of the global energy market place we had today. we are entering a new area of energy abundance in america and the world. we have only been able to extract hydrocarbons from

quality rock, primarily through vertical wells. america now counts natural gas supply in centuries. experts agree we will be energy independent in terms of crude oil within this decade. this phenomenon was brought about by a group of american independent producers and missed the general consensus of the industry. it was in complete contrast to popular belief that the united states was running out of oil and gas at the turn of the 21st century. today we must crack another misconception that we are not exporting petroleum. nothing could be further from the truth. major oil companies are refining without any limitations. why shouldn't independent producers be allowed to do the same? over the years some have argued

free access to world markets would drive up the cost of gasoline. the opposite is actually true. unlike the exports of crude oil, exports of gasoline and other refined products are not restrict it. petroleum products have been sold at a higher price than global markets. the benefits of exports to the american consumer will be competition for the refining of gasoline. indeed crude oil no different than any other commodity demanded by consumers. lower prices are only brought about by weaker demand or improved efficiency in the market. when governments attempt to legislate lower prices, no matter how well-meaning, market disruptions and unintended consequences inevitably result.

supply and competition fall short and the consumer ends up paying higher prices. over the past 18 months consumer prices for gasoline and diesel have been reduced almost 20% due to the energy renaissance brought about by horizontal drilling. a recent release yesterday by icf international states the american consumer cost released -- for these commodities can be reduced another $6.6 billion per year if the export ban is removed. we find ourselves at a crossroads. do we reflect the reality of today? lifting export restrictions will strengthen the domestic oil industry, a critical component of the economy whose impact reaches far beyond the american consumer. the energy sector has added jobs for millions of americans and

has also served as a job multiplier for nation's growing industries. energy independence means energy security. in conclusion, the world has drastically changed since the opec oil embargo, and the reactionary environment of federal regulations in the 1970's. even then that was symbolic as we had no oil export. >> thank you very much. mr. burnett. >> members of the committee, thank you for inviting me to testify before you today. i asked that my full for marks be included in the record. i am a senior vice president for fuel optimization for delta airlines.

airlines. in this position i managed delta's jet fuel supply as well as serve as chairman of the board of munro energy, the company that owns and operates a refinery in pennsylvania. behind the u.s. military, delta is the largest user of jet fuel in the world and the largest expense. because of this, we are uniquely situated, as an end-user of crude oil and refiner and the current debate over whether to lift it. we believe strongly that the ban on u.s. crude oil exports is good policy and that lifting export limits would come at the expense of the american consumer who would pay more for gasoline come up more for heating oil and more for the price of an airline ticket.

today the going price for a barrel of u.s. crude is $11 less than a barrel sold in europe. this price differential can be easily explained. u.s. crude market is a competitive one with a price determined by supply and demand. once the u.s. domestic market incorporated the supply of crude from places like north dakota, the price of a domestic barrel of oil came down. in contrast, the global market is influenced by a cartel were opec countries control production in order to set prices. if we let the export ban, we would in essence be allowing the transporter crude out of a competitive market in this country and into a less competitive global one controlled isu oil producing state. the results would be easy to predict. u.s. crude would flow out of the country and onto the world market. opec would reduce supply to remain high global prices. the united states use of homegrown oil would diminish and prices here at home what rise to

match the higher global price for a barrel of crude. as one commentator put it, allowing for the export of homegrown u.s. crude would do nothing more than imports higher opec prices into the u.s. market. it is clear who gains from this scenario. oil and production companies, many of which are foreign owned. with the increased supply of u.s. crude helping to push prices down, these companies want to sell u.s. crude on the global market at higher prices largely determined by opec. it is equally apparent who was -- would lose, the american consumers who would see prices rise for gasoline, petroleum products and most consumer goods that rely on fuel to get to market. this can be explained by looking at history. before the oil shale boom there was too much capacity in the northeast and along the gulf coast and many were closing.

delta purchase from conoco phillips. after that facility had been closed nearly one year. the shale revolution breathed new life into u.s. refineries and created jobs for thousands of refinery workers. in thinking about the merits of the export ban, we should also consider a goal, which was to help achieve energy independence and by independents, i mean the ability to meet the energy needs from sources within north america. notwithstanding the upswing in domestic production, this country still imports around 33% of its daily crude oil needs from outside north america. that is why exporting u.s. crude makes little sense. if we allow for the export of u.s. crude, we will have to import more oil from overseas and subject ourselves once again to an increasing degree of price volatility and higher global prices. in sum, the export ban works. it may have taken longer than

we anticipated in the 1970s, but we're now seeing the benefit. lower prices for crude in this country compared to global markets and an increase in homegrown energy. the ban may be unnecessary at some point in the future but still have a long way to go to protect against oil market volatility and achieve true energy independence. i will close with a sports metaphor. it would be like ending the game after the first quarter. thank you, mr. chairman. i look forward to answering any questions you may have. >> thank you very much. [inaudible] members of the committee for this opportunity to talk about this important subject. i have been writing about the influence of opec on our country since i was a junior in high school, believe it or not. i won a term paper contest in the state of massachusetts. i am so glad to be able to talk

about the fact that we might get the goalpost, get the ball through the goalpost. the united states is a leading global power. we promote open markets and free trade. we have for the last 30 years spent a tremendous amount of diplomatic effort to promote open markets and free trade and energy. that is a vital interest of the united states. i appreciate the thoughtful comments of the committee in terms of full debate on the subject. we do not want to take actions that enhance the monopoly power of opec or russia to use energy as a weapon or a tool. we want to lead from the front not from behind.

it is important for us to have this thoughtful debate and reevaluation of our current export policy. we need to consider how to avoid creating market distortion. we need to consider the following things. we actually export our new oil and gas. we export our oil in the form of refined products directly so we do not have an export ban on gasoline, propane. we are exporting that instead of exporting the crude oil. what we are discussing is what is the best way to organize free markets and to eliminate distortions and who gets the profit from the exports? will the refining industry get

the profits? will other industries get the profit from the exports? we are not in here to discuss banning all energy exports from the united states. we need to keep that in mind. because we have physical bottlenecks that prevent us from exporting our surplus of natural gas, we are currently exporting coal. we need to understand that when you block a hole in one point of the dike, water pressure comes to another part of the dike. the natural gas example is the best example. nobody expected the result of that to be the export of coal to europe. i am just returning from the

world economic forum. those and i can tell you the entire discussion focused on europe's need to reevaluate their entire energy policies because they are importing coal, emissions are going up, they are not drilling for natural gas, and they realize they have these huge distortions that has created a great disadvantage of the european economic system. we want to make sure the policies we promote here in our country will continue to allow us to achieve the advantages that we have. i want to address for one moment the issue of gasoline price volatility. the solution to gasoline or any kind of consumer volatility in prices is the minimal standards for inventory.

that is what happens in europe, that is what they do in japan, and in south korea. that is how industrialized economies protect consumers against sudden disruptions from like a refinery fire or a sudden cold snap in the winter. inventory levels are the critical issue to tied markets under temporary swings. in closing, i want to remind the committee and our public that when we had a temporary disruption of gasoline on supply during hurricane rita and katrina, europe loaned us gasoline supply from their mandatory strategic stocks they require industry to hold. we need to consider our

relationship with our allies, like europe, when we think about our future export policies. >> thank you. >> thank you for the opportunity to testify about whether to lift the crude oil export ban. since 2008, the united states has produced more and used less oil due to advances in drilling technology, and due to more efficient vehicles. lifting the ban on crude oil exports could squander this recently improved energy security and price stability. we urge you to defend the existing domestic crude oil export ban. when congress passed in 1975, the u.s. produced 64% of its oil while importing only 36%. in 2013, we produced and

imported the same proportions of petroleum. the only experience we have had of lifting oil export prohibition occurred following the 1996 removal of a ban on alaska oil exports. much alaskan oil was shipped to the west coast. an analysis found that lifting the oil ban tripled the already existing price difference between west coast and natural gasoline prices. -- national gasoline prices. when alaskan oil exports cease, the gasoline price differential between the west coast and the national average did decline. lifting the nationwide crude oil export ban could raise gasoline prices. lifting export ban could add $10 billion a year to consumers fuel bills.

without the ban, oil companies could sell their oil at the higher world market price -- the foreign domestic price spread for oil was $10 a barrel. domestic production has significantly grown over the past five years, the energy information administration projects crude oil production will peak in 2019 and begin a steady decline after that. this energy abundance could be a temporary phenomenon. they also predict that in 2014, the u.s. will consume 5 million barrels per day more of oil and liquids than we produce. this gap between demand and supply to continue at least through 2040, growing by 13%. i advise you to look at the chart the clerk has. this is hardly energy independence. any domestic oil sold overseas

must be replaced by more expensive imported oil each -- which could raise gasoline prices. the replacement oil would likely be heavy crude imported from venezuela and canada. venezuela is not very friendly to the united states. canada is our closest ally, its heavy tar sands oil produces double the carbon pollution responsible for climate change compared to conventional u.s. oil. neither of these are good options. u.s. imports more oil from the organization of petroleum export countries than any other single source. opec oil is vulnerable to supply disruptions. interruptions may occur frequently for a variety of reasons including conflicts and natural disasters.

oil produced in the united states is less vulnerable to supply disruptions and provides more energy security. the u.s. is exporting 3 million barrels per day of refined petroleum products. we are exporting oil already. he would rather see that oil kept here and made into a product by american workers rather than ship to be made into a product by foreign workers. oil companies are doing quite well. the five largest oil companies made a combined total profit of over $1 trillion in the last decade. that is based on their quarterly reports.

our transportation system is entirely powered by oil, which makes crude oil different from many other commodities. american families, the economy and our energy security are vulnerable to sudden foreign oil supply disruptions and price spikes. we must invest in alternative nonpetroleum transportation power, including electric vehicles, biofuel, it and public transit. -- public transit. there is no independent evidence that energy security of fuel prices will remain unchanged after the removal of the crude oil export ban. president obama and congress should maintain our recent gasoline price stability and energy security by defending the ban on crude oil exports. thank you for having me. >> thank you, all of you. i will ask one question to start this off.

mr. hamm and mr. burnett have different views. both believe the same benefits and potential pitfalls exist for their preferred policy position. lower prices if the senate follows their advice. higher prices if we do not. the question becomes, how can this be? we have two very thoughtful individuals and they have diametrically opposed views. is this a lack of knowledge? is it possible that different regions of the country would be

affected in different ways? if export restrictions are lifted, is it possible that america would see prices go up in some parts of the country and down in other parts? i want to hear the four of you weigh in on that. >> i think it comes down to one example i can give. recently, a spokesman for a large refinery in the united states, talking about the nationwide export ban. he told the market recently, it provided a particular unfair advantage in the market.

they were seeing pressure on refineries outside of the u.s. and closures occurring. this year projected about -- last year, half a million barrels. 1.6 million barrels per day the previous year. i think we all realize that refinery closures, not good for consumer prices. and they are not good for my business. we need refineries. that is not good for anyone. the difference between me and this gentleman is considerate.

>> same question. >> the fundamental difference is whether u.s. oil prices would go up or go down as a result of exports. it is my position that if the u.s. begins to exporting crude oil, the opec producing countries and saudi arabia will act to maintain crude oil price by reducing their output. my logic is based on the fact that crude oil prices will rise to an international level. the net result of that would be increased feedstock cost to our refineries and the closure of refining capacity in the united states, particularly in the northeast. less supply of gasoline and other fuels and higher costs. >> you sort of started this by the illusion that there may be regional differences. let me let you take a crack at this. >> i have to talk about how the international oil market works because sometimes people are unclear.

when we export refined products globally, it means refiners in europe have bought those products and they have cut their refinery runs and opec is already affected because they cannot sell more of their crude oil to europe because those refinery runs are shot and are gasoline exports are hurting opec. whatever opec policies they will take, they will take whether we export the product or whether we export the crude oil. that is not the issue, right? the issue -- we have a slogan in the oil market. the tyranny of geography. whether i am selling refined product or whether mr. hamm is selling his crude oil, he wants to sell it to the closest possible refiner because that is how he makes the highest amount of money because the transportation costs eats into

his profit. even if we were to lift the export ban, the crude oil would first and foremost look for a buyer inside the united states because that is how it would be most profitable because that would be the cheapest transportation. if it happened that there was a refinery in mexico or canada that would benefit, the oil will flow to the best possible use. what that can mean when we have bottlenecks, those bottlenecks create some distortion that might artificially lower prices

in one particular geography for a particular time until that bottleneck -- >> i am over my five minutes. >> it is important to know that we really do not export very much gasoline right now, a little less than 400,000 barrels a day. the primary product we export is low sulfur diesel. i do not see that as being a real challenge. i would agree with mr. burnett that it is tough to try to lower the price when the price of the commodity is controlled by a cartel. i would see it would not lower prices at all to allow exports of gasoline -- sorry, exports of oil. >> we will continue this discussion. the pacific northwest has a history of some of the highest

gasoline prices in the country. if there issues relating to the tyranny of geography, the people i represent are going to be very interested in that issue and steps taken to protect them and their well-being. >> mr. weiss, you made reference to the alaska export issue and there was also an essay that was recently released from the center for american progress that also made some claims about alaskan crude oil. i want to insert into the record, 1999 study from the gao that examined the impacts of lifting the ban on crude oil exports from alaska. in that report, they state despite higher crude oil prices, no observed increases occurred in the prices of three important petroleum products used by consumers on the west coast.

this was not cited in the essay. i would like to submit a report back in 2006 which was also cited. >> without objection. >> we have to make sure we have the full quotes in context. you mentioned the tyranny of geography. i was reading an article yesterday where because of the glut of the oil coming from the north into the gulf refineries, texas is looking to move their crude through the panama canal up to the refineries in california.

it speaks to the issue of alignment that we get to a point where we will have a mismatch between what we are producing domestically and our ability to meet the needs, the capacity within our refinery. understanding and appreciating that it is getting to the point now where we have reconfigured as many refineries as we can. maybe there is a little more room. we are looking to some pretty significant decisions. when you are moving crude from texas to the panama canal to come out to the west coast refineries, and still hoping to make a profit. we are looking for some solutions. this issue of timeliness is one that i have been trying to track. the growing volumes that can not leave north america are increasingly posing a challenge

to industry, putting the spotlight on where we are today, which is the oil export ban. this timeline comes up a lot in discussion. i am not asking for a date, but what is your general sense on when these initiatives collide with production? when do we hit that misalignment or mismatch that could then cause some real disruption? >> the mismatch is beginning to happen already. so many refineries were refitted for heavier crude when it did not look like supplies would be here domestically. most of what they would be refining -- without those

retrofits, sweet crude does not fit with some of them. you need to move that to the more efficient ones that could handle this low sulfur premium crude oil that we are producing in north dakota and other places. the mismatch is beginning to occur. a lot of people expect it to occur as quickly as the over supply of natural gas. there supply and demand was equal. imports have been 60%. reduce that halfway to about 32%

in nine years. that is a really good move. >> let's go to ms. jaffe. >> when you look at the specialized models for the trading of products and crude oil, people anticipate that by 2016, our condensate flows will be so high that mixing them into the crude stream, exports to canada, use in petrochemicals, will max out for our physical facilities unless there is some giant upsurge in investment for specialized equipment, which is not on the horizon. in 2016, we would face a situation where companies like continental resources may have to stop drilling because it would be a containment problem. we would not be able to find a place to store all of this condensate if we cannot produce it and export it. >> we have not seen a new

refinery since -- 25 years? >> we have seen two companies, marathon and valero, valero has extended a distillation tower. marathon has made an investment in ohio. these kinds of investments take time. if we do not have these giant investments announced in the next year or so, i think it will be very difficult to absorb the condensate flows. >> i am well over my time. >> if you could quickly offer your views? >> the energy information administration has documented that the refining capacity in the last dozen years has increased by about 2.5 million barrels per day even though we have not opened a new refinery. the utilization rate is at 87%.

there are numerous refineries that will be expanding over the coming years in north dakota and texas. >> thank you very much, mr. chairman. this will be a simple yes or no. did you all believe the xl pipeline -- keystone pipeline would be a strategic advantage to the united states of america? >> i've certainly been in that camp. the thing that has really hurt everybody up there is the delay going on. >> you are in favor of it? >> yes. >> yes, i think the only way to keep the canadian oil in the ground is to lower demand. >> you are in favor of the pipeline? >> if we have the demand for the oil, we need to transport oil by

pipeline. >> no, i am not, because of the huge increase in carbon pollution. we get to keep the pollution and other countries will get the petroleum products. >> for those of us -- we do not understand, we keep talking about energy independence. we're still paying high prices at the pump. can you explain the opec position? well they all -- will they maintain the oil cartel and be able to control world pricing? can that ever change to where we in america can benefit? >> the higher opec's market share, the more power they have to control the price. as the united states becomes a

bigger producer, and the eia projections are based on current knowledge. we are having a paradigm shift in the way we look for and produce oil. these temporary projections about the peak -- as the united states and north america and mexico and other countries produce more oil from unconventional resources, opec will have a smaller and smaller share of the market. their producer power will be reduced over time. to the extent the united states exports crude oil, and countries that are in europe and countries in asia are able to buy spot market incentives oil and gas at market competitive prices, than

opec's power will be reduced to dramatically over time. >> if they want to have oil at $100 a barrel, that is what it has been. they are a cartel and control 40% of the oil produced. it is easy for them to turn the spigot one way or another to get the price they want. that is how cartel's work. >> the pricing, the way the pricing on crude versus the pricing on natural gas, why is there such a difference? we are not on the world market with gas. gas is $15 or so in japan. transportation is harder and the supply is --

>> with diesel, which run close to $5. >> someone help me explain why west virginiayiskm!9 is -- mr. t

quickly. >> 72% of the price in the pump is crude oil price. >> i'm sorry. >> we've been told there will be four votes on the senate floor. by my calculation, each of the remaining senators can have their five minutes. that will be good. >> thank you mr. chairman. first mr. burnett, i want to commend delta for buying a refinery in pennsylvania and operating it. we appreciate that. also andy newman who's here with you today is an outstanding individual and does a great job. i want to commend you on her as well. i think the number one priority for@nt÷y americans when you talk energy is they want what they call energy independence.

i know you refer to it as energy security. but essentially producing more energy than we consume. i can't think of anybody that's done more to help us achieve that. we're not there yet but i can't think of anybody done more to help us move in that direction than yourself. my first question for you is, what can the federal government do to help us produce more energy in this country but specifically more crude because that's what you do. what can the federal government do to help us continue to increase our crude production. i look at this graph, that doesn't show us producing more than we consume. >> well, first of all, we need to change some rules. like fcc rules that limit what we can put on the books to five years. lot of these resource plays, it's going to take next 15 to 20

years to develop it. i can't put them on the books. those numbers totally distorted. we had to teach them how to count. at one time, it was only taking the crude oil numbers, not putting any of natural gas or electric in. they finally realized we're up to 12.6 million-barrel days of production in this country. that's first thing. we got to the get the number right. those numbers are totally pessimistic. nest thing do no harm. we're going down the right path. if we don't have a lot of tax changes and things like that, if lifted so people can go ahead with their business, we can get there. i don't know, i look at the rocks. what really produced in the past in this country, is basically what leaped off the source rock beds.

now we can produce some source rocks effectively with horizontal drilling. we're on our way to get there. both with gas and with oil. all we need to do is basically do no harm. >> second question goes to transportation. recently we've had accidents with rail moving crude. of course we need to address that. we know that. tell me what we can do, what we should do and what you're doing so that we can make transportation crude by rail safer? >> rail has come a long ways. since basically -- it was deregulated. regulations have put it out of business as we all know. it's come back. it's doing a good job. we're seeing a lot of rail companies that have been tremendous. think there's three things. first of all, in the oil field, safety is ultimate.

prevention of accident, preparation, everybody is working on that. rerouting trains effectively, they're doing this twice rail inspections. they're going to two a month that's based on everything. anything that's congested, they trying to handle it quickly as they can. this is a newcguir thing. it comes out there since done. the rails are input. they're working on it. safety is utmost important to them. they are certainly doing their job. >> as we develop more energy, we need infrastructure, that means both pipeline and rail. would you agree with that? >> i do. certainly pipelines -- rail cost more. it will put oil to the places you need it and do it quickly. but pipelines eventually will >> just one concluding question.

how do we both expand and developniqdq( more refineries? we're building a refinery in north dakota, i think first one in 25 years. how do we get more refinery expansion and development in this country? >> well, the gentleman is right, there's been some capacity added to éo+9ñ the er the years. because you couldn't start one from scratch. so, basically expansion, add new towers and stuff has been done by the refinery industry. think that over all, looking at the regulations from building new ones, they are more efficient and better. certainly needs to be looked at. >> mr. burnett? it's got to be quick. i'm tight($ mr.my)r;5 sufficient capacity in the

united states today in refining to be able to absorb all the oil that's being produced. the issue is infrastructure and getting the oil to the refineries. we would certainly like to take more but the struck isn'td otp3e yet. these projects are all in progress. it's just a lag effect from the fact that the oil is there. it's being produced with the lag of in the infrastructure but it will come. >> we have 15 minutes for three senators. >> i want to go back to ms. jaffee on something you touched on. one of my concerns is the potential lost of opportunity cost in terms of are we exporting crude, or exporting those refined petroleum products. it seems we create more jobs by exporting refined petroleum products by exporting crude. can you sland on this and then

if any of you disagrees with that position, explain to me how crude oil than exporting refined petroleum products? when i was a kid my mom sold levis we had a textile industry. give me your thoughts on that. >> i have an opinion on that. the experience in the industry is that companies like continental resources, when they have8" a better cash flows, they invest more into drilling and therefore we have more oil in this country. that drilling creates a lot of jobs. when a refinery raises its throughput rate to 90% versus

80%, that probably doesn't create very many jobs at all. refining is a very job, notota very job intensive job. that's reason why saudi arabia has trouble creating jobs inside the country. i would say on balance, if your goal is just a hundred percent jobs, would create more jobs having more cash flow through the up stream side of the oil industry than the down stream side. >> the university of massachusetts did a study several years ago that found that investments in oil production create one third of the number of jobs compared to investments in wind, solar and other forms of clean energy. if jobs and energy is what you're interested in, investment

payoff than petroleum. >> mr. hamm. >> i agree. ms.jaffee, there has been more jobs created in the up stream sector than anywhere else over the last ten years. refineries, it's not very intensive from manpower stand power. you run 95% capacity is about the same. but in our business, we created a lot of jobs. >> mr. burnett. >> one thing i want to emphasize, the export of product into a free and competitive markets exported crude is not into a free argument controlled by opec. the added value in country. the world, they're all building refineries because they want the added value to stay in their country too. thank you. >> getting to senator baldwin

and senator scott, i'll yield back the last of my time. >> thank you gracious as always# >> scott. dr.jaffee i believe our trade deficit is one of the biggest' threats to our national security. in our testimony, you touched how lifting the export ban on crude oil could help improve our trade deficit. can you explain how ituwuxi3"t our trade ban particularly with regards to china? >> we will be in a unique position where our imports of crude oil, which are a huge part of our trade deficit is going to go down over time. we're!&$yo: to have a situation where china is going in the opposite direction. and higher rising amount of their trade is going to be for importing crude oil. as we move forward, they will be

increasing in their debt and in their vulnerability to the international oil market. we will be able to strengthen our economy through these balance. i think that one of the things that china does from my travels there and discussions with them over geopolitics. they have us in a great cycle. theye?ow2u support iran. they support other players in the middle east that caused disruptions and instability. we have to spend our taxb(w$çns sending our military out there to try to help withu>uó(n those troubles. that makes us more indebted to china because they're buying our treasury bills and bonds and so forth. pattern, we're not having and this burden on our trade"hzj balance. china is the one that feels the pain of all the instabilities in

the middle east. i think we'll find it easier to bring china to the table to negotiate with us about stability internationally. >> thank you. i wanted get one more question in and give you the balance of my time. mr.hamm, you've been one of thev best guys, inconventional business. i read through your testimony, you said that by 2025, we could see another million jobs or so coming out of the oil and gas industry. when you think about not lifting crude oil export cap, what does that do to our economy? we've seen a tremendous surge, north dakotas!d,g as well. would this is a major impact on the jobs that couldkñs-nqy be cd if%>

it can certainly put a cap and stagnate what we're doing in the future.v9÷/aíyxk it's not a good thing if we keep thisd/5÷lñ3wbzy4ñ industry grow where we'rerñ?ésri1r energy indt and have opec have a severe step back. >> mr. weiss? senator scott. have the whether we export or not because if we exporttiv> more oil, we'e going to have to import more oil to make up for that gap. if one is concerned8qp)oñ about reducing our oil trade deficit the number one thick -- thing we can do is dramatically reduce consumption. we have economy standards that will get us to 54.5 miles per gallon by 2025. we can go beyond that after 2025

and that's how we would reduce our trade deficit by dramatically reducing our consumption. >> two thing, i saw you shaking your head ma'am. before you comment, we can very quickly solve our deficit by allowing us to get on our federal lands where resources. but dr. jaffe. >> just want to point out, every refinery in this country has a different configuration of what kind of crude oil you can or can't refine. and whether we export or don't export, we're not going to physically change that except over a ten year period maybe over time. because of the distance, refiners will invest regardless whether we're exporting or not. ifkb(exj we have balance in qua, we either going to leave it in the ground or we going to export it. if we have imbalance of what kind of quality of crude we can refine in country.

there may be a time when we can by barrels that we need. but we're going to need heavy crude because there's going to be some refineries that exist in the gulf coast that have certain configurations and there's onlyw throught(y?vc the system. @zyh%+xm back the balance of my >> senator baldwin. >> thank youtw!oo3ú mr. chairma. as i mentioned earlier, wisconsin is experiencing a propane crisis right now. very sflf8u! supplies +>á i'm very interested in subject matter of this hearing from7xñ?a affect propane. i have two questions for you mr. burnett. one of propane shortage in2t4hj)b the t

=v significant pipelines that have servedr[!yie regioniís[apí a decade are being repurposed to serve new oil fields. we understand that one pipeline in april will be repurposed but has traditionally supplied propane to our area. think these infrastructure pressures will only increase. is dedicated to oilq !zl that's heading overseas, is there adequate remaining infrastructure in the united states to ensure that other essential fuels like propane continue to throw to american -- flow to americans domestically or exported, the logistics problem will remain the;ozz:mc same. historically crude2ù>f oil was n

i don't know if that answers your question. i think that it's going s>

production and whether we export crude oil or not will not matter. these infrastructure problems -- hopefully we can get to where we can build new pipelines in this country quickly. people will have to realize thañ this is going to go forward as renaissance. they'll put money back in the infrastructure as necessary.b]qñ >> i've been trying towtdofrpx l myself on the production of propane because of the crisis that wisconsinge>> it's primarily from natural gas. i talked about the con den say the export. when you produce both natural

can be)v+@7x a by-product. propane is one of the things that gets stripped out of natural gas liquid. the export of crude oil to the extent thatv1wdññ;(g

contributes factors. so +qqúdhthe supplies has been . maintenance. the weather event:>÷qj alone dt cause the shortages. >> the solution to that is regulated inventory. >> i was hoping to get back to you if i have give mr. weiss a chance to answer the question. i do want to follow. on that if not at this hearing. >> thank you senator baldwin. there has not been an predict the impact of lifting the crude oil ban on the price of gasoline and other refined products. one thing this committee could committee administration to conduct an analysis. >> i have run out of time but i did want to follow up with you

ms. jaffe with that. i heard that in your testimony it's something that we certainly need to be looking at not only in wisconsin but other states impacted by the propane >> you all may be experiencing another first here in the senate. you're going to get what amounts to a joint question from myself and senator murkowski. we were both wrestling with the definition of energy independence. i probably frame it as how you go about defining energy security and then i'm going to yield to senator murkowski who would also like to be part of the discussion. when i contemplate energy security, i ask myself does this mean no more import? or does it mean the capacity for

no more import or does ià;b mean more exportq>ce than imports? -? of what constitutes energy independence, i want to let myi colleague weigh in on this because you are seeing our bipartisan efforts perhaps iny4p one!f'nqe ofqla3ów our -- we ao find new ways to demonstrate. we never asked a joint question to my knowledge. there's always first time here. let me let senator murkowski be part of this. >> because it's such an easy question here. we're thinking the same way, one od,ç+panother's thoughts. i too have been thinking about

how we define energy independence and we've got couple ends of the spectrum here. we::÷qd. can either be very ins a nation and try to do it all ourselves and basically thumb our nose at the rest of the world. kind of difficult in most areas. or we can do as senate widen>0ãs suggested in one of his greater flow of exports and opportunitieswjlk?zhñ across ous and5 =? insulate ourselves from when i think about energy independence, energy security, it goes two things like economic security. security. how do we ensure that as wesí6o0 also helped our economy become

stronger. we have also worked to;>hbo]u&0e i don't view energy security tom close in on ourselves:x=i=p bur that we are -- we open up to a greater extent. vulnerable tocobó>zé,ñ?r colleague lettinggfe9m;t me join in on th. question, i'm going tonméxjz a. it's important as the ranking!÷t and the chair on this committee here? it truly does go to the whole issue of not+o,eóñ only oil expt export of our energy that we're successfully able to produce i'

>> mr. hamm. >> i think it's plural and owned. i would assure you there's more foreign owned refineries, motiva. you never stopped them for being able to ship their oil in. i take itgez independent when we're exporting more than that they're bringing in. that's what you have to look at i would suggest that we look at it over all, not inclusive of just who we are and what our needs are. xíç

>> mr. burnett. >> here's what i define energy independence. i think ak)jz you also/ñ^r9w2)?e america not the united states. it has to include canada. z !g] if you include canada, it's feasible for north america to be energy independence by 2030. what that means is that, the world still be crude imports. there's a! it would mean an increase in product exports and probably exports of coal and other energy as well. >> jaffe. >> i would say *tjidñ agree witt given my slogan the tyranny of geography. there will be balancing for quality andqeq7?d other reasons between different kinds of energy sources in an outside boredders, wejbsg( have a free e agreement with mexico and canada. i do want to end with the

following two points. number one, supply bottlenecks, no matter how they are created are the thing that make volatility intense. as we heard about propane. second thing is that, senator murkowski is correct, a secure global market is what's going to bring american consumers the lowest price andq/é7u the most consistent stability in fuel prices. that is what the u.s. should seek to do to be a responsible participant in making sure we have fewer global market. >> mr. weiss. >> i appreciate the joint question. i'm sorry we're not able to give you a joint answer. i think all of the discussion about energy independence is focused on supply. that is something we control some of and some we don't. my view we need to focus on reducing our demand. that is something we do have control over. it will help save consumers money. it will help produce the carbon

pollution that will cause extreme weather that will disrupt our energy production and transportation system. we need to focus on reducing demand. when it comes to transportation, which is fuel over 90% by oil, we need to invest in alternative oil. whether it's electric vehicle, public transportation. all of those things will give consumer choices so we are not solely dependent on this one fuel to run essentially run our economy. because as long as we are, we'll still be here having discussions about energy security and energy independence. >> suffice to say, this is the first hearing apparently on this topic. it will not be the last. i knew it would be a piece of cake to find common ground on this question. this is going to be in the to be continued department. we thank you all. we thank you for your patience and the committee is adjourned.

>÷.27f>1 the house andql)y thee are in session tomorrow. you can watch live coverage of the house here on c-span. the senate over on c-span two. here's a closer look what to expect on capitol hill this >> the house just wrapped up two days of their conference over the eastern shore of maryland.

it seems that two key issues come out of that. one, feeling with the debt limit and the other immigration. first on the debt limit. how do republican leaders to plan to address that? >> they are trying to4,ç+3>r gee pulse of the rank and file members on whether they will would allow a clean debt limit extension february or whenever they choose to stage the vote or whether they're going to attach some preconditions. indications are there there are some sentiment tieing the debt limit repealing healthcare law that deals with payment health insurers. it's a technical thing called risk corridors. it's become the gop's next big target in obamacare. whether they decide to make this linkage is to be decided.

there's some strong sentiment in the republican caucus. >> they were wrapping up that meeting you tweeted about. they decided to tie the debt limit to the obamacare provision. is that another way to slow down the implementation of obamacare? is this a serious proposal? >> they sense there could be some political currency in prostaying this. basically health plans have to sell policies to everyone now. they can wind up with an actuarially uncool customer. this is a way for the government whether that's being prudent it's a get away depends on the political frame. >> on to the immigration issue. i understand that speaker some key principles on

immigration. what are we hearing+gbmo aboutme principles? >> this;tnlu8 is big.íavñépgk4% this is";#&,-ñii.meñ the furthee majority gotten. there wasmñwjcer some resemblann some areas to the deem that was -- deal that was struck in the they want tolrheró: do a more l approach. they want to address visas and employment verification. they want to address legal status that people brought to the country when they were children and the important thing is they would give some legal status sort of citizenship to the approximately 11 million country. legislation is still inlvfz7k w? >> yes. this is just political calculations and survivorship. lot of7kt79ag members arehña6>ñ

uncomfortable taking the vote because they're afraid to be primaried. how do you do this -- how do you accommodate[gi:hp those concernu maybe we see something on border security, letting agriculture workers go back and forth to something that everyone can agree on. i'm not sure they're going to go as far dealing with legal status of undocumented people this year. >> before the republican retreat, the house did pass the farm bill. it's the senator's turn in the coming week. >> they're expecting strong show of support on a procedural vote on monday afternoon. year package. huge piece of legislation. some timestñ tuesday afternoon. this could be thea7f/ñ9(z last g bipartisan legislative deal this

year unless something unexpected happens on taxes or immigration. i think it deals with so many different provisions and it's been subject of three yearsn&éof negotiations. when you havecddna something generally everyone agrees on, people are going to likely not pick up a big fuss. it's a conference agreement. >> once the farm bill clears, what's in store not only in the just got the speaker's schedule. one of the things they're doing in the short run is)9trcñ public landì)/tn and hunting and fishing bills. states care and people who hunt and fish do.

expand access to bureau of land management and forest service> you can follow the c.q. roll call onéugaz twitter as well. thank you for the preview of next week. >> glad to be with you. >> a look at some of the live events tomorrow on the c-span network. treasury secretary jack lew is expected to call on congress to d.c. he said the government likely to reach the limit of its borrowing authority some time inú[@óyíg le

february or early march. we'll hear from current and former economic experts after the secretary's remark. live coverage beginning at 9:00 a.m. eastern on our companion network, c-span two. also tomorrow ahead of the winter protection u.ñk$rin sow - winterskmdln in sochi, russia. they'll be meeting at the center for the national interest. you can watch that live beginning at6w5s0 12:30 p.m. ean also on c-span two. qñ&b >> i was in a car wreck. i wrote about intensively) aaz]y book. the whole time i was in the hospital, not injured really, ehad a cut on my leg and broken ankle. i was praying that the other person in the car would be okay. the other person in the car, was one of my best friends. which i didn't know.

i didn't really recognize that at the site of the crash.c8iñ# and over for him to be okay and he wasn't. i thought well that -- nobody listened. god washçñvy not listening my pr wasn't answered. i went through a very long time believing that prayers could be answered. it took me a long time really and a lot of growing up to come backc6bt8 >> first lady laura bush, monday c-span and c-span three also on c-span radio and c-span.com. watch our recent interviewjyjw t >> next we'll be taking a look directors of state healthcare y5'c @&c"p% that points out some of the politics surrounding the

healthcare law that headline, glitches and state exchanges n+í like hawaii,sk% oregon. now that discussion on state healthcare exchanges hosted by the robert wood johnson foundation. >> good morning and welcome to our robert wood johnson foundation sponsored health reporters round table. today m our topic is where are h now, the state of health reporters roundtable. today our topic is where enrollment. i'm susan denser senior policy advisor to the foundation. i wantnc to brieflyrç introdue

today. her colleague brett thompson who runs communication, both of them will be available at the end of the briefing today ton answer questions. today marks the end of the fourth full month, the 123rd day to be exact, not that counting, of the health insurance marketplaces or exchanges created under the affordable care act. as we all know the start up phase was very yrvox for the i federal marketplace, healthcare.gov. on the other hand, other state marketplaces faired muchn/@obmr and in the aggregate, the big picture is, it now appears that millions of people have successfully signed up. either for private health insurance coverage, for medicail or the children's health s insurance program through the exchanges. today we've gathered five people

who worked closely with some of exchanges to report. now, none ofxu(zdzñ these exchas were without glitches. buthnow'#tx on the other hand, y things worked and we're going!lo hear about both the challenges andqvm0n?át successes. speakers to bring us up to date exchanges.l$fxúe what they know whoal has signedp for coverage. what outreach strategies worked what they foresee between now and the end of open enrollment period on march 31st as well b as what plans they are making as well as what plans they're making for ope let me introducetzi⌝ our speaks now., r so let me introduce our speakes she's the program director of the state health reform assistance network. that's a o program funded by the robert wood announce. it'sam dedicated to providing

technical assistance to state. he's a public affairs lecturer at princeton university. departmentocfaép health and senr services and worked before that in the u.s. senate, the house of representatives, the domestic policyon council of the white and the healthcare:ah'4o taskñk force at the anti-trust decision we delighted to have with us, audrey haynes who is the secretary of the kentuckye cabinet for health and family services. she previously served as senior then governor steveqalq

administration as director othf initiative. christine ferguson. previously she spent close to eight years as a research washington university school we're very happy to have her with us.7;?!n4(p&c"p%mila has j. she's the executive5íeh directf the d.c.v)##ñ$exchange8ptev au. she'syy$j]eéñ nationally recogn. she's the executive corredirect superintendent of insurance of 2011. she also52jhrv has served in ky

leadershipa?amwñ positions atz9 national association of insurance commissioners and was formally an associate research at the georgetown university health policy institute.at from california, we're happy to have peter lee. who's the executive director of have peter lee who's the executive individuals and small businesses.hw8q%á he formally served as deputy director of the center foror implement higher at cms. beforeúi=c8v that was thewe ceoe health. welcome to allm1a of you. we're going to start with an over viewe from healther howard,

state-based health insurance exchanges. johnson 0o@:hujz for yourvdvdík for bringing us together today to talk about early lessons. !b0c so what are we seeing? >> we're seeing enrollment isjy outpacing the enrollment,z3s/f e marketplace. that's because most of the system glitches have been workeñ vlpñ based marketplace. we're also seeing we're seeing for more robust consumer assistance in those state based3 marketplaces. and medicaid.

it's worth noting there is a success story in five states, this is just early on, that been doing what we call fast tracka$nj9ñq[/&ée4 expedited er medicaid. oregon, forxp example, despiteáw their own going change to enroll 121,000 people into medicaidee. we're seeing that plan choice varied by state level acros38wx; 6júc what it locks like in their states. overall, we're seeing that 80% are choosing silver or higher level. and that age distribution also varies. overall, 24% of the enrollees are in the 18 to 34 age range, that coveted age range. consumer assistance varies. one really important distinct between the state-based

exchanges and the federally facilitated marketplace states is active robust consumer assistance. this chart demonstrates how much more funding. we know how important it is, given the general consumer confusion about their options. as people are learning more and more, the state-based marketplaces have more and more resources to get the word out. also the consumer assistance partnership states. which are also receiving funding from the federal government for outreach. now, we've seen these early successes. there are challenges. first up are the systems failures. some vendors have not been able to deliver. states have struggled with the i. i.t. implementations. those audits are really prompting decisions about whether and how to salvage what they've built thus far or

whether to start over. it really demonstrates a commitment from the states to system repair and enhancement. i think that suggests that ultimately those state-based exchanges will be successful over time. there have been significant investments in i.t. if they can salvage or repair, they will be successful. not only their system failures but states have figured out work arounds. as states tend to be good at doing. first, paper processing. and then in several states, states have been pursuing policy options to allow people to keep their previous coverage options during this transitional period. so while we've had some rocky starts in some states, states have been looking at transitional patches to allow people to keep their coverage. and of course it's very important to make sure we're effectuating the enrollment in the coverage. we're seeing that's getting better day by day. today, there was some good reports out about how many people have -- were paying their premiums. but something that's been a real focus for state-based

marketplaces is effectuating that coverage and making sure they're able to transfer that data back to the carriers about enrollment and about payment to make sure that coverage is effectuated. overall, very promising news from the state-based marketplaces. as we look forward. and promising enrollment data. which we know we're going to be hearing more today. so thank you. i'm going to turn it over to audrey. >> thank you, heather. and of course i'm very pleased to be here. thanks to the robert wood johnson foundation for hosting the event this morning. so i know folks have heard a lot about kentucky. which we're really pleased about. as you all know, our governor is really pleased about it. so this is sort of a little bit short version of our story. in kentucky, there were 640,000

uninsured in a state that's just over 4 million. we have about 300 -- it's actually the exact number is 308,000 that we expected to qualify for medicaid under the new eligibility rules when we expanded medicaid. and about 290,000 we anticipated to qualify for premium assistance through the exchange. the way it happened in kentucky is the governor signed an executive order which created the exchange and its administrative structure. it is organized in my cabinet, the cabinet for health and family services. i want to mention this just a little bit. we find that this is -- has been part of what we call the secret sauce, i suppose. in my cabinet, you have the department for medicaid services. you have the department for

community based services which has been doing all the eligibility for medicaid and also provides food stamps and the snap programs. snap benefits and child care, that sort of, those programs. also in our cabinet is the department for public health and department for behavioral health. our office of health policy. just to mention a few of the major departments. we think this is rather significant because it -- we haven't had many of the structural barriers you would think, well, everyone works for one big administration it shouldn't be a problem. but we all know that sometimes organizational structures do get in the way. they become barriers. also, because medicaid is in the cabinet, and they work so closely and did work so closely with the exchange, we also have a really experienced i.t. department. anyone knows that medicaid has

to have a pretty super i.t. department that supports it. but so do the other departments within our cabinet. so we had a lot of experience within the cabinet at bringing up very large i.t. structures. and then we also had a really great vendor in deloitte consulting that truly sent their "a" team to the game with us. we established an advisory board. our advisory board was made up of all the stakeholders. as i'm sure it happened in the other states as well. one of the stakeholders, i want to point out, it's had varying degrees of success in other places around the country. the insurance agents have been really, really involved in kentucky. and we have over 2,000 agents that have become certified on the exchange and are helping both small business as well as

individuals get signed up. and clearly they -- even though they still of course receive an insurance commission, when they help people sign up for medicaid and helped walk them through, they don't get anything for that. and so a lot of the insurance agents that are in lower income neighborhoods and communities where a lot of people that are uninsured would qualify for medicaid versus one of our qualified health plans, they have been really terrific in helping them as well. and of course we have what we call connectors. those are navigators. to help as well all around the state. our exchange is known as connect, kentucky's health care connection. so why did we decide to do it? it's not something we're proud of but we're about the 44th sickest state in the country. and if that's not reason enough, then i'm not sure what is.

because we all know that both education and health are such important building blocks for a state's economic development opportunities that are afforded to them. 50th in smoking. 41st in diabetes. 48th in poor mental health days. 49th in poor physical health days. 50th in cancer deaths. 49th in cardiac heart disease. 43rd in high cholesterol. 48th in heart attacks. and 44th in annual dental visits. not something that any of us in our state would be proud of. certainly not something that if you were serving as governor, secretary of the cabinet for health and human services, you would be proud of. kynect and the affordable care act provided us tremendous opportunity. really an historic opportunity

to begin to take advantage of the law and turn this around. our health statistics, we believe, could actually get worse before they get better. at least the reporting. the reason we say that is because there's going to be such a high demand for screening and so many people that have gone without insurance for so long. we actually think there's going to be possibly a lot of chronic diseases that are diagnosed that have just frankly gone undiagnosed and unreported. so we're trying to get everyone to brace for the fact that, you know, we could go down a little bit before we go up. but we know that ultimately we will be heading into the right direction. so what are enrollment statistics? these are as of monday. i have new statistics hot off the press this morning. i think when you'll give them to you, it will probably give you some idea of how quickly, how our enrollment, daily enrollment has really picked up. for example, we, as of this

morning, we have 195,502 enrolled in health care coverage through kynect. you can see what it was at the first of the week. we had 148,837 that have qualified for medicaid. that's about 76.1% of the overall enrollment. it started out as about 70% of the enrollment was medicaid. it's gone to -- or 80%. it went to 70%. now it's suddenly at about 75% of the enrollment as medicaid. we have 44,160 individuals that have enrolled in a qualified health plan. 54,094 have been found eligible for a subsidy to purchase a plan. and some have just not yet

chosen that. we have 647,186 folks that have conducted a preliminary screening. and our call center reported this morning 456,950 calls that have been answered. we've had just under 1 million unique visitors to our site. the other number that's not up here that we're very, very proud of in kentucky is we have 1,471 small businesses that have begun applications and about half, 548, have now completed them for their employees. clearly, all numbers that in our state we're really proud of. and here's our cute little -- cute little call center person. and our number. so i'm happy to answer questions and turn it over to christine.

>> thanks so much. i'm really happy to be here today to represent the leadership in the smallest state in the union. you're going to have the largest state in the union at the end. on behalf of our leadership, governor chafee, lieutenant general roberts, legislative leadership in rhode island and my colleagues in the cabinet. we really like the idea of being the smallest state in the union and in the top two best exchanges in the country. in terms of our enrollment and beating our targets. likewise, we have similar statistics of the other states in the context of making our way

through the uninsured. we're about a third of the way, moving up into half of the way in medicaid of new enrollees. and in the number of ininsured in the state with the tax credit. i want to talk a little bit about lessons learned. the numbers have been all over the paper. everybody's focused on enrollment, enrollment, enrollment. there are some lessons we learned. there is some really important steps forward we need to take. there are going to be lessons learned at the federal level and state level. and there should be. number one is this kind of massive i.t. build and the implications of that. i think the difference in how we approach it has to be reflected on.

we have to rethink at the government side how we do these things. for us in rhode island, we've been very fortunate. our system's working really well. we're moving to system stabilization as opposed to -- as opposed to fixing -- we're fixing, but as opposed to having to redo. that issue is the core of all of our businesses. it's essential lesson learned. it's essential cooperation between state departments and state agencies and quasipublics and the state leadership. if you tonigdon't have it, it's difficult to make sure you accomplish your goals. third, there are really fundamental problems in the basic law of the aca that need to be cleaned up. if