the first question is do we know for certain whether or not shale gas development through hydraulic fracturing poses an increased risk over risk associated with conventional oil and gas development? >> not for certain. that's why we're doing the studies. >> thank you. >> is it known for certain whether or not shale gas development through hydraulic fracturing poses no risk to the environment or to health? >> no, same answer. that's why we're studying it. >> and so what you're doing, you remember to the study an objective sign based understanding of the potential risk is really going to be the first step for congress to figure out how we can develop unconventional shale gas resources. so last year as you know congressman henchy and i requested the e pa to do a study to determine the potential impacts of hydraulic fracturing on drinking water. now due to the extent and complexity of these studies, the epa established quality assurance plans to ensure the validity of the data; is that correct. >> that's correct. >> the study is currently under way with report of plmry findings due at this year an

then predictions going beyond, and so in 2010, if you look at what are called unconventional gas, shale gas, tight gas, and methane gas, what you find is that in 2010, about 58% of our gas was from these unconventional sources. in 2011, it's going to be well over 60 to 65%. the data is not fully in for 2011. i want to remind you of the role the department of energy played in all of these sources of natural gas. there are many quotes out there, not from the department of energy, but from others. this one from fred julander, a member of the american petroleum council, and he said the department of energy was there with research funding when nonetheless was interested and today we're reaping all the benefits. early r&d in tight gas, shales, and methane helped to catalyze the developments of technologies we're applying today. so actually beginning in the mid'70s, when we began to fund this, there was a coordinated program beginning in 1978, and here on those redd bars, you see the department of energy funding. we stopped in 1992. in 1991, schlumberger picked up hydraulic fracturing and drilling

is it known for certain whether or not shale gas development through hydraulic fracturing pose noes risk to the environment or the help snj. >> same answer. >> okay. and so what you're doing, you refer to the study and objective science based understanding of the potential risk is really going to be the first step for congress to figure out how we can develop unconventional shale gas resources. so last year, as you know, congressman hinchy and i initiated requests that the epa did a study to determine the potential impacts of hydraulic fracturing on drinking water. due to the extending complexity, the epa established quality assurance plans to insure the fa lid ti of the data. is that correct? >> that's correct. >> and the studies currently under way, as i understand, was a report on preliminary funding due at the end of this year and another one due in 2014. is that correct? >> correct. >> now under your new budget request, the current study will be expanded to address the broader environmental impact of hydraulic fracturing including ecological impacts as well aways to minimize the e-n

we did this with research in shale gas, 1978, '92, the industry didn't want to touch it. horizontal drilling or fracking the rock. industry picked it up. that's the attitude we in doing

could be as significant or even far more significant than the technology that was developed for shale gas. so we are -- we're looking forward to the test. but the test is one part of a program going forward. before -- quite candidly, before industry would want to begin investing in it on their own. so again, it's this balance. right now industry is not -- they view methane hydrates more as something that plugs up their lines. rather than a potential source. and just like with shale gas, if it looks like it can be developed and industry gets invested in it as part of the strategy, then they can take it over. right now the program being done in alaska is actually being directed by a d.o.e. scientist. so it is a research project. but it's just one part of that research project. after this stage, we see it continuing. >> well, and i think that's important, because we recognize that apparently there is $12 million now proposed in this budget for all methane hydrate research next year. it's my understanding that this test is going to -- it's going to be more expensive. so the commitment from d.

i did not exactly manage the development of a shale gas that has _ -- under cut my stock by a factormust try to remember that it is a business and keep our eyes on the economics and try to identify the changes we keep all -- we think are inevitable and plan for them. over the course of my 28 years, i have had a compound return of somewhere between 12 and 13%. i wish i had bet more money on me when i was young but i did not having more to bet. here and exelon, we have been through the collapse of 2000 and 2008 and shale gas expansion and we have a total return of almost 10% compounded at a time when the s&p 500 is now near four and the utility index is something like 7.5% area we have done very well in the environment we have had. >> and his other life you have outside the utility which is now your primary light. i did not mention that you have endowed a chair of biology? this is virus fighting? >> it is at the university of wisconsin where i went to school. jean and i, my wife, have endowed with three chairs there, one in greek history, byzantine history, and one virology. i sent the

we did this with research in shale gas, 1978, '92, the industry didn't want to touch it. horizontal drilling or fracturing the rock. industry picked it up oovps. that's the attitude we in doing this, that where could we put our dollars that would actually stimulate the research and development to a point where the private sector starts to run with it and grow american industries. so that quadrennial technology review was very useful in helping us find out by pulling back and looking across all of our funding arms energy, offices and now rp, are we putting the dollars where we think they can do the most good. that is beginning to shape. we hope as it goes on further, just like the quadrennial reviews of the pentagon and state, actually set up long-term plans that can help our country. energy investments are 60, 70-year investments. they can't be decided year to year to year. you can't -- when you build a new gas plant, a transmission line, you name it. these are long-term investments. >> thank you very much, senator mccow ski? >> thank you, mr. chairman. the chairman asked

morning, that's interesting, you all talked about the fact that because there is both wet gas and oil in some of the shale finds that that has encouraged people to go ahead and explore and extract even though the natural gas prices are relatively low. will that continue? i think of marcellus where maybe there's less of the wet gas or oil, but utica, maybe there's more. will that encourage more develop ment in some of those finds? >> yeah. >> mr. diwan. >> yes. we need to think about the u.s. gas market as an island. so if we oversupply, which we are right now and prices are low, on the oil side, we don't have the same issue. oil prices are already global. and at the present prices and the present taxation system in the united states, these barrels are very profitable. so we will see a continued development of liquid plays. and i think in the next two to five years, we'll have three or four new plays emerging just because of that price differential. >> mr. burkhard, when i asked you about what might hold it back, you talked about skills, personnel and just resources devoted to oil maybe taking away from na

gas market, the increase in prices has allowed the industry to crack the shale code and to unleash this new golden era in the u.s. oil patch. and this gold en era veiis real reshaping the oil and gas industry. we feed to think that when you look at investment globally right now, in the last three years, the u.s. has been key area of investment flows, if you look at the last ten years, a producer in the united states used to produce, make profit here and invest abroad, because they didn't believe they can make sustainable reinvestment in the united states, what we see right now is exactly the contrary. the global oil and gas industry is making profit all over the world and investing in the united states. the united states is a net absorbant of cash. and that's a huge change in the industry. thank you. >> thank you very much. senator manchin, did you have a question you wanted to ask at the beginning? i was told you had to leave. [ inaudible ] okay, why don't you go ahead. >> thank you all of you for coming -- thank you. and i'll get right to the point. it's the xl pipeline, and i'll ask

and just like with shale gas, if it looks like it can be developed and initially gets invested, that is part of the strategy. then they can take it over. right now the program being done in alaska is actually being directed by a d.o.e. scientist and so it is a research project. but it's just one part of that research project. after this stage, we see it continuing. >> well, i think that's important. we recognize that apparently there's 12 million now proposing this budget for all methane hydrate next year. it's my understanding that this test is going to -- is going to be more expensive. so the commitment then from d.o.e. will be important. we'll follow up on this conversation. thank you, mr. chairman. >> senator widen? >> you've been a patient soul. you have sat in that seat for 2 1/2 hours. as you can sttell, up on this se of the desk, there are diverse views with respect to energy. folks would care about wind and solar and coal and nuclear. and so there is a wide variety of opinion. i want to ask you about an area that i think would be unifying and something that i think you in pa

. >> something like shale gas. so if the studies are true -- there would be people that could articulate better than i could -- we have a boatload of gas. we have a bunch that could really dramatically change the future of the country. we could actually be an energy exporter in our lifetime. yet everybody is waiting for world war iii to erupt between the epa on one side and somebody else on the other saying, look, here is the standard we have to meet swrechlt to reclaim 100% of the water, do it in an environmentally friendly way. there's no sense that there's going to be an over arching strategy verses yard by yard of fight and warfare. it's just not the way other countries necessarily approach stuff like this. >> that's a great example of what other countries do. they say i have this amazing new entrepreneurial errant to discover, it could be a new chip. here i have discovery of the energy kind. how do i approach it as a nation? what do i worry about? who should i consult with on the regulatory side? who knows any

we have a resource endowment as measured by a boomer in natural gas with shale gas and other finds the u.s. has an incredible abundance. in corridors we have great wind. if you look at kind of the central corridor to the west, we have probably the best wind to do power generation of anyplace in the world, and we have some of the cleanest coal and access to oil. so we start as a -- what other countries will look at as a natural resource powerhouse. then you add to that some of the technical innovations around energy efficiencies, some of the innovations around renewables, some of the company and environmentally friendly systems around shale gas, advanced technology in things like nuclear reactors, batteries, gas turbine systems, efficient engines and jet engines and automotive engines, and then the great university and lab skill we've got. we can actually put this together as a country and achieve i think multiple goals over the next decade. i never think that complete energy self sufficiency is necessarily a good thing. you want to be part of a global network. but i think between now a

since that time, and it's been the story that then the development of shale gas and shale oil has been quite remarkable in the last half dozen years. but there are also -- there's active environmental concern, there are reports on emissions, things of that nature, so the research we're now wanting to do in the department of energy and usgs is, all right, first, what's really happening? and secondly, how do you keep on advancing best practices because we improve on virtually everything we do going forward, and as i said, how could our research help in developing and improving the practices that are more focused on making sure that the water tables aren't contaminated, things of that nature? >> is the administration looking for a way or a reason to shut down fracturing? >> no. >> thank you. >> thank you, mr. alexander. mr. womack, thank you for your patience down there. >> thank you. happy birthday, happy anniversary, and my complements to the secretary for his comments at the er summit. and my complements to shundar who is hosting the event. i want to stay on the natural gas subject for

gas. in your new estimates, the marcelis shale, which we previously thought had enough gas to meet the entire nation's demand for 17 years at current consumption rates has been revised downward to a six-year supply. so it seems like the numbers are all over the place. i think it speaks to -- it speaks to the fact that you've got changing technology, you have increased exploration that allows us to understand a little bit more about what we're looking at in terms of the reserves but it does go to the heart of what you all deal with and that is understanding the numbers, understanding what we're dealing with in terms of supply. a long time before the pred agreed for those of us calling for an energy policy, it became ef the u.s. does matter in terms of influences world energy trends and determining our own fate. if an emergency or disaster does occur, there's a strong likelihood that the rest of the world will look to us for leadership and we've got to be ready for that. so i'm hopeful this hearing will help inform not on this committee but others of patterns developing and help us to see where

shale gas. ries to cut a deal with china about pipelines that require commitment for the next ten years. china wants to see gas go to contracts. and what exists now between spot and gas prices which typically have always been linked to oil prices which is what russia wants are reasons this is not getting done. in russia they're looking at europe and saying fiscal austerity is actually a bad thing. viewed a panel where putin sat with michael milken, the head of spare bank, and they had an intellectual discussion. the main conclusion was fiscal austerity even though greece is ultimately -- it's a fore gone conclusion they leave the euro, fiscal austerity right now will kill europe. this is the worst thing europe can do right now. even the russians believe in a little stimulus goes a long way. >> in terms of the trade, it sounds maybe you want to go to a play that's domestic russian market, non-oil? >> well, i think while russian oil stocks remain cheap, yeah. look at the consumer names. is potentia

the slope may hold as much as 80 trillion cubic feet of shale gas. they plan to start drilling off the north slope this year. and gold notched its first weekly rise in four weeks. and the expectations of further easing in china and near zero interest rates has boosted gold's appeal. gold settled up about 3% this week at $1775 per troy ounce. but it failed to get to that $1800 level for the week. >> another day, where the dow reached and breaks the 13,000 mark, but it just can't seem to hold on to it. you know, it's been almost four years since we closed above that mark. we had better than expected home sales numbers, we had consumer sentiment, which was really good as well. >> joining us, let's talk about where the market may go from here from a fundamental and technical perspective. good to see you both. thank you for joining us. >> great to be here. >> katy, we're all obsessing on dow 13,000. you follow the s&p as most traders do. what does it mean to be at this level right now do you think? >> it's obviously a round number with a lot of psychologi

department support helped to develop the technologies that have allowed us to tap into america's abundant shale gas resources. today, our investments can help advance technologies that will help unlock the promise of renewable energy. the budget invests approximately $400 million in our programs. it advances offshore wind, carbon captured utilization and stores the smart-grid technologies. and it helps reduce our dependence on foreign oil with biofuels and fuel-efficient vehicle technologies. the budget request invests 770 million in the nuclear energy program to help develop the next generation of nuclear power technologies, including small modular reactors. it also includes funding for the continued nuclear waste r&d, which aligns with the recommendations of a blue ribbon commission on america's nuclear future. as we move to a sustainable energy future, america's fossil energy resources will continue to play an important role in our energy mix. the budget request includes $12 million as part of a larger r&d initiative by the departments of energy, interior and epa to understand and minimize the p

you'll see shale gas. you'll see oil. you'll see hydro. in other words, we're really doing it. but the reality is to get to that, all of the above, that means we have to develop all of them. i'm looking for help in this endeavor. let's touch for just a minute on this. i may go over my time just a minute. i hope you'll endullth me. 80% of the new development is in situ. instead of excavating as is the traditional practice, you actually drill like you drill for conventional oil. >> so talk to me in terms of what -- with canada, united states and some help from mexico, we produce about 70% of our crude. we have keystone, we go to 75%. plus and we have the opportunity for much more. we then don't have to rely on the middle east. 80% of the new development is in situ which is the same footprint as conventional. why wouldn't we be trying to do all of that than we can? from an energy standpoint, from the concept of north american energy independence, isn't this a plan that gives us the opportunity to truly get to all of the above? and why aren't we doing it? how can you help us get th

but on the other hand if shale gas in the united states remains so cheap and so many volumes are coming an exporter in the future and at the same time if china potential new major client for russian gas may also increase its shale gas production and, therefore, its need may be less. russians have to read the markets very, very carefully. >> reporter: oil prices are still historically high. what's your outlook for oil prices and how do you see the global chick recovery feeding into this? >> i think the last time we talked in this very forum i said that oil prices are in a danger zone for economic recovery and maintain this again and especially for europe. the part of the global economic chain is a major problem. in 2008 the very awful year, the financial crisis, europe had the oil import $350 billion and in 2011 europe's oil import will n increase to $400 billion which is a major problem for the trade finance for europe and also it has the implication to slow down the chinese economic growth which was crucial for us to take us from the financial crisis. >> reporter: thanks for taking the

it turns out parallel to this, we have developed new technology, and we can now get gas out of shale. in the year 2000, we expected to have a supply of natural gas, and the assumption was we would have to bring in liquefied natural gas. they were talking about connections, a huge ship coming in with a liquefied natural gas. we are now talking about a 125- year supply, and there are ports to ship the gas to china, so instead of importing gas and paying for it, we are now going to be exporting gas and getting paid for it. now, these two developments -- [applause] north dakota and shale gas -- by the way, shale gas is from here to buffalo, new york, it is a huge series, and some of them are associated with oil. eastern ohio producing both natural gas and oil. of this, and in western pennsylvania, i think they have created 62,000 new jobs. this is an exciting. now, it is enormous. the new technology and new market conditions. we have a virtually limitless supply of energy, and we can be independent producing our own energy on a way that people on the left do not even want to think about.

the potential with shale gas is enormous. we have done a study with pwc that shows the shale plates will create 1 million manufacturing jobs in this country in the next few years. you think about the spinoff jobs that occur from that. it has enormous potential. that doesn't even take into account all of the benefits that businesses will derive from lower cost energy. we really need to focus on that. we also need to take the politics out. congratulatio congratulations, governor. that is why you are governor. a lot of times we play politics with energy policy. the keystone pipeline is a great example. it needs to move. we need to make sure we are trying to encourage every type of energy supply and development that we possibly can in this country because it does mean jobs in the future. there is no question about that. >> in the meantime, you know, private industry is just driving innovation, conservation, ge appliance hybrid introduced friday. go to the auto show. you will see fuel efficiency standards 45 miles per gallon. whil

the epa budget requests a total of $14 million dedicated to studying shale gas development through hydraulic fracturing. is that correct? >> that's correct. >> now of that, $6 million is dedicated to completing the reports promised for 2012 and 2014. is that correct? >> i believe that's correct as well. >> and then the $8 million increase will go towards what you just described, better understanding the ecological effects of waste water discharge and the potential impacts on air quality resulting from hydraulic fracturing, is that correct? >> that's correct. >> so i want to point out that the total funding of $14 million in fiscal year 2013 budget. the $14 million is epa's contribution to a coordinated $45 million effort between the epa, the department of energy, and the u.s. gee logical services. is that correct? >> that's correct. >> now, can you explain the benefits of the effort between the usgs and do snechlt. >> we have overlapping responsibilities. we also don't want to be stove piped. we want to insure that we're doing one study to do one issue. we also want to make sure we're lookin

if you go to our state, you'll see wind, biofuels, you'll see ethanol, biodiesel, shale gas, oil, you'll see hydro, biomass, all of these. in other words, we're really doing it. but the reality is to get to that all of the above, that means we have to try to develop ought of them, not pick winners and losers. so i'm looking for help in this endeavor. let's touch for just a minute on in-situ. mr. chaeirman, i may go over my time just a minute. with the development of the canadian oil sands oil, 80% of the new development is in situ, whereas instead of exka craving, you'd actually drill, so your greenhouse gas is the same as conventional drilling, right? talk to me in terms of with canada, united states, and some help from mexico, we produce 70% of our crude, add keystone and we go to 75 plus add the possibility for much more. 80% of the new development is in-situ. why wouldn't we be trying to do all of of that that we can from an energy standpoint, the concept of the north america energy independence, isn't it th a plan that gives us an opportunity to truly get to all of the above? why ar

we're not there in my view. >> something like shell shale gas. if the studies are true, right? i think there would be people could articulate better than i could, we have a let bode of gas. we have a bunch. that could dramatically change the future of the country. we actually could be a energy exporter in our lifetime yet everybody is waiting for world war 3 to erupt between the epa on one side and somebody else on another versus saying look, this is the standard we have to meet. we have to reclaim all the water, 100% of the water. we have to do it environmentally friendly way. there is no sense there will be overarching strategy versus yard by yard of fight and warfare. it is just not the way, you know, other countries necessarily approach stuff like this. >> that's a great example of what other countries do. they say i have this amazing new entrepreneural to discovery. it could be a new chip. here i have discovery of the energy kind. now how do i approach it as a nation, okay? what do i worry about? what should i, who should i consult with on regulatory side? who knows anythin

their predictions going beyond, and so in 2010 if you look at what are called unconventional gas, shale gas, tight gas and methane gas, what you find is that in 2010, about 50% of our gas was from the unconventional sources. and 2011 is going to be well over 60, 65%. the data is not fold in for 2011. i want to remind you of the role that the department of energy played in all these sources of natural gas, there many quotes out there, not from the department of energy but from others. this one from fred was a member of the american petroleum council. and he said department of energy was there with research funding when no one else was interested, and today we are weeping all the benefit. benefit. early d.o.e. r&d in tight gas, sans, gas shale and coal base nothing helps the development of technologies we are applying today. so, actually begin in the mid '70s we begin to fund this there was recorded program began in 1978, and here, those red bars, you see the department of energy funding. we stopped in 1992. in 1991, the hydraulic fracturing and horizontal drilling. and so is being handed off

have now officially banned the controversy a practice known as fracking a method used to retrieve shale gas deposits as a source of energy fracking has been shown to trigger earthquakes and pollute water and many argue that it has incredibly adverse effects on the environment the banning of fracking in the two nations has helped promote a greater environmental movement all across europe with other nations now considering a ban on fracking all looking into greener and safer forms of energy during a time when france bulgaria and the rest of europe are facing serious economic challenges are still conscious of the fact that we need to move away from dangerous and harmful forms of energy and move towards greener and safer forms of energy for the future the bad ricky santorum at a two thousand and eight press and people of faith in politics form santorum lee labeled the democratic party has. and said the democratic lawmakers on our most primal lost so he went on say the party is about sexual freedom us was it's about homosexuality it's about sexual freedom it's no secret the santorum is quite lit

now what's called shale gas or unkeunconventional gas we have e a surplus of it. we've been using more natural gas in our power system replacing coal. now will we see natural gas used in transportation in a something unway. will we see it used with heavy duty truck and things like that. and i think the longer that gas prices are down and the bigger the began between oil and gas prices, there's more tendency to use natural gas as one of the alternatives in our trans portation system. and that's where we mainly use oil in transportation. >> rose: where is china on that whole question because of their own investment in finding alternative sources. >> china is on this very fast track that probably by the end of this decade they'll be using as much oil as we are. more new cars are now sold every year if i china that the united states and that's happened very fast. so the chinese are very concerned about energy. they see it as very basic to their economy. they have 20 million people a year moving from the countries to the cities who need housing who need jobs who need t

if you go to our state, you will see wind, biofuels, biodiesel, shale gas, oil, hydro, all of these. we are really doing it. the reality is to get to that all the above, we have to develop all of them, not pick winners and losers. i am looking for help in this endeavor. mr. chairman, i may go over my time. i hope you will indulge me. 80% of the new development -- instead of excavating, you drill. your greenhouse gas emissions is the same as for conventional drilling. right? talk to me in terms of what canada, united states, and some help from mexico, what we produce about 70% of our crude. if we had keystone, we go to 75%. we do not have to rely on the middle east and venezuela. 80% of new development is the same footprint as conventional, why wouldn't we be trying to do all that that we can do? from an energy standpoint, from the concept of north american energy independence, it is in this a plan that gives us the opportunity to get to all the above? how can you help us get this done? >> it is environmentally much preferred. >> 80% of new development. >> i understand. it is a little

pick something like shale gas, right? f the studies are true, right, and i think there would be people that could articulate better than i could, we have a boatload of gas. i mean, we have a bunch that could really dramatically change the future of the country. we could i should be an energy export in our lifetime. yet everybody is waiting for world war iii to erupt between the epa on one side and someone else on another person saying look, here's the stand but we have to we claim all the water, 100% of the water. we've got to do in environmentally friendly way, but there's no sense that there's going to be an overarching strategy versus yard by yard of the fight and warfare. it's just not the way, you know, other countries necessary approach stuff like this. >> that's a great example of what other countries do. they say i have this amazing new onto no real arm of this country. it could be a new chip. here i have discovery of the energy kind. now, how do i approach this? what do i worry about? what should i -- who should i

very important is the emergence of shale gas and shale oil as a cheap source of energy which has madeturing more competitive. also the fact that you now have had several years of low wage growth. so wage disparities have been reduced. and so all this is bringing a very welcome relief. i'm worried that the politics of the election are going to interfere and put a lid on this because the republicans don't want to face the elections when obama can claim to have sort of saved the economy, recover. they will continue to push for austerity, no new taxes, and therefore cutting of services which will depress economic activity and employment. so it will be a break on the politics. it will be a break on the recovery this year. after the elections, if the republicans win, actually, they'll undergo a miraculous transformation where they discover that actually it wouldn't be so bad. we can afford to have some stimulus. >> so you think mitt romney, if elected, would pursue a stimulus program? >> i'm pretty sure that would happen. of course, obama would like to as well. he may find it more difficult