[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





                     SUBCOMMITTEE FIELD HEARING ON
                     THE IMPACT OF ENERGY POLICY ON
                            SMALL BUSINESSES

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            AUGUST 25, 2009

                               __________

            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                               

            Small Business Committee Document Number 111-043
Available via the GPO Website: http://www.access.gpo.gov/congress/house







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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)

  


                         STANDING SUBCOMMITTEE

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, Texas
PARKER GRIFFITH, Alabama

                                 (iii)


                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page

Altmire, Hon. Jason..............................................     1
Fallin, Hon. Mary................................................     2

                               WITNESSES

Bergey, Mr. Mike, President, Bergey Windpower Company, Norman, OK     6
Sullivan, Jr., Mr. Robert J., President, Sullivan and Company, 
  Tulsa, OK......................................................     8
House, Mr. David, President, Jireh Resources, LLC, Tulsa, OK.....    10
Terry, Mr. Michael E., President, Oklahoma Independent Petroleum 
  Association, Oklahoma City, OK.................................    12
Mocha, Mr. William, President and CEO, Air Power Systems Co., 
  Inc., Tulsa, OK................................................    15
Robson, Mr. Joe, Chairman of the Board, National Association of 
  Homebuilders, Broken Arrow, OK.................................    17

                                APPENDIX


Prepared Statements:
Bergey, Mr. Mike, President, Bergey Windpower Company, Norman, OK    29
Sullivan, Jr., Mr. Robert J., President, Sullivan and Company, 
  Tulsa, OK......................................................    33
House, Mr. David, President, Jireh Resources, LLC, Tulsa, OK.....    36
Terry, Mr. Michael E., President, Oklahoma Independent Petroleum 
  Association, Oklahoma City, OK.................................    44
Mocha, Mr. William, President and CEO, Air Power Systems Co., 
  Inc., Tulsa, OK................................................    47
Robson, Mr. Joe, Chairman of the Board, National Association of 
  Homebuilders, Broken Arrow, OK.................................    64

Statements for the Record:
Mational Association Of Royalty Owners...........................    71

                                  (v)

  

 
                   SUBCOMMITTEE ON INVESTIGATIONS AND
                    OVERSIGHT HEARING ON THE IMPACT
                  OF ENERGY POLICY ON SMALL BUSINESSES
                        HELD IN TULSA, OKLAHOMA

                              ----------                              


                       Tuesday, August 25, 20099

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10 a.m., in the 
B.S. Roberts Room, North Building, OSU-Tulsa Campus, 700 N. 
Greenwood, Tulsa, Oklahoma, Hon. Jason Altmire [chairman of the 
Subcommittee] Presiding.
    Present: Representatives Altmire and Fallin.
    Also present: Representative Sullivan.
    Chairman Altmire. Now call this hearing to order.
    Energy plays a critical role in every sector of our 
economy. From manufacturing products to growing the food we eat 
to transporting and delivering goods, every aspect of American 
commerce depends on abundant and affordable sources of energy. 
This isn't about to change anytime soon. Our use of oil 
increases two percent annually and is expected to reach 21 
million barrels per day by the year 2030.
    America's 26 million small businesses consume approximately 
half of all energy use for commercial and industrial purposes.
    It's also important to remember that small businesses are 
key players, not just in energy consumption, but also energy 
production. Nationally, independent oil and natural gas 
producers represent more than 5,000 of Americans--America's 
small businesses. The average number of full-time employees at 
these companies is 12. That is a small business by anyone's 
standard. While these companies are small, together they 
produce the majority of our oil and natural gas. Small 
producers drill 90 percent of the oil and natural gas wells in 
the United States. More than 80 percent of American natural gas 
comes from these businesses.
    Entrepreneurs are also leaders in developing new sources of 
energy. For example, small firms comprise 90 percent of the 
renewable and efficiency industries. So as our nation looks to 
our energy future, we must be sure that we factor in small 
business needs from both angles as consumers, but also as 
producers. A number of energy matters are being debated in 
Washington right now.
    My hope is that today's hearing will provide important 
outside-the-beltway perspectives on these critical issues.
    I thank Ranking Member Fallin for hosting this hearing so 
that we can gather this valuable insight and I thank 
Congressman Sullivan for being here as well and inviting me to 
the district.
    As I see it, the issues before us break into three broad 
categories. First, lessening our dependence on foreign energy 
sources is not just an economic challenge, but a question of 
national security. Our national energy dialogue must examine 
how to expand energy production in this country so that less of 
our oil comes from unstable and dangerous parts of the world. 
Second, our discussion today should touch on expanding new 
forms of energy. And finally, reducing consumption will have to 
be part of the equation.
    We are making strides in this area by encouraging the 
adoption of more fuel-efficient cars and trucks and we are also 
giving consumers greater incentives to maximize energy 
efficiencies in their own homes. Entrepreneurs are pioneering 
the technologies that will help us meet our energy goals. The 
policies we develop in Congress should harness and support the 
good work entrepreneurs are already doing.
    And on that note, let me thank each of our witnesses for 
being here today. I thank them for their testimony and I think 
it will provide us valuable insight.
    [The information is included in the appendix.]
    Chairman Altmire. With that, I will turn to the Ranking 
Member of the Subcommittee for her opening statement. 
Congresswoman Fallin.
    Ms. Fallin. Thank you, Mr. Chairman, and let me just say 
welcome to Oklahoma. It is Congressman Altmire's first time to 
ever visit our state, and as we were visiting in Committee over 
the last couple of years, I asked him to come to Oklahoma and 
he made a commitment to do that, so we appreciate you taking 
time to come to our great state and to have this important 
field hearing on a topic that is very near and dear to our 
heart, and that of course is small business and the energy 
sector and how federal policy could affect Oklahoma and of 
course our nation. And I appreciate your great comments about 
our national security and our economic security and as it 
relates to small business and energy, so thank you so much for 
being here today. We welcome you.
    And before I begin, I want to thank Oklahoma State and the 
Tulsa campus for hosting this hearing today. It takes a lot of 
time and effort to put these events together. I appreciate 
President Gary Trennepohl for hosting us here. Thank you so 
much and your staff has been wonderful. I want to recognize Dr. 
Mary Bea Drummond who has helped us, and Travis McBride who 
have been helping to coordinate this event and your vice 
president Ron Bussert--I see him here, who I went to college 
with at Oklahoma State. Good to see you here, Ron.
    And also want to recognize our secretary of energy, J.D. 
Strong. I think I heard that he walked in the room--there you 
are. Welcome. Good to have you here--from Oklahoma and also 
Corporation Commissioner Dana Murphy. We appreciate your 
attendance today, along with all of our guests that have joined 
us. Thank you so much for coming, and we're very appreciative 
of Congressman John Sullivan for opening up his district to 
have this hearing. I know that as a colleague, John is very 
interested in energy policy so we appreciate you hosting us.
    Well, let me just begin by first of all saying thank you 
all for taking time to join us here, and especially our 
witnesses, as we examine the impact of our nation's changing 
energy policy and how that affects our small businesses. So 
once again, we know that our chairman has many demands upon his 
time and places that he could be, but he recognizes the 
importance of energy in small business, especially as it 
relates to Oklahoma, so thank you once again for being here and 
taking the time to be with us. Jason has been a great friend to 
me and I appreciate that. Jason and I were actually both 
elected to Congress in 2006 and served on the Small Business 
Committee now for three years and he has been very 
conscientious, hardworking, and easy to get along with and 
works with both sides of the aisle.
    And Congressman Sullivan, I want to mention a couple of 
things about him. We are in his hometown. John and I have 
served together for many years, both when he was in the 
legislature at the Oklahoma Capitol, and I have sought after 
his advice and considered him to be a good friend. He, of 
course, has been elected to Congress. He serves on the Energy 
and Commerce Committee and is now serving a second term as a 
member on this Select Committee on Energy Independence and 
Global Climate Change, and he is one of only six Republicans on 
that Committee, and he is the only Oklahoman who is appointed 
to that Committee and he has been a great leader in the area of 
energy and climate change issues and knows very well how those 
issues affect our small businesses in our state. So John, thank 
you once again for coming today to testify in front of this 
important Committee and this conference.
    Well, energy is the lifeblood of our economy along with 
small businesses, and many in this room have worked together to 
help build our small businesses in our state and of course to 
build our energy sector. America's economic prosperity is 
closely tied to the availability of reliable and affordable 
supplies of energy. This is not a new issue.
    However, with technology improving, the energy independence 
discussion has changed greatly over the past couple of years. 
The stark reality is that our nation imports about 60 percent 
of the petroleum that we currently need, and to make our 
petroleum supply even worse, we have not built a new refinery 
in the United States in over 25 years. And this is stretching 
our refining capacity to the limit, and in fact, the volatility 
of energy prices.
    Over the past couple of years, we have debated traditional 
renewable alternative energy policies and I do not believe that 
the search for energy should be limited to any one particular 
form of energy, but we should look for all forms of energy and 
encourage especially our small businesses to pursue those forms 
of energy. It is important for our nation, for our national 
security, and our economic security to pursue all the above 
forms of energy to help provide for further energy independence 
in our nation, to create good-paying jobs, especially as it 
relates to small business, to promote a cleaner environment, 
and I also believe without imposing any new national energy 
taxes or some type of urban emission trade systems, which I 
believe would affect our production of energy and even affect 
our economy.
    Another way to explore expanding our energy is through 
other forms of energy such as nuclear energy, and the 
Department of Energy has recently stated that the best way to 
reduce our emissions is to look for cleaner forms of energy 
production and nuclear energy is one of those areas. Our 
economy is driven by energy, but we must also have a balanced 
approach to exploring ways to meet our energy needs. And that 
means looking for new ways to increase production of energy, 
including all forms of energy, whether it's oil, coal, nuclear, 
wind, solar, biofuels, all the different forms of alternative 
energy that are available to our nation.
    And while we're looking at the future of energy 
independence, we also have to make sure the federal government 
is doing all that it can to provide the fuel that our economy 
needs to operate at a reasonable price. Leading the way in 
domestic energy production, reducing the United States' 
dependence on foreign oil, Oklahoma stands at the forefront as 
we struggle for the energy independence.
    Oklahoma has long had the tradition of producing much of 
our nation's traditional sources of energy. Our state ranks 
third in our nation in natural gas production, fifth in crude 
oil production, and eighth in crude oil distillation, and one 
in seven jobs in Oklahoma is directly or indirectly supported 
by the oil and natural gas industry in Oklahoma. And we are 
very fortunate to have over 80,000 active oil wells that 
produce 61 million barrels of oil in Oklahoma. Eight percent of 
America's natural gas reserves are located in Oklahoma and many 
of our greatest energy fields in America are located in our 
state, and yet we still have fields that could be produced or 
need to encourage better production of.
    As the United States seeks out alternative forms of energy 
sources, Oklahoma has enormous potential as a source of wind 
power, solar power, and even ethanol production.
    The development of wind power is an exciting source of 
energy in our nation. The state of Oklahoma should look at ways 
to produce and promote wind energy in our state. In fact, I 
think Oklahoma is sixth in the nation in development of wind 
energy. The panhandle alone has the capacity to produce more 
than 8400 megawatts of wind generation and western Oklahoma has 
been very good in developing more wind energy, and so far, we 
have an investment of over $10 billion in wind production in 
our state. So we're very excited about the potential that 
Oklahoma has to be one of the leaders in alternative forms of 
energy and especially wind energy.
    It's also very important that we take a measured and 
calculated approach towards addressing our energy and climate 
needs, and dramatic new requirements for energy can have 
devastating effects upon our economy as we look at some of the 
rules and regulations that we're discussing in Washington, D.C.
    We are very fortunate today to have on our panel 
representatives from many different industries who will 
testify. We even have someone who's going to visit with us 
about some of the proposed changes in Congress in our 
homebuilding industry and how some of the new mandates can 
affect energy and our homes in creating energy efficiency in 
our homes. We're excited to have the national president of the 
American Home Builder Association to testify, along with some 
of our other producers, some of our other alternative forms of 
energy sources here, some of our suppliers, who I think can 
very easily, Mr. Chairman, address how small business will be 
affected by some of the policies that we're discussing in 
Washington, D.C. And how our policy discussions will either 
hopefully reduce our dependence on foreign energy, create other 
forms of energy that will be more efficient, cleaner, and cost-
effective versus how some of our policies could cost us jobs 
and also further increase our dependence on foreign energy.
    So we are very fortunate to have an expert panel today to 
testify and may I just conclude by saying welcome to all of 
you. We appreciate your time to be here.
    [The information is included in the appendix.]
    Ms. Fallin. Now, I'd like to introduce Congressman John 
Sullivan, who has joined us here today and he's going to make 
some opening comments.
    Mr. Sullivan of Oklahoma. Thank you, Congresswoman Fallin 
and Congressman Altmire. Thank you for being here. You guys are 
doing a great job in addressing a really--something that's very 
concerning is how energy policy in Washington, D.C., affects 
people and small businesses, which are the backbone of our 
economy as we all know.
    You know, I think to address our energy policy in this 
country, we could do it in a better fashion by, you know, 
making sure it doesn't affect small businesses, but not taxing 
people and having a carbon trading system scheme, we need to do 
it differently. Like Congresswoman Fallin said, we need to look 
at all of the above energy strategy.
    We need to look at wind, solar, nuclear, gas, oil--all 
those things are very important. But, you know, a lot of those 
things aren't going to happen immediately. They're just not. 
You know, we need to--you know, we want to get on a different 
horse, but until we can get on a different horse, let's not 
shoot the one we're on. And one of the things we need to look 
at is how do we--what do we do, how do we get through this?
    One of the ways we lessen our dependence on foreign oil is 
focusing on natural gas. That is the way to do it. It burns 
clean and we have an abundance of natural gas here in the 
United States of America. Because of drilling techniques and 
hydraulic fracking, every field that's found supersedes--you 
know, they're always better. They're bigger. You know, we 
don't--we can lessen our dependence on foreign oil. It burns 
cleaner. We use about 21 million barrels of oil a day in the 
United States of America. And about 69 percent of that is 
refined into transportation fuel and used.
    One of the things we can do, as I presented a bill in 
Congress that focuses on natural gas vehicles, getting them on 
the road, looking at research and development so the tanks can 
run--have longer range. Can we get diesel engines in trucks to 
run on natural gas. That's how we're going to do it, not 
jeopardizing jobs and sending them overseas like this cap and 
trade scheme does.
    If someone--every emitter is going to be, you know, taxed 
by their trading--or trading these schemes and what is small 
business going to do, a small manufacturer? They're going to 
send their jobs to Mexico. We're going to lose those jobs. 
There's no environmental regulations there. It's going to hurt 
our economy. And we can do it in a different way. I think we 
need to look at this and look at long-term natural gas strategy 
as a way to bridge the gap until we get these technologies.
    We were talking about wind power in the back. I think wind 
power is great, but you know, let's be realistic about wind 
power. We got to get transmission, we got to get the right-of-
way acquisition, the easements bought. It's going to take years 
before that's viable. I'd like to see it, you know, a large 
percent of our electric generation, but it's not going to be 
for a long, long time. So in the meantime, I think it's very 
important that we focus on natural gas strategy and interenergy 
policy. Thank you.
    Chairman Altmire. Thank you, Congressman Sullivan.
    [The information is included in the appendix.]
    Chairman Altmire. And just a word on process to the 
witnesses: We're going to hear from each of you, starting with 
Mr. Bergey, one at a time. Each of you will have five minutes 
for your remarks and at the conclusion of all the testimony we 
will then move on to questions.
    So I will turn it over to Ranking Member Fallin to 
introduce the first witness.
    Ms. Fallin. Thank you, Mr. Chairman.
    We are very pleased to have our first witness Mr. Mike 
Bergey, president of Bergey Windpower of Norman, Oklahoma. He's 
the cofounder of BWC and president since 1987. Mr. Bergey is a 
mechanical engineer and internationally recognized expert in 
the field of small wind turbines, distributed generation, and 
rural electrification.
    He has authored more than 70 technical papers and articles 
in the field and serves as a consultant to numerous government 
and international agencies. He holds one patent in the wind 
energy field. He has twice served as president of the American 
Wind Energy Association and served on the board of directors 
from 1981 to 2007. He's the past chairman of the U.S. Expert 
Council of--for Renewable Energy, a member of the U.S. 
Department of Commerce Environmental Technology Trade Advisory 
Committee, and president of the Oklahoma Renewable Energy 
Council.
    He is currently the president of the Norman Chamber of 
Commerce and board of the Oklahoma Sustainabilty Network.
    Do you have anything else you could do in your spare time? 
Mr. Bergey, we welcome you. Thank you for coming today.

                    STATEMENT OF MIKE BERGEY

    Mr. Bergey. My home is full of deferred maintenance.
    Mr. Chairman, Representative Fallin, and Representative 
Sullivan, thank you for the opportunity to be here today.
    Mr. Chairman, you--by odd coincidence, I was actually a 
constituent of the fourth district in 1967, a little before 
your time, when my parents moved there before taking--my father 
took a job out here. So we actually lived in Sewickley, 
Pennsylvania for a while.
    Chairman Altmire. That's in the district I represent right 
now.
    Mr. Bergey. Bergey Windpower is the third-leading 
manufacturer of small wind turbines in the world. Our products 
are not these large wind turbines used in wind farms, but 
they're small turbines used by homes, farms, small businesses, 
and for rural electrification and set--remote cell sites, 
things like that. We have projects in all 50 states and more 
than a hundred countries. We have 65 employees and we have a 
subsidiary in China.
    Over the last 30 years, it has often been difficult because 
of low energy prices and shall we say a minimal federal energy 
policy. We have gained significantly and with little bits of 
federal assistance with trade missions, foreign assistance 
programs, R&D support. It's helped us to improve our 
competitiveness and get a foothold in foreign markets. We've 
also used the SBA--an SBA-backed loan back in the 1980s to 
develop some of our products, so we have used--piggybacked on 
government programs. We have just gained a federal tax credit 
for small wind turbines after 23 years out in the wilderness, 
and we expect significant job growth in the coming five years.
    Mr. Chairman, we support the increased administration and 
Congressional support for clean energy technologies. We believe 
that green-collar jobs is a real economic development 
opportunity for the U.S. and as an internationally competitive 
company, we face competitors in Asia and Europe. We know that 
we're somewhat behind the ball in our government support for 
these clean technologies. Our competitors have received more 
support, so we think it's a good move.
    We do support also the emerging national renewable energy 
standard and the actions that are being proposed to address 
climate change. We think these actions are past due and they 
follow what the public would like to see and they will help our 
international competitiveness we believe. We have no concerns 
over losing competitiveness domestically or internationally if 
energy prices rise a few percent as a result. We are a 
manufacturer. But energy costs are a very, very small part of 
our total cost of production.
    For example, our energy costs last year were under one 
percent, while our health care costs were 4.4 percent, almost 
five times as much. We think we can handle any future increases 
in energy costs from cleaner energy sources by better product 
design, better manufacturing productivity, and other things.
    There are a couple of things that we would like to see the 
federal government do to help end some barriers that we're 
facing in our technology. First one drives me a little nuts is 
as a--as an engineer, and that is the fact that because of the 
lack of reciprocity for professional engineering stamped 
approval of state by state, the towers for our turbines have to 
be engineered by us and then reviewed by people who often don't 
have much knowledge in the field to gain a professional 
engineering stamp in those states. It costs consumers thousands 
of dollars to get this stamp, it adds no value, and I really 
firmly believe that the laws of physics and rules of 
engineering do not vary state by state, so we'd really like to 
see some help getting rid of that extortion.
    We'd also like to see the federal government tighten some 
loopholes that a few utilities--not most but just a few--are 
using to discourage customer-owned wind and solar systems. 
These arbitrary requirements for unnecessary insurance, new 
insurance, and unneeded special equipment raise the cost, limit 
competition for these utilities, and they thwart the intent--
clear intent of federal law. So we think that closing these 
loopholes would be very helpful and it's a--looks like a 
relatively easy job.
    In closing, we like where energy policy is headed. We 
believe it will benefit both our company as a clean energy 
technology company, but also the national economy. We think 
that it will create a lot of new jobs.
    We have 350 vendors nationwide, over 200 here in Oklahoma, 
and we are a growing part of their sales, and so we know that 
we're helping the economy.
    Thank you again for the opportunity to be here. Thank you, 
Representative Fallin, for putting this together.
    Chairman Altmire. Thank you, Mr. Bergey.
    [The statement of Mr. Bergey is included in the appendix.]
    Chairman Altmire. Next we have Mr. Bob Sullivan, owner and 
president of Sullivan and Company, a 47-year-old family-owned 
independent oil and gas exploration and production company 
operating in several midcontinent states.
    Mr. Sullivan has also founded two other successful natural 
gas gathering and service companies in the past 30 years. A 
graduate of the University of Notre Dame and the University of 
Michigan, Mr. Sullivan was appointed to Governor Keating's 
cabinet as secretary of energy in March of 2002 and continued 
his service under Governor Brad Henry through October 2003. 
Additionally, he served as chairman of the board for the 
Oklahoma Energy Resource Board from 2003 to 2005. He was 
instrumental in the original organization of the OERB in 1994 
and its growth in public education and environmental cleanup, 
which is modeled around the country, by the way.
    Thank you for being with us today, Mr. Sullivan.

              STATEMENT OF ROBERT J. SULLIVAN, JR.

    Mr. Sullivan. Thank you very much, Congressman Sullivan and 
Congresswoman Fallin and Mr. Chairman. I appreciate you being 
here in Oklahoma.
    Just for perspective, I have a--it's very personal, the 
company that I have. I pay for the wells that I drill out of 
the same pocketbook that I pay for my groceries. I learned the 
business from my father and I have a son working for me, so 
it's very much a family operation.
    Independent oil and gas operators get the money for 
exploration and production activities from two sources: 
Internally-generated cash from production and outside capital 
raised from non-operator investors. In our company we annually 
plow back 100 percent of the cash generated from production and 
employ several times that amount from outside investors.
    Capital tends to flow into the business for new exploration 
when there is a reasonable expectation of a strong financial 
return in relation to risk, and flows to other industries when 
oil and gas is viewed as too risky for expected rewards. In my 
35 years in this volatile business, approximately 22 of those 
years have been sideways or down economic experiences for our 
company and for our family.
    The other 13 have been rewarding economic experiences. 
Obviously the good years have to pay for the bad.
    Federal government actions directly impact my company. 
There are three topics important to my operation that are on 
your plate today in Washington, any one of which can severely 
cripple my business: Number one, elimination of intangible 
drilling cost as a tax deduction. IDCs are expenses we incur 
every time we drill a well. They are a normal business expense, 
just like any business incurs: Paying people, buying supplies, 
buying services. In the name of punishing oil and gas 
companies, Congress wants to repeal these items as tax 
deductions.
    Number two: Repeal the percentage of depletion as a tax 
deduction. Percentage of depletion has been recognized for over 
50 years by the accounting profession as a normal and logical 
recognition of a depleting asset, much like the depreciation of 
a piece of income-producing real estate.
    Like drilling cost deductions, eliminating percentage 
depletion has become a politically popular vehicle for nailing 
oil companies. Perhaps the most misunderstood fact among 
elected officials is that if the objective is to bash big oil, 
major oil companies don't even take percentage depletion as a 
tax deduction. They use cost depletion. So a repeal of 
percentage depletion hurts only little guys like me.
    In a look back on my operation for 2008, had these two 
business expense deductions been repealed, as is now proposed 
in Congress, my family and the investors we have attracted to 
our activities would have paid $975,000 more in federal income 
taxes. The consequences of that burden would be as follows: 
First, my investors would direct their money to another 
industry or not invest at all; secondly, our family would very 
likely not continue in this business--too much risk for the 
perceived reward; third, 26 employees of Sullivan and Company 
be out of work; fourth, dozens of vendors would no longer be 
selling supplies and services to us; and fifth, America would 
have less Heartland domestic oil and gas reserves production.
    The third thing on your plate in Washington that I'd like 
to discuss is the classification of fracturing fluids as 
hazardous materials under the Safe Drinking Water Act. 
Fracturing rocks underground far below any drinking water 
sources has been taking place all over the world for decades 
with no known adverse consequences to drinking water supplies. 
The image of oil companies polluting our water supplies makes 
for a tantalizing negative picture for the uninformed and a 
tempting tool to bash alleged pollute--polluters. The problem 
is that it's a fictitious image. Hydraulic fracturing is not a 
high-risk practice. For decades, oil and gas industry worldwide 
has employed belts and suspenders to assure protection of 
drinking water sources and has an enviable track record in this 
regard.
    In my case, over 90 percent of the drilling we are now 
undertaking and planning over the next few years requires 
hydraulic fracturing. While this subject is likely to be 
considered initially, in the regulatory world and the EPA, it 
is of such national importance that legislative action is also 
likely. I urge you, as responsible representatives and fellow 
stewards of our national resources, to reject any federal 
action that would restrict hydraulic fracturing as a proven 
method of recovering much-needed domestic oil and gas reserves.
    In closing, let me make a general request. The vigorous and 
innovative private sector in this country has been the engine 
that has propelled America to the highest standard of living in 
the history of mankind, and it can continue to be that catalyst 
going forward. While responsible oversight and regulation are 
necessary to prevent abuses, the general posture of the federal 
government should be to avoid being a hindrance to the 
ingenuity, creativity, determination, productivity, and honest 
pursuit of prosperity by small companies like mine.
    The best thing you can do for us is to encourage, not 
discourage, the independent producers to find and produce 
domestic oil and gas and to similarly allow the private sector 
to create the prosperity we all seek.
    Thank you for allowing me to submit this testimony.
    Ms. Fallin. Thank you, Mr. Sullivan.
    [The statement of Mr. Sullivan is included in the 
appendix.]
    Ms. Fallin. Our next witness is David House, based right 
here in Tulsa, Oklahoma. Mr. House has been in the exploration 
and production business in various ventures and companies for 
over 30 years. His last company sold about a year ago and he is 
currently in the process of establishing a new company.
    He is past chairman and current board and executive 
Committee member of the Oklahoma Independent Petroleum 
Association. He's the past president of the Natural Gas 
Association of Oklahoma, and has testified on behalf of the 
OIPA at both the House and the Senate Energy Committees.
    And we welcome you here to this Committee hearing, too, Mr. 
House.

                    STATEMENT OF DAVID HOUSE

    Mr. House. Thank you very much, Mr. Chairman, Congresswoman 
Fallin, and Congressman Sullivan. Thank you for the opportunity 
to be here.
    Thank you for your insight that two of the most critical 
elements in our nation today are small business and energy. As 
a small exploration and production company, our mission is to 
deploy capital in an efficient and effective manner to provide 
energy for our nation, jobs for our employees, tax payments to 
our state and nation, and to care for the land and the 
environment as we do so. Our history says that we have had some 
degree of success in meeting this mission.
    As has already been noted, it is important for us to 
realize that when we talk about the domestic energy business, 
we are talking about independents that drill over 80 percent of 
all the wells in America today. Independents are the domestic 
energy industry. Energy is a core value in our nation which 
does not get the recognition it deserves.
    We must begin to total--to understand the total role that 
energy plays in our economy, our defense, and our quality of 
life. If we don't understand this, we will someday pay for our 
ignorance.
    A viable energy policy is one that promotes domestically-
sourced, reasonably-priced, and environmentally responsible 
energy over a long time horizon and can meet our total energy 
requirements. While the current administration goal of green 
energy is laudable, the reality is that the last 25 years of 
effort in the wind and solar business now produced about two to 
three percent of our total energy requirements. Green energy is 
good and we should encourage it, but don't be misled. It will 
not be a significant part of our total energy requirement for 
decades to come.
    There is, however, a national energy strategy that we can 
employ that will significantly change our reliance on foreign 
crude oil. And very simply, as has already been noted, we must 
move a substantial portion of our transportation fuel to 
compressed natural gas. Starting this process is a difficulty, 
and may I suggest to you that the way to start this is for the 
federal government, as many states as we can get to sign on, to 
mandate that all new vehicles over the next 36 months be CNG 
vehicles. If there's any place that is appropriate for 
government to insert itself in the free market, it is this 
critical area of moving us to a sustainable, long-term fuel.
    We will never replace oil, nor should that be our goal. We 
have substantial remaining oil reserves in this nation that we 
should produce and--develop and produce. What we must do, 
however, is reduce our reliance on foreign- owned oil by those 
who wish to harm us. The improvements in horizontal drilling 
and fracture treatments have opened vast new natural gas 
reserves that were not available to us even five to seven years 
ago. The current estimate is that we have over 2,000 tcf--2,000 
tcf. That's the only number out there bigger than the federal 
deficit. We have to use this domestic resource. It is 
environmentally acceptable and it is abundant. The technology 
for using CNG is old school. I used CNG in a truck 20 years 
ago. It's used around the world, and it will only improve as 
the market for it grows.
    At the same time, we cannot kill this goose that is about 
to lay the golden egg. We must not rip up 50 years of tax 
policy that's embedded in our industry. The retention of the 
expensing of intangible drilling costs, percentage depletion, 
and the exemption from passive loss rules are critical to our 
ability to attract capital. With outside capital--without 
outside capital, we cannot survive as an industry.
    Let me just say that the main reason that we have this huge 
amount of natural gas available to us are the improvements in 
hydraulic fracturing. This, again, is old school technology. It 
is totally safe; it has been studied by the EPA for years. If 
you go back far enough you will find that no one other than 
Carol Browner herself has declared this to be safe completion 
technique. To take away this critical technology as is 
currently proposed by Congress is foolhardy beyond imagination.
    My five minutes is up. Thank you for your time and I'm 
certainly available for questions at your convenience.
    [The statement of Mr. House is included in the appendix.]*
    Mr. Sullivan of Oklahoma. Our next witness is Mr. Mike 
Terry, president of the Oklahoma Independent Petroleum 
Association.
    A lifelong Oklahoman, Mr. Terry graduated from the 
University of Oklahoma and began his career in the commercial 
banking industry. He later returned to join his family's oil 
business in Ada. There, Mike co-owned and managed a successful 
oil field service company called CFI and began purchasing oil 
and gas properties in 1984. After selling the service business 
in 1992, Mike was appointed as executive director of the 
Oklahoma Commission on Marginal Wells at Sarkeys Energy Center 
in Norman.
    In 1994, Mr. Terry was hired as the first executive 
director of the newly formed Oklahoma Energy Resource Board 
where he manages--where he managed the nation's first oil and 
gas check off program.
    In March 2006, Mike accepted a position as executive vice 
president of Diamondback Energy Services in Oklahoma City with 
the responsibilities in operations, marketing, and sales. Mr. 
Terry was named president of the Oklahoma Independent Petroleum 
Association, one of the nation's largest oil and gas 
associations, in February of 2007. Representing the interest of 
more than 2,000 members, welcome, Mr. Terry.

                 STATEMENT OF MICHAEL E. TERRY

    Mr. Terry. Thank you, Congressman Sullivan. Chairman 
Altmire, welcome to Oklahoma. Congresswoman Fallin, thank you 
for having us today.
    The Oklahoma Independent Petroleum Association is the 
largest state oil and gas association and one of the larger 
energy groups in this country. And although some of our more 
than 2,000 members are large companies like Devon and 
Chesapeake, more than--many of our--most of our members are 
small companies and they are the backbone of our association.
    For the most part, independent producers spend more than a 
hundred percent of their profits on drilling oil and gas wells. 
They are not big oil. They don't operate refineries. They don't 
sell gasoline. Much like the farmers and ranchers in our state 
who sell cattle and wheat at the market price, independent 
producers have no say in what they get for their product, they 
just take what the market gives them.
    Oklahoma's oil and gas fields remain strong relative to 
other states, and we rank third or fourth in natural gas 
production and fifth in crude oil production. Independents 
dominate the energy industry, drilling 90 percent of the new 
wells in our state, producing 96 percent of the crude oil, and 
88 percent of the state's natural gas. Sadly, however, it is 
estimated that 70 percent of the natural gas we produce in this 
state leaves the state and goes to the rest of the country. We 
lose that value-added by doing that and of course, that's 
another subject.
    Even more relevant to Oklahoma's energy industry and the 
connection to small business are the marginal oil and gas 
wells. These low-volume producers, also known as stripper 
wells, are defined as producing less than 10 barrels of oil per 
day or 60 mcf of gas. Oklahoma has more than 73,000 of these 
wells. Marginal wells produce 29 percent of our U.S. domestic 
production, but they present--they produce 85 percent of our 
oil wells in this state. With more than 400,000 of these 
marginal wells in the United States, that represents more than 
a million barrels per day.
    It goes without saying that these independent producers are 
a major component of our state's economy. For the first time in 
our history, more than one billion dollars was paid in state 
gross production taxes in 2006. If you combine that with income 
taxes, ad valorem taxes, motor vehicle taxes, and other 
miscellaneous taxes, our industry accounts for more than 25 
percent of all the taxes paid to our state. Add to that a 2000 
workforce of 76,297 workers with a total labor income of 8.9 
billion, which is larger than our state budget. The wages that 
are paid are much higher than most other industries in our 
state. In fact, in 2007 that average was $97,420 annually, 
which is almost three time more than the other industries in 
our state.
    But equally important to the jobs and the taxes paid are 
the philanthropic contributions made by these business owners 
and their employees. They are the same people who devote their 
time and resources to the local charities, to schools, to civic 
clubs, churches, hospitals, and museums. All you have to do is 
travel around this state and look on buildings and you see oil 
and gas names everywhere. It's the imprint of the oil and gas 
sector.
    I've spent this time defining the Oklahoma energy sector to 
make a point. The independent producer is inextricably linked 
to small business and small business is critical to our state 
and our nation. A recent survey completed by the Oklahoma 
Marginal Well Commission reported that approximately 50 percent 
of the respondents operated less than ten wells.
    With that in mind, I want to turn to the negative impact 
that U.S. Government could have on small business. I do that by 
concentrating on two areas of grave concern, and that is tax 
policy and regulatory burden. The tax policy of oil and gas 
drilling and production activities has been the foundation of 
the independent producers decision-making process for years and 
years. These age-old tax policies have recognized three 
essential elements of our business: Number one, the huge 
capital expenditures that are required to drill and equip these 
wells; number two, the high risk associated with the operation 
and production activities; and number three, the ultimate steep 
decline curve of the production.
    In my opinion, the tax policies proposed by the White House 
combined with the cap and trade bill passed by the U.S. House 
would be the largest money grab on small business in the 
history of our country. The proposed tax treatment is 
specifically designed to dramatically curtail the drilling and 
production of the independent oil and gas industry, thus 
thrusting a dagger in the heart of small business. Repealing 
the expensing of intangible drilling costs, reducing or 
eliminating the deduction for depletion, and exempting passive 
losses for interest owners will have severe implication on the 
independent's capability for attracting capital as we've 
already heard. Fewer wells will be drilled, production, 
especially marginal production, will decrease at an alarming 
rate, consumer energy prices will escalate, and dependence on 
hostile foreign countries will grow dramatically.
    Any government policy that would cause increases in energy 
costs during the severe recession like we are in now is simply 
bad policy and beyond comprehension. HR 2454, also known as the 
cap and trade bill, is one of the worst pieces of legislation 
to ever come out of the U.S. House in my opinion. It's the 
perfect example of economic pain without environmental gain. 
The estimated cost by the EPA to consumers and energy producers 
would be 1 to 2.9 trillion dollars by the year 2050.
    The goal, to reduce greenhouse gases 80 percent by that 
time, simply impossible. Especially since most of the other top 
carbon-producing countries in the world will never participate 
in a meaningful reduction of emissions. Big government will 
just get bigger. And a no-free-market regime will be 
established as the government will dictate everything from the 
number of emission allowances auction to the amounts purchased 
by individuals and companies. There will be stacks and stacks 
of buratic red tape and the monitoring required to prevent 
fraud and cheating will go on and on.
    The system is also designed in my opinion to give big 
business just another advantage over small business. As the 
large and the publicly-held international companies develop 
emission trading departments, they'll use this as just another 
profit center for their companies as they buy, sell, and trade 
emissions while the small company will just be left in the 
dark, unable to hire experts, establish trading activities, or 
even have a good understanding of how you compete in this new 
world of emissions trading.
    Finally, environmental and regulatory rules and regulations 
have become the ball and chain for the independent producer. 
And as this environmental movement sweeps across the country, 
there's a constant barrage of new bureaucracy facing our 
members year after year after year. One of the most difficult 
challenges of our association is to educate our members on 
issues like storm water, drilling permits, water permits, air 
quality, tribal authority, SBCC rules, the Endangered Species 
Act, FEMA, BLM, OSHA, CO2 sequestration, flood plains--the list 
goes on and on and on. It's an exhausting and very expensive 
process.
    And the latest warmongering by the environmentalists as has 
already been talked about is the regulation of hydraulic 
fracturing. Although this issue has already been investigated 
by the EPA and found to be nonharmful to our water supplies, 
once again, the oil and gas has the big target on their back 
for more regulation. Ladies and gentlemen here today, I'm a 
formal small business owner and now represent hundreds of small 
businessmen and women who explore and produce the energy that's 
provided our country with the greatest quality of life in the 
world.
    But I sit here troubled and very frustrated. I believe the 
independent producer is under attack like never before. And 
that means small business is under attack. Excessive taxation 
and extreme regulation is the sure recipe for the demise of 
small business and in my opinion a path towards socialist 
society. We must educate the uneducated, we must encourage the 
oppressed, and we have to stand firm in our convictions. Time 
will tell if we're all up to the challenge.
    Thank you for your courteous attention and the opportunity 
to share my thoughts on these important issues.
    Ms. Fallin. Thank you, Mr. Terry. We appreciate your great 
comments.
    [The statement of Mr. Terry is included in the appendix.]
    Ms. Fallin. Next we have Mr. Larry Mocha, who is president 
and CEO of Air Power Systems here in Tulsa, Oklahoma. Air Power 
Systems manufactures pneumatic cylinders and valves for the 
truck equipment industry. His company has grown from 600,000 in 
sales in 1984 to over 10 million in 2006. He is a graduate of 
Oklahoma State University and currently serves on a number of 
academic and governmental advisory boards, and when I was 
lieutenant governor of Oklahoma he was chairman of Oklahoma's 
Small Business Commission for many years and worked very 
actively in small business issues.
    He is currently the chairman of the Mayor's Initiative For 
Entrepreneurship and is the current chairman the Center for 
Legislative Excellence. Mr. Mocha, we appreciate you joining 
us. Oh, I see you also served on the board of directors of the 
U.S. Chamber of Commerce and the U.S. chairman of the Small 
Business Council. So don't want to forget all that.
    Thank you and welcome, and good to have you here.

                   STATEMENT OF WILLIAM MOCHA

    Mr. Mocha. Thank you, Congresswoman Fallin, thank you, Mr. 
Chairman, and thank you, Congressman Sullivan. It's an honor to 
be here today and I really appreciate you bringing this service 
to Tulsa, and welcome to Tulsa.
    My father started our business in 1964. I graduated from 
OSU in 1970 and was the first employee. Six months later I was 
the first employee to be laid off because the business couldn't 
handle us. During this--I rejoined him again in 1972 and we had 
a good time working together during the '70s. In the early '80s 
with the Oil Bust, my father modeled to me what you do during 
tough times and how you get through it, and then I lost him in 
1984 and it was too early. He was almost 65 and he had a lot 
more to teach me. I wish he were still here.
    In the late '80s I had my share of recessions, two product 
liability lawsuits, those of which propelled me to get active 
in small business issues. I was a delegate to the White House 
conference in 1995 and have been very active in federal and 
national small business associations.
    In 2000 we set a goal. Our business had been hovering 
around 3 million in sales for too long. So we decided we have 
to do what's necessary to be a bigger company, to be a better 
company, and we set a goal. We wanted to do 10 million and 6 by 
2006. We worked hard, we got very close.
    In the last quarter of 2006 the EPA issued its new 
standards for emissions on Class 8 trucks. Our products that we 
manufacture in Tulsa go and work on Class 8 trucks, which we 
sell around the United States. The market that we serve, the 
ones that buy those trucks, said no, the emissions are too 
expensive, they cost an initial $10,000 per truck, and the 
economy, the fuel economy is worse. So they said no to buying 
the trucks. We ended the year 2006 at about 9.7 in sales, 9.7 
million, just short of our 10.6 million.
    Since then, because of the EPA standards that were 
introduced, we've had a decline in our sales for these last two 
to three years. This recession that has most recently hit us 
kind of surprised us. We just about worked ourselves out of the 
problems with the EPA initiative when the recession hit. My 
problem or my concerns now is that--is the recession is 
impacting everyone. What happened to us in 2006 we've almost 
resolved. We've almost gotten out of it. We've almost figured 
out a way to be a better company, to do other things, and to 
offer new products.
    But the recession that's hit us recently has hit everyone. 
And I look at Washington and it concerns me, like the EPA, who 
came with a new Class 8 restriction on emissions. Why is the 
government impacting and coming up with more rules and more 
regulation that strangle small business.
    Let's assume for a minute that all the rules and all the 
regulations that come out of the agencies, all the legislation 
that comes from Congress that detrimentally impacts small 
business, let's assume that they're all good for small 
business, all good for the world, all good for our climate. Why 
aren't they imposed equally then throughout the global markets? 
Why do we allow companies to come into Tulsa, to Oklahoma, to 
the United States, to compete against American manufacturers 
that don't have the stringent EPA standards that we have to go 
by? Why do we allow that?
    My concern is it is not fair. It's not fair for 
manufacturers. It's not fair for American businesses. I believe 
in American business. I believe in small business.
    I think we can compete against everyone. I just want the 
field leveled. What I'd like to ask you to do specifically, 
Congresswoman Fallin, is to draw a line in the sand and say, no 
more. If you want to compete for American dollars, you need to 
have the same kind of American standards that we have to have. 
You need to pay your people well. You need to keep from 
drumping bad products into your drinking water. You need to 
take care of your people.
    We need someone right now to stand up for American workers 
and for American business. The line in the sand.
    I'd like to call for a new initiative and I took the 
creativity in calling it the Fallin Initiative. I worked on the 
Fallin Commission some years ago when we tackled the workers' 
compensation here in Oklahoma and, Mr. Chairman, I don't mean 
to insult you with it, but with the Fallin Initiative, maybe we 
could come up with a new moral code, a new moral code for 
importing companies and importing countries. If you want a 
piece of American currency, of the American market, you've got 
to take care--do your part of taking care of our world.
    You know, in closing, I just want to tell you it's 
difficult today to be in business. It's difficult anytime. We 
have to compete, we have to be creative, we have to take care 
of our employees. They have health insurance problems. We got 
lots of problems in the world today. The American worker can 
handle it. My small business can handle it. We're going to get 
through this just fine.
    But wouldn't it be nice if our government were by our side, 
standing with us, helping us navigate these troubled times? In 
closing, I'd only say that if you believe that small business 
is the engine that is going to get us out of these difficult 
times, can't we all stand up for small business? Can't we all 
stand up for American businesses? Doesn't that make sense? 
Thank you.
    [The statement of Mr. Mocha is included in the appendix.]
    Mr. Sullivan of Oklahoma. I want to thank all the 
panelists. I've unfortunately got to leave after this 
introduction, but I appreciate all the valuable input you've 
given and it means a lot. Thank you so much.
    Our final witness is Joe Robson, a builder and developer 
from Tulsa, who, in 2009, became chairman of the board of over 
a 2,000-member National Association of Home Builders. He is 
founder and president of the Robson Companies, Incorporated, 
developers of residential communities and commercial 
properties. He has been a member of the board of directors 
since 1990, was the chairman of BUILD-PAC in 1998 and was the 
chairman of the Legislative and Regulatory Policy Task Force in 
2002.
    He also has served as the national vice president 
representing Oklahoma, Kansas, Missouri, and Nebraska and was 
the moderator of the national vice presidents in 2004. 
Additionally, Mr. Robson was chairman of the Federal Government 
Affairs Committee 2003, chairman of the Resolutions Committee 
in 2002, and vice chairman of the Budget Committee in 2005.
    Thank you, Mr. Robson, for being here today.

                    STATEMENT OF JOE ROBSON

    Mr. Robson. Great. Thank you, Congressman Sullivan, and 
thank you, Chairman Altmire and Ranking Member Fallin.
    I appreciate the opportunity to testify today about energy 
policy as it relates to housing and the homebuilding industry. 
Despite the fact that we're in the midst of one of the worst 
housing downturns since the Great Depression, homebuilders 
continue to make energy efficiency and sustainability for new 
homes a priority. As well, consumers continue to demand energy 
efficiency in new homes. In our most recent survey of builders, 
56 percent of those surveyed said that at least some of their 
customers were willing to pay extra for green amenities.
    However, cost and maximizing value for the dollar are 
critical drivers of the potential buyer's decision making, 
especially in the current economic downturn. Most consumers are 
not willing to pay extra for a more efficient home, unless they 
are likely to see the benefit of their investment within a 
reasonable length of time. In our view, this calls for 
continued robust federal incentives for energy efficiency in 
the built environment. In fact, the homebuilding industry is 
setting the pace in green construction with the development of 
the consensus-based National Green Building Standard, the only 
green building standard approved by the American National 
Standards Institute.
    Unfortunately, the American Clean Energy and Security Act, 
or ACES Act, passed by the House in June takes the opposite 
approach by imposing national building codes on states and 
localities. In particular the bill aggressively increases 
energy code targets for new homes, provides greater authority 
for the Department of Energy to modify codes, and gives little 
flexibility to the states and local governments with specific 
geographic and climatic conditions. Perhaps the most 
problematic aspect of the ACES Act is that in its broadest 
terms, it seeks to wring significant savings from new homes, 
the smallest, most energy-efficient segment of the market.
    According to the Energy Information Administration, newer 
homes--those built after 1991 account for only 2.5 percent of 
all energy consumed nationally. Further, the Census Bureau 
reports that there are roughly 128 million homes in the U.S. 
today, and 74 percent, or 94 million, were built before the 
existence of modern energy codes. Ensuring long-term energy 
efficiency in new homes is critical, but we must also focus 
where the greatest gains can be made and that's in the existing 
home segment of the market.
    Codes by their very nature do not address all aspects of 
energy consumption in housing. Incentives for increased energy 
efficiency are also critical to achieving the nation's long-
term energy goals. There are several important incentives that 
exist in the tax code now, and my written statement discusses 
several of those in detail.
    What I'd like to highlight is the new home energy 
efficiency credit established as part of the Energy Policy Act 
of 2005. Use of this program has increased three-fold since its 
creation and it remains the only incentive in the law for 
increased energy efficiency in single-family construction. I 
would urge the Congress to make this program permanent and 
enhance it so that it may have a greater effect on the energy 
efficiency of new home construction.
    Homebuilders are stakeholders in both building and energy 
efficiency industries, and we look forward to working with 
Congress to craft policies that effectively address the energy 
challenges facing housing and our nation.
    Thank you again for the invitation here and I'd be happy to 
answer any questions.
    [The statement of Mr. Robson is included in the appendix.]
    Chairman Altmire. Thanks to each and every one of you for 
taking the time out of your day to be here, and I have a lot of 
questions based on your testimony, both your written testimony, 
which I've read, and your testimony here today.
    I wanted to start with Mr. House. You talked in both your 
written and statement today about compressed natural gas 
vehicles and incentives to move forward with that. I come from 
a region of the country, western Pennsylvania, natural gas was 
part of our economy as well, and I was intrigued by that.
    Can you talk a little bit about the differences and the 
advantage or disadvantage of natural gas versus electric cars? 
If you're to find an alternative source and move away from 
gasoline, what's the comparison between those two technologies?
    Mr. House. Well, I think that compressed natural gas 
vehicles require only a minor change to the fuel system itself. 
The internal combustion engine as we know it today is still 
very usable with CNG as a fuel. The good part about CNG as a 
fuel is that it produces less than half of the pollutants that 
a gasoline engine produces, and so that's the biggest 
advantage, that it is commercially available today at a 
reasonable cost.
    And it's something that we can actually implement in a very 
short time frame. We're staring 2010 in the face today. By the 
year 2020, we could have a substantial portion of our 
transportation fleet on compressed natural gas. I think that 
the ramp-up to using electric--electricity for our cars would 
be much a much longer ramp-up time and the technology is not 
quite as advanced. It's coming, but it's not quite as advanced.
    Chairman Altmire. How would the fill-up process work when 
you need to refill the car versus recharging an electric car?
    Mr. House. Right. It would take place at the same fueling 
station you use today. The only thing would have to be added is 
a compressor that could compress natural gas up to a higher PSI 
to get it into your tank, so the infrastructure is there as far 
as the fueling stations.
    They just need to make modifications to be able to accept 
natural gas vehicles. Oklahoma has over 40 CNG vehicle stations 
available to us today. The state of Utah has numerous. They're 
one of the leaders in this technology.
    So it's a very accomplishable goal is the reason I'm a 
proponent of it. Something we can actually accomplish.
    Chairman Altmire. Thank you.
    Mr. Terry.
    Mr. Terry. Mr. Chairman, could I add--
    Chairman Altmire. Certainly.
    Mr. Terry. --to that please, sir?
    The other thing I think you have to look at when you 
compare the two is where does electricity come from? Fossil 
fuels. I mean, right--in our country today most of it is made 
from coal, and of course coal has the most drastic emissions of 
all the fossil fuels. So how efficient is that to generate 
electricity from coal and then pass that on to the automobile 
industry.
    And the second thing is it's going to require a tremendous 
amount of batteries and, first of all, do we have the 
technology to really do that, and then what happens when those 
batteries get old and we need to discard them? That could be a 
serious environmental issue as well.
    Chairman Altmire. Great, thank you.
    Western Pennsylvania, we know a little bit about coal as 
well. But I hear you. Your point is well taken.
    Mr. Terry. Thank you.
    Chairman Altmire. Mr.--oh, Mr. Sullivan, go ahead.
    Mr. Sullivan. Just a quick comment. If you're looking for 
something to do to dramatically impact the CNG world, seems to 
me that we've got this kind of a do loop going on where people 
aren't buying or converting the CNG cars because of perception 
that there aren't enough natural gas filling stations. We have 
40 gas stations--natural gas stations in the state; there ought 
to be 400.
    The people that put in that infrastructure aren't doing it 
because there aren't enough people drying--driving gas cars, so 
it's a--you've got to break that loop and the way to break it--
and this is something where I think it's an appropriate role 
for federal government--is just create a--either a massive 
incentive or a big stimulus charge or something to put in these 
natural gas outlets, and the best billboard you could ever have 
would be retailers that we all know around the state and have 
regular, premium, diesel, and natural gas, and everybody would 
see that and they'd see the difference. But if you want to 
spend a relatively small amount of money to encourage that, I 
think it would be a tipping point.
    Chairman Altmire. What would be the general price 
differential if you had natural gas versus gasoline?
    Mr. Sullivan. I think natural gas, if you get apples to 
apples, is about--
    Mr. Terry. 96 cents.
    Mr. Sullivan. How much?
    Mr. Terry. 96 cents.
    Mr. Sullivan. 96 cents when the world is 2.70, 2.80.
    Chairman Altmire. Okay. I had a question for you, Mr. 
Sullivan, as well, on the hydraulic fracturing, and, Mr. Terry, 
you mentioned this also.
    One of the largest finds recently for natural gas, of 
course, runs not only through western Pennsylvania but Kentucky 
and Ohio up through New York and West Virginia--Marcellus 
Shale. How does the environmental community's concerns with 
hydraulic fracturing impact the development prospects for 
that--for the Marcellus Shale?
    Mr. Sullivan. Well, I'm familiar with that play and the 
fracturing needed to make it work. And I can tell you I've sat 
in a number of rooms where capital expenditures were being 
considered for infrastructure and drilling the Marcellus, and 
the prospect, just the prospect, of Congress, the EPA, either 
one, classifying hydraulic fracturing as hazardous activity has 
already--just that prospect has kept capital from going in 
there.
    I just urge you--I mentioned in my testimony--just urge you 
to look at the record. It's been going on for 50 years and 
nobody's gotten injured by this, no water's been polluted, and 
for your area and western New York and all the states that are 
involved in Marcellus, this is a huge thing. It could be an 
economic engine to generate new reserves of gas close to the 
marketplace, close to the consumer--consumption in the 
Northeast. So I think your area should be mightily interested 
in being careful about the hazardous material classification.
    Chairman Altmire. Thank you.
    One more on this round and then I'll turn it over to 
Ranking Member Fallin and then we'll come back for a second 
round.
    Mr. Terry, I appreciated your comments and with regard 
especially to small business and the impact of different 
policies may have and would have.
    With regard to the Recovery Act, the stimulus bill, that 
was passed earlier and there were $30 million in small business 
tax cuts that were in that bill, things like expensing and 
capital depreciation, all of those things.
    Have you seen in your industry any benefit from the 
stimulus plan upon small businesses? Did those tax cuts in any 
way impact your business or nationally do you feel that the 
stimulus has had a positive impact in any way?
    Mr. Terry. No, I have not, and of course, when you see 
natural gas prices go from 13 to 10 to 5 to many of the small 
business independents are now getting $2 or less for natural 
gas. Those incentives just don't help because the economic 
nature of the business where price is important is just too 
overwhelming, so I have not seen the impact of that in a 
positive way.
    Chairman Altmire. Okay. Congresswoman Fallin.
    Ms. Fallin. Thank you, Mr. Chairman. As you can probably 
tell by some of the testimony, we're pretty passionate about 
energy in Oklahoma and I appreciate--
    Chairman Altmire. I noticed.
    Ms. Fallin. --I appreciate your state's interest in energy 
policy, too. I know that you had a strong interest.
    You know, one of the things I was thinking about was one of 
the recent policies that we had in Congress with the Cash for 
Clunkers program, and I was curious, Mr. House, if you could 
talk to us about the conversion of a gas car to a natural gas, 
compressed natural gas, car. What would that cost be? Do you 
have an estimate on--
    Mr. House. It varies a little by the vehicle type, but 
somewhere between 2500 and forty--$4,000 is--
    Ms. Fallin. And we just gave away $4,500 for Cash for 
Clunkers.
    Mr. House. Right. In my written testimony I think I might 
have alluded to that.
    Ms. Fallin. Well, and that's just interesting because here 
we just spent, you know, I think almost $3 billion or so for 
Cash for Clunkers and we could have been converting cars to 
compressed natural gas as--
    Mr. House. Absolutely.
    Ms. Fallin. --an energy policy. We could have been moving 
towards cleaner fuel at that time and so that's good to know 
that figure and of course, that would have also addressed some 
of the infrastructure issues in--in having the fill stations 
for compressed natural gas once you would put more cars in the 
marketplace--
    Mr. House. Absolutely.
    Ms. Fallin. --that could have been converted to that 
compressed natural gas.
    And if I could just ask all of you, I know that the 
intangible drilling costs, the percentage depletion, and the 
hydraulic fracturing changes that could be coming from EPA and 
of course from some of the rules, regulations, possible 
restrictions through cap and trade, all of us are very 
concerned in Oklahoma how that will affect our production of 
especially the marginal wells that you talked about, but if we 
were to have some severe restrictions on hydraulic fracturing, 
how many wells do you think that would shut down in Oklahoma 
for production, and how would that affect the employees in our 
state?
    And Mr. Chairman, as I think Mike Terry had mentioned, 
there's about 25 percent of our revenue from our state comes in 
from gross production taxes and right now, with the price of 
gas and oil the way it is, we've seen a huge shortfall in gross 
production taxes to our state budget, almost 80 percent drop, 
which has had a big effect on our revenue as far as state, but 
could you just talk about how any potential changes in the 
hydraulic fracturing and restrictions could affect revenue in 
our state, production, and even the jobs, especially as it 
relates to small business.
    Mr. Terry. First of all, let me say on hydraulic 
fracturing, I've been in that business twice in my lifetime and 
I've had hydraulic fracturing fluid all over me. I probably 
drank it. And the greatest component--the largest component of 
that fluid is a substance called guar gum. It makes the fluid 
thicker so it will carry sand and other proppants that are 
used, and I don't want to get too technical here, but that is 
the same constituent that's used in ice cream, in salad 
dressing, and all kinds of stuff that we consume as consumers.
    It is extremely overblown. I've never heard of one instance 
of anyone dying from having, you know, ingested anything that 
has to do with hydraulic fracturing. Like I said, I've been in 
the business twice and very familiar with it. As far as the 
impact, and Mr. Chairman, in your area of the country, those 
Marcellus wells will not be drilled unless they're 
hydraulically fractured. Just mark it down. It is absolutely 
impossible for those wells to be economically feasible unless 
you frac them. So in your area of the country, those--that--
it'll stop. Absolutely it will stop.
    In Oklahoma, it was proposed that there would be about 500 
in our--in our shale play in the southeastern part of the 
state--it's called the Woodford Shale--and all of those wells 
have to be, have to be, hydraulically fractured. That's 500 
wells that probably would not have been drilled, and that 
doesn't include the other parts of the state. So I mean, it 
would be devastating, absolutely devastating, to not only the 
industry but the state of Oklahoma because of the--the tax 
revenues, the jobs, everything that's related to our industry 
would come to a standstill if you take, you know, hydraulic 
fracturing out of the picture. It's just--it just can't happen.
    Chairman Altmire. May I, on that point?
    The environmental community--and I'm asking you to maybe 
put forward an argument that you don't agree with--but what is 
the case that they make for having to regulate that or deny the 
approval of it?
    Ms. Fallin. Mr. Chairman, if I could ask, would you mind 
passing the microphone around, because some of the people in 
the back may not be able to hear your responses on this.
    Mr. Terry. In my opinion, it's more of an education 
situation than anything else. As we have seen the shale play go 
to other parts of the country and grow exponentially, there are 
people in those areas that don't understand what's going on. 
And they're not educated about the oil and gas drilling 
practices or the production practices, and it concerns them. 
They see this large equipment and they see all the activity and 
they get worried, and they know that there's drilling going on, 
you know, how does that affect my drinking water.
    But you know, we've been drilling wells for over a hundred 
years, and particularly in Oklahoma, the safeguards are in 
place at the state level. We have Commissioner Murphy here, who 
could testify about all the different rules and regulations 
that we put in place in our state to protect ground water. And 
when you're hydraulically fracturing a well at 9,000 feet and 
your fresh water system is at 400 feet, and there's concrete 
and steel pipe in between, it--it's just literally impossible 
for it to impact the ground water.
    And so it's an education process, Mr. Chairman, and I don't 
know how we solve it quickly. I know in Oklahoma we formed an 
organization that educates our people about our industry and 
it's been very successful. It's in the school system, it's in 
the public arena and, you know, I would propose a national 
education program about the energy, and just to alleviate these 
kinds of things.
    Chairman Altmire. Thank you.
    Ms. Fallin. Mr. Bergey, you had mentioned that you felt 
like there was some things that you liked in the energy 
direction of our nation and, of course, Oklahoma has been one 
of the leaders in wind production, but could you further talk 
about the effects? I'm just kind of curious about proposed cap 
and trade legislation and how it would affect your industry and 
wind production.
    Mr. Bergey. Sure. The cap and trade will not directly cause 
new wind farms, but it will certainly provide--it'd be one of 
the only--one of the solutions that companies may use to gain 
credits and to offset some of their pollution.
    The bigger impact would be the renewable energy standard, 
which would be mandate for utilities to use a certain amount of 
electricity from clean energy sources.
    28 states have that. The federal government is considering 
one, and that would have a large impact on large wind 
development--not small wind; small wind is more expensive than 
large wind so utilities won't choose our products, 
unfortunately, for that.
    But for large wind, it would have a very big impact and I 
think would have a very positive impact for the state of 
Oklahoma. We've been under the what is now called the Pickens 
Plan, but actually the Department of Energy goal of 20 percent 
wind power by 2030, Oklahoma would be in the top four states in 
development. We could see up to 30, maybe as much as $50 
billion of investment in western Oklahoma where the wind blows, 
and with the transmission to move that to the larger market, we 
could be a very substantial gainer from that.
    And also point out that the major problem with wind power, 
it's intermittency is most attractively solved by using natural 
gas combustion turbines for backup. We're very strong both in 
the installed capacity of that, but more importantly as my 
fellow guests have alluded, we are very strong in natural gas 
supply here, so it makes--we spend--it seems a little crazy to 
be importing so much coal from Wyoming and maybe a little bit 
from Pennsylvania, I don't know, but certainly a lot from 
Wyoming when we have so much wind power and so much natural gas 
here.
    I'll just take--stay on the microphone for this very 
quickly and say that I fully support all of the enthusiasm for 
natural gas vehicles for very solid economic development 
reasons.
    Ms. Fallin. Can I ask you to just comment real quickly on 
the transmission lines and the grid, and I hear that's a huge 
issue and very expensive as far as you produce the wind, but 
you've got to get it out to the community. So could you address 
the availability of the transmission lines and the power grids?
    Mr. Bergey. Certainly. The--well, basically you don't want 
to live where the wind blows strong enough to produce cheap 
electricity, where it takes six clothespins to hold your undies 
on a clothesline. You just don't want to be there. So most 
people live in the big cities.
    Our transmission grid did not anticipate wind power or 
solar power, even merchant natural gas for that matter, and so 
it does--the lines just don't go from where we need it to go to 
and so we're having to build that and that is expensive. 
There's a who pays, how does that cost get allocated kind of 
question.
    The regional transmission organizations have taken a 
leadership position and have worked out the rules of the road 
in terms of the investments, and that--those projects are 
moving forward. They're very large construction projects, 
billions of dollars, they involve land rights and some cases 
even eminent domain, and so they will take some time, and 
that's why Boone Pickens has sort of throttled back on his 
centralization of his projects in Texas. It was the realization 
not that wind power was going to be less attractive, but when 
he starts getting those billions of dollars of General Electric 
wind turbines arriving at his doorstep, he really needs to put 
them in the ground somewhere. And he wouldn't have any place to 
plug them in around Pampa, Texas. So he's going to I think end 
up doing projects here in Oklahoma.
    But transmission is something that states and the regional 
transmission organizations are aggressively pursuing and I 
think that it's--that bottleneck is going to be largely gotten 
rid of in the next five or six years.
    Chairman Altmire. Okay. We'll do one more round of 
questions. I had a few--couple.
    For Mr. Robson, you talked about the consumers' incentive 
to seek energy efficiency and if it's a delayed payback that 
they're a lot less likely to do it. Have you seen, despite that 
increased consumer demand for solar and wind--more solar I 
guess in your industry--just from folks who were interested in 
the technology and have questions about it and want to 
incorporate it into the building process?
    Mr. Robson. People are interested. They're curious about 
it. Some do it--just a small percentage do it just because it's 
the thing to do, but that's a very, very small percentage. It 
really comes down to dollars and cents.
    Chairman Altmire. Are there parts of the country where it's 
more popular than others?
    Mr. Robson. There's parts of the country that it's more 
popular. It's primarily where the sun shines a lot more than 
others, so yeah, it's going to be dependent on the kind of 
climate.
    Chairman Altmire. Good.
    Mr. Bergey, you talked about small businesses in your 
testimony and we thank you for that. I was wondering about the 
comparison from your industry's viewpoint between small 
businesses and larger businesses and has there been an 
increased demand for alternative energy more or less in small 
versus larger employers--is there an increased interest 
depending the size of your business?
    Mr. Bergey. There certainly has been an increased interest, 
Mr. Chairman. We receive calls every day from companies that 
want--large and small--who are looking to reduce their 
operating costs. For the vast majority of them, the wind 
resources where they're located versus the electric rates they 
give don't provide an economic rate of return, and so our 
advice is invest in efficiency, get thermal heat pumps, those 
sorts of things, to cut your electricity demand and then wait 
for solar and wind systems to get into higher production 
volumes so that they'll be more economic at their sites.
    But yes, there is definitely an increase in interest in 
green technologies, not just for the environmental aspect but 
for the green of money--to save operating costs.
    Chairman Altmire. Thank you.
    My final question is for Mr. Mocha, and you talked a lot 
about foreign competition and things that we could do to help 
our own businesses here in America, and I agree with the things 
that you outlined.
    I wondered if you had specific recommendations for ways 
that the EPA in particular--because you talked a lot about them 
and things they were doing wrong--do you have specific 
recommendations on what the EPA could do in an affirmative way 
to improve the process for development--developing and 
implementing regulations that impact energy businesses like 
yours?
    Mr. Mocha. I'm sorry if I gave you that impression.
    I'm under the impression that everything EPA is doing is 
right. It's government trying to do its job and really doing a 
pretty good job.
    My concern is that the manufacturers in America have to use 
different processes and we have to play by different rules than 
manufacturers in other countries. In fact, we see some of the 
large manufacturers moving to other countries. You see people 
like me going to other countries for plating processes, for 
example.
    Why don't we level the playing field? Why don't we only 
allow those countries who have similar processes that America 
does to be able to market for the American dollar? I'm assuming 
everything that EPA is doing is right and good for the country.
    Chairman Altmire. Well, thank you for that. I'm glad I 
asked that question. And again, being from western 
Pennsylvania, we obviously can see the impact of the businesses 
moving overseas and foreign competition as well, so.
    Mr. Mocha. We have a lot of customers in your part of the 
country.
    Chairman Altmire. Okay. Well, I appreciate your testimony 
and I'll again turn it over to Miss Fallin.
    Mr. Mocha. Thank you.
    Ms. Fallin. Thank you, Mr. Chairman. I might just follow up 
on that, Mr. Mocha, on some of the proposed changes that are 
coming down from cap and trade and how you affect--how you 
believe that would affect your competitiveness, not only here 
in the United States but especially overseas as you're trying 
to operate under some of the new regulations that could be in 
effect with that piece of law.
    Do you see that increasing your business and your 
competitiveness with foreign countries or do you think it might 
diminish that?
    Mr. Mocha. I'm glad you asked that. I think the American 
manufacturers, including us, can compete with anyone and we can 
compete successfully with anyone, but they have to have the 
same standards.
    My suggestion is if EPA or Congress, anyone who has new 
regulations, new processes, new things that are going to 
implement business, if that could be somehow accessed--somehow 
regulated where everybody is impacted by it, then that's fair. 
That's--let's do it.
    But if you cannot enforce regulation to other countries, 
then don't do it to American manufacturers because you're 
hurting us, and I don't think that's the intent of the 
government or EPA, so somehow we need to--if we're going to do 
that--you know, in a sense, it's really good for us to stand up 
and be a role model for the rest of the world. But it's only 
good if the rest of the world follows suit and we cannot reward 
countries that do not have those same kind of processes that 
America does.
    Ms. Fallin. Well, unfortunately, we can't mandate those 
other countries to follow the same rules and regulations that 
we do in a--
    Mr. Mocha. But we can--
    Ms. Fallin. --global marketplace.
    Mr. Mocha. --keep them out of America--
    Ms. Fallin. That's right.
    Mr. Mocha. --and we can keep them out of our markets.
    Ms. Fallin. But we don't always do that.
    Mr. Mocha. That's right. I think we need to have a new 
moral code and that's why I mentioned before, I think it ought 
to be the Fallin Initiative. It may not be an easy thing to do, 
but we've got lots of bureaucrats in Washington who are ready 
and able to do the job.
    Ms. Fallin. Well, I might be able to do it on a state 
level, but nationally and globally I don't know yet.
    Mr. Mocha. You can do it.
    Ms. Fallin. I don't have that much influence yet. But thank 
you.
    And I want to ask Mr. Robson, you talked about the ACES 
Act.
    Mr. Robson. Yes.
    Ms. Fallin. Is that the right terminology?
    Mr. Robson. Yes.
    Ms. Fallin. And how that affects cost on homes and 
competition and some of the regulations on that, and I'm 
particularly interested in how that could affect small 
businesses and homebuilders and those that are involved here in 
Oklahoma's economy about some of the mandates. Could you just 
elaborate a little bit more on that?
    Mr. Robson. Yes. The--as it pertains to the national 
building code that is being proposed, the mandates are to have 
30 percent increase in energy efficiency requirements over the 
2006 international energy code. That would be upon enactment. 
If states don't enact a 30 percent code, they lose federal 
dollars and there are damages that the Department of Energy can 
go against the states. By 2014, I believe, it has to be 50 
percent over the 2006 energy code, and then it increases five 
percent per year after that up to 75 percent by 2029, I 
believe.
    Our concern is that it is putting all of the burden on new 
construction, which already has had a much higher standard than 
we already have and we kind of talked along, Chairman Altmire, 
your question on, you know, what are the economics of doing 
things or not? What you do is price new homes completely out of 
the market. And frankly, I don't know how you get there. We 
don't have the technologies to get to 75 percent, and granted, 
we've got a few years to do it, but I just don't know how you 
get there and squeeze that much more energy efficiency.
    You know, the housing industry, homes supposedly use 30 
percent of the energy of the country. New homes since 1991 use 
two and a half percent, so that leaves the 74, 75 percent 
using, what, 27 and a half percent. That is where the real 
efficiency comes from, and nobody is addressing it--in fact, it 
specifically exempts existing homes and buildings, and that is 
the problem, especially from the construction industry.
    Ms. Fallin. Well, I would assume if these mandates go into 
place it would increase construction costs.
    Mr. Robson. Yes, absolutely.
    Ms. Fallin. Which would probably slow down homebuilding and 
last time I checked, home prices in the United States have been 
going down and majority of people have their investments in 
their homes.
    Mr. Robson. Right. Well, and the other problem and one of 
the major issues with the current housing crisis is appraisals. 
You know, we can't get appraisals, whether it's existing homes 
or new home construction. There is no allowance right now and 
that's one of the big impediments to energy efficiency and 
construction is getting credit from an appraisal standpoint for 
the energy efficiencies you build into a new home. If you start 
adding 30 percent, 75 percent efficiencies, and you don't 
change the appraisal process, you completely up-end the market.
    Ms. Fallin. So it doesn't change the value of the home.
    Mr. Robson. No. There's no credit that's being given for 
energy efficiency right now.
    Ms. Fallin. What suggestions do you have for the current 
homes that are built that are not the new homes that you said 
are not eligible for the credit and how--what ideas do you have 
to help encourage current older homes to be able to create more 
efficiencies within their homes and maybe use new technology 
without breaking the bank and without going over their loan 
value as far as appraisals go?
    Mr. Robson. I think it's got to be on all fronts. And 
Commissioner Murphy is here. We've been working with the 
Corporation Commission and the electric utility companies and 
working on the demand side management issues in Oklahoma. I 
think that's something being addressed around the country.
    But that is a critical issue as to how you pay for energy 
efficiency and a lot of those homes are for lower-income 
housing and maybe they can't afford efficiency improvements. 
There are a number of proposals, there's particular financing 
mechanism called PACE that was cut out of this bill actually 
that would have been a possibility--more of a local option, 
financing option. You've got to be able to finance them and get 
the appraisals and the value when you do those, even on 
existing homes. So there's a number of proposals out there. 
Unfortunately the ACES doesn't address any of them.
    Ms. Fallin. Okay. And Mr. Chairman, I just want to mention, 
I know that Congressman Sullivan had to leave a few minutes 
early, but he has actually authored some legislation in 
Congress that encourages compressed natural gas and 
infrastructure development in our nation and I'm--I just want 
to commend him since he is not here. I'm a cosponsor of that 
legislation and it's very important to us here in Oklahoma that 
hopefully we can get that bill out of Committee and get it on 
the floor sometime. But it's a good piece of legislation. I 
think it would serve our nation well and help us move towards 
cleaner energy and help us with producing more American-made 
energy, reducing our dependence on foreign energy.
    Mr. Chairman, I just want to say thank you so much for 
coming to our state. As you can tell by our witnesses here, 
they are all experts in their field. They are very passionate 
in what they believe and we think we've gleaned some great 
ideas here today and heard both the good sides of what we're 
proposing and some of the negative sides of what some of our 
policies could do to small business and especially to our 
economy here in our state to our hopefully moving away from 
dependence on foreign energy and even some of the small 
business as far as rules and regulations and mandates coming 
from Congress and how that will affect our small businesses.
    So I want to say thank you once again. Thank you to all of 
our witnesses.
    Chairman Altmire. And I would second what the Congresswoman 
said about Mr. Sullivan. He's a good friend. I know he 
represents you all very well here and I thank him for taking 
the time to be here in his absence now, and I certainly thank 
Miss Fallin. Enjoyed being here and thanks especially to 
Oklahoma State-Tulsa for your hospitality. Thanks for helping 
us set this up. These are not easy to do. We appreciate the 
fact that you allowed us to hold this hearing here. I had the 
opportunity to walk around a little bit before the hearing and 
you have a beautiful campus and top-notch facilities. Thanks 
for the work that you do every day for students from Oklahoma, 
but especially thanks for allowing us to be here today. Thanks 
to each one of you.
    This was very instructive to me and to the Committee as a 
whole, and this testimony was sent to everyone on the Committee 
and I'm sure they will review it and may have follow-up 
questions for you of their own, so you may be hearing from 
others on this.
    And with that, I would ask unanimous consent that all 
Committee members will have five days to submit statements and 
supporting materials to the record, and without objection, so 
ordered.
    Chairman Altmire. This hearing is now adjourned.
    [Whereupon, the Subcommittee was adjourned.]

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