[Senate Hearing 111-45]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 111-45
 
   ENERGY DEVELOPMENT ON PUBLIC LANDS AND THE OUTER CONTINENTAL SHELF

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   TO

CONDUCT AN OVERSIGHT HEARING ON ENERGY DEVELOPMENT ON PUBLIC LANDS AND 
                      THE OUTER CONTINENTAL SHELF

                               __________

                             MARCH 17, 2009


                       Printed for the use of the
               Committee on Energy and Natural Resources

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Arvizu, Dan, Director, National Renewable Energy Laboratory, 
  Golden, CO.....................................................    43
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Bryce, Robert, Author and Energy Journalist, Austin, TX..........    49
Cooper, George, President and CEO, Theodore Roosevelt 
  Conservation Partnership.......................................    52
Hon. Lisa Murkowski, U.S. Senator From Alaska....................     9
Kopf, Steven R., Partner, Pacific Energy Ventures, LLC, Portland, 
  OR.............................................................    57
Moeller, Philip D., Commissioner, Federal Energy Regulatory 
  Commission.....................................................    32
Prukop, Joanna, Secretary, New Mexico Energy, Minerals and 
  Natural Resources Department, Santa Fe, NM.....................    38
Salazar, Hon. Ken, Secretary, Department of the Interior.........     2

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    73

                              Appendix II

Additional material submitted for the record.....................    97


   ENERGY DEVELOPMENT ON PUBLIC LANDS AND THE OUTER CONTINENTAL SHELF

                              ----------                              


                        TUESDAY, MARCH 17, 2009

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:08 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. I'd like to welcome everyone to our hearing, 
especially Secretary of Interior, Secretary Salazar on this 
important topic of energy development on public lands and in 
the Outer Continental Shelf, more specifically. Our Nation has 
abundant energy resources, a good portion of which are found on 
our onshore public lands and in the Outer Continental Shelf. 
These resources are owned by all the people of the United 
States.
    Their management is entrusted to the Federal Government. 
That's why we're particularly pleased to have our new Secretary 
of Interior here to tell us about his vision for the 
development of our energy resources both onshore and offshore. 
Secretary Salazar has important decisions to make. Decisions 
that may prove essential to our Nation's energy security and 
economic well being, but also decisions that will impact upon 
the landscape and environment for generations to come.
    I look forward to hearing about the administration's plans 
in this regard. I hope Secretary Salazar can share with us his 
vision of how we can determine the best places for energy 
development. In the OCS how we can move forward to get more 
energy production both oil and gas and renewables in a safe and 
environmentally sound manner from the Outer Continental Shelf.
    I know the Secretary is interested also in our onshore oil 
and gas leasing program and recognizes the contribution of that 
program to our energy supply. I hope under his leadership the 
BLM can resolve any resource conflicts up front so that this 
important program can run smoothly and efficiently. To this end 
it's important that the inspection and enforcement programs 
there in the BLM be well funded.
    Finally the administration is clearly committed to 
renewable energy. I know Secretary Salazar is. The development 
of the Department of Interior and the Forest Service have a key 
role in the citing of generation and transmission facilities 
for wind and solar energy. I know Secretary Salazar has 
undertaken initiatives to bring about more renewable energy 
production on Federal land.
    We also have a very distinguished panel of additional 
experts today who will come forward as a second panel after 
Secretary Salazar testifies and we've had a chance to ask 
questions.
    So, Senator Murkowski is on her way and is not here yet. 
I'm sure she'll have an opening statement when she arrives and 
some comments to make. But why don't we proceed with your 
statement, Secretary Salazar. We look forward to hearing your 
perspective on these important issues.
    [The prepared statement of Senator Bunning follows:]

   Prepared Statement of Hon. Jim Bunning, U.S. Senator From Kentucky

    Thank you Mr. Chairman. I would like to welcome all of our 
witnesses here today especially Secretary Salazar. Ken, it is 
good to see you again.
    At a time when our nation's energy needs are continuing to 
grow the Department of Interior will play a unique role in 
shaping and administering policy that will develop our domestic 
public resources.
    We have the capacity with the large amount of natural 
resources on our public lands to make an important step forward 
in achieving energy independence.
    Thanks to American entrepreneurship we also have the 
technology to develop these resources in a way that is mindful 
of our environment and our National parks.
    I hope that as a nation we will be able to grow our 
domestic energy portfolio and develop these resources as 
opposed to stifling growth through strict federal environmental 
mandates and climate taxes.
    I have long said that I support clean energy but I support 
all forms of clean energy. The Department of Interior is in a 
position to support these efforts through demonstration 
projects such as ones that will sequester and capture carbon.
    These types of projects combined with efforts from the 
private sector can spur on the development and expansion of our 
energy portfolio while creating American jobs.
    I would also like to see the Administration move forward 
and develop a comprehensive plan of action for our oil and gas 
resources on our Outer Continental Shelf. OCS restrictions are 
a relic of the past--especially when our economy is struggling, 
unemployment is rising and state economies are suffering.
    Now is the time to show the nation that we are serious 
about meeting our energy needs by supporting the production of 
American energy from American waters.
    Thanks you Mr. Chairman and I look forward to hearing our 
witnesses' thoughts on the many energy related issues that face 
our nation.

  STATEMENT OF HON. KEN SALAZAR, SECRETARY, DEPARTMENT OF THE 
                            INTERIOR

    Secretary Salazar. Thank you very much, Chairman Bingaman 
and to all the members of the committee to Senator Dorgan, 
Senator Landrieu, Senator Udall and Senator Barrasso, Senator 
Bunning, Senator Bennett. Thank you all for being here this 
morning to engage in this conversation on this very important 
issue for the future of our Nation and our world. Thank you for 
being here as well, Senator Bayh.
    Let me first say that this is my first hearing in front of 
the Senate Energy Committee since I came before this committee 
for its blessing in my confirmation process now, almost it 
seems I guess, about a month or so ago, maybe 6 weeks ago. I'm 
delighted to be back here because many of the issues that I'm 
working on in the Department of Interior are issues which you, 
in this committee are very interested in and will obviously 
play a major role in defining the future of how this Nation 
resolves these issues.
    Let me say at the outset from the point of view of 
President Obama from the time of the campaign through his 
leadership as President of the United States. He believes that 
we need to move forward with a comprehensive energy plan. When 
he speaks about comprehensive energy plan he talks not only 
about the whole future of renewable energy and the new energy 
economy. But he also talks about our conventional fuels 
including oil and gas and clean coal technologies and the like.
    So my instructions as I run the Department of Interior for 
the United States of America is to do what I can to implement 
that comprehensive energy vision that President Obama has 
brought to the Nation. I think it is important to note that 
even though this issue has been something which many of you 
have worked on for a very long time. But perhaps this time is a 
little different than it was in the 1970s and the 1980s when 
there was passing attention paid to this issue, but really, not 
much happened.
    We continue to become more and more dependent on the 
foreign oil to the point where we are now importing close to 70 
percent of our oil from foreign countries. So breaking the 
chains of our over dependence on foreign oil is a central 
tenant of what we are attempting to do. In addition making sure 
that we're addressing the issues of climate change which are 
affecting the entire globe are important.
    Finally that the hundreds of billions of dollars that 
flowed to other places across the world are moneys that 
actually could be spent here in the United States as we move 
forward with our economic development and economic 
opportunities here at home. So those are some of the key 
tenants of the President's vision with respect to how we move 
forward with energy development. Let me make two other quick 
points. Then I'd be happy to take just some questions.
    First of all I know that from the perspective of some it 
seems like we are rolling back many of the initiatives that 
were taken by the prior administration with respect to oil and 
gas development. I've heard comments in the press and other 
places that perhaps we are anti-development. But the fact is 
that much of what we are still doing is continuing to develop 
oil and gas here in the United States both onshore and 
offshore. It is very much a part of our energy future. It is 
something which I will address industry officials at several 
meetings as the week moves on.
    Just a couple of concrete examples so you all will know 
some of the work that we have been doing in this area. Just in 
the last several weeks we have approved seven major oil and gas 
lease sales on the onshore of the United States of America. 
Those seven lease sales have raised a total of $33 million. 
They have included over a million acres of land that has been 
in fact leased for oil and gas development within the onshore 
of the United States.
    In addition the offshore continues to be an important place 
for us to look for possibilities for oil and gas development 
tomorrow. I will be in New Orleans serving as an auctioneer 
since I've served as Senator and Secretary of Interior, 
tomorrow I'll serve as auctioneer with respect to part of lease 
sale 181 South as we move forward into the Gulf of Mexico. 
That's 34.6 million acres. 34.6 million acres in the Gulf Coast 
that will be subject to this oil and gas lease sale tomorrow in 
New Orleans.
    Senator Landrieu, thank you so much for inviting me to go 
to Louisiana to participate in this. I look forward to seeing 
you down there again soon as we deal with other issues relating 
to the offshore. The lease sale tomorrow itself will also 
include about 4.2 million acres that are within what we call 
Lease Sale 181 and as many members of this committee will 
remember that debate and the legislation that was enacted in 
that time.
    One of the things that Senator Alexander and others, 
Senator Landrieu were involved in was the creation of a 
permanent royalty for conservation. The first permanent 
conservation royalty of its kind that was included in that 
legislation which was crafted by this Congress now 2 years ago. 
So that will be implemented tomorrow.
    So I finally will say with respect to development of oil 
and gas resources that we are committed to having a complete 
process with respect to hearing from affected stakeholders 
throughout the country with respect to the future of the Outer 
Continental Shelf. So in the weeks ahead we will be holding 
meetings and hearings in Anchorage, Alaska, San Francisco, 
California and New Orleans, Louisiana and Atlantic City, New 
Jersey. As we hear from Governors, Senators, Congressman and 
other stakeholders about the importance of the resources in the 
offshore.
    We will try to indentify where the holes are with respect 
to information that we need. We will be releasing a report 
which is currently being prepared by the United States 
Geological Survey and the Minerals Management Services with 
respect to the information that they have in the Outer 
Continental Shelf that will be all of what we will be doing in 
those hearings. I am hopeful that many of you will be 
participating with us in those hearings around the country. I 
know Senator Landrieu and Senator Murkowski in their respective 
states will be participating in those hearings.
    I have two more quick points if I may, Mr. Chairman. I know 
I've run past my 5 minutes. But I will try to be very brief on 
these two final points.
    I want to spend just a few minutes talking about renewable 
energies and how important those renewable energies are to the 
United States of America. We have within the Department of 
Interior formed a working group, a task force, that's looking 
at developing renewable energy.
    We have a group of members of the Cabinet including 
Secretary Chu, Secretary Vilsack and Chairman Wellinghoff, the 
Chairman of FERC and others working to help us do two things 
with respect to renewable energy. Those two things are first of 
all, trying to create a zoning process where we actually 
identify those zones where we might be able to cite renewable 
generation facilities across the country both onshore as well 
as offshore. Second of all, looking at the difficult issue 
which many have been struggling with and that is the issue of 
transmission. How do we get the electrons that are generated 
from these renewable energy sites to the places that they are 
going to be consumed?
    If I can take you through some quick maps* and I was 
hoping--I think we may have brought some copies of this. But if 
not, I think you'll be able to see what I'm trying to 
demonstrate here.
---------------------------------------------------------------------------
    * The following graphics have been retained in committee files: 
Solar Energy Potential, Wind Energy Potential, Geothermal Energy 
Potential, a Table Showing Renewable Energy Potential of Federal Lands 
in the West, California Desert District Showing all Lands With Solar 
Potential, California Desert District Showing all BLM Lands with Solar 
Potential, California Desert District Showing BLM Lands, except those 
with Special Designation, and the Electron Super Highway.
---------------------------------------------------------------------------
    First of all this first chart just shows where the 
renewable energy potential is of the United States of America. 
These are maps that you have seen. The National Renewable 
Energy Lab have produced. But it shows the great potential for 
solar energy within the Southwest.
    The second map is one that shows the wind energy potential 
of the United States of America. As you will see the wind 
energy potential is very, very large for the United States 
right from the Great Plains and the Dakotas all the way down 
the middle of the country. On also in the areas on the 
Atlantic, most of the Atlantic is very rich in terms of the 
possibility of offshore wind as well as some areas off of the 
Pacific. So that shows where some of the potential is for huge 
wind energy production.
    Next, geothermal energy. If you will look at the geothermal 
energy potential there is huge potential, especially in the 
Western part of the United States. Many of those geothermal 
properties are located on public lands run either by the BLM or 
by the Forest Service in the Department of Agriculture.
    The next chart will show, it's a quick table that shows 
what the renewable potential energy is from some of these 
sites. But if you look at the assessment has been done by a 
number of different people. The essence of what you will do is 
if you go through a renewable energy citing process you can 
identify the number of megawatts that can be produced from 
these different streams of renewable energy.
    So the approximate portion of renewable energy on Federal 
lands that can come just from solar energy itself is estimated 
at being somewhere in the neighborhood of 42,000 watts, that's 
42,000 watts. Most of it located in the Southwest. It can be 
produced just from solar energy itself.
    The wind part that is located on Federal lands is 
approximately 51,000 megawatts of power that can come from this 
wind energy. Much is, Senator Barrasso in Wyoming, much is 
located, Senator Dorgan up in North Dakota and so we know that 
there's a lot that can be done with respect to the development 
of this energy because it's already out there. These are 
technologies that are already proven. They're not technologies 
that are 10 or 15 years away.
    Now let me walk through with you with three visuals that 
demonstrate the kind of energy, renewable energy zoning process 
that the Bureau of Land Management, working with a number of 
stakeholders has gone through in Southern California. The first 
of those charts is a chart that indicates all the location of 
lands in Southern California which are prime sites for the 
location of renewable energy sites. The reality is though that 
there are overlays that have to go on top of those sites which 
have high energy potential including the location of Federal 
facilities, the location of places where we have endangered 
species such as the Desert Tortoise and the like.
    So the next chart will show what happens when you then take 
that set of acreage and you put the overlay with respect to 
other lands that might be available. So what we've done here is 
we've taken off national parks, national monuments, all the 
Department of Defense lands, which are huge in Southern 
California. You see that the number of acres that would be 
available for solar development then is significantly less.
    The final chart then that we will put up will show what 
happens when the stakeholders, the State of California, the 
utilities, environmental groups and others have gone through 
and said. What we have done here is to identify the areas in 
Southern California which are on public lands, which are the 
best places for us to site solar energy facilities. We are in 
the process of trying to do that around the country.
    It's going to take us a little more time to get it done. 
But at the end of the day what we're trying to do with this 
planning process, it's no different than the land use planning 
process that a local government would go through is to be 
proactive in planning where the placement of these renewable 
energy facilities will ultimately go. What has happened in the 
past is that we essentially have had a helter skelter kind of 
approach to where we site solar facilities.
    Today we have 200 applications for solar energy power 
plants that are located in Bureau of Land Management properties 
across the country. There is no program or no planning that has 
gone into how we process those applications. We also have about 
20 applications that are pending before BLM with respect to 
wind projects.
    But again, there has been no process in how we move 
forward. So we hope that working with our sister agencies in 
the Federal Government that we'll be able to move forward and 
create these energy zones for the United States of America. So 
that's my No. 1 with respect to renewables.
    The second point I want to make illustrated by this chart 
is that in the Western parts of the United States we are 
already significantly along the way of trying to figure out 
where the transmission corridors should go for the United 
States of America. What this map will show through the black 
lines as well as the grey lines that are on that map, are 
approximately 6,000 miles of new transmission to built in the 
Western part of the United States. About 5,000 of the miles 
that are designated in that map are located on Bureau of Land 
Management properties. About 1,000 of those miles are located 
on Forest Service lands.
    There are places along those corridors that we still need 
to figure out how we're going to connect them up. But it seems 
to us that if we can figure out a way of creating this 
transmission grid in the West. We can then work with our sister 
agencies including DOE and FERC. We can do this for the entire 
United States of America.
    So Secretary Chu, myself, Secretary Vilsack, FERC and 
others are working to try to come up with this map for your 
consideration and for the consideration of President Obama as 
we move forward with respect of that. At the end of the day, 
hopefully, what we will have is working with all of you, a 
super electron highway for the United States of America that 
will get us into the electronic grid of the 21st century.
    The last and final point, Chairman Bingaman and Senator 
Murkowski and members of the committee is that there has been a 
jurisdictional feud that has gone on for quite a while 
unresolved between FERC and the Department of Interior, MMS 
relative to the citing of renewable energy facilities in the 
Outer Continental Shelf. We've had several meetings with FERC. 
I'm proud to let you know this morning that as of late last 
night we signed a memorandum of understanding between the 
Department of Interior and FERC that will allow us to move 
forward with the citing of renewable energy facilities in the 
OCS.
    There is no dispute here with respect to wind energy and 
how we move forward with wind energy in the Outer Continental 
Shelf. So our intention is that as we continue together input 
on the future of the OCS that we'll be able to move forward to 
finality with respect to the rules that apply to wind energy 
off the offshore. There are States like Delaware, New Jersey, 
many others, Massachusetts that have asked us to try to 
expedite the rulemaking with respect to wind energy in the 
offshore. I believe that we will be in a position where we'll 
be able to do that in the several months ahead.
    With that I would be happy to take questions from the 
committee.
    [The prepared statement of Secretary Salazar follows:]

     Prepared Statement of Hon. Ken Salazar, Secretary, Department 
                            of the Interior

    Thank you, Chairman Bingaman, Senator Murkowski, and Members of the 
Committee, for giving me the opportunity to come before you today to 
discuss energy development on public lands and the Outer Continental 
Shelf (OCS) under the Department of the Interior's jurisdiction. This 
is my first hearing before you since my confirmation as Secretary of 
the Interior and it is an honor to be here.
    President Obama has pledged to work with you to develop a new 
energy strategy for the country. His New Energy for America plan will 
create a clean energy-based economy that promotes investment and 
innovation here at home, generating millions of new jobs. It will 
ensure energy security by reducing our dependence on foreign oil, 
increasing efficiency, and making responsible use of our domestic 
resources. Finally, it will reduce greenhouse gas emissions.
    During his visit to the Department for our 160th anniversary 
celebration two weeks ago, the President spoke about the Department's 
major role in helping to create this new, secure, reliable and clean 
energy future. The vast landholdings and management jurisdiction of the 
Department's bureaus, encompassing 20 percent of the land mass of the 
United States and 1.7 billion acres of the Outer Continental Shelf, are 
key to realizing this vision through the responsible development of 
these resources.
    These lands have some of the highest renewable energy potential in 
the nation. The Bureau of Land Management has identified a total of 
approximately 20.6 million acres of public land with wind energy 
potential in the 11 western states and approximately 29.5 million acres 
with solar energy potential in the six southwestern states. There are 
also over 140 million acres of public land in western states and Alaska 
with geothermal resource potential.
    There is also significant wind and wave potential in our offshore 
waters. The National Renewable Energy Lab has identified more than 
1,000 gigawatts of wind potential off the Atlantic coast, and more than 
900 gigawatts of wind potential off the Pacific Coast.
    Renewable energy companies are looking to partner with the 
government to develop this renewable energy potential. We should 
responsibly facilitate this development. Unfortunately, today, in BLM 
southwestern states, there is a backlog of over 200 solar energy 
applications. In addition, there are some 20 proposed wind development 
projects on BLM lands in the west. These projects would create 
engineering and construction jobs.
    To help focus the Department of the Interior on the importance of 
renewable energy development, last Wednesday, March 11, I issued my 
first Secretarial Order. The order makes facilitating the production, 
development, and delivery of renewable energy top priorities for the 
Department. Of course, this would be accomplished in ways that also 
project our natural heritage, wildlife, and land and water resources.
    The order also establishes an energy and climate change task force 
within the Department, drawing from the leadership of each of the 
bureaus. The task force will be responsible for, among other things, 
quantifying the potential contributions of renewable energy resources 
on our public lands and the OCS and identifying and prioritizing 
specific ``zones'' on our public lands where the Department can 
facilitate a rapid and responsible move to significantly increased 
production of renewable energy from solar, wind, geothermal, 
incremental or small hydroelectric power on existing structures, and 
biomass sources. The task force will prioritize the permitting and 
appropriate environmental review of transmission rights-of-way 
applications that are necessary to deliver renewable energy generation 
to consumers, and will work to resolve obstacles to renewable energy 
permitting, siting, development, and production without compromising 
environmental values.
    Accomplishing these goals may require new policies or practices or 
the revision of existing policies or practices, including possible 
revision of the Programmatic Environmental Impact Statements (PEISs) 
for wind and geothermal energy development and the West-Wide Corridors 
PEIS that BLM has completed, as well as their Records of Decision. The 
Department of Interior will work with relevant agencies to explore 
these options.
    We will also, as I have said before, finalize the regulations for 
offshore renewable development authorized by section 388 of the Energy 
Policy Act of 2005, which gave the Secretary of the Interior authority 
to provide access to the OCS for alternative energy and alternate use 
projects. This rulemaking was proposed but never finalized by the 
previous Administration.
    For these renewable energy zones to succeed, we will need to work 
closely with other agencies, states, Tribes and interested communities 
to determine what electric transmission infrastructure and transmission 
corridors are needed and appropriate to deliver these renewable 
resources to major population centers. We must, in effect, create a 
national electrical superhighway system to move these resources from 
the places they are generated to where they are consumed. We will 
assign a high priority to completing the permitting and appropriate 
environmental review of transmission rights-of-way applications that 
are necessary to accomplish this task.
    Developing these renewable resources requires a balanced and 
mindful approach that addresses the impacts of development on wildlife, 
water resources and other interests under the Department's management 
jurisdiction. I recognize this responsibility, and it is not a charge I 
take lightly.
    At the same time, we must recognize that we will likely be 
dependent on conventional sources--oil, gas, and coal--for a 
significant portion of our energy for many years to come. Therefore it 
is important that the Department continue to responsibly develop these 
energy resources on public lands.
    In the past 7 weeks, the Department has held seven major oil and 
gas lease sales onshore, netting more than $33 million for taxpayers. 
And tomorrow I will be in New Orleans for a lease sale covering 
approximately 34.6 million offshore acres in the Central Gulf of 
Mexico. This sale includes 4.2 million acres in the 181 South Area, 
opened as a result of the Gulf of Mexico Energy Security Act. 
Continuing to develop these assets, through an orderly process and 
based on sound science, adds important resources to our domestic energy 
production.
    Based on this approach, I announced last week that I would be 
hosting four regional public meetings next month in order to gather a 
broad range of viewpoints from all parties interested in energy 
development on the OCS. In addition, I directed the Minerals Management 
Service and the U.S. Geological Survey to assemble a report on our 
offshore oil and gas resources and the potential for renewable energy 
resources, including wind, wave, and tidal energy. The results of that 
report will be presented and discussed with the public.
    The meetings will be held in Atlantic City, New Jersey, New 
Orleans, Louisiana, Anchorage, Alaska, and San Francisco, California, 
during the first two weeks in April. These meetings are an integral 
part of our strategy for developing a new, comprehensive, and 
environmentally appropriate energy development plan for the OCS. I have 
also extended the comment period on the previous Administration's 
proposed 5-year Plan for development by 180 days. We will use the 
information gathered at these regional meetings to help us develop the 
new 5 year plan on energy development on the OCS.
    Similarly, again based on sound science, policy and public input, 
we will move forward with a second round of research, development, and 
demonstration leases for oil shale in Colorado and Utah. While we need 
to move aggressively with these technologies, these leases will help 
answer the critical questions about oil shale, including about the 
viability of emerging technologies on a commercial scale, how much 
water and power would be required, and what impact commercial 
development would have on land, water, wildlife, communities and on 
addressing global climate change.
    We are also proceeding with development onshore, where appropriate, 
on our public lands. As I noted above, the responsible development of 
our oil, gas and coal resources help us reduce our dependence on 
foreign oil, but this development must be done in a thoughtful and 
balanced way, and in a way that allows us to protect our signature 
landscapes, natural resources, wildlife, and cultural resources.
    We also need to ensure that this development results in a fair 
return to the public that owns these federal minerals. That's why the 
President's 2010 Budget includes several proposals to improve this 
return by closing loopholes, charging appropriate fees, and reforming 
how royalties are set. Of course, I'll be happy to discuss these in 
more detail after the Administration's full budget request is released 
in the coming weeks.
    Implementation of the President's energy plan will ultimately focus 
the nation on development of a new green economy and move us toward 
energy independence, and I and my team are working hard to put that 
plan into place.
    Mr. Chairman, I know you and the Committee, along with the Majority 
Leader and others in Congress, are working hard on these issues. I 
believe we are being presented today with an historic opportunity to 
enhance our economy, our environment, and our national security. Too 
much is at stake for us to miss this opportunity.
    Thank you, Mr. Chairman and Members of the Committee. I am happy to 
answer any questions that you may have.

    The Chairman. Thank you very much. Before we go to 
questions let me defer to Senator Murkowski for any comments or 
opening statement she'd like to make.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Mr. Chairman, thank you. In the interest 
of time seeing as how many members are here today I don't want 
to make an opening statement. I will submit mine for the 
record.
    [The prepared statement of Senator Murkowski follows:]
  Prepared Statement of Hon. Lisa Murkowski, U.S. Senator From Alaska
    Good morning. Thank you all for being here today. And thank you to 
Chairman Bingaman for convening this hearing on the timely topic of 
energy production from public lands and the Outer Continental Shelf.
    Our nation is blessed with abundant energy resources--both on land 
and beneath the surfaces of our lands and waters. We're eager to 
develop our vast wind and solar resources, particularly in the West, 
and we are excited about the enormous hydrokinetic energy potential 
along our coasts. In Alaska our tides can run over 20 feet, and it's 
fascinating to consider the raw energy behind that.
    At the same time, let's remember that the purpose of this hearing 
is not limited to renewable energy, just as our nation's energy policy 
cannot be limited to renewable energy. Today, over 80% of the nation's 
total energy consumption comes from conventional sources like coal, 
oil, and natural gas. In terms of what we can access, transport, and 
convert into the most energy at a price Americans can afford, renewable 
energy has a lot of catching up to do.
    I believe the Energy Committee understands this issue. The good 
news is that we don't have to develop one form of energy at the 
exclusion of another. A terrific example is legislation we're working 
on right now with Chairman Bingaman's staff to make use of the 
geothermal energy that comes up as a byproduct of mature oil and gas 
wells.
    The bad news is that some D.C. policy makers appear to have 
declared a war on oil. Raising taxes on energy companies or excluding 
areas from oil and gas exploration have historically resulted in higher 
energy bills for American families. Increasingly, those bills must be 
paid to foreign state run oil companies. We cannot allow our domestic 
oil and gas production to be shut down in favor of increased dependence 
on foreign oil.
    The promises of renewable energy from public lands and the OCS are 
many but our purpose today must be to establish realistic goals. How 
many kilowatts, how many barrels of oil equivalent, how much energy can 
we count on from the various sources given the vast acreage at the 
federal government's disposal?
    On Alaska's own Outer Continental Shelf, I'm told that the Chukchi 
Sea represents oil and gas resources comparable to another Gulf of 
Mexico. Further south, we know that North Dakota is embracing its new 
nickname as the Saudi Arabia of wind energy. And still further south, 
solar panels in the desert Southwest region hold significant potential.
    One challenge with any of these energy sources is their remoteness 
to the country's major population centers. That is an issue I really 
want to focus on today--how energy developers can find cost effective 
ways to produce and deliver their product for customers who are very 
far away. We move oil, gas, and coal with trucks, trains, ships, and 
pipelines. However, the deployment of wind, solar, and hydrokinetic 
resources have an associated learning curve--we need to determine where 
to place transmission lines; what kind of lands they need to cross over 
to get there; and what sorts of new impacts we can expect on public 
lands and oceans.
    I'm interested in discussing Secretary Salazar's announcement last 
week regarding ``renewable energy zones.'' I think it's increasingly 
understood and accepted that intermittent renewable resources will 
require huge supplies of baseload natural gas for those periods when 
the wind isn't blowing or the sun isn't shining. If we aren't careful 
to maintain conventional energy supplies in close proximity to a 
``renewable energy zone,'' it might be more aptly called an 
``intermittent energy zone.''
    I'd like to thank all of our witnesses for joining us today. I know 
many of you have traveled from out West to be here. I look forward to 
hearing your testimony and getting your thoughts on the challenges and 
expectations I have outlined. Mr. Chairman, thank you again for 
convening this important hearing.

    Senator Murkowski. But I do appreciate Secretary Salazar, 
your consideration of the comments that some of us have made. I 
most certainly, about the concerns that I have about where the 
administration may be going when it comes to our oil and gas 
and our more traditional resources. We need to make sure that 
those resources are not closed off as we seek to develop more 
in terms of our renewables.
    With that I will end my remarks. But I do have to take this 
opportunity, maybe it's because my leg is bound up and I'm 
getting around very well. But there are a few things that 
irritate me more than maps of the United States of America that 
do not include that great northern State. I will include Hawaii 
as well.
    [Laughter.]
    Senator Murkowski. Our renewable energy resources are 
wonderful and vast. We look forward to the time that you will 
come up to visit them. But we do encourage the Department of 
Interior to make sure that all 50 States are represented on the 
map.
    [Laughter.]
    Senator Murkowski. Thank you and welcome back to the 
committee, Secretary Salazar.
    Secretary Salazar. That's a point well taken. Alaska is so 
important that it merits a map all to itself.
    [Laughter.]
    Senator Murkowski. You're right. You're right. Thank you.
    The Chairman. Let me start with a few questions. Can you 
tell us what your time line is for finalizing a new 5-year plan 
for oil and gas leasing in the Outer Continental Shelf? What 
your intention is with regard to consultation with coastal 
States in the development of that 5-year plan?
    Secretary Salazar. Senator, being that our meetings will 
actually take place during the month of April. We have extended 
the comment period for 180 days on the revised 5-year plan. So 
sometime within the year after those comments are all in I hope 
that we are then able to have a comprehensive plan with respect 
to the future of the Outer Continental Shelf.
    I think the renewable energy part of it frankly is probably 
going to be easier than the parts that we'll deal with 
additional production in the offshore. But as President Obama 
has said he is not opposed, the administration is not opposed 
to production in the offshore. But we want to make sure that 
it's part of a comprehensive energy plan.
    It has to include what we have to do with respect to 
efficiency, with respect to renewable energy, respect to 
climate change. We want to try and bring it all together. So we 
will be working on that in the months ahead.
    The Chairman. Let me ask about onshore. How do you see your 
responsibility and authority with regard to the citing of 
transmission lines as compared with as it relates to the 
Federal Energy Regulatory Commission? With the citing of these 
lines across public lands what should your role be as 
distinguished from FERC's authority?
    Secretary Salazar. Chairman Bingaman, I believe the 
Department of Interior should have a robust role in the citing. 
But I also do not believe that we should let bureaucratic silos 
stand in the way of us getting the job done. So that is why we 
have pulled together as a team including FERC to try to figure 
out how we move forward on this agenda.
    Certainly the Department of Interior has huge resources and 
knowledge relative to our public lands and the protection of 
sensitive areas within our public lands, our scientists both 
within the U.S. Geological Survey as well as within our land 
resource agencies can provide tremendous input into where we 
are going to cite these transmission lines. Our scientists from 
the Fish and Wildlife Service will also be involved. So I 
believe that we ought to have, you know, a robust role in terms 
of making the decisions with respect to where these corridors 
actually will ultimately go.
    I will say this, Mr. Chairman, I believe that the work that 
has gone on in the Western part of the United States has moved 
as far as it has gone in large part because it's been an effort 
that has been inclusive and has included the Governors of the 
Western States. In fact much of what we see with respect to the 
Western grid which is half of the Continental United States. 
Much of that work is where it is today because of the 
leadership of the Western Governors.
    The Chairman. The Land and Water Conservation Fund has been 
on the books now for several decades. As you know we have had 
great difficulty getting the funds appropriated that were 
contemplated to go into that Land and Water Conservation Fund 
when it was first set up. Do you think it would be helpful to 
have a dedicated source of funding for the Land and Water 
Conservation Fund? Is that something that you and the 
administration would support?
    Secretary Salazar. We have not yet made any final decisions 
about matters that will relate to where budgeting issues and 
where some of this money is going to go.
    I have a personal point of view on that. That is that we 
ought to be looking at the designation of money in trust for 
land and water conservation. I believe it could be very much a 
part of a treasured landscape agenda for the 21st century.
    I think that in the Gulf Coast legislation that we passed 
several years ago where we included the first permanent 
conservation royalty in it. That was a good first step in terms 
of trying to fund land and water conservation funds. When one 
looks at the numbers that we currently are investing they 
really are miniscule relative to what was envisioned in the 
past.
    I think when John Kennedy first announced the Land and 
Water Conservation Fund he felt that it was going to be a 
robust set of funding for us to protect our land and water and 
wildlife resources of the United States of America as we 
continue to grow. In 1977, I believe, the Atlanta Water 
Conservation Fund was at that point funded at some $900 
million. If you adjust that for inflation it should be funded 
today at some $3.4 million.
    Yet the truth of the matter is that we, every year, end up 
funding only a very small fraction of that amount. That's 
something that I think we need to address. I think that as the 
country continues to grow and we look at American citizen owned 
resources that are being developed and the revenues that come 
from those resources that we should invest some of that money 
in the great landscapes of this country.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. Secretary, I'm 
very pleased to hear your announcement this morning about the 
memorandum of understanding with FERC and MMS. That's very, 
very important.
    I'm curious as to what you anticipate the timeline will be 
in the Cape Wind project has been out there since 2001 
undergoing regulatory scrutiny. It seems like every interested 
party has had an opportunity to provide comment both under 
State and Federal law. How much longer would you anticipate 
that a project like this that has been out there for as long as 
it has been and the review it's gone under? How much longer do 
you think we wait until a decision is made on Cape Wind or any 
other offshore projects?
    We had a hearing a few weeks back where we had a 
representative from New Jersey--it was a wind project off of 
New Jersey. They're looking very, very aggressively to having 
offshore wind off their coast within a very, very short period 
of time. How do you anticipate we will move forward with these 
offshore wind projects?
    Secretary Salazar. First Senator Murkowski let me say that 
what we have with FERC that we completed last night that I 
signed off on is an agreement on how we move forward. It 
essentially makes a statement that the Department of Interior 
and MMS under the laws of this Congress has the authority with 
respect to offshore wind. So that allows the rulemaking process 
which had been held up essentially to move forward.
    We also note, recognize we have some additional work to do. 
But the Chairman and I are committed and the members of the 
Commission as well to help us move forward to conclusion in 
what's going to be a broader MOU. We don't want to be tripping 
over each other as we're dealing with ocean, tidal or wave 
energy. At the same time we're moving forward with offshore 
wind.
    The fact of the matter is, and the science will tell us all 
that we are very ready to move forward with offshore wind. The 
technology is there. We proved it on the onshore.
    We have many projects in the offshore that are in the 
making. So we ought not to let the jurisdictional disputes with 
respect to ocean, tidal, wave energy essentially get in the way 
of us moving forward with that. So we will work out something 
that will be satisfactory to both FERC and to us.
    With respect to Cape Wind itself and how we move forward 
with that. You know, obviously there has been approval given by 
numerous agencies. There is still litigation that is ongoing. 
We would hope that we would be able to move forward with a 
decision on that particular project sometime in the next 
several months.
    Let me get to, I think, what is your more fundamental 
point. That is when will we be ready to move forward with 
rulemaking in the offshore, to put it into final form with 
respect to wind energy development and to be able to start 
harnessing all this potential wind energy in the offshore? We 
could be ready to move forward within probably 2 months from 
now after we have our hearings around the country to move 
forward with the finalization of those rules.
    It may be necessary. We will do it in consultation with 
this committee and the Congress and obviously the President and 
the White House. Whether or not there are changes that we want 
to make to those rules, if that decision were to be made then 
it may postpone by several months when we get the final 
rulemaking. But we're working on it as fast as we can.
    Senator Murkowski. Let me ask you about a statement that 
Interior released saying that it will be taking a closer look 
at the energy development that is slated for the Chukchi. Can 
you give me a better understanding as to what you mean by 
closer look and whether or not Interior has actually begun on 
this process? Then also there was a statement released, I guess 
just this morning from the Department that touched on leasing 
in the National Petroleum Reserve Alaska.
    But my question is, is the commitment from the Department 
to the 5-year leasing sale up in Beaufort, the Chukchi, the 
North Aleutian. You've indicated and we're pleased that you are 
coming to Alaska in April for those hearings. But can you just 
give me a quick update on where we are with Chukchi and what 
you mean with a closer look?
    Secretary Salazar. We are looking at everything out in the 
Outer Continental Shelf. Obviously Alaska has huge resources 
both onshore as well as offshore. We have spoken, Senator 
Murkowski, often about the Alaskan natural gas pipeline and 
your interest in that and how we might be able to be of 
assistance in moving that forward.
    We are in a learning process on the Outer Continental 
Shelf. That's part of what we are doing with these hearings 
including my visit to Alaska. I know there nothing in Alaska is 
very easy and there's lots of conflict relative to development 
in the four areas that are subject to the current 5-year plan 
in Alaska itself.
    So we are in the process of learning more about it and 
making decisions about how we are going to move forward. But we 
haven't made any specific decisions with respect to any of the 
offshore areas in Alaska other than to say this, Senator 
Murkowski, is that as we look at the offshore what we want to 
do is we want to make sure that it fits in with a comprehensive 
energy program.
    One of the parts of a comprehensive energy program will be 
the development of our oil and gas resources within the 
country. So let me leave it at that at this point in time. I 
think after we come back from Alaska we'll have more of a sense 
of each of the areas that you have spoken to me about.
    Senator Murkowski. We do appreciate that. We recognize that 
this potential offshore is quite impressive. The planning that 
has gone into the offshore for these four areas has been 
relatively extensive.
    The administration has pushed it off, a shorter term delay. 
But we would hope that that commitment would be there to look 
very seriously at that potential offshore. Thank you, Mr. 
Chairman.
    The Chairman. Senator Landrieu.
    Senator Landrieu. Thank you. Welcome, Secretary Salazar. 
I'm looking forward to your visit to New Orleans tomorrow. 
You're going to be a wonderful auctioneer.
    They'll be as these things go about 1,000 individuals and 
businesses that are there really anxious to see what the bids 
are going to be in the Gulf of Mexico for a new area that you 
actually helped to open up when you were a Senator. I want to 
really commend you for your extraordinary leadership joining 
with so many of us, both Democrats and Republicans to open up 
some additional acres of drilling that had been shut off to 
development. As you know, Mr. Secretary that moratoria stayed 
in place from the first Bush administration through the Clinton 
administration almost all the way through the end of the former 
administration with only 5 months left.
    That moratoria, you know, set our country back in so many 
ways in terms of us now being very rusty, if you will, when it 
comes to smart development of offshore resources. So I'm 
looking forward to tomorrow. I think you'll get a real sense of 
the energy and excitement that is in the Gulf of Mexico from 
Texas to Louisiana to Alabama to parts off the shore of Alabama 
for, you know, for this lease sale.
    Let me second say, before I get into my question. As I've 
said this before to you privately and publically. I don't 
believe the President could have made a better choice if he had 
looked all over the world, seriously, for a person to lead this 
Department than you.
    I have and the people that I represent have a great deal of 
confidence in your ability to strike the right balance between 
moving aggressively to grasp the possibilities of renewables 
but also using so much more smartly the natural and traditional 
resources that we have. Senator Murkowski mentioned the great 
contributions that Alaska has made as you know. I don't need to 
tell you what Texas and Louisiana have done over the years to 
produce oil and gas.
    I think your approach to a more rational plan is something 
that I most certainly will support and looking forward to these 
four hearings. One of which will be in South Louisiana as you 
mentioned one in California, one in New Jersey and then I 
think, one in Alaska.
    My question is actually following up on what Senator 
Bingaman said. As you know I worked with you and Lamar 
Alexander to fashion potentially a dedicated source of revenue 
for the Land and Water Conservation Fund. But would you care to 
comment about maybe a path forward, not just in terms of the 
inventory for where we need to look for offshore resources and 
how we might go forward on that, but also establishing a smart 
partnership with the States in terms of sharing revenues from 
these offshore developments as is currently the law today.
    Do you see the benefit of that? How is that figuring into 
maybe your plans, you know, for the future? The importance of 
having that sort of partnership established with the States so 
it really is everybody has got their oars in the water, moving 
in the same direction. There's not this conflict between the 
need for the Federal Government to develop these resources and 
the lack of appropriate support for the communities that are 
serving as the platform for those resources.
    Could you just comment generally about that? The inventory, 
how we might move forward with an updated, modern inventory of 
our offshore lands and how important do you think this 
partnership between the Federal Government and States and the 
local communities actually is to achieve your goal of energy 
security for our Nation?
    Secretary Salazar. Thank you very much, Senator Landrieu. 
Thank you for the complements. I do hope that I can be a 
problem solver in the time that I serve as Secretary of 
Interior on behalf of the Nation and its people.
    First of all let me just say that with respect to the 
inventory. One of the realities of the offshore is that there 
are some places where we do have tremendous information. The 
Gulf of Mexico is a perfect example where the geologic seismic 
information tells us a lot about the Gulf of Mexico.
    On the other hand the information that we have off the 
Atlantic is very old and very incomplete. So sometimes I think 
the debate that takes place here with respect to development on 
the offshore of the Atlantic is a debate that is taking place 
of respect to a phantom because nobody knows what's out there. 
So it makes great political theater for everybody involved to 
have a big debate about it. But that will be one of the key 
questions.
    So where are we on information in the Atlantic? What kind 
of additional information needs to be developed? It seems to me 
that if we were a private landowner that we'd want to know what 
the best information is so that we can make cogent, logical 
decisions about how to move forward.
    So there is, frankly, an information derth in much of the 
Outer Continental Shelf. I expect that that's one of the things 
that we will be seeing when in the report that is put together 
by USGS and MMS. Although I'm not prejudging what that report 
will say, I know they're working on it very hard. I very much 
look forward to the report.
    On a very important question that you raise on the revenue 
sharing, it is an important question for the United States of 
America. You remember the very tough debate where not everybody 
on this committee, including our wonderful chairman, frankly 
are all in the same view of what kind of a revenue sharing 
program might exist. That's all part of the discussion and 
dialog that I believe we need to put on the table.
    It may be time. As I said in my earlier comments, for us to 
take a look at the Land and Water Conservation Fund and to get 
it permanently funded so it doesn't become part of the annual 
appropriations fight that essentially has funded probably 2 
percent of the vision of John Kennedy when he announced that 
the Atlanta Water Conservation Fund was important. If we're 
going to get it done to make sure that we're investing in the 
treasured landscapes of America. Then we ought to figure out a 
way of getting it done.
    I know the debate between the offshore and onshore formulas 
is something that will move forward as you all consider an 
energy bill here. We do not have a position on that at this 
point in time. But look forward to listening and working with 
you on that agenda.
    Senator Landrieu. Thank you, Mr. Secretary.
    The Chairman. Senator Bunning.
    Senator Bunning. Secretary Salazar, welcome back to the 
Energy Committee.
    At a time when our Nation's energy needs are continuing to 
grow, the Department of Interior will play a unique role in 
shaping and administering policies that will develop our 
domestic resources. While I recognize greater public input in 
the regulatory process I was disappointed by your decision. 
Thirty-two of us signed a letter to the President expressing 
that frustration on the Outer Continental Shelf and the delay 
which you said you solved this morning, a delay to move forward 
on energy development while leasing on the Outer Continental 
Shelf.
    Congress made the American people wait nearly 30 years to 
address our immediate energy challenges. Yet you have told the 
American people they must continue to wait. On top of this 
initial 60 day comment period, if that is correct, this brings 
the total comment period to 240 days lasting until September. 
Is that correct?
    Secretary Salazar. If you're talking about the new 5-year 
plan that was prematurely proposed.
    Senator Bunning. Yes.
    Secretary Salazar. The answer is yes. I will respond more 
in my opportunity comes up.
    Senator Bunning. The draft plan already received a record 
120,000 comments from the States, environmental groups, 
industry, labor groups and members of the public with 87,000 of 
those comments supporting expanded and expeditious deployment. 
After September do you envision any additional regulatory 
delays? By that time you will have prepared a comprehensive 5-
year program for oil and leasing.
    Secretary Salazar. Senator Bunning, let me step back and 
just say there was no need to reopen the 5-year plan. We had a 
5-year plan that was in place for a 5-year period until 2012. 
The 5-year plan was----
    Senator Bunning. It was just delayed.
    Secretary Salazar [continuing]. Essentially opened up. 
Opened up by my predecessor before it had to be opened up. The 
fact of the matter is that the Executive branch, Presidential 
Moratorium as well as Congressional Moratorium expired just 
within the last year.
    I think it is important for the United States of America to 
take a look at the Outer Continental Shelf in the most 
comprehensive way that we can because we're talking about 1.75 
billion acres in the Outer Continental Shelf. I think for us to 
make sure that we're moving forward in a methodical and 
appropriate way and taking the time to do it in that kind of 
fashion is an appropriate way. So, you know, the time that we 
have chosen, I think gives us ample time to engage with you and 
members of the Senate and the House of Representatives to 
figure out a way forward for the Outer Continental Shelf.
    As President Obama has said that he believes the Outer 
Continental Shelf ought to be part of what we deal with in 
terms of a comprehensive energy plan. We hope to be able to 
work with the stakeholders, listen to the Governors, listen to 
the Senators, listen to others and to try and figure out a good 
way forward on this 1.75 billion acre asset of the American 
public.
    Senator Bunning. Tomorrow you said you're going to New 
Orleans to be an auctioneer on 181, section 181, in the Gulf. 
How long do you think it would take before the rules are in 
place to have some type of exploration in section 181?
    Secretary Salazar. I mean the rules are already in place 
for offshore leasing and in the Gulf of Mexico. So we'll just 
move forward with the regular process that has been established 
which we already deal with extensively in terms of the offshore 
leasing. The 34 million acres that are being put out to lease 
tomorrow, we'll see what the response is in terms of those who 
are interested in leasing those properties on the Gulf Coast.
    But it is a very extensive lease sale of the area in the 
Gulf Coast where there are known reserves of oil and gas, 
significant reserves of oil and gas. So I think that will move 
forward in regulatory.
    Senator Bunning. My basic question is when do we see the 
first rig in the Gulf and 181?
    Secretary Salazar. As you know Senator Bunning, you know, 
the oil and gas companies will go ahead and provide their bids 
tomorrow. The oil lease is hopefully for whatever is leased 
upon ultimately will be finalized and it will fit in within the 
exploration and development program of the oil and gas company 
that acquires the lease.
    Senator Bunning. Thank you.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you. Mr. Secretary, I 
think the subject of this hearing is very important. I think we 
need to maximize the potential for renewable energy in our 
country. That includes the potential to develop renewable 
sources on public lands.
    We need to develop a transmission capability in order to 
maximize and then move renewable energy where it's needed. That 
means citing transmission lines across the country and also on 
public lands. We also need to maximize the potential to produce 
oil and gas here at home.
    Senator Bingaman, Senator Domenici and I, along with then 
Senator Talent, were the four that initiated the legislation to 
allow for oil production on Lease 181 in the Gulf of Mexico. I 
think much more of the Gulf should be open. I understand your 
point that you want to find out what is there.
    But I think we're not too many months away from the drill, 
baby, drill bumper sticker which was then a political campaign 
when oil went to $147 a barrel in day trading. But the notion 
of being able to use more of our domestic resources and I'm 
speaking of oil and gas and renewables is a very important 
element of an energy program.
    So let me ask you a question philosophically if I might 
about what you and the administration think about offshore 
drilling generally. Are we headed toward a kind of a different 
culture in taking a look at these with the understanding that 
we need to be able to produce oil and gas as a part of an 
energy strategy going forward? We understand most of that 
production, additional production capability is in the Gulf of 
Mexico, not exclusively but there's a substantial amount of it 
there.
    So tell me your philosophy and what you think the 
administration's philosophy is with respect to drilling?
    Secretary Salazar. Senator Dorgan, as I indicated just in 
the last several weeks on the offshore there have been seven 
major oil and gas lease sales. No one from the administration 
has said don't move forward with those oil and gas lease sales. 
Tomorrow we're moving forward with 34 million acres of 
additional area in the Gulf to be auctioned off for lease.
    I think actions should speak very loudly here in terms of 
wanting to make sure that our onshore and offshore resources 
are in fact made available to meet the energy needs of the 
Nation. As President Obama said during the campaign and as he 
has said since then, he, you know, wants us to have a 
comprehensive energy plan. It's in that context that the OCS 
has got to be a part of that comprehensive energy plan.
    But for it to be comprehensive in nature, you know, we need 
to do the things that he has talked about. The things that were 
included in the stimulus package. The great initiatives that we 
have underway for renewable energy and to try and update the 
electrical grid so we're not dealing with the Thomas Edison 
electrical grid but really update it to the 21st century.
    So lots of different challenges that we have ahead of us as 
we deal with putting together a comprehensive energy plan. We 
hope to move with that with all deliberate haste.
    Senator Dorgan. Secretary, we understand U.S. Geological 
Survey estimates there's somewhere around a half a million 
barrels of oil a day under Cuban waters, 50 miles off the shore 
of Florida. The Spanish are interested in drilling there. 
Canada and I believe China is also taking a look at it. Under 
the current embargo, our American oil companies are not 
permitted to be involved there. Do you think they should be?
    Secretary Salazar. I do not know what the administration's 
position on that issue is. I know that it is a very difficult 
and a very emotional issue for people. I do know that the 
geologic information is there from USGS in terms of what the 
availability is.
    But it does take us down the path of what has been a very 
difficult geo-political issue which this Senate and this 
Congress and prior administrations have dealt with. So that 
would probably be something that you might want to ask Senator 
Clinton or Secretary Clinton.
    Senator Dorgan. Alright. I understand your point. Let me 
just make an additional point that's also important.
    Those of us that believe we need to be able to maximize 
renewable energy, solar energy in the South across the South 
and West--wind energy from Texas north to North Dakota in the 
Heartland. In order to maximize the production of these 
resources you have to be able to move it where it's needed. 
Produce it here, move it there where it's needed.
    That means that we must, we absolutely must find a way to 
produce or develop this interstate highway of transmission 
capability that connects America. It seems to me that a 
significant part of that is planning, citing and pricing and 
part of that is citing on public lands.
    So we had people here last week talking about green energy 
lines or X amount being renewable transmission lines. The fact 
is electrons are color blind. Whatever you put on a line is 
going to move no matter where it comes from, coal fired 
generating plants or wind energy.
    So I want to finally make the point to you that it's very 
important for the production or the creation of an energy bill 
that the public lands piece be resolved with respect to 
transmission as well. I appreciate the work you're doing. We've 
a lot to do together and in a hurry to get this right in my 
judgment. Thank you, Mr. Secretary.
    Secretary Salazar. If I may, Mr. Chairman, just a comment 
on that. You know I think that I always, I said this to 
President Bush probably two or three that I thought this whole 
question of energy had the potential to unify the country, you 
know, the need for energy independence, economic opportunity 
here at home, address the issue of climate change, not to be a 
Republican or a Democratic issue. I remember helping with some 
of you on this panel put together the Set America Free 
Coalition including conservatives like my good friend, Senator 
Sessions and Senator Brownback and a whole host of other 
people.
    I do think that this is an area where we can figure out a 
way of moving forward together on one of the signature issues 
of the 21st century. I do hope with all fervor that it is a 
bipartisan way forward.
    The Chairman. Senator Bennett.
    Senator Bennett. Thank you, Mr. Chairman. Mr. Secretary, 
welcome. I echo the wisdom of the President in choosing you as 
the Secretary. I'm delighted to have a fellow Westerner in that 
slot who understands the issues relating to public land States 
and States where the Federal Government is the primary 
landlord.
    I'm glad that you want to move forward with another round 
of leases in Colorado and Utah. But you're aware that I'm still 
very concerned about the 77 leases that you canceled a few 
weeks ago. I raised that issue with Mr. Hayes.
    He said it's not firm yet. You're just reviewing them. They 
are not canceled. They're postponed. I'm glad to hear that.
    But I've submitted some questions to Mr. Hayes about the 
lease sale. I'm going to need answers to those questions before 
I can feel comfortable about moving forward on his 
confirmation. So I hope that the Department can sit down with 
me and Senator Hatch and others to discuss the status of these.
    You say you want to unify. This early action has done more 
to divide, at least in my State than maybe anything that's been 
done. So I hope we can get that behind us and get it resolved.
    I was interested in your charts. You showed the tremendous 
amount of solar, potential solar energy in my State and in the 
Southwest. Then when you got to California you started blocking 
out large chunks of land because they were used for other 
reasons and would not be available for solar panels.
    You're aware that there are proposals before the 
Department. They've been incorporated into legislation offered 
that would create 9.8 million acres of wilderness in Utah. Now 
I'm trying to resolve the wilderness problem in Utah.
    I think the 9.8 million acres is excessive. But if you 
overlay the maps of what you say is available there in solar 
energy with the maps coming from some of these groups saying 
that all of this should be wilderness. You recognize 
immediately that if the folks that are arguing for the large 
acreage of wilderness are successful those lands will not be 
available for renewable energy because acres of solar panels or 
large numbers of windmills are clearly not compatible with the 
wilderness experience.
    Have you looked at this? Do you have any idea about how you 
might reconcile these competing views?
    Secretary Salazar. Senator Bennett, I appreciate the 
question. Let me take your second question first. That is what 
we've done in Southern California is frankly go through a 
process where we've tried to identify those areas that are 
sensitive.
    We do not believe every acre of BLM lands, for example that 
has tremendous solar potential should be developed as part of a 
solar power plant. So that's why we go from the large 
availability of public lands down to those areas where it would 
be best suited for us to put the solar energy power plants. 
It's that kind of planning I think that is important for us to 
do as a----
    Senator Bennett. I applaud you for that. I'm just pointing 
out in Utah you're going to have a real problem as far as the 
wilderness folks are concerned.
    Secretary Salazar. When we get to Utah and I mean we have a 
task force that's actually working on this. We will take a look 
at those overlays. See where those energy zones make the most 
sense.
    It's really an effort on our part, Senator Bennett, to make 
sure that we're being proactive in our planning. As opposed to 
the helter skelter which we currently have underway which 
essentially is anybody coming in, filing and application. 
There's really no plan in place.
    We have 200 pending solar power plant applications. But 
really no strategic plan in how we're going to process them or 
how they're going to be cited or how close they're going to be 
to transmission and the like. Let me say this with respect to 
the Utah lease sales. I appreciate your letters to me. I 
appreciate your strong sentiment with respect to those 77 lease 
parcels.
    It was my view as I reviewed that particular set of 77 
parcels is that there were some that were just too close to 
some very, very important ecological values for Utah and for 
the Nation including Arches National Park. So I think we need 
to move forward and take a review of those 77 lease parcels and 
look forward to working with you and the people of the State of 
Utah on how we move forward.
    We will happily respond to the questions that you submitted 
to David Hayes. But let me also say I would ask the members of 
the Senate, the members of this committee to help us get people 
into place so that we can get the government doing the job that 
it has to do. Frankly in the Department of Interior with 67,000 
employees, with 20 percent of the land mass of the U.S., with 
1.75 billions in the Outer Continental Shelf of acreage. I am, 
today the only person who has been confirmed by the U.S. 
Senate.
    So we need to get some of our other people in place so that 
we can be more responsive to the issues that this committee has 
to helping with this committee in terms of moving forward with 
the energy legislation that this committee has been working on.
    Senator Bennett. I want to help you get them in place too. 
There's a way to do that. Thank you.
    Secretary Salazar. Thank you.
    The Chairman. Senator Sanders.
    Senator Sanders. Thank you, Mr. Chairman. Welcome, 
Secretary.
    Secretary Salazar. Thank you, Bernie.
    Senator Sanders. I sit on both the Environmental Committee 
and the Energy Committee. On both committees we hear that the 
prognosis regarding global warming is even worse than we had 
thought just a couple of years ago which I think raises the 
understanding that we have got to be extremely aggressive in 
terms of moving toward energy efficiency and sustainable 
energy. I applaud the direction in which you are moving and 
have moved in the last couple of months since you've been in 
office. Thank you for what you're doing.
    I am a great proponent of solar energy. Last summer I was 
at Nellis Air Force Base. I don't know if you've been there 
where they now have the largest installation of photovoltaics, 
I believe, in the United States.
    They did a very good job. They did it on budget. They're 
providing 25 percent of the electricity to a very large base 
just on photovoltaics.
    I was also when I was in Nevada visited I think it's called 
Solar One which is a solar thermal plant outside of Las Vegas 
as well. They are very quietly supplying electricity to I 
believe 17,000 households. I have talked to people. I think you 
have as well who believe that the Southwest of this country has 
unbelievable potential in terms of solar energy that we have 
not begun to tap.
    I am a strong proponent of solar thermal plants. I've 
talked to people who have on the drawing board, plants that 
could provide 500 megawatts of electricity. So my question to 
you is how soon are we going to see the establishment of solar 
thermal plants which can in fact provide electricity to 
millions and millions of homes in this country without emitting 
any greenhouse gas emissions?
    Secretary Salazar. Senator Sanders, I believe that we 
should move forward as quickly and as expeditiously as we can. 
Because I, too believe as you do that harnessing the power of 
the sun has huge potential for us in terms of dealing with the 
issue of global warming. That's why we have started this effort 
to try to create renewable energy zones around the country to 
try to identify those areas where it's best suited for us to 
place solar power plants.
    Also to deal with ultimately what will be the Achilles heel 
of the renewable energy revolution which you so much believe 
in. That is if we are not able in some way to move forward with 
the chokehold on the unavailability of transmission we can 
study the potential of solar and wind and geothermal until the 
cows come home. It's not going to get done.
    So we just need to move forward. In my view, aggressively 
in building the super electronic highway which President Obama 
has spoken about so eloquently. We need to do it together.
    Senator Sanders. No, I agree. I was very pleased that in 
the Stimulus package many billions of dollars are being devoted 
to energy efficiency and sustainable energy. I think that's a 
huge step forward.
    I think what would be really extraordinary is if the day 
would come within the next few years where you and the 
President could be cutting the ribbon for a solar thermal plant 
without any greenhouse gas emissions providing electricity to 
hundreds and hundreds of thousands of people. I think it would 
show the whole world the seriousness of what we believe in and 
our ability to go forward. Do you have any idea when we may be 
able to see our first large solar thermal plant in the 
Southwest?
    Secretary Salazar. I think it certainly should and will 
happen during the next several years. I know there are plans on 
the board to actually construct solar power plants.
    Senator Sanders. There are a number of very serious 
proposals out there. I just think financing is often the 
problem as well. I'm sorry.
    Secretary Salazar. I agree with you Senator Sanders. I 
think we have the potential of moving forward with solar power 
plants that can produce from 250 to over 500 megawatts of 
power. I think that's what's in our reach in the next several 
years.
    I think it's up to us to be aggressive as you were in the 
Stimulus by providing the more than $11 billion to help with 
upgrading the grid for America. It's up to this Congress and up 
to the administration as well to move forward aggressively in 
terms of making the solar and renewable energy dreams a 
reality. We cannot wait.
    Senator Sanders. So what I'm hearing from you is solar 
thermal is high up on your priority list. You see the 
possibility of moving forward within the next couple of years.
    Secretary Salazar. Indeed. I have put together, as I said 
in my opening statements, Senator Sanders, the task force 
within the Department of Interior to help us move forward with 
renewable energy. Much of it is located on the public lands.
    We are working together interdepartmentally with a number 
of my colleagues on the Cabinet to put together the renewable 
energy zones for the Nation and also dealing with the 
transmission challenges that we face. Instead of trying to put 
everything in silos and----
    Senator Sanders. Right.
    Secretary Salazar [continuing]. You now have a 
jurisdictional dispute going on with FERC about what FERC's 
role is and isn't. FERC is at the table with us.
    Senator Sanders. Good.
    Secretary Salazar. Helping us draft what these energy 
corridors will look like.
    Senator Sanders. Thank you very much, Mr. Secretary. These 
are enormously important issues. It sounds like you are moving 
in the right direction. Thank you.
    The Chairman. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman and Mr. 
Secretary, welcome back to our committee. We're proud of your 
service. I congratulate the President for nominating you.
    I know you're going to do a great job. You understand the 
issues and understand this Senate which is helpful too.
    You know, but I know the White House, the administration is 
under a lot of pressure. Senator Bennett talked about leases 
that have been delayed that have been worked on for 7 years in 
Utah. Then still haven't come forward.
    So it has a chilling effect on investors if they don't feel 
like when they comply with things they can get it done. It's 
going to be another delay, another delay and another delay. So 
that's really what I was concerned about in the Gulf.
    Alabama has some frontage on the Gulf. I've been out to 
some of the oil rigs. They're spotless out there.
    But mostly when I visit an oil rig it's when I'm going 
fishing. We fish under and around the rigs. There's not the 
slightest sheen of oil on the water where those rigs are 
pumping large amounts of oil.
    So I guess, tell me about your delay. You asked for MMS, 
Mineral Management Service report within 45 days. Then you're 
going to conduct regional meetings to discuss this.
    We need at some point to get this thing done. Those of us 
who've watched the issue for a long time get nervous because 
when you can never seem to close the deal it never seems to get 
closed. So what are our prospects of actually getting this 
opened, getting bids done and actually seeing production from 
some of these acreage of President Bush opened before he left 
office?
    Secretary Salazar. You know, Senator Sessions, I appreciate 
the complement and also the question. My view is we are moving 
forward in terms of providing huge amounts of acreage for 
production. We see production as being very much a part of a 
comprehensive energy equation for the United States of America.
    President Obama talked about that reality during his 
campaign. He has given me that direction as I move forward as 
Secretary of Interior. The seven lease sales that we have 
conducted onshore actually made available some 1.2 million 
acres.
    There's no problem with respect to the development of the 
oil and gas within those lands. But because of the seismic 
market realities and geo physical information available to 
companies that are leasing these properties. Only, I think, 
250,000 acres are actually leased.
    Tomorrow we're in New Orleans trying to lease 34,000 or no, 
34 million acres. Who knows how much of that acreage will 
ultimately be leased? So there is no doubt that we are moving 
forward with a production part of what we're trying to do with 
respect to energy.
    Now with respect to your question on the MMS and how we 
move forward. We're dealing in a relatively new reality with 
respect to an absence of a congressional moratoria and an 
executive moratorium on the OCS. It's my view that as we move 
forward with this huge American citizen asset that we need to 
be thoughtful about how we craft a plan forward.
    That's why we're taking the kind of time that we're taking 
in moving it ahead. Part of the reason that I'm going to New 
Orleans tomorrow is we want to send a loud and clear signal 
that when we talk about a comprehensive energy program for the 
Nation that we recognize that oil and gas are going to be a 
part of that comprehensive energy program.
    Senator Sessions. I think that's good. I would just say to 
you that when the delays don't seem to have an end it causes a 
lot of nerve wracking. Maybe reduces investment. So I worry 
about that.
    You know I'd like to ask you to think about this. Secretary 
Chu was calling on the Arabs I believe recently, OPEC countries 
to produce more oil. But at the same time we're not producing 
all the oil and gas from oil shale and our coal and coal to 
liquids that we could produce.
    You and I worked together to see energy as a national 
security issue. I guess my time is up. Mr. Chairman, I'll just 
wrap up.
    But we worked together to see this as a national security 
issue. I know you understand that it's far preferable for us to 
produce more oil and gas keeping that money and wealth at home 
than to be dependent on foreign nations to increase their 
production of oil and gas. You might want to briefly comment on 
that.
    But I do think that to me the energy question is national 
security.
    No. 2, pollution, keeping this country and world clean.
    No. 3 is the economy and having a realistic price for our 
oil and gas and not driving it up unnecessarily.
    So all of those are factors I think we must consider in 
each decision we make. Any brief comment?
    Secretary Salazar. If I may, Chairman Bingaman?
    The Chairman. Go right ahead.
    Secretary Salazar. You know I think your concluding comment 
with respect to the values that drive us here to try to do the 
right thing on energy really is what has a potential of 
bringing this country together around these issues. There's no 
one that cares more about the national security of the United 
States than President Obama and the members of this committee. 
There's no one that cares more about making sure that we deal 
with the issues of emissions and global warming than President 
Obama.
    There's no one who has been working harder and more 
fervently since becoming President and even before that on the 
whole economic crisis that our country faces in a large part 
because of the energy issues in America. So I think on those 
values that you articulate, Senator Sessions, I think there is 
a good opportunity for us to come together as Democrats and 
Republicans as we move forward.
    The Chairman. Senator Wyden, did you have----
    Senator Landrieu. Mr. Chairman, yes. I just had a comment 
very, very briefly to follow up with Senator Sessions'. Senator 
Wyden has allowed me 30 seconds.
    First of all it might be good to note for the record and 
Secretary Salazar that domestic production is expected to 
increase this year for the first time in the United States 
since 1991. I'd like this to be included in the record. That's 
in 19 years and in large measure because of the rigs coming 
online in deep offshore, off of your shore, Senator, in mine.
    No. 2, the acreage that the Senator is speaking about or 
the Secretary is speaking about, 34 million. To put it in 
comparison the current acreage leased, Mr. Chairman is 41 
million acres in the offshore. 34 million, I believe, Tom, is 
it 34, is going to be available tomorrow? It's a significant 
lease sale.
    So it answers both. There's more oil being produced for the 
first time in 19 years in America in large measure because of 
offshore. It's 34 million acres is nothing to sneeze at.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. It's good to have 
the Secretary here. I want to thank the Secretary first for the 
very strong message you sent about ethical priorities at the 
Department.
    You said you were going to do it. You did it right out of 
the box. We appreciate that.
    I'm also glad that we're headway now in terms of renewable 
energy development on public lands. I want to start Mr. 
Secretary, by talking about a problem. I know you're familiar 
with in the West.
    We have this huge backlog in terms of hazardous fuels on 
the forest floor. It's really the byproduct of neglect. All 
this dead material has just piled up and it becomes a huge risk 
of fire.
    I think you know, we've talked about it. Some of these 
fires that we're seeing in the West are infernos. They aren't 
natural ones. They come about as a result of neglect.
    I and others want to get that material and use it as a 
source of biomass, as a source of clean energy that we think 
will put people to work, and will, at the same time, make our 
forests healthier. The problem is that the 2000, you know, 
Energy Act included a definition of renewable biomass that 
essentially excluded all the biomass including slash and 
thinning byproducts from Federal lands.
    So what you've got now is you've got people in the forest 
products industry, environmentalists, scientists, all ready and 
anxious to use, you know, biomass. It's a win/win/win 
situation. Reduce the risk of fire, green up the environment 
and put people to work making clean energy.
    We've haven't been able to do it because of this policy 
with respect to Federal lands. Now I introduced legislation to 
amend the Clean Air Act to modify the definition of renewable 
biomass contained in the renewable fuel standard so that 
biomass from national forests and BLM land is eligible as a 
fuel source. Would you be willing to work with all of us on 
this?
    I think there will certainly be bipartisan support for it. 
You might recall that when we tried to do it before then 
Chairman Bingaman and Senator Domenici went off and tried to 
get it started with a good definition. We got it here in the 
committee and then along the way support for it evaporated.
    So I think there will be bipartisan support for it. Can we 
have a commitment from you and your office to work with us on 
getting this biomass definition right so we can get this woody 
byproduct off the Federal lands and as a clean energy source?
    Secretary Salazar. The answer is yes. We would be happy to 
work with you. You know, I have always seen biomass as being 
one of those great opportunities with respect to the renewable 
energy.
    Indeed because of the Stimulus package there is money in 
there for hazardous fuels reduction for whatever reason the BLM 
was not treated as generously as the Forest Service. So we have 
taken it upon ourselves to work closely with Secretary Vilsack 
so that we have a concerted approach to how these dollars are 
spent. There are moneys that were included in there with 
respect to grants for biomass facilities.
    So, not into the Department of Interior but in the 
Department of Agriculture and so we're hoping to see some of 
these projects sprout out.
    Senator Wyden. Let's get this definition right so that we 
can get some of the woody biomass off Federal lands. We're 
barred from doing it. There's a way to do this so that forest 
products, industries, environmentalists who are concerned about 
old growth.
    They'll come together. We saw that we were able to do it 
with Senator Domenici and Senator Bingaman. I think working 
with your office we'll be able to get that definition correct.
    Let me ask you about one other one very quickly. During 
your public announcement last week you mentioned the potential 
for wave energy. But the actual order didn't do that.
    Wave energy didn't get into the order. Can we work with you 
to make sure that it makes its way into the actual order and 
the list of energy priorities? It might have just been an 
oversight.
    Secretary Salazar. It is, you know, in the portfolio of 
renewable energies. I think when you look at current and tidal 
energy they need to be very much on the table. But we must also 
be cognizant of where we are with respect to the technologies.
    We know that we have the technology ready and available and 
already deployed with respect to wind energy. We know the same 
thing is there with respect to solar even though it's not quite 
as far along as it is with wind. The technology around ocean 
and tidal and wave energy is a little further removed from 
becoming a reality.
    But it is something that is on the table. It is something 
that we will work on in concert and together with FERC because 
there is jurisdiction that they do have that we will try and 
work on this issue as part of our renewable energy portfolio.
    Senator Wyden. My time is up. I would only say, Mr. 
Secretary, I think making sure that wave energy gets the 
attention it warrants would fit perfectly at page two of the 
order. If I can work with you that would be great.
    Thank you again for getting out of the gate, particularly 
on ethics in such a strong fashion. That message sunk in around 
the country. I appreciate your doing it. Thank you, Mr. 
Chairman.
    Senator Bennett. Mr. Chairman?
    The Chairman. Senator Bennett?
    Senator Bennett. May I intervene for 30 seconds? Wave 
energy may be behind. But tidal energy is not.
    I have visited the tidal facility in Laurence, France that 
is producing tidal energy. They've been doing it for 40 years. 
They're making money at it. It is absolutely reliable.
    I've talked to the Secretary of Energy about this. I'll be 
happy to talk to you about it if you have an interest in it.
    Secretary Salazar. Thank you very much.
    The Chairman. I believe Senator McCain is arriving. Let me 
ask if he would like to ask some questions of Secretary Salazar 
before we go to the second panel. Oh, I see Senator Menendez, 
he arrived too.
    So why don't we first----
    Senator McCain. I would be glad to yield to the Senator 
from New Jersey.
    The Chairman. We'll go ahead with you Senator McCain since 
we went with Senator Wyden. We'll come back to Senator 
Menendez.
    Senator McCain. Thank you very much, Mr. Chairman.
    I did not have an opportunity to publicly say 
congratulations Senator Salazar. We are very proud and pleased 
that you've agreed to serve in this very important position. I 
look forward to continuing the bipartisan and nonpartisan way 
you have addressed issues that are critical to the future of 
this country and especially, obviously the West where the 
Federal Government owns so much of our land in Arizona and 
Colorado as well as other States.
    I was very interested in your comment that was carried in 
the media about offshore--about ANWR. I guess my question is do 
you believe that the technology is there today to do the kind 
of exploitation of reserves in ANWR that you were discussing?
    Secretary Salazar. Senator McCain, what I said in my 
statement. I think in a press statement that I made yesterday 
is that the technology with the oil and gas industry has 
significantly changed over time. Ten years ago no one would 
have ever thought that horizontal drilling would be a 
possibility at all in the way that it is today where you can go 
out many distances from where you actually have the wall pad.
    So I understand the technology has significantly improved. 
Having said that the position of the administration and my own 
position is that ANWR as a national refuge needs to be 
absolutely protected and I have not seen the information other 
than what I have seen in news reports about the ideas that my 
good friend Senator Murkowski and others have about horizontal 
drilling. So our position as an administration has not changed 
at all with respect to ANWR.
    Senator McCain. Maybe when you get a chance to get briefed 
and researched on it you could provide the committee with 
information as to whether you believe that technology is there 
or not. Because obviously if we don't believe the technology is 
there that there's not going to be the kind of exploitation of 
those reserves that many advocate. As you know I have not 
supported drawing in ANWR. But if the technology is there I 
certainly feel strongly that we ought to--and so that we don't 
disturb this pristine area that we should certainly pursue it.
    What's your view and position on offshore drilling at this 
time?
    Secretary Salazar. Senator McCain with respect to offshore 
drilling we are continuing programs with respect to offshore 
drilling as Senator Landrieu and others in the testimony this 
morning has indicated. We're moving forward with the sale 
tomorrow of some 34 million acres in the Gulf Coast of Mexico. 
So we continue to look at it.
    President Obama's position on this has been I think very 
clear. That is that he looks at the offshore as part of a 
comprehensive energy program. How we put together the pieces of 
this comprehensive energy program is something that we're 
looking forward to working with you and members of the Senate 
and Congress on.
    Senator McCain. Perhaps you could provide for the record, 
if you could, exactly what areas do you think that could be 
leased, what areas you think should not. I mean, again, as in 
ANWR the devil is in the details. We'd appreciate that 
additional information as to what areas offshore are ready to 
be leased and can be explored and exploited and which should 
not be.
    We'd appreciate that very much.
    Finally, Mr. Secretary I'd like to have your views on 
nuclear power. The administration and the Secretary of Energy 
has said we won't use Yucca Mountain. They've also opposed 
reprocessing.
    You can't develop nuclear power, energy, in this country if 
you don't reprocess and you do not use Yucca Mountain as a 
repository for spent nuclear fuel, so I'm wondering what your 
position is. They basically killed nuclear power in the 
foreseeable future for this country. To hear the argument that 
somehow reprocessing can't be done in the United States of 
America flies in the face of the fact that Japan, the British 
and the French all reprocess.
    By the way I did quote to Secretary Chu the Department of 
Energy report that by 2050 solar, which all of us strongly 
support, would only provide 5 to 10 percent of our renewable 
fuel requirement. I see no way of achieving energy independence 
and the price of oil will go back up because our economy will 
recover--that nuclear power can't be part of the equation.
    Right now it seems to me we are at a dead stop.
    Secretary Salazar. Let me first of all say, Senator McCain, 
I appreciate the leadership that you have brought to the Senate 
on so many issues including the issue of climate change and 
energy. I very much look forward to working with you as we 
tackle those issues.
    On your first statement on the OCS and wanting to have 
places where we can drill and we can't. We do have those places 
mapped out. In fact we are moving forward in the Gulf of Mexico 
tomorrow is a place where we know is absolutely open.
    There are lots of places in the OCS that we don't know very 
much at all about. You know, much of the debate that's taken 
place here over the last several years has been with respect to 
the Atlantic coast. The information that we're dealing with on 
the Atlantic coast is information that is more than two decades 
old. The seismic information still needs to be developed.
    So we're having a conversation about areas where we really 
don't know a lot about. We have tried to put forward what's 
going to be a process that includes a 45-day report which is 
due in the next several weeks from MMS and USGS that will tell 
us more on the OCS. We will move forward with a thoughtful 
agenda to try to develop a comprehensive plan on the Outer 
Continental Shelf.
    Nuclear. You know, that obviously is an area where 
Secretary Chu is very involved. All I know is from my 
conversations with him is that it's very much an issue that is 
on his agenda. As you know from President Obama's own comments 
relative to nuclear energy, he sees that as a part of our 
energy future.
    It was in this committee under the 2005 Energy Policy Act 
that in a very bipartisan way. I think 82 votes on that bill 
that came out of here. We included a chapter in there that with 
respect to nuclear energy.
    Having said that the fact is that there are some difficult 
technological issues. Yes, we can learn a lot from what has 
happened in France and other places. But there are people like 
Secretary Chu who I know are very much on top of trying to 
figure out what our next steps are with respect to that part of 
our energy equation.
    Senator McCain. Thank you. I thank you for the time, Mr. 
Chairman. I just want to say again, Mr. Secretary, we are very 
proud to have you serve in this important position.
    I know you have an in depth knowledge of the needs and 
requirements for our national parks, for our public lands, for 
BLM, for a broad variety of issues that are important to the 
future of this Nation. Thank you again for your willingness to 
serve. Thank you, Mr. Chairman.
    The Chairman. Thank you. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman, Mr. Secretary. 
Happy Saint Patrick's Day. I know you're a big celebrant of it, 
so.
    I want to start off by commending you, Mr. Secretary for 
acting quickly to extend the public comment period on President 
Bush's administration's hastily constructed 2010/2015 year OCS 
oil and gas leasing program. I look forward to joining you in 
New Jersey when you come to hear from people along the New 
Jersey shore about what drilling off the Outer Continental 
Shelf would mean to them in their lives, in the economy of the 
State and in coastal States like New Jersey. So we appreciate 
that you're going to be there.
    While we now have more time to consider that plan, we're 
still dealing with the current 5-year plan for the Outer 
Continental Shelf. That plan allows for example, for a special 
lease sale off the coast of Virginia. The proposed site may be 
off the coast of Virginia, but as we know the ocean does not 
respect State borders. Any spill caused by a hurricane or an 
accident is likely to wash up in New Jersey less than 100 miles 
away.
    As I have mentioned in many previous hearings. When you 
were a member of this committee if drilling were to begin in 
the Atlantic, New Jersey could suffer extreme economic 
consequences even when a minor spill or leak occurs. In the 
late 1980s medical waste washed ashore on several of our 
beaches.
    It was quickly contained and cleaned up. But 22 percent of 
all of the tourism to the shore that year dropped just from 
that one incident and that resulting in about the loss of $800 
million, so I don't want to imagine what an oil spill could do.
    I know that everybody talks about how the new technology is 
such that that's unlikely. If you look at the pictures that 
I've exhibited on the Senate floor from the U.S. Coast Guard 
about the oil spills that took place in the Gulf as a result of 
the hurricanes. We know that it is not foolproof by any stretch 
of the imagination.
    Second I want to introduce into the record, Mr. Chairman an 
article from the New York Times, dated March 15, 2009. The New 
York Times reported just 2 days ago that the number of oil and 
gas rigs set up to drill for new energy supplies has plummeted 
to less than half of what existed last summer from 2,400 to 
less than 1,200 today. If oil and gas companies are not using 
the leases they have now, I'd like to know why they need more 
leases in environmentally and economically sensitive areas.
    So I'd ask consent to have that included in the record, Mr. 
Chairman.
    The Chairman. It will be included.
    Senator Menendez. Also you know, let me get to one or two 
questions, Mr. Secretary. I see the fact that you took this job 
and you often talked about the energy moon shot as one of the 
things that you hoped to be able to achieve. I think that is 
desirable.
    You know the Energy Information Agency estimates that the 
United States has approximately 3 percent of the world's proven 
oil and natural gas results. Given that fact and considering it 
takes an estimated 8 to 12 years to develop a new oil or gas 
field offshore. Does it really make sense to open areas where 
there is no existing oil and gas infrastructure?
    If we're taking that energy moon shot it seems to me we'd 
be better focused on developing the renewable energy sources 
that we want. That's question No. 1.
    Question No. 2. It's clear that the level of scientific 
knowledge needed to proceed with rational decisions about the 
plan OCS leasing on the Atlantic coast in my view are sorely 
lacking. How does your agency propose to manage to catch up 
with these glaring data gaps with respect to economically 
important fisheries, coastal economic and ecological conflicts, 
undersea biological resources? Those don't seem to get the type 
of data information necessary in making a decision.
    So my question is would you support a plan that would 
ensure that the National Research Council of the National 
Academy of Sciences would provide studies to the Department 
before they made a determination better understanding the 
potential impacts of drilling on ocean and coastal ecosystems?
    Finally, you know, my understanding is that the 
Department's 5-year OCS drilling plan does not consider the 
potential economic impact on a State's tourism industry, for 
example or its fishing industry. So if that's the case why 
wouldn't the Federal Government evaluate incompatible uses of 
land or water the same way, for example that we would do in 
other zoning determinations?
    Those are some of the policy questions that I'd like to see 
the Department think about. I'd like to get your initial 
reactions to some of those.
    Secretary Salazar. Thank you very much, Senator Menendez. 
Let me first say thank you for being a part of making a 
statement that the Department of Interior really is more than 
just the Department of the West because as you indicated when 
you led the effort to take us to the Statue of Liberty and to 
Ellis Island there are important functions of this Department 
that touch on every State, including all the national icons of 
this great country. So I thank you for your efforts in that 
regard.
    Let me try to respond to a couple of your questions. With 
respect to the OCS and the development along the Atlantic which 
I know has been a near and dear issue to your heart from the 
first day that I met you. It is an issue that requires, I 
think, the putting together of the scientific and knowledge 
foundation for us to be able to make rational decisions going 
forward.
    The fact is that when you look at the Atlantic most of the 
information with respect to oil and gas is at least 25 years 
old. So sometimes we end up fighting about something. But we 
really don't have the knowledge base to even be engaged in the 
fight.
    So I'm expecting this report from MMS and USGS will give us 
an overview of the information that we do have. As importantly 
what it should do is to give us the knowledge about the 
information that we do not have. So I'm looking very much 
forward to that report.
    Now I do not expect the report to be, in 45 days, to be as 
comprehensive as perhaps you and others might want it to be. 
But it will be the beginning of the discussion of some of the 
issues which you raise. I do think that one of the things that 
is important as we move forward with putting together a plan on 
this very important national asset, 1.75 billion acres of land 
in the Outer Continental Shelf, that we make sure that we are 
listening to the stakeholders.
    Indeed that was part of the problem that I had with 
Secretary Kempthorne's order. Notwithstanding the fact that I 
have great respect for him as a person, I did not feel that 
there had been appropriate opportunity for the stakeholders to 
comment on a reopening up of the 5-year plan for the OCS. So 
our time now and our time in the months ahead will be spent 
hearing from people like you as well as others who are 
concerned about the future of the OCS so we can make rational 
decisions on how to move forward.
    The Chairman. Let me----
    Senator Menendez. Thank you, Mr. Chairman.
    The Chairman [continuing]. Indicate Senator Barrasso has 
indicated for the good of the cause he's willing to submit his 
questions for the record so we can have the second panel come 
forward.
    They've been extremely patient in waiting. We have a very 
distinguished second panel. So we will conclude your testimony 
at this time. Thank you very much, Secretary Salazar. We will 
be in touch. Some questions Senator Barrasso will have a few 
questions in addition to the ones that others have mentioned. 
Thank you very much.
    Secretary Salazar. Thank you very much, Mr. Chairman. For 
you and Senator Murkowski and all the members of the committee, 
you honor me with the opportunity to appear before you today. 
Thank you.
    The Chairman. Thank you very much. Would the second panel 
please come forward? While they are coming forward I will 
introduce them.
    First is the Honorable Philip Moeller who is the 
Commissioner with the Federal Energy Regulatory Commission. We 
thank you for being here.
    Joanna Prukop is Secretary of Energy, Minerals and Natural 
Resources for the State of New Mexico. We appreciate Joanna 
being here.
    Dr. Dan Arvizu who is the Director of the National 
Renewable Energy Laboratory in Golden, Colorado. Thank you very 
much for being here.
    Robert Bryce, who is an author and energy journalist from 
Austin, Texas, thank you for coming.
    George Cooper is a President and CEO of the Theodore 
Roosevelt Conservation Partnership here in Washington.
    Mr. Steve Kopf is a partner with Pacific Energy Ventures, 
LLC out of Portland, Oregon.
    So thank you all for being here. If you could each take 5 
minutes and give us the main points we need to understand about 
this set of issues. We would be anxious to hear your point of 
view.
    Commissioner Moeller, why don't you go right ahead?

 STATEMENT OF PHILIP D. MOELLER, COMMISSIONER, FEDERAL ENERGY 
                     REGULATORY COMMISSION

    Mr. Moeller. Thank you, Mr. Chairman and members of the 
committee. My name is Phil Moeller. I'm a member of the Federal 
Energy Regulatory Commission.
    Today I appear before you to represent my views as well as 
those of Acting Chairman John Wellinghoff regarding energy 
development on public lands and the Outer Continental Shelf. 
Citing of needed energy infrastructure both onshore and 
offshore is important to meet our Nation's energy needs and 
decreasing our reliance on carbon emitting energy resources. 
The Commission has been citing energy infrastructure for over 
85 years.
    Under the Federal Power Act the Commission has been charged 
with citing, licensing and overseeing the operation of the 
Nation's non-Federal, hydro power projects and accompanying 
transmission lines since the 1920s.
    Under the Natural Gas Act the Commission has for 65 years 
issued certificates of public convenience and necessity 
authorizing the construction of natural gas pipelines.
    Although most electric transmission citing is done by State 
and local authorities the Energy Policy Act of 2005 gave the 
Commission the authority, in limited circumstances, to permit 
interstate electric transmission facilities within national 
interest electric corridors designated by DOE. While we have 
not yet been called upon to exercise this authority, the 
Commission and eight other Federal agencies executed a 
memorandum of understanding on early coordination of Federal 
authorizations and related environmental reviews required in 
order to cite these facilities. Based on decades of experience 
in hydro power projects and natural gas pipelines the 
Commission has developed comprehensive, efficient processes 
that provide for the public notice and extensive public 
participation including participation by affected Federal 
agencies, Indian tribes and States.
    We're guided by six principles of energy infrastructure 
development.
    They are a pre-filing process that allows and encourages 
all affected stakeholders to identify issues and resolve 
conflicts.
    Designating us as the single lead agency to make the 
overall public interest determination.
    Allowing that agency, us, to establish a schedule for all 
actions related to a proposed project.
    Building one Federal record including one environmental 
document on which decisions are made.
    Providing for expeditious judicial review in a single 
United States Court of Appeals.
    Once a Federal decision has been made, authorizing the 
permitee to use Federal eminent domain to acquire the property 
needed.
    Now in recent years the Commission has received 
applications for preliminary permits and licenses for 
hydrokinetic projects which we define as projects that generate 
electricity through the motion of waves or the unimpeded flow 
of tides, ocean currents or inland waterways. An EPRI study has 
found that the estimate of our potential for wave and current 
power in our Nation's oceans to be a full 10 percent of our 
energy portfolio. Under our FPA authority to license 
hydroelectric projects, the Commission has issued about 170 
preliminary permits representing 10,000 megawatts of potential 
generation to entities studying hydrokinetic projects.
    The Commission has also been asked to determine whether its 
long standing FPA authority to license hydroelectric projects 
applies to hydrokinetic projects on the OCS or whether such 
authority resides in the Department of Interior's Mineral 
Management Service. The Commission determined that it has 
authority over such projects. But that it can exercise such 
authority in a way that does not conflict with the authority of 
the MMS over other OCS activities.
    The staffs of the two agencies, 2 years ago, developed the 
language for a memorandum of understanding pursuant to which 
MMS would continue to exercise its general authority over 
activities on the OCS. The Commission would issue licenses for 
OCS hydro power projects. Under this agreement the Commission 
and MMS could work together just as we've done for decades with 
the Forest Service when we issue licenses and permits within 
National Forests, with Interior when we issue licenses and 
permits on Indian reservations, on BLM lands and on Bureau dams 
and with a Corps of engineers when we issue authorizations for 
projects at a Corps facility.
    The memorandum has not yet been signed. But we envision it 
would result in all hydrokinetic projects whether onshore, in 
State waters or on the OCS being subject to a uniform licensing 
and oversight regime. It would permit exercise of the 
Commission's expertise in citing the primary transmission lines 
connecting hydrokinetic projects to the electric grid which 
would not be the case if the Commission has no jurisdiction 
over the underlying projects.
    Finally the Commission's jurisdiction over hydrokinetic 
projects on the OCS would not hinder in any way the timely 
development of associated wind facilities subject to MMS 
regulation on the OCS.
    As Secretary Salazar mentioned today I'm thrilled to also 
note that both he and our Acting Chairman Wellinghoff have 
agreed on a principle to move forward with developing this 
memorandum of understanding. I personally, as a proponent of 
this industry, want to commend the leadership of both of them 
in moving forward on this subject so that we can get this 
resolved and move forward. Thank you again for giving me the 
opportunity to appear before you today. I'll be happy to answer 
questions when appropriate.
    [The prepared statement of Mr. Moeller follows:]

 Prepared Statement of Philip D. Moeller, Commissioner, Federal Energy 
                         Regulatory Commission

    Mr. Chairman, and members of the Committee: My name is Philip 
Moeller and I am a member of the Federal Energy Regulatory Commission 
(Commission). Today I appear before you to represent my views as well 
as those of Acting Chairman Jon Wellinghoff regarding energy 
development on public lands and the outer continental shelf (OCS). 
Siting of much-needed energy infrastructure, both onshore and offshore, 
is important to meeting our Nation's energy needs and the goal of 
decreasing our reliance on carbon-emitting energy sources. Energy 
development on public lands and the OCS will play an important role in 
meeting this goal and I appreciate the opportunity to discuss the 
challenges and opportunities associated with it.
    The Commission has been siting energy infrastructure for over 85 
years. It has been responsible for siting hydroelectric facilities and 
accompanying transmission lines since the 1920's and has sited natural 
gas pipelines since the 1930's. In exercising these long-standing 
responsibilities our agency has worked closely with other Federal 
agencies, including working with federal land management agencies in 
siting energy infrastructure on federal lands. We stand ready to ensure 
that this successful coordination continues and that Federal agencies 
work closely in the timely siting and permitting of necessary 
infrastructure, including the transmission and hydrokinetic energy 
facilities that will be needed to take us through the 21st century.

 THE COMMISSION'S EXPERIENCE IN SITING ENERGY INFRASTRUCTURE ON PUBLIC 
                           LANDS AND THE OCS

    The Commission is well-versed in reviewing and authorizing critical 
energy infrastructure projects, and in establishing a regulatory regime 
that encourages the development of appropriate energy projects, while 
at the same time protecting the interests of consumers and safeguarding 
the environment.
    Based on its decades of experience in hydropower projects and 
associated transmission lines, as well as siting natural gas pipelines, 
the Commission has developed comprehensive, efficient processes that 
provide for public notice and extensive public participation, including 
participation by affected Federal agencies, Indian tribes, and states. 
These processes ensure the early identification of issues and any study 
needs (and where possible, consensual resolution of them), development 
of a thorough environmental analysis, and decisions based on a complete 
record and consideration of the public interest. We have also learned 
that a single federal agency having the responsibility and the 
authority to make siting decisions with regard to projects that affect 
the national interest is clearly the most efficient way to site major 
energy projects. In a typical infrastructure proceeding, the Commission 
involves, from the prefiling process forward, federal and state 
resource agencies (as well as other relevant federal agencies, such as 
the Department of Homeland Security and the Department of 
Transportation), Indian tribes, local government, and private citizens, 
to assist in the early identification of issues and the development of 
the record. After gathering input from these sources, the Commission 
crafts a decision that comports with all aspects of the public 
interest.

         PRINCIPLES FOR SITING ENERGY INFRASTRUCTURE FACILITIES

    The following principles of energy infrastructure development have 
worked well in the disparate infrastructure siting disciplines under 
the Commission's jurisdiction: 1) a pre-filing process that allows and 
encourages all affected stakeholders to identify issues and any study 
needs early; requires working on environmental review and a project 
application simultaneously; and involves common efforts to resolve 
conflicts and to identify an acceptable environmental alternative; 2) 
designating a single lead agency to make the overall public interest 
determination, while respecting the roles of other federal and state 
agencies; 3) allowing that agency to establish a schedule for all 
actions related to a proposed project, thus ensuring that agencies act 
in parallel and that the public can rely on predictable milestones; 4) 
building one federal record, including one environmental document, on 
which decisions are made; 5) providing for expeditious judicial review 
in a single United States court of appeals (either in the circuit where 
the proposed facility is to be sited or in the District of Columbia 
Circuit), based on the record developed by the lead agency; and 6) once 
a federal decision has been made, authorizing the permittee to use 
federal eminent domain to acquire the property needed for a project 
that has been determined to be in the public interest. The Commission 
has applied these principles across the areas it regulates, as I review 
below. Of particular note, the Commission has a long history of working 
together with federal and state agencies to site energy infrastructure 
in the public interest.

                          HYDROPOWER LICENSING

    Since 1920, the Commission has been charged with licensing and 
overseeing the operation of the Nation's non-federal hydropower 
projects. Today, the Commission regulates over 1,600 projects with the 
capacity to produce over 54 gigawatts of clean, renewable electric 
energy, which represents more than half of the nation's approximately 
100 gigawatts of hydroelectric capacity, and over five percent of the 
electric generating capacity in the United States. Further, under 
existing authority in the Federal Power Act (FPA), the Commission has 
sited thousands of miles of primary electric transmission lines related 
to these projects that have helped deliver this power to the nation's 
consumers.
    A number of the hydropower projects regulated by the Commission are 
located, in whole or in part, on federal lands, for the most part 
within national forests managed by the Department of Agriculture's 
(Agriculture) U.S. Forest Service; on lands managed by the Department 
of the Interior's (Interior) Bureau of Land Management (BLM); at dams 
operated by Interior's Bureau of Reclamation; on Indian reservations 
under the jurisdiction of Interior's Bureau of Indian Affairs; or at 
dams operated by the U.S. Army Corps of Engineers. The Commission has 
worked successfully with these entities to ensure that the hydropower 
licenses issued by the Commission appropriately balance all aspects of 
the public interest, including the development of power, environmental 
protection and enhancement, recreation, flood control, water supply, 
and irrigation.
    The Commission has executed a number of memoranda of understanding 
(MOUs) with other agencies with regard to the hydropower licensing 
process. These include MOUs with the Bureau of Reclamation and the 
Corps ensuring that Commission licensing actions appropriately 
recognize those entities' jurisdiction, an MOU with the State of Oregon 
regarding the licensing of offshore projects, and a series of 
agreements with a variety of agencies developed by the Interagency 
Taskforce on Hydropower Licensing.
    In addition, the Commission developed, through a process of 
extensive interagency cooperation and negotiation, its integrated 
licensing process, designed to streamline the licensing process through 
the early identification of issues, the development of consensus 
regarding the gathering of environmental information, and the 
coordination of action by agencies with jurisdiction to issue necessary 
authorizations. This effort was premised on the understanding that 
dependable and affordable hydropower requires a licensing process that 
is efficient and fair.
    While the FPA vests in the Commission the ultimate authority to 
license hydroelectric projects that are in the public interest, the act 
recognizes the need for the managers of public lands to have an 
important voice in the process. For example, the Commission regularly 
works with federal land managers pursuant to section 4(e) of the FPA, 
which, with respect to licenses issued within reservations of the 
United States, as that term is defined in the FPA, reserves authority 
to the Secretary of the department managing the reservation to impose 
as license conditions whatever measures the Secretary deems necessary 
for the protection and utilization of the reservation. Thus, hydropower 
development on public lands occurs with the concurrence and assistance 
of these agencies.

                   NATURAL GAS PIPELINE CERTIFICATION

    Under the Natural Gas Act, the Commission has for over 65 years 
issued certificates of public convenience and necessity authorizing the 
construction of natural gas pipelines. Under the Commission's 
oversight, the country has developed a robust, comprehensive pipeline 
grid that moves natural gas supplies from producing areas to consuming 
regions. Since 2000, the Commission has approved over 13,000 miles of 
new pipeline, with a capacity of nearly 95 billion cubic feet per day 
of natural gas. In total, there are nearly 215,000 miles of interstate 
natural gas pipeline in service that cross multiple states.
    Natural gas pipelines often cross public lands, typically national 
forests or lands managed by BLM. In such cases, the Commission works 
with the Forest Service or BLM (which generally serve as cooperating 
agencies for the preparation of the Commission's environmental 
documents) to identify land management issues and to develop 
appropriate conditions to protect federal lands. Typically, the 
Commission requires natural gas companies to satisfy all of the federal 
land managers' concerns before allowing pipeline construction to begin.
    The Commission has executed memoranda of understanding with a 
number of agencies with regard to their respective duties concerning 
natural gas facilities. These include:

   Interagency Agreement Among the Federal Energy Regulatory 
        Commission, United States Coast Guard and Research and Special 
        Programs Administration for the Safety and Security Review of 
        Waterfront Import/Export Liquefied Natural Gas Facilities, 
        February 2004; and
   Memorandum of Understanding Between United States Army Corps 
        of Engineers and the Federal Energy Regulatory Commission 
        Supplementing the Interagency Agreement of the Early 
        Coordination of Required Environmental and Historic 
        Preservation Reviews Conducted in Conjunction with the Issuance 
        of Authorizations to Construct and Operate Interstate Natural 
        Gas Pipelines Certificated by the Federal Energy Regulatory 
        Commission, June 2005.
   Memorandum of Understanding Between the Department of 
        Transportation and the Federal Energy Regulatory Commission 
        Regarding Liquefied Natural Gas Facilities, April 1985;
   Memorandum of Understanding Between the Department of 
        Transportation and the Federal Energy Regulatory Commission 
        Regarding Natural Gas Transportation Facilities, January 1993;
   Interagency Agreement on Early Coordination of Required 
        Environmental and Historic Preservation Reviews Conducted in 
        Conjunction with the Issuance of Authorizations to Construct 
        and Operate Interstate Natural Gas Pipelines Certificated by 
        the Federal Energy Regulatory Commission, May 2002;
   Memorandum of Understanding Related to the Licensing of 
        Deepwater Ports Among the U.S. Department of Commerce, U.S. 
        Department of Defense, U.S. Department of Energy, U.S. 
        Department of Homeland Security, U.S. Department of the 
        Interior, U.S. Department of State, U.S. Department of 
        Transportation, U.S. Environmental Protection Agency, Federal 
        Energy Regulatory Commission, Council on Environmental Quality, 
        May 2004; and
   Memorandum of Understanding on Coordination of Environmental 
        Reviews for Pipeline Repair Projects, June 2004.

           SITING INTERSTATE ELECTRIC TRANSMISSION FACILITIES

    Electric transmission lines, particularly in the Western part of 
the United States, may need to cross federal lands to bring energy to 
market. Timely permitting by federal land agencies can be critically 
important to ensuring sufficient transmission infrastructure, including 
transmission needed to move location constrained resources such as wind 
power to interconnect with the interstate transmission grid and reach 
consuming regions. Most electric transmission siting is done by state 
and local authorities. However, the Energy Policy Act of 2005 gave the 
Commission the authority, in limited circumstances, to permit 
interstate electric transmission facilities within national interest 
electric transmission corridors designated by the Department of Energy 
(DOE). While the Commission has not yet been called upon to exercise 
this authority, the Commission and eight other Federal agencies, 
including DOE, Interior, Agriculture, the Environmental Protection 
Agency, the Department of Commerce, the Council on Environmental 
Quality, the Department of Defense, and the Advisory Council on 
Historic Preservation, in July 2006, executed a memorandum of 
understanding on early coordination of federal authorizations and 
related environmental reviews required in order to site electric 
transmission facilities. This should ensure cooperation among the 
signatory agencies with respect to the siting of interstate electric 
transmission facilities.
    With respect to its transmission siting authority, the Commission 
also has in place procedures that involve extensive information-sharing 
and consultation with state and federal agencies, members of the 
public, and other stakeholders. The Commission staff is currently 
working with one potential applicant under these regulations, using the 
prefiling process to provide information regarding necessary data and 
analyses.

                         HYDROKINETIC PROJECTS

    In recent years, the Commission has begun to receive applications 
for preliminary permits and licenses for hydrokinetic projects, which 
are projects that generate electricity through the motion of waves or 
the unimpounded flow of tides, ocean currents, or inland waterways. An 
Electric Power Research Institute (EPRI) study has estimated the 
potential for wave and current power in our nation's oceans to be over 
350 billion kilowatt hours per year, which could increase hydropower 
production from its current 10 percent of our energy portfolio to 20 
percent. Under its FPA authority to license hydroelectric projects, the 
Commission has issued and pending about 170 preliminary permits 
representing 10,000 megawatts of potential generation to entities 
studying hydrokinetic projects.
    The Commission has responded to the prospects for this new form of 
renewable energy in a number of ways, including:

   Issuing a declaratory order with respect to the Verdant 
        Project in New York City, concluding that short-term testing of 
        new technology for projects that are not connected to the 
        interstate electric grid may not require a Commission license.
   Issuing a policy statement with respect to the issuance of 
        preliminary permits for hydrokinetic projects, designed to 
        encourage competition.
   Developing a program to issue, on an expedited basis, short-
        term pilot licenses for hydrokinetics projects with limited 
        environmental impacts, to provide for the testing of new 
        technology and the gathering of environmental information, 
        while ensuring environmental protection.
   Issuing the first license for a hydrokinetic project, for 
        the Makah Bay Project, off the coast of Washington State.
   Issuing a license amendment authorizing the installation of 
        the first instream hydrokinetic project, in the Mississippi 
        River, in Minnesota.

    The Commission's consideration of hydrokinetic projects has 
required the Commission to consider and resolve a number of legal and 
policy issues. For example, the proponents of the Makah Bay Project 
initially asked the Commission to declare that an offshore project was 
beyond the Commission's jurisdiction. The Commission concluded, 
however, that because section 23(b) of the FPA requires the licensing 
of project works located across, along, or in any of the navigable 
waters of the United States'' and the FPA defines ``navigable waters'' 
very broadly, as ``those parts of streams or other bodies of water over 
which Congress has jurisdiction under its authority to regulate 
commerce with foreign nations and among the several States,'' an 
offshore project within U.S. waters was required to be licensed.
    Ultimately, the applicant, after initially filing a petition for 
judicial review of the Commission's order, concluded that the 
Commission's unified licensing regime was preferable to seeking 
authorizations from various agencies in separate proceedings, and filed 
for, and, following a public process involving extensive participation 
from federal and state agencies, an affected Indian tribe, and other 
stakeholders, was granted a license to test its technology.
    The Commission has also been asked to determine whether its long-
standing FPA authority to license hydroelectric projects applies to 
hydrokinetic projects on the OCS or whether such authority resides in 
the Department of Interior's Mineral Management Service (MMS). The 
Commission determined that it has authority over such projects but that 
it can exercise such authority in a way that does not conflict with the 
authority of the MMS over other OCS activities. The staffs of the two 
agencies two years ago developed language for a memorandum of 
understanding pursuant to which MMS would continue to exercise its 
general authority over activities on the OCS, and the Commission would 
issue licenses for OCS hydropower projects. Under this agreement, the 
Commission and MMS could work together, as the Commission has for 
decades done with the Forest Service when it issues licenses and 
permits within national forests; with Interior, when it issues licenses 
and permits on Indian reservations, on BLM lands and on Bureau of 
Reclamation dams; and with the Corps of Engineers, when it issues 
authorizations for projects at Corps facilities.
    This memorandum has not been signed but the type of framework it 
uses would rely on a well-established, successful scheme of regulation 
with respect to hydropower projects located on the OCS. It also would 
result in all hydrokinetic projects, whether onshore, in state waters, 
or on the OCS, being subject to a uniform licensing and oversight 
regime. Moreover, it would permit exercise of the Commission's 
expertise in siting the primary transmission lines connecting 
hydrokinetic projects to the electric grid, which would not be the case 
if the Commission has no jurisdiction over the underlying projects. 
Finally, the Commission's jurisdiction over hydrokinetic projects on 
the OCS would not hinder in any way the timely develop of associated 
wind facilities (subject to MMS regulation) on the OCS.
    The process used by the Commission for reviewing proposed 
hydrokinetic projects provides a procedure that is collaborative, 
comprehensive, and well-suited to addressing new technologies; has been 
designed, based on pre-existing, time-tested procedures and through 
public comments and lessons learned from experience, to foster the 
orderly, timely development of hydrokinetic projects; and offers all 
affected federal agencies a role in determining license conditions for 
projects within their areas of interest. I am pleased to report that 
Acting Chairman Wellinghoff and Secretary of Interior Salazar have 
begun active discussions regarding coordination of Interior and FERC 
jurisdiction related to the OCS and the expeditious resolution of an 
MOU between the two agencies.

                               CONCLUSION

    The Commission has for many years successfully sited energy 
projects on different types of federal lands, working cooperatively 
with the agencies that manage those lands. I believe that this can 
continue in the future with respect to all of the types of energy 
projects the Commission sites, including hydropower projects located on 
the OCS. It is in our national interest that all government agencies 
join in taking whatever steps we can to ensure that the nation has a 
secure energy future. We must jointly overcome obstacles, as the 
Commission has a long history of working with its sister agencies to 
do, rather than stumbling over them.
    Thank you again for giving me the opportunity to appear before you 
today. I would be happy to answer any questions you may have.

    The Chairman. Thank you very much.
    Secretary Prukop, go right ahead.

   STATEMENT OF JOANNA PRUKOP, SECRETARY, NEW MEXICO ENERGY, 
    MINERALS AND NATURAL RESOURCES DEPARTMENT, SANTA FE, NM

    Ms. Prukop. Good morning Chairman Bingaman, Ranking Member 
Murkowski and members of the committee. I'm Joanna Prukop, 
Cabinet Secretary for Energy, Minerals, and Natural Resources 
in New Mexico.
    As Chairman Bingaman said last year in a speech at MIT 
about the energy challenge we face, we need to overhaul the 
existing energy infrastructure on which we all depend. While we 
do not usually think of our public lands as infrastructure, 
these lands, both State and Federal are the foundation of the 
infrastructure for much of America's energy development and are 
essential infrastructure for the deliver or transmission of 
energy whether through pipelines or over wires.
    New Mexico, like most States in the West has huge reserves 
of fossil fuel and royal class locations for renewable energy 
resources. We have experienced unprecedented development of 
these resources in the last few years. The speed and intensity 
of development has stressed the land managers and regulators 
abilities and capacities to adequately evaluate proposals and 
permit applications in order to protect equally important 
resources like drinking water.
    We must first keep in mind that the development of each 
resource has its own complications. For example, commercial 
scale solar operations with their blanketing effect will 
eliminate livestock production on public lands, require the 
withdrawal of minerals for leasing, eliminate recreational use 
of the land and will significantly disturb wildlife habitats 
and wildlife populations. Currently we make decisions about 
these public land resources in a somewhat haphazard or 
disjointed manner.
    Decisionmaking would work better if there was an integrated 
system wide process in which State and Federal agencies worked 
together to address natural resource and stakeholder needs. 
Here are two examples we can learn from.
    First, consider the recent Federal effort to designate west 
wide energy corridors. The designated corridors followed 
existing power lines and pipelines from fossil energy sources. 
These are entirely on Federal land and completely ignored the 
status and use of adjoining non-Federal lands.
    The corridors do not focus on developing renewable energy 
resources and are not useful for the new energy infrastructure 
as they could be. New Mexico and others suggested that the 
corridor designation process be delayed slightly until the 
Western Governors Association completed its work on identifying 
the best areas for renewable resource development as part of 
the Western Renewable Energy Zones Initiative, known as WREZ. 
The request was ignored and the final decision was made at the 
end of the last administration. If they had waited just 2 
months they could have utilized the information gathered to 
create the Western Renewable Energy Zone maps and information 
from their related WGA wildlife corridors initiative report.
    Second, energy development and transmission on public lands 
is a reactive process both at the State and Federal level. 
Often based on requests from private developers and on outdated 
resource management plans, the land managers are trying to make 
good decisions. But they have limited personnel and resources 
to wrestle with these complicated land use decisions. 
Developers and others are pressing them to move quickly.
    Let me describe what happened in New Mexico when we did not 
have a significant involvement in this process. Otero Mesa is 
an area in Southern New Mexico that contains the last remnants 
of the ecologically fragile Chihuahuan Desert found in the 
United States. BLM issued its final environmental impact 
statement and resource management plan that included some 
environmental protections for Otero Mesa. But the State 
executive branch felt that the proposed protections weren't 
strong enough.
    The matter went to court. The State did not get everything 
it wanted in that process. But one issue the Federal judge 
addressed was the need for additional environmental review 
before leasing takes place in this area, an outcome we fully 
supported as the State.
    These two examples demonstrate the need for Federal and 
State agencies to work together to create integrated system 
wide processes that include all public lands. Early and 
frequent coordination between State and Federal land managers 
and other agencies and stakeholders will make public lands work 
better for all of us.
    I close by urging you to consider the following.
    First, continue funding the BLM pilot offices and add more 
State personnel with environmental and wildlife expertise.
    Continue and expand support for landscape conservation 
initiatives like Restore New Mexico, a healthy lands initiative 
under the BLM.
    Build on the data collected by the WGA, WREZ and wildlife 
corridors process.
    Fund State and Federal jointly constructed natural resource 
data bases.
    Support creation of integrated State and Federal decision 
support systems that use technologies like GIS mapping of 
spatial data layers to inform decisionmaking early on.
    Focus new studies on information gaps in available data 
rather than duplicating existing analyses.
    Finally support recurring funding for these proposals 
perhaps from energy development fees instead of using 
discretionary funds.
    Thank you very much for allowing me to appear today.
    [The prepared statement of Ms. Prukop follows:]

  Prepared Statement of Joanna Prukop, Secretary, New Mexico Energy, 
        Minerals and Natural Resources Department, Santa Fe, NM

    Chairman Bingaman, Ranking Member Murkowski and members of the 
Committee, my name is Joanna Prukop. I am the Secretary of the New 
Mexico Energy, Minerals and Natural Resources Department. The 
Department regulates oil and gas production, mine reclamation, and 
timber harvesting, all of which may result in energy production. We 
also have an energy conservation division in which we aggressively 
promote energy efficiency and renewable energy. And we have a Parks 
division, because we all have to relax sometime. I also serve on the 
New Mexico Renewable Energy Transmission Authority, an independent 
entity created by the state to promote renewable energy by developing 
transmission and storage facilities to assist in getting the clean 
energy to new markets. I am a regulator of traditional energy 
resources, a promoter of renewable resources and energy efficiency, and 
a participant in land management decision making.
    My education and experience before becoming cabinet secretary 
concentrated on working with wildlife. I currently serve the 
Association of Fish and Wildlife Agencies (AFWA) as Chair of the Energy 
and Wildlife Policy Committee.
    I have had the opportunity to represent New Mexico on several 
committees organized by the Western Governors' Association (WGA). I am 
on the Steering Committee for the Western Renewable Energy Zones 
Project to identify and promote areas in the west that have the best 
resources for renewable energy development and transmission investment. 
I am a member and past chair of both the Western Interstate Energy 
Board and Western Interstate Nuclear Compact; and a member of the 
Western Interconnection Regional Advisory Body.
    I want to thank each of you for inviting me to talk about a most 
important subject, Energy Development on Public Land. As Chairman 
Bingaman said in a speech a year ago at the Massachusetts Institute of 
Technology about ``The Energy Challenge We Face,'' we ``need to 
overhaul the existing energy infrastructure on which we all depend.'' 
If we are going to overhaul the infrastructure then we need to work 
from the ground up. While we do not usually think of public lands as 
infrastructure, these lands, both federal and state, are the foundation 
of the infrastructure for much of America's energy development, both 
for fossil fuels and renewable energy sources, and are essential 
infrastructure for the delivery or transmission of energy whether 
through pipelines or wires.
    New Mexico, like most states in the West, has huge reserves of oil 
and gas, coal and uranium. There are also world class locations for the 
development of solar and wind resources within the state. We have 
experienced unprecedented development of these resources in the last 
few years. The Bureau of Land Management (BLM) reports 14 solar 
applications pending in New Mexico, proposing to use nearly 55,000 
acres of land. BLM wind applications total nearly 300,000 acres. Oil 
and gas applications for permits to drill (APDs) submitted to BLM have 
dropped from highs of 1,300 a year to something closer to 1,000. The 
New Mexico State Land Office is working on option agreements for more 
than 21,000 acres for utility scale solar power plants, 115,000 acres 
for wind power and 56,000 acres for biomass. Statewide, the New Mexico 
Oil Conservation Division processed more than 2,300 APDs in each of the 
last two years, but expects only 1,600 this year. The speed and 
intensity of the development plans have stressed the land managers' and 
regulators' human resources to adequately evaluate the proposals and 
permit applications in order to protect equally important resources 
such as drinking water. With fewer requests for APDs for oil and gas 
and for exploration permits for uranium, the current economic downturn 
may have given us just a minute to develop a better approach from the 
bottom up. Let us consider where we are now in developing energy from 
and energy infrastructure on public lands.
    First, we must keep in mind that the development of each resource 
has its own complications. For example, commercial-scale solar 
operations with their blanketing effect will eliminate livestock 
production on the public land, require the withdrawal of minerals for 
leasing, eliminate recreation use of the land and will significantly 
disturb wildlife habitat and populations. Wind farms may interrupt 
grazing, create significant surface disturbance for construction and 
maintenance, and potentially impact air force training activities. We 
are already familiar with the impacts of oil and gas development, but 
we need to think of the impacts on that industry as we consider carbon 
sequestration. At this time it is not even completely clear who owns 
the pore space below the surface in which carbon might be stored. 
Generally we think the pore space ownership belongs to the surface 
estate, but there are a number of exceptions. New Mexico and other 
states are starting to define that ownership and other related issues. 
Transmission corridors (power lines and pipelines) also create 
substantial surface disturbances from construction and maintenance and 
impact wildlife resources, visual landscapes and other uses.
    Currently we make decisions about these public land resources in a 
somewhat haphazard or disjointed manner. Consider the recent federal 
efforts to designate Westwide Energy Corridors. For the most part the 
designated corridors follow existing power lines and pipelines from 
fossil energy sources, are entirely on federal land, and completely 
ignore the status and use of adjoining non-federal lands. The corridors 
do not focus on developing renewable energy resources and as a result 
they are not as useful for the new energy infrastructure as they might 
be. New Mexico and others suggested that the corridor designation 
process be delayed slightly until the Western Governors' Association 
made significant progress on identifying the best areas for renewable 
resource development as part of its Western Renewable Energy Zones 
(WREZ) initiative. The request was ignored and the final decision was 
rushed at the end of the last administration and completed just two 
months before the WREZ maps were produced. The process also did not use 
the WGA's work included in the Wildlife Corridors Initiative Report. 
Both WGA initiatives developed information on a landscape scale to be 
used in making future land use decisions. Making such complex decisions 
without utilizing the best available information is self-defeating and 
contrary to fostering actions that help meet our nation's energy 
independence goals.
    Currently, leasing public lands for energy development and 
transmission is driven more by developers than by sound land use 
decisions. For the most part, it is a reactive process, both at the 
state and federal level, based on requests from private developers. 
Land use managers then make decisions, too often relying on out-dated 
resource management plans. The land managers are trying to make good 
decisions, but they have limited personnel and resources to wrestle 
with these complicated land use decisions and developers are pressing 
them to move quickly. It is no wonder that many decisions are 
successfully challenged on appeal. Decision making could work better if 
there were a system-wide process to bring state and federal agencies 
together to work with all interest groups.
    In making this suggestion I am in full agreement with goals of the 
energy and climate change task force recently announced by Ken Salazar, 
the Secretary of Interior. He wants the task force to identify zones on 
public lands where his department can facilitate rapid and responsible 
large-scale solar, wind, geothermal and biomass energy production and 
work with other federal agencies, states and Tribes on transmission 
issues. Speaking for New Mexico, we are eager to work with Secretary 
Salazar and his task force. This important work must be built on a 
well-informed decision making process involving the states.
    Some say the states are not fully committed to energy development 
on public lands. This is not the case. In New Mexico we have to be. A 
substantial part of our economy depends both directly and indirectly on 
energy production. The oil and gas industry directly employs more than 
20,000 people in the state, provides nearly 90 percent of the capital 
funding for schools, and contributes nearly 20 percent of the state's 
general fund. Renewable energy projects also bring in jobs and economic 
growth. The small town of Mountainair that has a new 100MW wind farm 
under construction reports dramatic increases in gross receipts 
revenues, work for local contractors, full rentals and motels, crowded 
restaurants, grocery stores with longer hours, and other evidence of an 
improving local economy. However, the State of New Mexico is reducing 
its spending, largely due to the decrease in anticipated oil and gas 
revenues. As oil and gas production declines we must diversify our 
revenue base. We must meet the state's economic challenges with energy 
resource development, especially given the advent of the new Clean 
Energy Economy.
    It appears Secretary Salazar is planning to use his task force to 
remove obstacles to renewable energy permitting, siting, development 
and production. I hope he welcomes a system-wide process that includes 
the states in a way and in a role that we have not seen before. Let me 
describe what happens when a state like New Mexico does not have 
significant involvement in the process. My administration took over 
shortly before the BLM issued its Final Environmental Impact Statement 
and Resource Management Plan for an area in southern New Mexico that 
includes Otero Mesa. The plan proposed some environmental protections 
for the area, but the State Executive Branch did not consider those to 
be sufficient protection for an area containing the last remnants of 
the ecologically fragile Chihuahuan Desert in the United States. The 
Governor objected to BLM's plan because it was not consistent with 
state law and policies and offered his own plan, as allowed by law. His 
plan was not accepted and ultimately the matter went to court. The 
court did not agree with everything we wanted, but one issue the judge 
specifically addressed is the need for additional environmental review 
before leasing takes place in the area, which we fully support. We see 
this as an opportunity to do things better in the future and hopefully, 
avoid other lawsuits. The New Mexico BLM agrees that the pre-leasing 
environmental review process allows for: 1) a fresh look and chance to 
reassess the eligibility of each parcel, 2) an opportunity to consider 
new information and impacts to other resources, and 3) an opportunity 
to attach meaningful requirements, such as avoidance areas or specific 
stipulations, to protect those resources.
    For the future we need to create an integrated system-wide process 
that includes all public lands, and considers current and future uses 
of adjoining lands. Early and frequent coordination between state and 
federal land managers and other agencies and stakeholders will create 
the likelihood of positive results. For example if Secretary Salazar 
intends to promote renewable energy development by identifying the best 
resource areas and initiating environmental reviews, then the process 
is hastened by working with the states. As discussed above the WGA WREZ 
initiative is already working to identify the best zones throughout the 
West. What is the next step? Consider the possibility of using the BLM 
pilot office approach for more than speeding the review time for APDs 
and increasing the number of field inspections. This program in New 
Mexico has been highly successful on that level. The program could be 
expanded so that other state personnel are embedded in BLM offices to 
work on issues related to the reviews required under the National 
Environmental Policy Act (NEPA). State natural resource and 
environmental personnel could bring many state policy issues to the 
BLM's attention as BLM evaluates alternatives and selects the preferred 
approach. These individuals could bring the state perspective and 
state-developed information, such as wildlife management plans, to the 
federal planning process in the very first stages. It is appropriate to 
include state representatives who have broad trustee or police powers 
over natural resources. State personnel could also include State Land 
Office officials because in our state, and in other states, development 
and siting decisions are likely to include both state and federal 
lands. This level of coordination is virtually a requirement for 
transmission corridors because there will be a complete mix of land 
ownership in almost every project. The focus needs to be on a landscape 
scale and this means a substantial sharing of information and policy is 
needed to make the best decision. Also if the decisions are made by the 
state and federal agencies working together we will avoid actions 
similar to the Otero Mesa litigation I described earlier.
    Placing state personnel within federal agency offices to work on 
planning and environmental issues is a step beyond the cooperating 
agency status now available as part of the NEPA process. It ensures the 
communication and constant interaction other arrangements frequently 
fail to achieve. The arrangement serves to underscore that public lands 
deserve the best decision-making process available and that an 
integrated, system-wide process will result in decisions using the best 
information available. It will ensure that planning is done at a 
landscape scale, if not on a statewide or regional scale.
    Embedding state personnel in federal land management offices will 
also help address areas of continued shortfall--monitoring, evaluation 
and reclamation efforts. Jointly developed monitoring protocols will 
result in consistent data gathering as a measure of progress and the 
information will guide any adaptations that may be needed to achieve 
the management goals. For instance, if the goal is to restore habitat 
in a part of New Mexico, it is important to consider all public lands 
in the area on a landscape level and what joint efforts in reclamation 
work can be done to assist in improving the area. The species 
management plans prepared regularly by state wildlife agencies could be 
the starting point for such restoration efforts. The inter-agency, 
inter-disciplinary Candidate Conservation Agreements for Lesser Prairie 
Chickens and Sand Dune Lizards in New Mexico, the multi-state Sagebrush 
Conservation Initiative and the Wyoming Landscape Conservation 
Initiative all serve as examples of significant collaborative efforts 
that could be used for all energy development.

                         CONCLUSION AND SUMMARY

    Federal and state agencies working closely together will make 
public lands work better for all of us--we can make those energy 
infrastructure changes we all need. I close by urging you to consider 
the following:

   Continue to fund the BLM Pilot Offices and add more state 
        personnel with environmental and wildlife policy experience to 
        fully deliver the promise of interagency cooperation,
   Continue and expand support for landscape conservation 
        initiatives like Restore New Mexico to reclaim degraded 
        grasslands, watersheds and wildlife habitats to offset impacts 
        from development (like wildlife habitat fragmentation) and use 
        this model for all energy development,
   Build on the data collected for the WGA initiatives for 
        identifying the best renewable energy zones and wildlife 
        corridors and habitats,
   Fund state and federal jointly constructed databases with 
        environmental information collected on natural resources, 
        before the need for a specific data collection arises, such as 
        revisions to a resource management plan or a specific permit 
        application,
   Support creation of integrated state and federal decision 
        support systems that use new technologies like GIS mapping 
        (spatial data layers) to inform decision making early on,
   Focus any new studies or information gathering efforts on 
        gaps that may exist in studies already completed rather than 
        duplicating existing analysis, and
   Support continuing funding for these proposals, perhaps from 
        energy development fees, instead of using discretionary funds.

    Thank you.

    The Chairman. Thank you very much for your testimony.
    Dr. Arvizu, we're glad to see you again. Please go right 
ahead.

 STATEMENT OF DAN ARVIZU, DIRECTOR, NATIONAL RENEWABLE ENERGY 
                     LABORATORY, GOLDEN, CO

    Mr. Arvizu. Thank you, Mr. Chairman. Chairman Bingaman, 
Ranking Member Murkowski, thank you for this opportunity to 
discuss renewable energy development on public lands and the 
Outer Continental Shelf. I'm the Director of the National 
Renewable Energy Laboratory in Golden, Colorado. NREL is the 
U.S. Department of Energy's primary laboratory for renewable 
energy and energy efficiency.
    I'm honored to speak with you here today. I've submitted a 
more comprehensive report of my spoken remarks for the record.
    As our Nation moves toward a clean energy future it's 
become increasingly clear that Federal lands are one of the 
keys to realizing the true potential of the vast resources of 
renewable energy. Wind, solar, biomass, geothermal, water, 
ocean energy resources are in abundance across the Nation's 
millions of acres of Federal lands and offshore regions. Our 
laboratory has produced maps which graphically show the 
renewable energy resource potential of public lands and a map 
of the overall renewable resource potential on Federal lands is 
part of my written testimony.
    Senator Murkowski, I'll point out that I have also omitted 
Alaska and Hawaii. But I will provide those for the record. 
Note that we have a great partnership with both Alaska and 
Hawaii in developing renewable energy in your States.
    If we take a quick look at the renewable resource potential 
in the 48 continental States and make an assumption about 10 
percent of that being developable. I'll note that this is a 
very coarse average. In fact we've done some work for Western 
Governors that would offer a much broader range that's 
potentially available.
    But we can readily see that the public land is really 
significant.
    One hundred and forty gigawatts, that's 140,000 megawatts 
of energy generated from photovoltaic solar; 400 gigawatts from 
concentrating solar power; 80 gigawatts from wind; 0.3 
gigawatts from biomass and that's just residual type of waste 
biomass.
    For geothermal we don't know the full potential. But we in 
fact know that there are at least 20 gigawatts of suitable, 
developable resource.
    If you take a look at all of that what you'll find is 
that's about 640 gigawatts. if you further assume that for the 
variability that we find both in wind and in solar, that the 
capacity of factor for that would be roughly 35 percent. What 
that equals is one half of the total generating supply of 
electricity in the United States.
    So it's a significant amount. we can go with various 
assumptions about how much that is. But that gives you an order 
of magnitude sort of volume or quality of the renewable energy 
resource.
    As Federal lands gear up to meet the national demands for 
renewable energy they will be confronted with new issues from 
the emerging wind, solar and other renewable industries. The 
economic drivers of wind power, for example are fundamentally 
different from those of oil and gas. There's a long history of 
leasing and resource development on Federal lands in these more 
traditional resources.
    The process of permitting renewable energy development in 
electric transmission projects on public lands should focus on 
two goals.
    First, find sites where the most economical renewable 
resources can be developed.
    Second, among those sites selected, those that can be 
developed with minimal environmental impact.
    In addition to energy generation projects Federal lands 
have a major role in improving and moving electricity from 
remote sites to where national population centers are. Regional 
planning and consideration of the economies of scales are 
essential in factoring and in routing the transmission lines 
across Federal lands. In our opinion, one supersized 
transmission line poses less harm and delivers more benefit 
than a proliferation of a number of smaller lines.
    NREL has been working with the Interior Department in the 
renewable energy access to public lands since 2002. We've 
helped with the Bureau of Land Management develop permitting 
policies and environmental assessments for solar and wind. 
We'll continue to do that as part of the American Recovery and 
Reinvestment Act in 2009.
    A good example of multi-agency cooperation is the solar 
reserve pilot project which is included in S. 539. The 
provision calls for the Energy Department and the Department of 
Interior and other relative agencies to work together to cite 
and facilitate utility scale power on Federal lands.
    For my final point I want to stress that the need for 
ongoing technology refinement is crucial. The wind industry, 
for instance, will not be able to take full advantage of the 
offshore opportunities without development of second generation 
technologies, systems and concepts. The same need for 
continuing R and D is equally true of PV solar and 
concentrating power geothermal and biomass and fuels as well.
    In all of these instances there's tremendous opportunity in 
the innovation cycle. I think we need to continue to support 
those as we deploy first generation technology. This concludes 
my opening remarks. I look forward to answering some questions.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Arvizu follows:]

 Prepared Statement of Dan Arvizu, Director, National Renewable Energy 
                         Laboratory, Golden, CO

    Mr. Chairman, thank you for this opportunity to discuss energy 
development on public lands and the Outer Continental Shelf. I am the 
director of the National Renewable Energy Laboratory, the Department of 
Energy's primary laboratory for research and development of renewable 
energy and energy efficiency technologies.
    As our nation moves toward a clean energy future, it is becoming 
increasingly clear that federal lands are one of the keys to realizing 
the true potential of our vast array of renewable energy resources. 
Wind, solar, biomass, geothermal, water and ocean energy resources are 
in abundance across the nation's millions of acres of federal lands and 
offshore regions. While the immense clean energy potential of public 
lands is clear, much work remains to fully characterize each of the 
resources contained therein, to identify the optimum sites and 
timeframes for deployment, and to put in place the best systems for 
making these lands available for commercial development.

                   RESOURCE POTENTIAL ON PUBLIC LANDS

    As part of my testimony, I have provided the Committee with maps 
our Laboratory has assembled which graphically show the renewable 
energy resource potential of public lands. These maps detail the 
resource potential on a county-by-county basis. At this stage, the maps 
do not account for variable factors such as development cost, access 
and existing land use applications.*
---------------------------------------------------------------------------
    * Maps have been retained in committee files.
---------------------------------------------------------------------------
    If we take the overall renewable resource potential on public lands 
in the 48 Continental states, and we assume that 10 percent of it could 
be developed, the possible contribution to the nation's energy needs is 
significant. For photovoltaic (PV) solar, 10 percent development of 
resource potential is estimated at 140 GW; concentrating solar power 
(CSP), 400 GW; wind power, 80 GW; and, biomass, (forest and primary 
mill residues only), 0.3 GW. For geothermal we considered only known, 
suitable development sites, and found a potential for 20 GW. (See 
technical notes following this text for a detailed explanation of 
methodology).
    Considering the collective potential of all of these renewable 
energy resources, again assuming 10 percent development of wind, solar 
and biomass, and 100 percent development of known geothermal, we found 
a potential contribution of approximately 640 GW. One caveat to keep in 
mind is that wind and solar are intermittent, and thus produce less 
energy over time than their full generation capacity would suggest.
    However, given that total U.S. electrical generation capacity is 
1,088 GW, you can begin to see the significance of renewable resources 
on public lands.
    Most all federal land areas have some renewable energy potential; 
many areas can support multiple renewable technologies. The resource 
potential on federal lands is concentrated in Western states, where the 
bulk of federal lands are located. Concentrating solar power dominates 
in the southwest; wind in the upper Great Plains, and photovoltaics in 
the remainder of federal lands. For geothermal, the best quantifiable 
information is available for specific sites that have been evaluated; 
the total geothermal potential may be significantly larger than these 
existing figures suggest.
    When the potential for federal lands to contribute to our nation's 
transportation fuel needs is considered, we found that the leftover 
residue material from logging and milling operations could produce 
enough cellulosic ethanol to displace 8% of gasoline consumption. This 
assessment does not include harvesting of standing trees for energy 
use; also excluded are the extensive resources that might be available 
as a result of pine-beetle devastation throughout forests in western 
North America. Cellulosic ethanol technology is still under 
development.
    Other national assessments of renewable energy potential likewise 
envision a major role for public lands. The 20% Wind Scenario developed 
by NREL and DOE is the most comprehensive accounting of the longer term 
potential for wind power in the U.S. Of the 300 GW that were projected 
to be needed to meet the 20 percent threshold of U.S. electricity needs 
in 2030, the study found that 54 GW would come from offshore wind. 
Another 33 GW is projected from wind farms located on public lands 
onshore.
    As federal land agencies gear up to meet the nation's demands for 
renewable energy, they will be confronted with new issues from the 
emerging wind, solar, and other renewable industries. The sensitive 
economic drivers of the wind power industry, for example, are 
fundamentally different than those of the oil and gas industry, which 
has a long history of leasing and resource development on federal 
lands. That fact is further complicated by the varying levels of 
maturity for each of the respective renewable technologies, and the 
disparate costs of energy produced by each.
    Any process for permitting renewable energy development and 
electric transmission projects on public lands should have at its heart 
the twin goals of finding sites where the most economical renewable 
resources can be developed, with the least harm to the environment. The 
quality and cost of wind, solar, geothermal, and other renewable 
resources varies geographically, as does the fragileness of terrain and 
wildlife habitat. Balancing the two requires a transparent, public 
dialogue between federal land managers, private land owners, 
environmental interests, industry, state authorities and technical 
experts.
    Federal lands in particular are expected to have a major role in 
the transmission of electricity from remote wind, solar and geothermal 
projects to the nation's population centers. Regional planning and 
consideration of the economies of scale are essential factors in 
routing transmission lines across federal lands. One super-sized 
transmission line poses less harm and delivers more benefit than a 
proliferation of smaller lines.
    Targeting a multi-billion dollar investment in a major transmission 
corridor requires careful planning because it needs to mesh with the 
grid that is already serving customers throughout the region. This 
comprehensive planning process needs to locate concentrations of high-
quality renewable resources, identify the demand centers that will 
receive the power, and ensure that both can be connected in a way that 
maintains essential grid reliability. A broad consensus early on about 
where transmission lines should go will reduce the potential for delay 
and litigation later, when specific lines are reviewed.

                        BARRIERS TO DEVELOPMENT

    Unduly burdensome fees and regulations in a leasing program could 
stifle development of the very clean energy resources that we as a 
nation are striving to encourage. It is essential that the unique 
economic and business considerations that are fundamental to the 
successful development of renewable resources are fully understood, and 
reflected in the leasing procedures and regulations for public lands.
    The pending rules by the Minerals Management Service regarding 
leasing of offshore resources are designed to be conducive to our 
broader federal energy goals. The American Wind Energy Association and 
the Ocean Renewable Energy Coalition submitted extensive comments on 
the proposed MMS rules; NREL, in its role to support the growth of 
renewable energy industries, has reviewed and generally supports these 
recommendations.
    Within those recommendations are some useful, broader principles 
for guiding future renewable energy access programs for public lands. 
To ensure timely development, the process should first and foremost 
minimize any opportunity for administrative delay and have in place 
workable timelines for project approvals. The process should also 
safeguard against misuse of the leasing system. Land management 
agencies should work with regional transmission planning entities, 
utilities and state regulators to ensure that federal leases for 
renewable energy development are awarded to those who are likely to 
build wind, solar or other renewable generation capacity, and not to 
those who intend to artificially increase the cost or limit the 
development of renewable resources by withholding their leased federal 
lands from development.
    Finally, revenue collection mechanisms in the process should be 
structured in ways that protect the federal treasury, without deterring 
publicly beneficial renewable energy projects.
    A related area of importance is the need for R&D sites in the field 
for testing marine energy systems. Separate and distinct from the 
commercial leasing program, such sites could be utilized for testing 
offshore wind turbines, wave energy systems and ocean current turbines. 
We urge that such a program be created in the near term to facilitate 
expected needs for prototype testing of new ocean energy systems.
    Some history is in order to explain how the renewable energy 
development program has evolved for public lands. In July of 2002, the 
Bureau of Land Management, DOE Golden Field Office and NREL signed an 
agreement to begin joint work on renewable energy technology expertise 
and project development on public lands.
    A year later, NREL completed the study, ``Assessing the Potential 
for Renewable Energy on Public Lands,'' for BLM, which covered solar, 
concentrating solar power and photovoltaics, wind and biomass (http://
www.nrel.gov/docs/fy03osti/33530.pdf). BLM's initial objective was to 
identify the BLM lands with the highest renewable resource potential, 
and to begin prioritizing and planning renewable energy development in 
those areas. One unexpected result of that study was a dramatic surge 
in the number of wind industry Right-of-Way (ROW) applications to BLM 
Field Offices in Western states for wind farm development on public 
lands.
    In response to the flood of wind industry applications, BLM worked 
with NREL and the wind industry to develop a first-of-its-kind 
application process. The result, in October of 2003, was the BLM Wind 
Development Policy Memorandum, which guides BLM Field Offices regarding 
wind industry applications.
    To date, more than 70 wind project development applications have 
been approved for wind resource monitoring, and several applicants have 
moved forward with development plans and environmental studies for 
commercial scale wind farm development. Of particular note is the 
proposed 2000-2500 MW wind farm planned near Rawlins, WY.
    In 2004, BLM began work with NREL to develop solar development 
policies for public lands, similar to those developed for wind power. 
Those policies were released in October, 2004. So far, BLM has received 
more than 200 applications for solar power project development, in 
California, Nevada, Arizona, New Mexico and Colorado. Typical projects 
are in the 400 MW-500 MW range.
    A significant challenge for both BLM and renewable energy industry 
applicants is the time and cost of the compliance requirements in the 
National Environmental Policy Act. An Environmental Impact Statement 
and other compliance procedures can cost applicants more than $1 
million and take 18 months or more to complete.
    To support the renewable industry and its own field offices, BLM 
engaged NREL and Argonne National Laboratory to develop a Wind 
Programmatic EIS (PEIS), which analyzes the environmental impacts of 
wind development in 11 Western states. The Wind PEIS was completed in 
June 2005 and adopted by the BLM as a way to streamline the permitting 
process. Currently, NREL and Argonne are helping develop a joint BLM-
DOE solar Programmatic EIS, scheduled for completion in late 2010. The 
Solar PEIS, like that for wind power, is planned to be adopted by BLM 
Field Offices to support solar power plant development.
    To overcome the limited experience BLM field offices have had with 
renewable energy technology, the agency has contracted with NREL for 
technical support with wind and solar development inquires, and for BLM 
staff training on wind and solar technology and development issues.
    DOE and the Interior Department recently began a joint effort to 
accelerate the processing of solar applications on BLM lands in the 
Southwest. Additionally, the DOE Solar Program has launched an effort 
with NREL and Sandia National Laboratories to deliver technology 
expertise and technical support to BLM Field Offices to handle energy 
land leases in light of the energy tax and investment provisions in the 
American Recovery and Reinvestment Act.
    As for renewable energy on federal lands beyond those controlled by 
BLM, NREL conducted a study for USDA-USFS, ``Assessing the Potential 
for Renewable Energy on National Forest Service Lands,'' January 2005. 
(www.nrel.gov/docs/fy05osti/36759.pdf) NREL also conducted a study for 
DOE's Office of Legacy Management, ``Assessing the Potential for 
Renewable Energy Development on DOE Legacy Management Lands,'' February 
2008. www.lm.doe.gov/documents/NREL41673.pdf

                         A COORDINATED APPROACH

    One point that cannot be underestimated is the need for a robust, 
multi-dimensional, and multi-agency federal approach to renewable 
energy development on public lands. A good example of cooperative 
efforts is the Solar Reserve Pilot Project, which is included in Senate 
Bill 539. This provision calls upon the Energy Department, the 
Department of Interior and other relevant agencies to work together to 
site and facilitate utility scale solar power projects on federal 
lands.

                            THE ROLE OF R&D

    The need for ongoing technology refinements likewise is crucial. 
The wind industry, for instance, will not be able to avail itself of 
new offshore opportunities without the development of the new 
technologies, systems and concepts that will be required to operate in 
the marine environment.
    Cost also is a determining factor for renewable energy 
technologies. Each of the renewable energy industries places a major 
emphasis on continuing efforts to reduce the costs of their commercial 
products, so they can compete on an even playing field with 
conventional energy systems. Of course, reducing the cost and 
increasing the efficiency of these technologies is the primary focus of 
NREL and the DOE programs it supports.
    Some of the necessary reductions in costs will come as a result of 
the economies of scale that are achieved as these industries mature, 
and grow into higher levels of manufacturing and production. Even so, 
much of the cost and efficiency gains that are still needed can only 
come from innovation, and that innovation can only come from an ongoing 
commitment to research and development.
    Continuing R&D by federal research institutions, universities and 
private sector is crucial to the long term, successful build-out of 
renewable energy systems on public lands, as it is for clean energy 
deployment generally.
    And while renewable energy industries have enjoyed considerable 
growth in recent years, there remains a lot of room for technology 
improvement. The increasing size of wind turbines well illustrates the 
point. As wind turbine manufacturers seek to capture maximum 
efficiencies, the size of the machines continues to grow. Where 
turbines under 1 MW dominated the market only a few years ago, machines 
in the 1.5 MW to 3 MW range are today the dominant force. With 
attention turning to the unique opportunities presented by offshore 
wind resources, there are now even proposals for 10 MW turbines.
    Conceptually, these giant turbines could undercut the dramatically 
increased costs of placing supporting structures in the ocean, by 
greatly increasing the power produced by each turbine. The problem that 
exists today is that there is no commercial pathway to producing a 10 
MW wind turbine, and many industry observers say it won't happen at all 
without a serious new commitment to research and development. We 
believe it will be possible to produce turbine blades nearly two 
football fields across, like those required of a 10 MW machine, but we 
don't know how to do it today.
    Ongoing innovation for increased efficiency and lower energy costs 
is essential if we are to fulfill the promise of other renewable 
technologies as well.
    For wind, solar, geothermal and other industries, it will be the 
second and third generations of technology that will ultimately boost 
deployment to the speed and scale the nation needs to meet our long 
term clean energy goals on federal lands, and beyond.

TECHNICAL DETAILS OF NREL CALCULATIONS FOR RENEWABLE RESOURCE POTENTIAL 
                            ON PUBLIC LANDS

          1. PV potential calculated with no exclusions. Installed 
        capacity estimated assuming 10% coverage by PV systems with a 
        10% conversion efficiency. Solar resource data is 2007 NSRDB/
        SUNY satellite modeled data for 1998-2005, fixed flat plate 
        with tilt = latitude.
          2. CSP potential calculated with exclusions in the 
        southwestern U.S. only; eliminating areas with slope >1%; 
        federal protected lands including parks, wilderness areas and 
        wildlife refuges; urban, wetland and water features; resource 
        areas <6.0 kWh/m2/yr; and remaining areas 
        <1km2 in size. Installed capacity estimated assuming 
        50 MW/km2. Solar resource data used is 2007 NSRDB/
        SUNY satellite modeled data for 1998-2005, direct normal solar 
        radiation.
          3. Wind potential calculated with standard exclusions: 
        federal protected lands including parks, wilderness areas and 
        wildlife refuges; urban, wetland and water features; a 3 km 
        area surrounding all of those excluded areas except water; 
        exclusion of 50% of the remaining U.S. Forest Service and Dept. 
        of Defense lands; exclusion of 50% of non-ridgecrest forested 
        areas; and exclusion of areas with slope >20%. Note 50% 
        exclusions are applied only once to a given area, they are not 
        cumulative. Installed capacity estimated assuming 5 MW/
        km2. The wind resource data used was that produced 
        for the 20% Wind Vision Report.
          4. Biomass potential calculations used installed capacity 
        estimates assuming 1 dry ton/hr/MW (20% efficiency industry 
        average). Biomass data from Geographic Perspective on the 
        Current Biomass Resource Availability in the United State 
        (Milbrandt, 2005).
          5. Geothermal potential (hydrothermal and convective EGS) 
        calculated with no exclusions. Installed capacity estimated for 
        each individual location, accounting for already developed 
        capacity. Geothermal resource data used was provided by Gian 
        Porro in Jan 2008 (Site Geothermal Data--Hydro and Conv EGS--
        Tech Potential.xls).

    The Chairman. Thank you very much.
    Mr. Bryce, go right ahead.

   STATEMENT OF ROBERT BRYCE, AUTHOR AND ENERGY JOURNALIST, 
                           AUSTIN, TX

    Mr. Bryce. Yes, hi. Good afternoon. America depends on 
cheap, abundant energy. But over the past few years it appears 
to me and particularly over the past few months, it appears 
that Congress is intent on making energy scarce and expensive.
    Before going further let me make it clear that I'm here 
only speaking for myself. I'm not a Democrat. I'm not a 
Republican. I'm a member of the disgusted party.
    I'm not a scientist or an engineer, not a billionaire like 
Boone Pickens. I'm a journalist. But I know how to use a 
calculator. When formulating energy policy it seems to me that 
the most important skill that Congress must apply is basic 
mathematics.
    I am, before I go further, I'm fully in favor of renewable 
energy. I have solar panels on the roof of my house in Austin, 
Texas. I'm very much in favor of solar power.
    But no matter how you do the calculations renewable energy 
by itself cannot, will not replace hydrocarbons over the next 
two to three decades. That's a very conservative estimate. 
Furthermore, the transition away from hydrocarbons, I think 
will be delayed due the ongoing global slowdown spending on new 
cars, new more efficient cars and investments in new energy 
technologies has drastically been slowed by the global 
slowdown.
    Alternative energy discussions always hinge on the matter 
of scale. Last month I visited a coal mine, an underground coal 
mine in Western Kentucky, the Cardinal Mine. They mine coal, 
bituminous coal 600 feet underground.
    This one mine produces about 15,000 tons of bituminous coal 
per day. That's the raw energy equivalent of about 66,000 
barrels of oil. That is nearly equal to, again in raw energy 
terms, to the entire output of all the solar panels and 
windmills in America which have a combined total output of 
76,000 barrels of oil equivalent per day.
    Here's another essential number, 47.4 million barrels of 
oil equivalent per day. That is America's total primary energy 
use on an average day counting nuclear power, coal, natural 
gas, wind, solar, hydro and everything else. Thus when you 
calculate the returns on wind and solar, they provide less than 
two-tenths of 1 percent of the entire primary energy needs in 
the United States.
    We can double solar and wind power. We can double them 
again. We can double them again. I think that we should. That 
will help.
    But the obvious point here is that Congress must take a 
balanced approach on developing energy policy. That means we 
have to continue drilling. We have to continue using 
hydrocarbons.
    The congressional leadership, I guess from me personally 
since I've written a lot about the Energy Independence issue. 
To me personally, one of the most disappointing aspects of the 
energy discussion in America over the past few months has been 
the continuing use and promotion of this delusional concept of 
energy independence that we hear from the Democratic leadership 
in Congress and from the White House. The same rhetoric is 
coming out while the White House and Congress are 
simultaneously promoting policies such as reduced access to 
Federal territory and cutting tax incentives for drillers that 
will, without a doubt, make the U.S. more dependent on imported 
energy.
    I mean talk about natural gas for a moment. Thirty years 
ago Congress fretted that the U.S. was running out of natural 
gas and passed laws restricting its use, particularly for 
electricity generation. Today thanks to new drilling 
technologies and particularly completion technologies the 
natural gas industry has assured that the U.S. will have 
abundant supplies of natural gas likely for decades to come.
    We now have a glut of natural gas. Gas should be seen and 
has not been discussed at all this morning that I can tell. Gas 
should be seen as a bridge fuel that is low carbon complement 
that can be a very logical and agreeable source of power that 
can combine with the intermittent nature of solar and wind.
    Regarding the Outer Continental Shelf, some opponents 
contend there's not much oil to be found out there. That is 
false. Any cursory scan of the energy headlines in the energy 
trade magazines show that Tupi discovery off shore Brazil and 
the Jack discovery, just to name two.
    Offshore Louisiana will likely yield tens of billions of 
barrels of oil. That is tremendous resource available in the 
offshore deep water. It should be pursued.
    The U.S. now has something on the order of 250 million 
motor vehicles as well as millions of recreational boats and 
tens of thousands of aircraft. We cannot run them all on sun 
juice and sails. We can't run them on ethanol.
    The fact is and people don't like to admit this. The fact 
is we need oil. The world needs oil and we have to drill for 
it.
    Senator McCain asked about this, nuclear power. If the 
Congress is serious about reducing carbon and really serious, 
we need to be serious about pursuing nuclear power. Pursuing it 
right darn quick.
    Rather than accept these realities though, what I see is 
Congress dallying and promoting and expanding programs like the 
corn ethanol scam which I think is an obscene, immoral 
boondoggle that does nothing to reduce this country's 
dependence on oil. The fact is the corn ethanol scam increases 
our food prices, worsens our air quality, perverts our 
Presidential selection process. Yes, I'm talking about the Iowa 
caucuses.
    The fact is Congress must choose between rhetoric and 
reality. I favor cheap, abundant energy. But I fear that what 
the actions that are being taken in the House and the Senate 
and what the White House is talking about will only make energy 
scarce and expensive.
    Thank you.
    [The prepared statement of Mr. Bryce follows:]

   Prepared Statement of Robert Bryce, Author and Energy Journalist, 
                               Austin, TX

    Good morning.
    America depends on cheap abundant energy. But over the past few 
years, and particularly over the past few months, it appears that 
Congress is hellbent on making energy scarce and expensive.
    Before going further let me be clear that I am here speaking only 
for myself. I am neither Democrat nor Republican, I'm a member of the 
Disgusted Party.
    I'm not a scientist or an engineer. I'm a journalist. But I know 
how to use a calculator. And that skill--basic mathematics--is the 
skill that Congress must apply when creating energy policy.
    I am fully in favor of renewable energy. But no matter how you do 
the calculations, renewable energy by itself, can not, will not, be 
able to replace hydrocarbons over the next two to three decades, and 
that's a conservative estimate. Furthermore, the transition away from 
hydrocarbons will be substantially delayed due to the ongoing global 
recession. It has cut the amount of capital available for new energy 
technologies and drastically slowed the sale of new, more efficient 
cars.\1\
---------------------------------------------------------------------------
    \1\ Ed Wallace, ``The Boomers Stop Buying,'' Business Week, 
February 26, 2009. Available: http://www.businessweek.com/print/
lifestyle/content/feb2009/bw20090226_384582.htm. For the slowdown in 
capital investment, see: Anthony Fiola, ``U.S. Downturn Dragging World 
Into 
Recession,'' Washington Post, March 9, 2009, A1. Available: http://
www.washingtonpost.com/wp-
dyn/content/article/2009/03/08/AR2009030801216.html?nav=hcmodule
---------------------------------------------------------------------------
    Alternative energy discussions always hinge on scale. Last month, I 
visited an underground coal mine in western Kentucky called the 
Cardinal mine. It's the 35th-largest mine in the U.S., producing about 
15,350 tons of bituminous coal per day.\2\ That's the raw energy 
equivalent of about 66,000 barrels of oil.\3\
---------------------------------------------------------------------------
    \2\ Personal communication with mine manager, Eric Anderson, 
February 20, 2009, at the mine offices, Madisonville, KY. In 2008, the 
mine produced 5.6 million tons of coal. That's 15,342 tons per day.
    \3\ A barrel of oil contains approximately 5.8 million Btu. E.I.A. 
data. Available: http://www.eia.doe.gov/kids/energyfacts/science/
energy_calculator.html
---------------------------------------------------------------------------
    That's nearly equal to--in raw energy terms--the total amount of 
energy now being produced by all of the solar panels and wind mills in 
the U.S., which produce the energy equivalent of about 76,000 barrels 
per day.\4\
---------------------------------------------------------------------------
    \4\ Obviously, this isn't an exact comparison. It doesn't account 
for the huge energy losses that occur when converting hydrocarbons to 
electricity. The pile of black rocks from the Cardinal mine doesn't 
equal the highly ordered electricity that comes from the solar panels. 
But even if you cut the actual energy output from the mine by two-
thirds, to 22,000 barrels of oil equivalent, it provides a good metric.
---------------------------------------------------------------------------
    Here's another essential number: 47.4 million barrels of oil 
equivalent per day. That is America's total primary energy use--coal, 
oil, natural gas, nuclear, and everything else.\5\ Thus, wind and solar 
now provide less than two-tenths of 1% of America's total energy 
needs.\6\ We can double these sources. And again and again. That will 
help.
---------------------------------------------------------------------------
    \5\ BP Statistical Review of World Energy 2008. Available: 
www.bp.com
    \6\ Actual number is 0.16%.
---------------------------------------------------------------------------
    But the point is obvious: Congress must take a balanced approach to 
energy policy that includes hydrocarbons.
    The Congressional leadership and the White House are promoting the 
delusion of ``energy independence'' while simultaneously promoting 
policies--such as reducing access to federal territory and cutting tax 
incentives for drillers--that will make the U.S. more dependent on 
imports.
    The ability of American energy companies to produce enormous 
quantities of natural gas from coal beds and shale beds may be the 
single most important development in the American energy business in 
the past two decades.
    Thirty years ago, Congress fretted that the U.S. was running out of 
natural gas and passed laws restricting its use.\7\ Today, thanks to 
new drilling techniques, America is assured of abundant supplies of 
low-cost natural gas for the foreseeable future if Congress doesn't 
mess it up.\8\ Gas should be seen as a bridge fuel to the future and as 
a logical, low-carbon complement to the intermittent energy provided by 
wind and solar.
---------------------------------------------------------------------------
    \7\ The Powerplant and Industrial Fuel Use Act of 1978, prohibited 
the use of natural gas for electricity generation. EIA data. Available: 
http://www.eia.doe.gov/oil_gas/natural_gas/analysis_publications/
ngmajorleg/repeal.html
    \8\ In 2008, U.S. gas production was 26 trillion cubic feet--the 
highest level ever recorded. E.I.A. data. Available: http://
tonto.eia.doe.gov/dnav/ng/hist/n9010us2a.htm
---------------------------------------------------------------------------
    Regarding the Outer Continental Shelf, opponents of drilling 
contend that there is not much oil to be found in this region. That is 
false. Two recent deepwater offshore discoveries--the Tupi in Brazil 
and the lower tertiary trend offshore Louisiana--likely contain tens of 
billions of barrels of oil.\9\
---------------------------------------------------------------------------
    \9\ See Bryce, Gusher of Lies, 39-40, 172-175.
---------------------------------------------------------------------------
    The U.S. now has some 250 million motor vehicles, as well as 
millions of recreational boats and tens of thousands of aircraft.\10\ 
We cannot run them all on sun juice and sails. We need--the world 
needs--oil. And if Congress is truly serious about cutting carbon 
emissions, then it's equally obvious that it needs to get serious, and 
right quick, about nuclear power.
---------------------------------------------------------------------------
    \10\ Bureau of Transportation Statistics. Available: http://
www.bts.gov/publications/national_transportation_statistics/html/
table_04_09.html
---------------------------------------------------------------------------
    Rather than accept these realities, Congress dallies, and continues 
the expansion of the corn ethanol scam--an obscene boondoggle that does 
nothing to reduce our oil consumption. Instead, it increases food 
prices, worsens air quality, and perverts our presidential selection 
process, and yes, I'm talking about the Iowa Caucuses.\11\
---------------------------------------------------------------------------
    \11\ Robert Bryce, ``Ethanol Bankruptcies Continue, 14 Studies Have 
Exposed the High Cost of Ethanol and Biofuels,'' Energy Tribune, 
February 4, 2009. Available: http://www.energytribune.com/
articles.cfm?aid=1281. Regarding air quality and the presidential 
primaries, see Bryce, Gusher of Lies, 145-99.
---------------------------------------------------------------------------
    Congress must choose between rhetoric and reality. I favor cheap, 
abundant energy. I fear the actions of the House and Senate--
intentionally or not--will only make it scarce and expensive, and they 
will do so at the worst possible time for our country.
    Thank you.

    Note: Robert Bryce is the managing editor of Energy Tribune.\12\ 
His latest book is Gusher of Lies: The Dangerous Delusions of ``Energy 
Independence.''
---------------------------------------------------------------------------
    \12\ For more see: www.robertbryce.com, or www.energytribune.com.

    The Chairman. Thank you very much.
    Mr. Cooper.

    STATEMENT OF GEORGE COOPER, PRESIDENT AND CEO, THEODORE 
               ROOSEVELT CONSERVATION PARTNERSHIP

    Mr. Cooper. Mr. Chairman, thank you very much. Ranking 
Member Murkowski, Senator Bennett, thank you. Thanks for 
inviting me here today to testify on behalf of the Theodore 
Roosevelt Conservation Partnership regarding responsible 
development of renewable and non-renewable resources both on 
public lands and the Outer Continental Shelf.
    The TRCP is a coalition of hunting, angling and 
conservation groups, labor unions and individual grassroots 
partners that works together to guarantee all Americans quality 
places to hunt and fish. The impact of expanding energy 
development on fish, wildlife, hunting and angling has become a 
top concern of our community in recent years. Historically 
American sportsmen-conservationists have demonstrated 
understanding of the need to extract and harvest resources from 
our public lands and waters. We certainly recognize that need 
today when it comes to energy.
    We also believe that these activities can and must be 
conducted in a manner guided by science that sustains fish and 
wildlife and ensures quality outdoor opportunities for 
generations to come. We believe with foresight and planning 
resources can be developed in our public spaces while assuring 
future hunting, fishing and other outdoor pursuits. As we sit 
here today we find ourselves on the heels of an oil and gas 
boom in the Rocky Mountain West and on the front end of a new 
push to expand renewable and conventional energy development 
onshore and offshore.
    At this particular juncture we believe it is vital for 
Congress and the administration to address lessons learned from 
the oil and gas development push we've seen in the West and 
proceed with new exploration and development guided by energy 
legislation that includes a specific fish and wildlife 
sustainability title. We believe language must be adopted to 
insure stronger, more consistent approach in Federal management 
of energy development and transmission whether it's renewable, 
non-renewable, onshore or offshore.
    We believe this approach must include a new emphasis on pre 
lease planning that secures the balance multiple use management 
we've been lacking that sustains fish and wildlife populations 
throughout development. We believe with a stronger new 
requirement for the science based out front planning, Federal 
and State agencies must have the ability to execute monitoring, 
mitigation, enforcement when leases are sold. This can only 
occur with adequate funding. Something we have not had to date 
and that should be adopted, in our opinion, in new legislation.
    The TRCP's recommendations to you come from leading hunting 
and fishing conservation organizations represented in our 
working groups. Our onshore recommendations are captured in our 
FACTS principles. Offshore recommendations are captured in CAST 
principles.
    Both have been submitted for the record. When looking at 
those two sets of principles the common core elements fall into 
the areas of precaution, planning and investment. I'll just hit 
on those briefly.
    On precaution the idea here is to ensure that all 
information about potential impacts to fish and wildlife 
resources are considered prior to developing those resources 
and if existing information is inadequate. If there are gaps, 
that to ensure sustainability to fish and wildlife additional 
research must be done to obtain that data.
    We really believe that we must discard the mindset of 
rushing to develop without adequate precautions. This need not 
be overly burdensome if up front precautions are followed 
consistently and adequate resources are made available to 
gather and synthesize fish and wildlife related data. Leasing 
and development can proceed in a much more predictable and 
reliable fashion. Let me just also say on precaution that it is 
essential in limited cases where certain treasured lands and 
waters have exceptional habitat and recreational values that 
these special places be protected.
    On planning with adequate and consistent precautions taken 
before development we believe a conservation strategy for 
sustaining fish and wildlife should be created for a given 
area. A well defined plan captured and conservation strategy 
will specify exactly how to accomplish adaptive management in a 
given area. Management includes adequate monitoring and 
mitigation enforcement. Pre-lease planning with conservation 
strategy that contains specific fish and wildlife population 
objectives will be critical as we weigh renewables development 
of new onshore areas and both renewables and non renewable 
development of sections of the Outer Continental Shelf, such as 
in the Atlantic where we have significant gaps.
    Finally investment, Secretary Prukop hit this effectively I 
think. Allocations of royalties paid to the Federal Government 
by industry from offshore energy development should be used to 
benefit fish and wildlife resources, including expanded marine 
resources. I'm sorry, research and fisheries management 
initiatives. In general much greater investment must be made to 
enable appropriate Federal and State agencies to have the 
scientists and qualified fish and wildlife professionals to 
plan and implement for responsible development.
    So I thank you again for the opportunity to testify. I 
believe we've learned some very important lessons from the 
surge and development of the Rocky Mountain West in recent 
years. I believe it's critical we apply those lessons to the 
major new development the Federal Government is currently 
contemplating.
    [The prepared statement of Mr. Cooper follows:]

   Prepared Statement of George Cooper, President and CEO, Theodore 
                   Roosevelt Conservation Partnership

    Chairman Bingaman, Ranking Member Murkowski, and members of the 
committee, I am George Cooper, president and CEO of the Theodore 
Roosevelt Conservation Partnership (TRCP). Thank you for inviting the 
TRCP to present testimony on how to responsibly develop renewable and 
nonrenewable energy resources on public lands and the outer Continental 
Shelf.
    Established in 2002, the TRCP is a national coalition of hunting, 
angling and conservation groups, labor unions and individual grassroots 
partners working together to guarantee all Americans quality places to 
hunt and fish. The TRCP and its partners are working together to 
preserve the traditions of hunting and fishing by (1) promoting proper 
conservation and enhancement of fish and wildlife habitat through 
greater use of and adherence to science-based resource management, (2) 
preserving and expanding access to quality places to hunt and fish, (3) 
increasing funding for fish and wildlife conservation and (4) speaking 
with a more unified voice on conservation issues.
    Our partner organizations and the sportsmen's community in general 
are mindful of the conservation legacy and philosophy of TRCP namesake 
Theodore Roosevelt, who remarked in a speech in 1910, ``Conservation 
means development as much as it does protection. I recognize the right 
and duty of this generation to develop and use the natural resources of 
our land; but I do not recognize the right to waste them, or to rob, by 
wasteful use, the generations that come after us.''
    American sportsmen-conservationists always have been mindful of the 
need to extract and harvest resources from our lands and waters. At the 
same time, however, we demand that these activities be carried out in a 
manner defined by sound science and that sustains fish and wildlife and 
ensures outdoor opportunities for generations to come.
    The TRCP and our partners recognize the need for both renewable and 
nonrenewable domestic energy production. Yet we believe strongly that 
energy development and transmission can and must be conducted 
responsibly to conserve the nation's fish and wildlife legacy for the 
benefit of all Americans. To this end, we maintain that energy 
legislation must include a fish and wildlife sustainability title.
    Specific language must be adopted to ensure that a stronger, more 
consistent approach is taken to federal management of energy 
development and transmission, whether it is renewable or nonrenewable, 
offshore or onshore. This approach must be built on upfront planning to 
ensure balanced, multiple-use management that sustains fish and 
wildlife populations throughout development. Whether it is wind, oil 
and gas, geothermal or any other energy-related activity (including 
transmission across new grids), scientific data regarding fish, 
wildlife and their habitats must be carefully considered prior to 
leasing these lands to industry for the purposes of development. 
Science-driven planning must impel leasing decisions, and, once leases 
are issued and development begins, it must be followed by active 
conservation, monitoring, mitigation and enforcement.
    The latest energy development boom in the Rocky Mountain West was 
managed inconsistently by the federal government. Neither current 
science nor the multiple-use mandate was adhered to uniformly. We must 
learn from these mistakes and act to avoid repeating them as we proceed 
with developing our nation's energy resources. A consistent and 
balanced approach will enable smooth and expeditious development of our 
valuable domestic energy resources without unnecessary sacrifice of our 
valuable fish and wildlife resources.
    The TRCP has organized our work on energy under two working groups, 
the Fish, Wildlife and Energy Working Group and the Marine Fisheries 
Working Group, which are composed of representatives of TRCP partner 
organizations. The working groups have compiled recommendations 
concerning federal management of energy development on public lands and 
waters known as the FACTS principles and the CAST principles (attached 
for the record). They may be summarized as three fundamental 
recommendations for Precaution, Planning and Investment--guiding 
principles that must be followed whether energy development takes place 
on public lands or the outer Continental Shelf.

                               PRECAUTION

    Many unknowns exist regarding the far-reaching impacts of energy 
development on fish and wildlife, particularly in marine environments. 
For example, many anglers consider the tarpon the ultimate sport fish. 
Six billion dollars annually are spent from Texas to Virginia in 
pursuit of tarpon, yet virtually nothing is know about where tarpon 
spawn. Imagine the impact that an oil rig may have if its location 
compromises crucial breeding habitat for this magnificent species. 
Adequate data about tarpon and other marine species must be compiled in 
advance and coupled with data on other uses of a given area to create a 
conservation plan (covered further below) that will drive leasing 
decisions and development activities, including specifying where and 
how development should occur, seasonal restrictions and mitigation 
measures to offset habitat loss. Areas whose value to fish and wildlife 
and user groups precludes development entirely should be detailed 
therein, as well.
    Onshore energy development must be subject to the same approach. 
Pertinent data regarding the effects of wind turbines must be evaluated 
in a manner consistent with the effects from drilling. The same 
approach should be used for locating transmission lines, roads, 
pipelines and other development-related infrastructure and activity.
    State Wildlife Action Plans identify the habitat needed for fish 
and wildlife species in every state. Produced by state fish and 
wildlife agencies, this information provides guidance for measures that 
must be undertaken during development activities to ensure the long-
term sustainability of all these important species.
    In the face of many unknowns, the scientific method must be 
employed to facilitate balanced energy development while conserving our 
fish and wildlife resources. Gaps in data cannot be used to justify 
poorly planned development; rather, they must highlight areas requiring 
additional study. Before development commences, managers must have a 
reliable assessment of its potential impacts and prioritize protection 
of ecosystems and the species these ecosystems support. Once data are 
gathered that identify sensitive fish and wildlife areas, management 
actions--such as seasonal road closures, modifications to construction 
equipment such as directional drilling, burying of pipelines--can be 
followed that minimize the impacts of development on these resources.
    Careful study may reveal special and unique places for fish, 
wildlife and recreational use that should be placed either entirely 
off-limits to development or where development must be extremely 
limited. The federal government must take an active role in identifying 
and setting aside these important areas so that their resources can be 
adequately protected. Current science and data on populations, public 
recreational use and other factors can be used to pinpoint such areas; 
places already identified through these means include the Rocky 
Mountain Front in Montana, the Wyoming Range and New Mexico's Otero 
Mesa, where valuable fish and wildlife resources and special habitats 
demand conscientious management.
    Willingness by the federal government to consistently engage in 
upfront planning before allowing energy development on public lands or 
waters will engender greater confidence by stakeholders, thereby 
reducing the protests and legal actions to which interested parties now 
are forced to resort.

                                PLANNING

    A specific plan or ``conservation strategy'' for each energy field 
or project on federal lands or waters can address proactively fish and 
wildlife management and needs--and would require more comprehensive 
planning than currently being completed. Conservation strategies should 
be completed before development starts. It must provide specific 
recommendations and actions to ensure fish and wildlife sustainability 
and minimize impacts while establishing plans for mitigation, detailed 
monitoring and evaluation. Federal agencies and Congress must match 
resources and personnel dedicated to expanding development with 
resources and personnel dedicated to avoiding, mitigating and 
monitoring, and managing the effects of such development on fish and 
wildlife. Project planning must include a science-based adaptive 
management process that monitors ongoing impacts and incorporates new 
information into future development decisions. Mitigation plans must 
employ data from impact monitoring and evaluation to adjust and improve 
development. On-site and offsite mitigation must be applied 
appropriately. Conservation strategies should be followed consistently 
across all forms of energy development on federal lands and waters, to 
both renewable and nonrenewable projects.

                               INVESTMENT

    A long-term, dedicated funding solution is needed to provide the 
Bureau of Land Management, U.S. Forest Service, National Oceanic and 
Atmospheric Administration, Minerals Management Service, and state fish 
and wildlife agencies the means to manage habitats and fish and 
wildlife populations affected by energy development. Increases in 
funding for expediting energy development have not been matched with 
commensurate increases in fish and wildlife investments. Long-term 
funding to inventory, monitor, evaluate and protect fish and wildlife 
populations influenced by energy development is sorely needed. Funding 
for fish and wildlife management must be available to manage habitats 
and populations proactively, not just for processing permits for 
expanded development. Any annual or short-term increases in federal and 
state funding for energy development should be matched by investments 
to address the consequences to fish and wildlife. Allocations of the 
royalties paid to the federal government by industry for offshore 
energy development must be used in ways that benefit fish and wildlife 
resources, including expanded marine research and fisheries management 
initiatives, via state and federal programs.

                 A POOR WAY TO DEVELOP ENERGY RESOURCES

    The TRCP has been working on energy development issues in the Rocky 
Mountain West for several years and has documented major problems with 
the current process for developing oil and gas on BLM lands.
    For example, on the Pinedale Anticline, a 200,000-acre project area 
in Wyoming with valuable wildlife resources, a number of serious 
problems have been identified by the TRCP due to poorly planned energy 
development. Thirty percent of the mule deer that existed prior to 
development has been lost with less than 3-percent disturbance. 
Adaptive management and mitigation have been loosely instituted and 
include no systematic approach for addressing impacts; losses from 
development are neither accounted for nor mitigated. The public has 
been excluded from most processes and their concerns dismissed; threats 
to public health and safety (ozone problems, water contamination) have 
been ignored. The ``maximum production'' and ``fix it later'' maxims 
have become primary premises for management of public lands within the 
upper Green River watershed. The BLM has been allowed to accelerate 
development activities without taking responsibility for the first 
eight years of development. The system has allowed unprecedented 
industry access to decision-making processes. The work of local land 
and resource managers has been marginalized in favor of state and 
national oversight. Industry has ``bought'' decisions by committing to 
off-site mitigation while serious on-site habitat loss occurs.
    These effects of energy development on public lands are not 
acceptable to sportsmen-conservationists.

                A BETTER WAY TO DEVELOP ENERGY RESOURCES

    Unfortunately, few examples exist where recent public-lands energy 
resource development is balanced with fish and wildlife resource 
conservation. One example is the Lacassine National Wildlife Refuge, a 
nearly 35,000-acre area in southwest Louisiana. The U.S. Fish and 
Wildlife Service holds the surface rights on Lacassine, but it does not 
own the rights to sub-surface minerals. Oil and gas exploration has 
existed on the refuge since its inception in 1937. Eighty-two wells 
have been drilled and 15 oil and gas transmission pipelines traverse 
the refuge, the result of right-of-way agreements between the Service 
and oil and gas companies. Energy exploration, production and 
transmission are not allowed to interfere with the purpose of the 
refuge, but neither can the refuge deny the sub-surface owner the right 
to access and produce minerals. Jointly agreed-upon special-use permits 
are issued to oil and gas production operations to communicate Service 
expectations and environmental concerns. The Service manages oil and 
gas operations under the guidelines of its Oil and Gas Plan, which 
facilitates the coexistence of a variety of fish and wildlife 
populations along with hydrocarbon operations.
    Lacassine is an important waterfowl area, and historic wintering 
populations are among the largest in the National Wildlife Refuge 
System. Lacassine Pool is one of the most critical wintering areas on 
the continent for northern pintails. This sanctuary has a wintering 
population of almost 400,000--between 50 percent and 80 percent of the 
entire southwest Louisiana midwinter waterfowl survey--and is crucial 
to the long-term viability of Continental pintail populations. 
Lacassine also supports bald eagles, peregrine falcons and Louisiana 
black bears. Furthermore, the refuge is enjoyed by hunters and anglers.

                               CONCLUSION

    In conclusion, I wish to re-emphasize the importance of Precaution, 
Planning and Investment for responsible energy development on the 
nation's public lands and outer Continental Shelf--values that should 
be incorporated into a fish and wildlife sustainability title:

          Precaution: Consider all available information about 
        potential impacts to fish and wildlife resources prior to 
        developing energy resources. When existing information is 
        inadequate to ensure the conservation of fish and wildlife 
        resources, additional research must be done to obtain the data 
        necessary to properly conserve these resources as energy 
        development proceeds. In cases where certain lands and waters 
        have habitat and recreational values that are too sensitive to 
        develop sustainably, protect them.
          Planning: A conservation strategy should be employed to take 
        a holistic approach to addressing fish and wildlife concerns at 
        the landscape or ecosystem level before development occurs. 
        Where energy development must occur, use the best available 
        science to develop cautiously using an adaptive approach--
        inventory, monitor, evaluate and incorporate new knowledge to 
        modify future projects to sustain natural resources.
          Investment: Allocations of royalties paid to the federal 
        government by industry from offshore energy development must be 
        used to benefit fish and wildlife resources, including expanded 
        marine research and fisheries management initiatives, via state 
        and federal programs.

    Thank you for your attention to the concerns of sportsmen and for 
your commitment to balancing energy development with other public land 
and water uses.

    [Supplemental materials retained in committee files.]

    The Chairman. Thank you very much.
    Mr. Kopf.

STATEMENT OF STEVEN R. KOPF, PARTNER, PACIFIC ENERGY VENTURES, 
                       LLC, PORTLAND, OR

    Mr. Kopf. Mr. Chairman and members of the committee, thank 
you for your interest in ocean energy on the Outer Continental 
Shelf. My name is Steve Kopf. I'm a partner in Pacific Energy 
Ventures and have spent the majority of my career fostering new 
technologies and business ideas as they move from R and D 
toward commercialization.
    Our firm is focused on sustainable resource development and 
has been engaged in the ocean energy industry since 2004. I'm 
also a board member at the Oregon Wave Energy Trust which is 
funded by the State to promote the responsible development of 
ocean energy with a goal of producing 3 to 5 percent of 
Oregon's energy needs by 2025.
    Beginning in 2006 I organized and led Ocean Power 
Technology's efforts to develop a commercial wave energy 
project in Reedsport, Oregon. The project is a great example of 
how FERC is helping this nascent industry navigate a complex 
regulatory process. Through collaboration and outreach the 
needs and concerns of all stakeholders were identified.
    Based on this input a multi-party settlement agreement was 
developed which addresses how the project can be monitored and 
how it will be adaptively managed. Our settlement team includes 
State and Federal resource agencies, existing users and 
environmental groups.
    The investment and collaboration is already paying 
dividends. We're building trust with the environmental and 
fishing communities. We're resolving how resource agencies 
manage early stage projects. We're getting a real project in 
the water. OPG project will likely be the first commercial 
scale wave energy project in North America.
    Over the past year I've had the opportunity to participate 
in diverse stakeholder coalition led by the Environmental 
Defense Fund. The coalition consists of 34 organizations 
including private sector developers, utilities, local 
governments, universities and six environmental organizations 
including hydropower reform Coalition, Natural Heritage 
Institute, Natural Resources Defense Council, Ocean Champions 
and the Surf Rider Foundation. This group worked together and 
drafted a set of principles that were presented in December to 
the President Obama's transition team.
    These principles include.
    One, commit resources to support a robust evaluation of 
ocean energy and its potential environmental effects.
    Two, support demonstration projects to rapidly accelerate 
the deployment under permitting conditions that protect ocean 
resources.
    Three, fund an environmental data base to assist developers 
and regulators in potential environmental effects.
    I'm going to skip the next one because it got resolved 
today. That's resolve the FERC/MMS jurisdiction dispute.
    Five, enable cooperation between agencies to simplify, 
expedite and economize the regulatory process.
    Six, initiate ocean planning to balance short term need for 
demonstration projects with a longer term need for multiple 
uses.
    Finally, continue to encourage stakeholder participation in 
a way that values the public input, balanced with an imperative 
to move forward.
    These principles clearly demonstrate a consensus to develop 
ocean energy. But in a way that respects the environment and 
proactively plans for the growth of the industry. The power of 
this coalition is that it unites a diverse group of 
stakeholders into a common vision of how we can do this right. 
Leveraging this position can only increase the probability of 
mutual success. I strongly encourage the committee to adopt 
these principles as the framework for whatever action it takes.
    I would like to thank Secretary Salazar, Acting Chairman 
Wellinghoff and Commissioner Moeller for their leadership in 
resolving the jurisdictional dispute this morning and paving 
the way for ocean energy projects to move forward. The three 
nautical mile line is indiscriminate. Waves roll right over it. 
Fish swim right under it. So thank you for deciding to develop 
a unified approach which continues FERC's leadership in the 
area of wave, tidal and current energy.
    The joint FERC/MMS announcement this morning preempted much 
of what I was going to say. But now that we've got clarity on 
the issue I would like to stress to the committee as well as to 
FERC and MMS the importance of a complete solution. Resolving 
the jurisdictional dispute is a great start. But there is 
clearly more to do.
    Before MMS issues the final rule for renewables on the OCS, 
please consider the differences in scale. Make sure that the 
procedures and fees for ocean energy reflect the early stage of 
the industry. Over burdening developers with multiple NEPA 
reviews and disproportionate front loaded license fees will 
limit near term development.
    Section 8 of the Outer Continental Shelf Lands Act gives 
Secretary Salazar broad discretion in collecting rents and 
royalties. Recognize that unlike oil and gas, ocean energy is 
not depleting a natural resource. Payments to the Federal 
Government must reflect the sustainable public benefit and a 
long term nature of capital cost recovery of renewable energy 
projects.
    Finally again, stress the importance of the planning. 
Respect the State's coastal zone management authority. Respect 
environmental and existing users and leverage NOAA's science 
and ocean planning experience.
    Let's think holistically. Get it right. We will enable this 
industry to rapidly demonstrate that ocean energy can and will 
be an important component of this Nation's energy independence. 
Thank you very much.
    [The prepared statement of Mr. Kopf follows:]

Prepared Statement of Steven R. Kopf, Partner, Pacific Energy Ventures, 
                           LLC, Portland, OR

    Mr. Chairman and members of the Committee, thank you for this 
opportunity to discuss the issue of ocean renewable energy on the Outer 
Continental Shelf (OCS). My name is Steven Kopf and I am a partner in 
Pacific Energy Ventures. I have spent the majority of my career 
fostering new technologies and business ideas as they move from R&D 
towards commercialization.
    Our firm is focused on renewable energy development and has been 
engaged in the ocean energy industry since 2004. I am also a board-
member of the Oregon Wave Energy Trust, which is funded by the State of 
Oregon to promote the responsible development of ocean energy with a 
goal of producing 3 to 5% of the Oregon's energy needs by 2025.

                      COLLABORATION DRIVES SUCCESS

    Beginning in 2006, I organized and led the team and process for 
Ocean Power Technology's project in Reedsport, Oregon. The Reedsport 
project is a great example of how FERC is helping early stage projects 
effectively navigate the regulatory process. The project utilized a 
collaborative process to identify the issues and concerns of all 
project stakeholders. The result of this collaboration is a settlement 
agreement that addresses how the project will be monitored following 
construction and how it will adaptively manage any unexpected 
environmental effects. Our `Settlement Team' includes State and Federal 
resource agencies, existing users, and environmental groups. The 
settlement process provides FERC with the basis to conduct its NEPA 
analysis with the confidence that all major issues have been adequately 
addressed by the stakeholders before the license application is 
submitted.
    The investment in collaboration is already paying dividends. We are 
building trust with the environmental and fishing communities. We are 
resolving how resource agencies can manage early stage projects. These 
efforts are paving the way to make Reedsport the first commercial scale 
wave energy project in North America.
    I am proud of the Settlement Team's accomplishments and have two 
other observations based on my experience that I would like to share:

          1. Need for Planning--When we started the Reedsport project 
        the Oregon's Territorial Sea plan did not include ocean energy, 
        resulting in uncertainty in project siting. Oregon is now in 
        the process of amending its Territorial Sea Plan and is 
        explicitly addressing ocean energy. I commend the Governor for 
        his leadership on this issue and feel that changes in ocean 
        governance and planning are critical to the responsible 
        development of this industry. Planning of the OCS must balance 
        both existing and future uses of the ocean.
          2. Unified Siting and License Process--Early stage companies 
        rely on significant amounts of private investment and investors 
        are wary of complex regulatory environments. There has been a 
        great deal of confusion of which agency has which authority, 
        with many overlaps in review and analysis. In Oregon we focused 
        on how best to integrate the State and Federal review of 
        environmental documents and developed a relatively streamlined 
        parallel review process. Oregon and FERC have developed a 
        Memorandum of Understanding (MOU) that clarifies roles and 
        responsibilities. As we move forward on the OCS, I believe that 
        it is imperative to focus on a unified regulatory process that 
        could work within the Territorial Sea as well. A unified 
        process will reduce cost, expedite review, eliminate 
        redundancies and allow early stage companies to continue to 
        attract much need investment and move forward regardless of 
        project location.

 OCEAN ENERGY CAN MAKE SIGNIFICANT CONTRIBUTION TO THE NATION'S ENERGY 
                                  MIX

    There are several attributes of ocean renewable energy that I would 
like to highlight:

   Large Resource Potential--EPRI estimates that as much as 10% 
        of the US energy demand could be produced by ocean energy 
        (wave, tidal and current).
   Proximity of Supply and Demand--More than 50% of the US 
        population lives within 50 miles of the coast, reducing the 
        need for costly transmission infrastructure.
   Predictability--Based on NOAA research, accurate wave energy 
        forecasts can be made days in advance, enabling energy planners 
        to better integrate ocean energy into their resource 
        portfolios.
   Base Load--The Gulfstream is an endless current that flows 
        northward just 5 miles from downtown Miami and can provide a 
        consistent supply of energy.
   Energy Resource Firming--Solar radiation creates wind and 
        the wind creates waves. Waves continue to propagate for several 
        days after a storm, offering utilities the potential to blend 
        with intermittent resources such as wind power.

    And while these attributes provide the vision for innovation and 
private sector investment, there is a unique challenge. Unlike solar 
and wind, there is no way to experiment and test these technologies 
without some use of public trust resources. Inherently, all ocean 
energy development will occur in public common areas. As a result, the 
pioneers in this industry such as Ocean Power Technologies, Verdant, 
Pacific Gas and Electric, and Snohomish Public Utility District are 
expending large amounts of capital to deal with the complexities of 
public land law in order to demonstrate and validate their chosen 
technologies.

THE CRITICAL ENERGY ZONE STRADDLES THE BOUNDARY BETWEEN THE TERRITORIAL 
                             SEA & THE OCS

    The early demonstration of ocean renewable energy has focused on 
the use of the Territorial Sea (within 3 nautical miles), based on 
proximity to transmission, water depth and regulatory certainty. 
However, the Outer Continental Shelf (3 to 12 nautical miles) will play 
a critical role as the technology begins to mature.
    Proposed projects, such as PG&E's WaveConnect site near Eureka, 
California, may actually straddle the boundary between the Territorial 
Sea and OCS. The WaveConnect project aims to test a wide variety of 
wave energy systems. Currently the project is confined to the 
Territorial Sea. However, shallow water depths in the Territorial Sea 
may limit the types of technologies than can be tested. Expanding this 
project to include an area on the OCS may be desirable, but split 
jurisdictions would greatly complicate the project.
    We have also learned in Oregon that Dungeness crabs love the 
Territorial Sea. Generally, crabs are harvested in water depths of less 
than 40 to 50 fathoms, the majority of which is inside the 3 nautical 
mile Territorial Sea boundary. Siting projects farther offshore could 
help minimize spatial conflicts with this important fishery.
    Clearly the OCS is critical to the commercialization of this 
industry and I thank you for recognizing this need and holding this 
hearing to address the need for regulatory clarity on the OCS.

                           GUIDING PRINCIPLES

    Over the past year I have had the opportunity to participate in a 
diverse stakeholder coalition led by the Environmental Defense Fund 
(EDF). The coalition consists of 34 organizations including private 
sector developers, utilities, local governments, universities, and six 
environmental organizations, including: EDF, Hydropower Reform 
Coalition, Natural Heritage Institute, Natural Resources Defense 
Council, Ocean Champions, and Surfrider Foundation. This group worked 
together and drafted a set of principles that were presented in 
December to President Obama's Transition Team. The principles that were 
agreed to by this diverse group include:

          1. Commit Resources--to support a robust evaluation of ocean 
        renewable energy and its potential environmental impacts.
          2. Support Demonstration Projects--to rapidly accelerate the 
        deployment of this promising technology under permitting 
        conditions that protect ocean resources.
          3. Fund Environmental Database--to assist developers and 
        regulators in assessing and studying potential environmental 
        effects.
          4. Resolve the FERC/MMS Jurisdictional Dispute--to allow this 
        nascent industry to move forward under a clear, consistent 
        regulatory environment.
          5. Enable Cooperation Between Federal and State Agencies--to 
        simplify, expedite, and economize the regulatory process. A 
        process which uses a single NEPA document is desirable.
          6. Provide a Mechanism for Ocean Planning--in a way that 
        leverages respective agency strengths, respects the State's 
        CZMA authorities, and balances the short-term need for 
        demonstration projects with the longer term need for balanced 
        ocean use.
          7. Encourage and Facilitate Stakeholder Participation--in a 
        way that balances the need for public input on decisions 
        affecting public lands with the imperative to move the industry 
        forward.

    These principles clearly demonstrate a consensus to develop ocean 
renewable energy, but in a way that respects the environment and 
proactively plans for the growth of the industry. The power of the 
coalition is that it unites a diverse group of stakeholders into a 
common vision of how we can do this right. Leveraging this position can 
only increase the probability of mutual success, and I strongly 
encourage the committee to adopt these principles as the framework for 
whatever action it takes.

                            RECOMMENDATIONS

    I recognize that there is no easy solution on how best to plan, 
lease, and license the OCS for an emerging industry, but I ask the 
Committee to consider these additional recommendations as you move 
forward with new energy legislation:

          1. Build on Momentum and Familiarity--Consider that the 
        industry has already invested in learning how to do a project 
        in the Territorial Sea that includes FERC as the lead agency. 
        And FERC has invested in this nascent industry by recognizing 
        our unique needs and adapting their regulations accordingly.
          2. Leverage the Unique Skills of Agencies--Consider how to 
        take advantage of the unique skills of different agencies. MMS 
        clearly has experience in leasing of the OCS. FERC has 
        demonstrated how to engage stakeholders and to develop 
        collaborative solutions in the form of settlement agreements 
        with adaptive management plans. And NOAA has much to offer in 
        the area of environmental baseline research and ocean planning.
          3. Oil & Gas and Renewable Energy Are Different--Recognize 
        the differences between oil/gas, wind, and ocean energy. A 
        consistent message in comments that were made to MMS on its 
        proposed rule is that it did not adequately accommodate these 
        differences. The rules should consider the differences in scale 
        and make sure that the procedures and fees for ocean energy 
        reflect the early stage development of the industry. 
        Overburdening the developers with multiple NEPA reviews and 
        disproportionate, front-loaded license fees will likely limit 
        near term development of the OCS. Section 8 of the Outer 
        Continental Shelf Lands Act (OCSLA) provides the Secretary with 
        broad discretion on collecting rents and royalties. Recognize 
        that unlike oil and gas on the OCS, renewable energy is not 
        depleting a natural resource, and that payments to the Federal 
        Government must reflect the sustainable public benefit and the 
        long term nature of capital cost recovery, particularly in 
        emerging renewable energy technologies.

    Over the past week since I was called to testify, I solicited the 
opinions of a wide range of parties interested in this topic. This 
included trade groups such as the Ocean Renewable Energy Coalition and 
the National Hydro Association, members of the EDF coalition, 
attorneys, lobbyists, and consultants. As you might expect, there are a 
wide range of opinions. Some are pro-FERC. Others are pro-MMS. However, 
we are all united on the need to resolve this quickly and completely. 
Resolving the jurisdictional dispute is critical, but is just one 
component of the comprehensive legislative and appropriations solution 
we need to allow this industry to rapidly demonstrate that ocean 
renewable energy can be an important component of our Nation's energy 
independence.
    Thank you and I look forward to your questions.

    The Chairman. Thank you very much. Thank you all for your 
testimony. Let me ask a few questions. Then I'm sure the 
others, Senator Murkowski and the other Senators will have some 
questions.
    Commissioner Moeller, let me just state that I welcome the 
news that this issue of jurisdiction offshore has been resolved 
between MMS and FERC. But I'm a bit skeptical. I mean it's easy 
to announce that there's going to be a resolution.
    But from the point of view of a potential developer you say 
in your testimony that the Commission jurisdiction over 
hydrokinetic projects on the OCS would not hinder in any way 
the timely development of associated wind facilities subject to 
MMS regulation on the OCS. This release that was put out says 
the Department of Interior has permitting and development 
authority over wind power projects that use offshore resources. 
FERC will have the primary responsibility to manage and license 
such projects in offshore waters.
    I'm just not exactly sure that this is going to be that 
streamlined a process for a developer who wants to put in one 
of these projects. Can you speak to that a little more 
definitively?
    Mr. Moeller. Yes, thank you, Chairman Bingaman. I think the 
first thing is that we don't have any interest in the wind. 
That's all in the realm of MMS.
    Our interest is in the hydrokinetic side of things. So I 
think that's been something where we've probably needed to 
educate people a little bit better. But this is part of that 
process.
    From our perspective----
    The Chairman. So as to wind projects offshore, you're happy 
to have MMS license those, cite those, do whatever.
    Mr. Moeller. Yes, we don't have jurisdiction on that. I 
mean there could be cases where there's a shared facility. Say 
a wave technology platform is used for a wind turbine.
    But in that case I think that's the promise of the MOU 
which again hasn't been finalized. But there's a lot of 
progress being made on it and that is that we can work out, by 
good communication between the agencies, how we can develop 
those resources or how the developer can develop them 
simultaneously.
    You know we have many examples where we have to deal with 
other Federal agencies on Federal lands. We have decades of 
experience doing it. So and with the right attitude this is not 
an insurmountable issue.
    The Chairman. I appreciate that. I don't question anyone's 
attitude. But I do think if you could perhaps get us whatever 
detail you can about how these issues are going to be resolved 
so that we're going to have to decide if we mark up an energy 
bill whether to legislate some resolution of some of this.
    We thought we had done that before. It turned out that we 
didn't. So the question is do we go back in and specify who has 
authority for what or is the problem solved? So if you could 
get us more information that would be helpful.
    Mr. Moeller. Absolutely. I'm confident we can solve it.
    The Chairman. Ok. Secretary Prukop, let me ask you in our 
State, in New Mexico I'm interested in this effort that we made 
there. As I understand it we have a system in place for the 
leasing of State trust lands for wind and solar development. At 
the Federal level we don't do it that way at the current time.
    We just essentially grant rights of way, permits to put in 
a solar plant. Should the Federal Government look at following 
the lead of New Mexico and set up a leasing system for wind and 
solar project development?
    Ms. Prukop. Yes, in New Mexico--well first the Federal 
Government should do this, yes. Because I think we need the 
funding to help support the work that needs to be done to 
develop resources on public lands for energy production. In New 
Mexico under the State Land Office Commercial Leasing Process, 
wind turbines or solar facilities are going in with something I 
would call, using the term loosely, a royalty.
    A few years ago when the State Land Office permitted a wind 
facility on State trust land they would charge by the annual 
lease fee based on the number of turbines of that property. 
Land owners in our area do the very same thing where they get 
from $3 thousand to $5 thousand per turbine, per year. More 
recently, especially with the major wind companies like Shell 
Wind and Edison Mission, they're moving toward a percentage of 
the generation.
    On State trust land that starts out at about 3.5 percent. 
Then over a 5-year period it is intended to grow to about 8 
percent of the total wind, in the case of a wind farm, wind 
energy production off of that property. So you can, using 
again, the term loosely, you can think of it as a royalty. That 
gives of an ongoing funding stream for, in our case, public 
schools.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. I want to just 
follow on Chairman Bingaman's comments about this memorandum of 
understanding out there. I appreciate that it's not fully 
flushed out, if you will.
    But Mr. Kopf, you spoke to finding a complete solution and 
that we may have in place this agreement that says jurisdiction 
is this way. The question that I would have, Commissioner 
Moeller and to you, Mr. Kopf is whether or not there is a 
legislative fix, legislative language that you feel we will 
have to advance. I think the Chairman's question is spot on.
    You've indicated Commissioner, that you're confident that I 
think you said you're confident that we can solve it. But does 
that solving it include a legislative fix as well? Where are we 
in this?
    Mr. Moeller. Thank you, Senator Murkowski. I don't think we 
need a legislative fix. I think we can handle it with a 
memorandum of understanding.
    It's pretty clear, at least I haven't heard anyone 
suggesting that we're not the primary jurisdictional entity for 
the first three miles. The question is what roles do we have 
after the first three miles. I think when you look at it from 
afar FERC is essentially has a role as a citing agency and 
that's its strength.
    The strengths of MMS are that it is essentially a leasing 
agency. That's where I think we can work together in a 
situation where there is a proposed development on the OCS. We 
can define our roles where essentially they would have lead 
over the leasing aspect of it we would have the lead on the 
licensing aspect of it. But that we would work very closely 
together.
    Senator Murkowski. Let me ask you, Mr. Kopf. As a 
stakeholder, somebody that is part of the process trying to 
make good things happen out in Oregon, what do you view as this 
complete solution then?
    Mr. Kopf. Thank you, Senator. Again I think it comes back 
to Senator Bingaman's concern is what is the MOU really going 
to say. Clearly if it's split as the Chairman just described 
then I think it is a workable solution.
    Already when you're doing a project in the territorial sea 
the State is the leaser and FERC is the licensor. So we're 
already working with two agencies. As proposed this morning I 
could see how that could work.
    But again I think the concern is the way the MMS rule is 
currently drafted. There were multiple NEPA reviews, burdensome 
fees and that would really need to be worked on to make the 
leaser, the citing part of this really work for the industry.
    Senator Murkowski. Let me ask you, Mr. Cooper. In your 
testimony you referenced that there are good ways, good 
examples and bad examples as to how we can develop our 
resources, our oil and gas resources on public lands. You cite 
the Lacassine Wildlife Refuge in Louisiana as an example of a 
good practice.
    Apparently you've got bears and eagles. In the midst of it 
all you have 82 oil wells, 15 pipelines. If this surface 
activity can co-exist with fish and wildlife what would your 
group's opinion be of drilling for oil directionally from 
outside of that wildlife refuge?
    I think you can guess where I'm hinting to, but if we can 
be sensitive to the environmental considerations on the land. 
Is this not something we would want to encourage?
    Mr. Cooper. We've seen the benefits of directional drilling 
particularly in well, in New Mexico, Utah, Wyoming. When we 
look at up front planning that takes into account impacts on 
fish and wildlife. Best management practices including things 
like directional drilling become a crucial part of the answer.
    I think to answer your question. We have seen tremendous 
strides in terms of technology and the ability to extract these 
resources also in conveying them with burying pipelines 
etcetera that we think can drive different decisions on 
leasing.
    I think there's been a disconnect though, between first 
doing that assessment that determines potential impacts. 
Matching it up against industry knows it can do whether it's 
directional drilling or other methods. Then coming up with a 
plan up front and then once the plan is established with these 
factors in mind, giving the appropriate agencies both State and 
Federal, the ability to monitor.
    So if that directional drilling is not doing what it needs 
to do that the steps are taken to carry out adaptive 
management.
    Senator Murkowski. Let me ask one final question directed 
to you, Mr. Bryce. You've mentioned that renewables as a very 
valuable and important part of our energy policy. We need to do 
more. We need to be aggressive with it.
    What if anything would a massive effort increase in wind 
and solar energy? Let's just say a tenfold increase. What do 
you think that that does to reduce our foreign oil imports?
    I mean this is where we want to go when we're talking about 
energy independence. Is a tenfold increase in wind and in solar 
get us there?
    Mr. Bryce. No, ma'am. I mean, as I say, I'm fully in favor 
or renewables. But I mean the clear issue here is electricity 
storage or energy storage.
    Compressed air energy storage for wind and solar are--there 
is one active plant in the United States. But as far as 
displacing oil, right now the solar and wind are providing 
electricity with no virtually no electricity transportation in 
the United States. We have Amtrak is some.
    But in terms of personal vehicles and heavy vehicles there 
is essentially none. Hybrid vehicles accepted. But that again 
is a hybrid.
    I mean the short answer to your question is it really, the 
key issue now is energy storage. That is where this defeated 
Thomas Edison. He spent $30 million of his own money in current 
dollars trying to get high capacity batteries. He failed and 
the market yielded to gasoline and hydrocarbons in the 
automotive market.
    So the key for the future of renewables, I think, 
particularly for solar and wind is some large scale energy 
storage and small scale so that it can be used in the 
transportation fleet.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman with respect to the last 
answer by Mr. Bryce, you know nearly 70 percent of the oil that 
we bring into this country is used in the field of 
transportation. If you project forward what we've done in the 
past. I agree with you that what we do with respect to 
renewables has little impact, not very much impact on reducing 
our need for foreign oil.
    But if you believe as I do that we're headed toward an 
electric drive vehicle future. We just put $2 billion in grants 
for batteries in the stimulus and so on. If you believe as I do 
that the future is going to be different. Then I think 
renewable is going to have a significant impact.
    With respect to the Senator from Alaska, you know a tenfold 
increase in wind energy. The fact is if we see the potential to 
exploit wind energy that I think really exists tenfold on the 
current base will not be as much as we can do. I mean we can do 
much more.
    I want to ask Dr. Arvizu. You know we're doing now one 
megawatt and up to three megawatt towers and turbines. Some are 
talking about ten megawatts. How much additional research is 
necessary for us to accomplish ten megawatt wind turbines?
    Mr. Arvizu. Thank you, Senator Dorgan for your question. 
I've been biting my lip here trying to figure out how I'm going 
to get into this conversation. I think it's, first of all short 
sighted to suggest that we need a lot more innovation before we 
can deploy renewable energy today.
    I think there's a first generation technology that we've 
been working on, literally, for 30 years. I think we can deploy 
that immediately. Get a start in an industry that I think will 
ultimately bear great benefits. Like you I think we need to 
invent the future that we're really after.
    If we don't care about the urgency then really there 
probably isn't any need for government intervention. I think if 
we do have a sense of urgency, as I do, regarding things, to 
carbon emissions, in regarding the volatility of price, 
regarding all the things that relate to the displacement of oil 
and transportation fuels. Then I think we need to move most 
aggressively in fashioning a set of market conditions that 
allow these industries to flourish.
    The ten megawatt turbine is a concept at this point. You 
know, I started 30 plus years ago looking at wind turbines that 
literally were a meter and a half across.
    Senator Dorgan. Right.
    Mr. Arvizu. Now they're 107, 120 meters across. There is a 
lot of evolution in that innovation pathway. Over time I think 
we'll get to ten megawatts for offshore type of applications 
because they can be put many miles away from the horizon of the 
shoreline and essentially will have little impact on anything 
except our generation capacity.
    So we're within probably, another 5 to 10 years of having 
those kinds of technologies in the marketplace. But we have 1.5 
megawatts that are kind of the generic staple of the industry 
today that we can put thousands of megawatts online really with 
very little impact in terms of generation reliability concerns.
    Senator Dorgan. I don't think this should be an either/or 
or that wind and solar should compete with oil. As you heard at 
the start of this hearing I believe we ought to be drilling 
most of the Gulf of Mexico. I mean, I'm for drilling.
    But by the same token I think as a country we should try to 
maximize the potential of renewable energy. I understand the 
issue of storage. But I also would point out that there are 
ways to make intermittent power, to firm up intermittent power 
combining it with hydro and a range of interesting approaches 
to firm up intermittent power.
    So my hope is that we will move very aggressively to 
maximize our potential for renewable energy. Because I think it 
will, if we move toward an electric drive vehicle future it 
will be helpful in reducing our dependence on foreign oil. I 
must also say that we're producing in a pilot project in North 
Dakota. We're producing hydrogen from wind energy and taking 
the energy from wind through electrolysis separating hydrogen 
from water and storing hydrogen for vehicle fuel. So a lot of 
different approaches here that are useful.
    I want to just mention with respect to Mr. Cooper's answer 
on horizontal drilling. We are doing the most unbelievable 
things with respect to drilling technology. In our region of 
the country the Bakken shale, which is the largest assessed 
recoverable oil pool ever found in the lower 48, just announced 
by USGS recently, about a year ago.
    They predicted up to 4.3 billion barrels recoverable using 
today's technology. That was not capable. We weren't capable of 
getting that 7 years ago, 10 years ago.
    Now they go down two miles, 10,000 feet. Make a big curve 
and go out 10,000 feet. They're searching for the Bakken shale 
seam which is 100 foot thick.
    They've divided it into top third, middle third, bottom 
third. They're searching 10,000 feet down for the middle 30 
feet of the Bakken seam. Then they go out two miles in that 
seam. They're getting unbelievable wells.
    The point is that sophistication of drilling has not been 
available until recently. All of a sudden we're accessing the 
largest assessed reserve of recoverable oil that we've ever had 
in the lower 48 because of technology. That's why I think Dr. 
Arvizu said it well when he said inventing the future.
    The previous President kept zeroing out the $75 million for 
drilling research, oil and gas research. As chairman of the 
committee, I kept putting it in. This new President is also 
going to zero it out. I'm going to put it in again because we 
lead the world in unconventional drilling and deep well 
drilling.
    Most of that is done by independents. We ought to continue 
to lead the world and make those investments in the future to 
invent our future.
    Senator Bennett. Will that be an earmark?
    [Laughter.]
    Senator Bennett. I'll be happy to co-sponsor it, if it 
will.
    Senator Dorgan. Listen, somebody is going to earmark all of 
these dollars. The question is it downtown or in the State 
governments. With the stimulus somebody is earmarking these 
things.
    But I wanted to make one final comment. I regret that I 
wasn't able to get back. But this is a really terrific panel. 
I've had a chance to review much of the testimony.
    I know Secretary Salazar is important. I'm really pleased 
that he was here. I'm pleased you had him.
    But this is a terrific panel. I think what you have put 
together in prepared testimony is going to be very valuable to 
our committee. So I thank you very much for being here.
    The Chairman. Senator Bennett.
    Senator Bennett. Thank you very much, Mr. Chairman. I agree 
with Senator Dorgan about the quality of the panel. What I'm 
looking for and anyone can volunteer an answer to this is the 
point at which we cross the line.
    Let's talk primarily about wind and solar. I happen to 
think the greatest source of renewable energy is going to come 
from tidal energy, not wave but tidal barrages, similar to the 
ones that the French built in Laurence, which I have visited 
and referenced in my previous comment and nuclear. I think 
those are the places where you get the scale.
    I think Mr. Bryce you've given us a valuable point in 
saying that it's nice to talk about all of these things in 
stovepipes and compare this amount of progress to previous 
progress. But to the Nation as a whole we're going to need an 
enormous amount of energy in the future. We've got to look at 
those that will give us scale.
    I agree that the Promised Land is probably about 30 years 
away and the bridge to the promised land of renewables is built 
out of fossil fuels. We need to recognize that reality and 
respond to it.
    But let's talk about wind and solar for just a moment. Both 
of which are intermittent and are not intermittent on a 
predictable fashion. Unlike tidal the wind can suddenly stop 
blowing and the sun can suddenly stop shining even though we 
think we've got enough warning as to when that will happen, 
there are still times when it happens without warning. If 
you're on the grid you've got a problem with that.
    At what point do we cross the line where we have solved 
enough of the problems of scale and intermittence that we can 
stop subsidizing it. It becomes an industry that stands on its 
own bottom financially earning enough money, Ms. Prukop, to pay 
royalties. I find it kind of ironic that the Federal Government 
is subsidizing so that these industries can pay the State of 
New Mexico royalties.
    Because obviously the industry can't stand alone and pay 
royalties, but somehow the way it's structured. That's a very 
interesting kind of way of transferring Federal dollars to the 
State of New Mexico. We have trust lands in Utah.
    We'd like to do the same thing. Because, you know, we need 
all the money for our schools we can get and like trust lands 
in New Mexico ours are all dedicated to education.
    But anyone, what do you see as the time when you say, ok, 
the Federal subsidies for research or for demonstration 
projects or whatever else it is for wind and solar can go away. 
It's reached a critical mass where it can make money on its 
own. At that point obviously you will be in an area where the 
scale is sufficient to make a big contribution because right 
now it's not making, as Mr. Bryce pointed out, it's not making 
any significant contribution.
    It's not making any money. We all believe at some point it 
will make a contribution. It will make some money. Where is 
that point?
    It can either be a guess as to time or a statement of the 
conditions that have to be in place before we reach that time. 
But just help me see when this future finally ceases to be 
something worth looking forward to and starts to contribute to 
the overall scale that our country needs. Alright?
    Ms. Prukop. Am I on?
    Senator Bennett. Yes, you're on.
    Ms. Prukop. I can give you several answers to what is a 
pretty complex question.
    One is you know, we can move toward a national renewable 
portfolio standard, RPS, that requires something like 25 
percent renewable energy.
    Senator Bennett. I don't want a government or an imposed 
requirement. I want an industry that stands on its own bottom 
and therefore survives in the marketplace.
    Ms. Prukop. Then let me tell you about one transmission 
planning concept in the Western States. It's known as High 
Plains Express and right now involves Wyoming, Colorado and New 
Mexico to deliver power in Arizona.
    One thing that's being designed into that project is 
farming wind with wind. Balancing geographic distribution of 
our wind resources, especially because we have high quality 
ones on the Eastern Plains of Wyoming, Colorado and New Mexico. 
So you deal with that intermittency question to some degree. 
You still will need a firming power of some sort, natural gas 
or conventional existing coal.
    One of the things about wind power is wind power is very 
competitive right now, especially depending on the volatility 
of the price of natural gas. Because we have a State production 
tax credit in New Mexico as well. It couples with the Federal 
PTC. We have wind power being generated right now in New Mexico 
that's five cents a kilowatt hour which is very cheap power.
    Senator Bennett. Yes, but that's subsidized. My question 
is----
    Ms. Prukop. No, that is correct. But what I'm getting to 
sir is we think that right now wind no longer needs to be 
subsidized. It is somehow linked to the price of natural gas 
though. So when natural gas prices are $6 in mcf or greater, 
wind is very competitive and probably doesn't need any more 
subsidization.
    Concentrating solar power however is still not under 15 
cents a kilowatt hour for whatever technology you want to talk 
about. Although thin film, PV is supposedly going to be under 
15 cents, still needs the Federal subsidy. So as soon as we can 
get more of that deployed which a Federal RPS would help with, 
then you'll drive those prices down.
    You'll become more competitive. So we probably could have 
wind and commercial scale solar cost competitive without 
Federal subsidies if we had a Federal RPS that drove that. You 
could probably do that in about 20 to 25 years.
    Senator Bennett. Ok.
    Mr. Arvizu. Let me offer a little bit different 
perspective. I think one of the things that we're struggling 
with here is what is the value of the energy? Essentially what 
do we want the market to do?
    I agree with you that the only competitive alternative 
energy form is one that can compete without government 
subsidies. I think ultimately we need to get it there. The 
price of energy, however, fluctuates wildly.
    It will continue to fluctuate wildly. So it's kind of a 
moving target. So where as much as I want to champion 
innovation because I believe innovation will ultimately get us 
there. We've got to get to it.
    My friend Vinnie Costa calls the Chinindia price. The price 
that's competitive in the China and India marketplace. Because 
without that I don't think it matters what we do in this 
country.
    But that said, technology will get us a certain part of the 
way there. But if the value is what you're after then you need 
to actually have a market set of conditions that allow that 
value to be priced appropriately in the marketplace. By that I 
mean there needs to be time of day pricing so when you're 
generating solar energy in the middle of the day when everybody 
in the Southwest has their air conditioners on and the value of 
that energy is over a dollar a kilowatt hour that you are 
matching that load with a resource that's clean, 
environmentally less impactful than other options that you 
have.
    What you need in order to do that is a smart grid. You need 
a grid that will allow you to vary your load as well as vary 
your supply for the conditions that you mentioned that are 
sometimes less than predictable. So we have a long way to go 
before we have the market conditions that allow these 
technologies to flourish in the marketplace.
    Now that said, if we don't do something now with government 
intervention of some sort, we will essentially continue on the 
path we've been on for the last 30 years which is really a 
minute amount of renewable energy on the grid. So where there 
is a philosophical argument that says you need to get to that 
end point. I think as a matter of trying to overcome structural 
barriers there needs to be some intervention. It needs to be 
smart intervention, I will add, because there's a lot of ways 
to do this wrong.
    But unless we do that we will never get to the outcome that 
we're after.
    Senator Bennett. Mr. Bryce.
    Mr. Bryce. If I could just add a couple of quick comments. 
The short answer is I don't know when we stop subsidizing. I 
don't think anyone here knows.
    Senator Bennett. We have 20 years do you think that's 
optimistic or too long?
    Mr. Arvizu. I think with the national effort I think 
certainly two decades is not unrealistic to expect that we can 
get there.
    Senator Bennett. Ok.
    Mr. Bryce. I see a lot of tremendous progress in the solar 
field. If you notice First Solar. They just announced they have 
the price of their new solar panels at under a dollar a watt 
which has been the aim of the industry for a long time.
    So if the industry continues to innovate I think they could 
cut that price in half again. Then perhaps in half again and 
then solar really does become viable. But that's going to take 
a while.
    You mention nuclear. If I could just, this is not germane 
necessarily directly to your point. One of the most promising, 
in addition to the boom in natural gas, domestic natural gas 
completion techniques.
    One of the most promising techniques I see in the whole 
energy field is modular nuclear reactors. There are three 
American companies. Galvin Energy, New Scale Energy, I don't 
know where Galvin. I think Galvin is based in Arizona. New 
Scale Energy based in Corvallis, Oregon. Hyperion Power 
Generation based out of Santa Fe.
    All are looking at producing modular nuclear reactors 
without electric output of less than 100 megawatts. Hyperion 
and New Scale have said they will go to the NRC this year for 
licensing requests for manufacture so that they would have a 
centralized manufacturing location where it's not stamping. 
It's a very complex process.
    Senator Bennett. Right.
    Mr. Bryce. But create the reactors that could be shipped 
then on a rail bed or on rail or by truck to the final 
destination. This could provide a scalable modular solution 
where they could gang individual reactors and have those large 
set of generation as it is needed. But the one stumbling block 
I hear and I heard this from Peter Lyons at the NRC himself, at 
the NRC is manpower.
    They don't, the modular reactor is a whole different breed 
of cat from the thousand megawatt plus reactors that they have 
been dealing with for the last few decades. They have to create 
a whole new separate licensing system, a whole new application 
fee process. From everything I've heard the NRC simply does not 
have the manpower. So I think if the Senate is really serious 
about base load power, low carbon, no carbon electricity, you 
have to give the NRC the resources that it needs.
    Senator Bennett. Yes.
    Mr. Kopf. Could I comment on behalf of the ocean energy 
industry?
    The Chairman. Why don't you do that reasonably quickly. 
Then we will conclude the hearing.
    Mr. Kopf. Yes, sir.
    Senator Bennett. I didn't realize I was going to set off 
this kind of a discussion.
    The Chairman. Yes, yes. That's fine.
    Mr. Kopf. Just five quick points.
    The Chairman. Interesting information. Go ahead.
    Mr. Kopf. Senator, I agree with your comments on tidal. I 
visited that same site in France. Alaska, Washington State and 
Maine have great tidal resources that under FERC's leadership 
are already being explored.
    With respect to wave energy just a couple of quick 
comments. Electric Power Research Institute has shown that 
there's as much extractable energy possible as currently we 
have in conventional hydro. One thing to keep in mind is that 
that resource is very close to our population centers. Fifty 
percent of the population lives within 50 miles of the coast. 
So again really helps avoid the transmission issue.
    Third in predictability, NOAA can predict wave energy 
densities out 120 hours which really gives energy planners and 
schedulers a great opportunity to integrate wave energy 
resource.
    Fourth aspect, don't forget about the Gulfstream. That's 
the powerful current that flows really on both sides of 
Florida, but mainly up the East Coast. That's base load power.
    If you can figure out how to tap that with a tidal like 
turbine, you've got base load power for Miami, really important 
and something that's being looked at.
    Fifth, firming. There's a recent study out of Stanford 
that's showing that wave and wind are kind of out of phase. You 
got to remember solar radiation creates wind. Wind creates 
wave. Waves become a storage device for effectively solar and 
wind.
    You know waves last for many days after a storm. 
Effectively, wave energy becomes a natural storage device for 
solar and wind. So, thank you. Appreciate it.
    Senator Bennett. Thank you very much.
    The Chairman. Thank you all. This is very useful testimony. 
We appreciate you waiting and talking with us. So that will 
conclude our hearing.
    [Whereupon, at 12:50 p.m. the hearing was adjourned.]

                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

      Response of Robert Bryce to Question From Senator Murkowski

    Question 1. You have stated that currently, wind and solar make up 
about two-tenths of one percent of America's total energy consumption. 
Am I correct in reading that in order to meet our still growing energy 
needs, Congress and the Interior Department should therefore be 
pursuing oil, gas, and coal development with at least as much 
enthusiasm as we seem to be pursuing renewables?
    Answer. The short answer: yes.
    No matter how avidly the U.S. pursues renewable energy, the hard 
truth is that energy transitions are protracted affairs--and Congress 
and the Interior Department must recognize that reality. It has taken 
the U.S. more than a century to build a $14 trillion-per-year economy 
that's largely based on hydrocarbons--oil, natural gas, and coal.\1\ 
Transitioning the world's largest economy away from those hydrocarbons 
will take decades and require trillions of dollars in new investment.
---------------------------------------------------------------------------
    \1\ CIA World Factbook. Available: https://www.cia.gov/library/
publications/the-world-factbook/geos/us.html#Econ
---------------------------------------------------------------------------
    ``There is one thing all energy transitions have in common: they 
are prolonged affairs that take decades to accomplish,'' wrote Vaclav 
Smil in November 2008. ``And the greater the scale of prevailing uses 
and conversions the longer the substitutions will take.''\2\ Smil, the 
polymath, prolific author on energy issues, and distinguished professor 
of geography at the University of Manitoba, wrote that while a ``world 
without fossil fuel combustion is highly desirable getting there will 
demand not only high cost but also considerable patience: coming energy 
transitions will unfold across decades, not years.''\3\
---------------------------------------------------------------------------
    \2\ Vaclav Smil, ``Moore's Curse and the Great Energy Delusion,'' 
The American, November 19, 2008. Available: http://www.american.com/
archive/2008/november-december-magazine/moore2019s-curse-and-the-great-
energy-delusion
    \3\ Ibid.
---------------------------------------------------------------------------
    I am in favor of renewable energy. I have 3,200 watts of solar 
panels on the roof of my house. But the key issue to keep in mind is 
that sources like solar and wind will not do anything to reduce 
America's use of oil. And that's where the American economy is most 
vulnerable. The U.S. gets nearly 40 percent of its primary energy from 
oil. The U.S. transportation system is almost wholly dependent on oil, 
therefore any supply disruption or price spike will a significant 
effect on the U.S. economy. Solar and wind provide electricity, not 
oil. Unless or until there is a major breakthrough in automotive 
batteries--accompanied by a major adoption of electric cars by U.S. 
consumers--electricity will not make a major dent in our oil needs. 
Therefore, Congress must recognize--and encourage--the development of 
oil resources on federal lands and on private lands. In particular, 
Congress should be pushing for increased exploration and production in 
offshore areas like the eastern Gulf of Mexico and the Outer 
Continental Shelf. Moreover, it should be pushing enhanced oil recovery 
projects, particularly those that use carbon dioxide flooding, to 
increase oil recovery from existing fields.
    At the same time, Congress and the Interior Department should be 
encouraging the use of natural gas. The U.S. has abundant natural gas 
resources--much of which is on private land. During combustion, natural 
gas emits about half as much carbon dioxide as coal and virtually no 
air pollutants. Therefore, increased use of natural gas, both for power 
generation and transportation, should be encouraged.
    Although nuclear power is not mentioned in your question, let me be 
clear: If Congress is serious about reducing America's carbon dioxide 
emissions, then it must move decisively to encourage the expansion of 
the U.S. nuclear power business. As I said during the Q&A portion of 
the hearing on March 17, one of the most exciting developments in the 
U.S. energy sector is the potential for modular nuclear reactors. But 
from what I've been told, the Nuclear Regulatory Commission does not 
have the manpower and funding it needs to deal with this new class of 
reactors.
    Ethanol is not mentioned in your question either, but I am 
compelled to make the same point I've made repeatedly over the past few 
years: the corn ethanol scam is one of the longest-running robberies of 
American taxpayers in this country's history. The corn ethanol scam is 
an obscene, immoral boondoggle that does nothing to reduce our nation's 
oil needs. The corn ethanol scam is not an energy program it is a farm 
subsidy program masquerading as an energy program. And the costs it is 
imposing are outrageous. I will offer just one example: The January 
announcement by Lexus that it is recalling 214,570 vehicles because 
``ethanol fuels with a low moisture content will corrode the internal 
surface of the fuel rails.''\4\ Despite this recall, despite the 
evidence that ethanol worsens air quality, despite the evidence that 
the it is raising food prices, despite the evidence that it does 
nothing to reduce our energy use, Congress is expanding the corn 
ethanol scam. If Congress is truly serious about energy policy, it will 
kill this special-interest boondoggle immediately and apologize to the 
American people for the harm it has caused.
---------------------------------------------------------------------------
    \4\ National Highway Traffic Safety Administration data, January 
2009. Available: http://nhthqnwws111.odi.nhtsa.dot.gov/acms/docservlet/
Artemis/Public/Recalls/2009/RCLMTY-012009-1234.pdf
---------------------------------------------------------------------------
    I am attaching below two of my recent articles that spell out some 
of my positions on these matters.* The first is from the March 4, 2009 
issue of the Wall Street Journal. The second is from the November 12, 
2008 issue of Slate.
---------------------------------------------------------------------------
    * Articles have been retained in committee files.
---------------------------------------------------------------------------
    Thank you for giving me the opportunity to speak to the Senate 
Energy Committee and to address your question.
                                 ______
                                 
     Responses of Joanna Prukop to Questions From Senator Bingaman

    Question 1. Please describe the system in place in New Mexico for 
the leasing of state trust lands for wind and solar development.
    Answer. Trust lands in New Mexico are leased by the State Land 
Commissioner. The practice used with proposed developers is to allow 
them a two-year lease that gives them access to the land to conduct 
studies such as those for wind speed at various locations. It also 
allows time for negotiations with existing holders of grazing leases 
that may exist in the same area. After that, if the developer wants to 
go forward with the project the lands involved are put up for bid. Bids 
are based on a percentage of electricity generating capacity rather 
than on acres used. The percentage rates are set in a manner that 
allows them to increase over the life of the lease. For example, over 
the 35 year term of the lease the rate may start at three percent and 
increase to eight percent as the developer recoups the project's 
initial construction costs.
    Question 2. Your statement references the Westwide Energy Corridors 
designated by the Department of Energy. It sounds like you have 
concerns that these corridors do not adequately take into account 
renewable energy sources. Can you please elaborate?
    Answer. In our comments to the draft Environmental Impact Statement 
for the Westwide Energy Corridors we identified a need for additional 
corridors to support development of renewable energy in New Mexico and 
proposed specific additions to the proposed corridors to meet these 
goals. The final report acknowledges that the federal agencies were 
asked to evaluate alternatives that would support renewable energy 
development but decided not to evaluate them. (Final Programmatic 
Environmental Impact Statement, Volume 4, p. 2.) As a result the final 
version does not respond to New Mexico's specific request for corridor 
designations and did not designate any new corridors to support 
renewable energy development in areas identified by the State.
    New Mexico is also actively involved in the Western Governors 
Association's Western Renewable Energy Zones (WREZ) initiative. The 
WREZ process is identifying key renewable energy areas throughout the 
West. By not building the energy corridor designation process on this 
valuable information the drafters diminished the likelihood that the 
corridors will significantly assist the development of renewable 
energy. Additionally, it is disappointing to see federal funds used for 
developing the WREZ information not being used to refine the corridor 
project. The lack of coordination is wasteful.
    Department of Interior Secretary Ken Salazar announced on March 11, 
2009, the creation of a new task force to identify specific zones on 
public lands to spur the large scale production of renewable resources. 
Assuming that group will build on the work done on the WREZ initiative 
it will dictate where transmission corridors are needed in order to 
encourage renewable resources. These should be much more helpful than 
many of the routes designated as part of the Westwide Energy Corridor 
effort.
    Question 3a. I am interested in your suggestion that the permit 
processing pilot offices be expanded to include additional state 
personnel. How much additional funded would be necessary to do this?
    Answer. In New Mexico I think adding two state employees to the 
pilot program effort would be extremely helpful in allowing the state 
environmental and wildlife policy issues to be considered as part of 
the evaluation of management plans, leasing decisions, leasing 
stipulations and other environmental work. Two experienced employees 
could be hired and outfitted with supplies and computers and funded for 
a reasonable amount of travel within the state for $225,000 per year. 
Assuming the cost and needs would be similar in all five of the states 
with the pilot program then the cost would be $1 to 1.25 million each 
year.
    Question 3b. Should this expansion also include additional 
resources for the inspection and enforcement program?
    Answer. In New Mexico the only state personnel working in the pilot 
program are employees of the Oil Conservation Division. For the most 
part they worked on inspection and enforcement issues. This may have 
been the case in other states because the national BLM website reports 
a significant increase in inspections by the pilot offices already in 
place. Total inspections reported in FY 07 were 10,982 compared with 
8,800 in FY 06. The number of environmental inspections increased 78 
percent, from 3,365 to 5,976 from FY 06 to FY 07. The BLM completed 100 
percent of the planned inspections in FY 07. It appears this portion of 
the program is already a success and should move from ``pilot'' status 
to a more permanent footing. Unfortunately, in New Mexico the three-
year pilot program is ending and it is not clear, yet, whether the 
arrangement will continue. Finally, it would be helpful to add one more 
component to the pilot or collaborative program and that would relate 
to data base creation. If both the BLM and state offices could share 
electronic data more easily it would help in all levels of 
collaboration. If the cost of developing and maintaining a data base 
was shared it would cost both BLM and the state agency less and both 
would have a better product.
    Question 4. Do you think it would be helpful to find a dedicated 
source of funding for the Land and Water Conservation Fund?
    Answer. A. Presently there are several sources of funding 
designated to support the Land and Water Conservation Fund (LWCF), but 
they are not truly dedicated to the program. Revenues from Outer 
Continental Shelf leasing, proceeds from the sale of surplus real 
property, motorboat fuel taxes and fees from recreation uses of Federal 
Lands are set aside, but may not reach LWCF. The funding for LWCF must 
be appropriated every year and can be appropriated to other programs. 
The National Park Service reports, ``The funding of high priority 
Interior programs from the LWCF through the appropriations process has 
resulted in a decrease in funding grants for recreation grants in 
recent years.'' There were zero dollars for grants to states under LWCF 
in 1996 through 1999. The best option for funding would be to make the 
current revenue sources true set-asides for LWCF, or at least a portion 
of them, so they are not competing against other Department of Interior 
projects.
    B. Another source for recurring funding could come from a small 
percentage of all federal energy-related leases. The leasing process 
could be changed for sites leased for renewable energy to be based on a 
percentage of production each year. New transmission lines could be 
charged based on their carrying capacity. And new agreements could be 
executed as current contracts expire from pipelines and existing 
transmission lines.
    C. Finally, fees could be charged for all permitted activities on 
federal land. Currently only proceeds from fees for recreation uses go 
to the LWCF. By requiring this of other activities you make those using 
federal lands pay for more protections of federal and state land under 
LWCF. Those using federal lands have a direct impact on the condition, 
conservation needs and recreational potential of the public lands. 
Spreading costs to all users is equitable and helps to assure that 
there will always be places set aside for recreation.
     Responses of Joanna Prukop to Questions From Senator Murkowski
    Question 1. You have stated that the 14 currently pending solar 
energy applications in New Mexico would represent solar energy 
development on as much as 55,000 acres of land. I understand that solar 
panels require as much as a thousand gallons of water per megawatt 
hour. Are you concerned about the water requirement for this 
development?
    Answer. Currently all forms of power generation require significant 
amounts of water for cooling. Living in arid New Mexico I am, of 
course, concerned about water at all times. Fortunately there is 
technology for solar energy that is water efficient: 1) utility-scale 
photovoltaic projects use only a minimal amount of water (for cleaning 
the panels). 2) Solar thermal projects (both `trough'' and ``tower'') 
can be dry-cooled. If solar thermal plants are wet-cooled they will use 
an amount of water greater than conventionally fueled (coal) wet-cooled 
thermal power plants--on the order of 900 gallons/mwh versus 500 
gallons/mwh. But if a solar thermal plant is dry-cooled, it uses less 
than 10% of the amount of water a wet-cooled plant uses. Granted, dry-
cooled plants operate less efficiently and, therefore, can run 3-8% 
higher costs (1cent/kwh more).
    Question 2. Do you believe that there should be federal lands zoned 
exclusively for renewable energy, or does there need to be access to 
other sources like natural gas and other baseload energy nearby?
    Answer. At this time we need to develop multiple sources of energy 
as we move from a fossil fuel dominated economy to one based on more 
renewable resources. Federal lands will play a significant role in all 
these resources and land managers need to consider what the best mix of 
resource development is. Clearly, certain uses such as solar are likely 
to prohibit other surface uses. But they may be located in area with 
subsurface development of geothermal or oil and gas resources. By first 
identifying the best areas for each resource type it will be easier to 
make planning decisions to facilitate the co-location of certain uses.
    Additionally, in certain situations it could be advantageous for a 
renewable energy facility to locate near a natural gas pipeline or a 
traditional power plant. Sometimes non-renewable energy sources are 
needed for firming power delivery obligations. With such firming, power 
commitments may be met even on a cloudy or non-windy day.
                                 ______
                                 
    Responses of Steven R. Kopf to Questions From Senator Murkowski

    Question 1. As a developer of ocean energy projects, you've stated 
that resolving the jurisdictional dispute is critical to the industry. 
What are your thoughts on today's announcement under which MMS and FERC 
would share the responsibility for these projects out on the OCS? Will 
this give industry the certainty it needs?
    Answer. I am optimistic that FERC and MMS can develop an MOU that 
clarifies and simplifies the leasing and licensing process for the 
Outer Continental Shelf. FERC has proven that it understands the needs 
of a nascent industry and is fostering a license process that is based 
on broad stakeholder participation and collaborative solutions. MMS has 
a clear role in leasing Federal lands for energy production. Currently, 
a developer working in the Territorial Sea (within 3 nautical miles) 
must work with both FERC for a license and the State for a land lease 
and in some cases a State hydroelectric license. In many cases the 
State license process parallels the FERC process and creates little 
additional work for the developer. The industry is hopeful that FERC 
and MMS will develop a leasing/licensing process that is consistent 
with how projects are licensed in the Territorial Sea.
    Furthermore, we expect that MMS will revisit the approach to 
leasing the OCS. As proposed in 2008, the draft rules seemed to ignore 
the reality of early stage technology development. The leasing fees and 
bid procedures were overly burdensome. Revisions must be made to the 
rules to recognize that ocean energy is not depleting a public 
resource. As currently structured the rules will stymie development. 
Section 8 of the Outer Continental Shelf Lands Act provides the 
Secretary with broad discretion on collecting rents and royalties. 
Recognize that unlike oil and gas, ocean energy is not depleting a 
natural resource. Payments made to the Federal Government must reflect 
the sustainable public benefit and the long term nature of capital cost 
recovery.
    In addition to the FERC/MMS MOU and the need for reform of the 
proposed MMS leasing rules, there is also a need for comprehensive 
marine spatial planning. Planning needs to be done in a way that:

          1. Respects the State's Coastal Zone Management Authority.
          2. Respects the environment and existing users, and
          3. Leverages NOAAs science and ocean planning experience.

    Resolving the jurisdictional dispute, developing reasonable lease 
rates/terms and initiating ocean planning are key elements to allowing 
the wave, current, and tidal energy industry to move forward. We 
appreciate your leadership in this area and look forward to a 
comprehensive solution.
    Question 2. You highlight EPRI's estimate that as much as 10% of 
U.S. energy demand could be produced by wave, tidal, and current 
energy. What kind of timeline are we looking at for that estimation to 
become a reality?
    Answer. EPRI has estimated that the wave energy and tidal resource 
potential that could be credibly harnessed is about 400 TWh/year, or 
about 10% of the 2004 US energy demand. Based on typical capacity 
factors, this is approximately 140,000 MW of installed capacity. In a 
June 2007 report, EPRI estimated that 10,000 MW of new hydrokinetic 
technologies could be installed by 2025, which would be equivalent to 
approximately 0.7% of US Energy demand. EPRI has made no estimated of 
the time it would take to build-out all 140,000 MW.
    Since 1999, the wind power industry has experienced explosive 
growth, adding almost 25,000 MW of new generating capacity. Using 
similar growth rates, it is likely that the ocean and tidal energy 
could contribute 10% of the US energy demand by 2040 to 2050. However, 
to achieve this growth rate, it is imperative for this industry to 
receive the same level of Federal support that the wind and solar 
industries have received.
                                 ______
                                 
     Responses of George Cooper to Questions From Senator Bingaman

    Question 1. Your testimony encourages us to include in any energy 
legislation a title that provides a fish and wildlife sustainability 
title.
    Do you think it would be helpful to find a dedicated source of 
funding for the Land and Water Conservation Fund?
    Answer. Mr. Chairman, The Theodore Roosevelt Conservation 
Partnership (TRCP) supports funding dedicated to fish and wildlife 
sustainability, outdoor recreation, and conservation education in every 
state. The TRCP worked for passage of the Wildlife Conservation and 
Restoration Program (WCRP), created by Congress in 2000, which 
authorizes federal funding to state fish and wildlife agencies for 
wildlife conservation and related recreation and education. While the 
program is on the books, its funding relies on annual appropriations 
that have not lived up to the expectations envisioned when it was 
created. Thus, state fish and wildlife agencies struggle to take the 
necessary planning and management actions necessary to sustain fish and 
wildlife species that are under their authority.
    The Land and Water Conservation Fund (LWCF) has a long-standing 
record of creating parks and open spaces, protecting wilderness, 
wetlands, and refuges, and enhancing recreation areas across the 
country. It's one of the most important and successful conservation 
tools ever designed.
    If the Committee is contemplating a dedicated funding source for 
natural resource conservation--including LWCF--the TRCP urges the 
inclusion of a fish and wildlife sustainability provision that 
maintains diverse and abundant fish and wildlife and prevents 
additional species from becoming endangered. A good template for such a 
title is offered by the Teaming with Wildlife Act of 2009, recently 
introduced by Sens. Tim Johnson (D-SD) and Debbie Stabenow (D-MI). That 
bill would provide a dedicated funding source for the Wildlife 
Conservation and Restoration Program through allocation of monies 
received from energy development onshore and offshore on federally 
managed land and water. The funding would allow states to fully 
implement their comprehensive wildlife strategies that provide action 
plans for conserving the full array of wildlife and their habitats. The 
TRCP believes that increased renewable and non-renewable energy 
development on America's public lands and waters necessitates the 
inclusion of such a fish and wildlife sustainability title in energy 
legislation emerging from this Committee.
    Question 2. With respect to offshore energy development, you 
advocate a network of conservation areas. Would these areas be in 
addition to existing marine sanctuaries? How would they be designated?
    Answer. Mr. Chairman, There is quite a bit of controversy in the 
conservation community about marine sanctuaries or Marine Protected 
Areas that are off-limits to both recreational and commercial fishing. 
TRCP wishes to focus on the principle that there are certain areas that 
are so special or unique that, if impacted by energy development, 
cannot be mitigated or replaced. These areas have such importance for 
marine life that any impact would cause significant and exponential 
impacts to the current and future populations of fish, mammals, and 
other sea animals. Impacts to these areas would also create a 
significant impact on the sustainability of commercial and recreational 
use of fisheries. These areas are of vital importance for reproduction, 
migration, brood-rearing, or other survival and propagation such that 
the risk from development would hinder species fitness or abundance. 
Many of these areas are unknown, but with adequate inventory and 
research, we can devise a process for identifying them and subsequently 
managing them as offshore energy development proceeds.
    The approach is much like the process we propose for onshore 
development and would include a thorough examination of the known 
information of marine life for the given area, an understanding of the 
needed and vital habitats or migration routes for species of concern, 
an understanding of the potential impacts from development, 
coordination with NOAA Fisheries, MMS, the states, research groups, 
industry, and other stakeholders. After the data and information are 
compiled and examined, maps could be developed that would identify 
areas that need various levels of protection to sustain marine life as 
energy development proceeds. This mapping would create a matrix of 
areas which then could be overlaid with proposed lease maps and energy 
potential. This matrix approach would allow for the identification of 
certain areas that should be off-limits, areas with restricted 
development, and areas with development as proposed.
    Once the mapping is complete, a ``sustainable wildlife (and fish) 
plan'' can be developed as plans are prepared to lease and develop 
energy resources. The designation, regulation and management 
requirements will only be as effective as how the authorized agencies 
implement the plans as they attempt to extract energy and sustain fish 
and wildlife. Formal designation of areas off-limits to development 
would be necessary if the problems with sustaining marine life could 
not be achieved through informal designation or management. Because of 
the dynamic nature of managing marine life and innovations in 
technology, these areas should be reviewed periodically and changed if 
the goals and objectives for sustaining marine life are achieved 
through better sustainable development methods.
    TRCP through its Marine Working Group has proposed the CAST 
(Conservation, Allocation, Science, and Transparency) principles as 
recommendations to assist in balancing responsible offshore energy 
development while sustaining marine life.
      Response of George Cooper to Question From Senator Murkowski
    Question 1. Mr. Cooper, in considering ways for the states and 
particularly coastal communities near offshore energy development to 
adjust for the risk and impacts to fish and wildlife, do you think that 
states should share in part of the revenues associated with energy 
production from the OCS?
    Answer. Senator Murkowski, The Theodore Roosevelt Conservation 
Partnership (TRCP) supports all state fish and wildlife agencies 
sharing in part of the revenues derived from energy production in the 
Outer Continental Shelf. Funding for fish and wildlife sustainability 
must be a key element of any energy legislation that would increase 
renewable and non-renewable energy development on America's public 
lands and waters. Allocations of royalties paid to the federal 
government by industry from offshore energy development must be used to 
benefit fish and wildlife resources, including expanded marine research 
and fisheries management initiatives, via state and federal programs. A 
good template for such a title is offered by the Teaming with Wildlife 
Act of 2009, recently introduced by Sens. Tim Johnson (D-SD) and Debbie 
Stabenow (D-MI). That bill would provide a dedicated funding source for 
the Wildlife Conservation and Restoration Program through allocation of 
monies received from energy development onshore and offshore on 
federally managed land and water. The funding would allow states to 
fully implement existing comprehensive wildlife strategies that provide 
action plans for conserving the full array of wildlife and their 
habitats.
                                 ______
                                 
   Responses of Philip D. Moeller to Questions From Senator Bingaman

    Question 1. Section 388 of EPAct 2005 was based on legislation 
transmitted by the Bush Administration that provided that MMS was to be 
the agency to authorize alternative energy projects on the OCS through 
the issuance of leases, permits, or rights-of-way. Was FERC part of the 
interagency process that led to this Bush Administration legislative 
initiative?
    Answer. While the legislative efforts in developing the Energy 
Policy Act of 2005 pre-dated my tenure at the Commission, I understand 
that Commission staff attended an interagency meeting on the 
administration's proposal to discuss the proposed legislation as it 
related to liquefied natural gas facilities. Commission staff was not a 
party to any discussions that led to Section 388, nor was it asked 
about the Commission's jurisdiction on the OCS.
    Question 2. Your statement observes on page 2 that, ``a single 
federal agency having the responsibility and authority to make siting 
decisions with regard to projects that affect the national interest is 
clearly the most efficient way to site major energy projects.'' Is it a 
problem in your view that two agencies, FERC and MMS, will be involved 
in siting these projects under the newly-announced MOU?
    What role do you see for each agency in the siting and approval of 
ocean energy projects on the OCS?
    Answer. We do not foresee problems with this approach. The 
Commission carries out its authorities under the Federal Power Act 
(FPA) while taking into full account the current reality of ``shared 
decision making'' among federal and state agencies.
    The Commission has worked closely with these agencies for almost a 
century to promote the comprehensive development of the nation's 
hydropower resources, and has developed processes that provide for 
public notice and extensive public participation, including 
participation by affected federal agencies, Indian tribes, and states. 
These processes ensure the early identification of issues and any study 
needs, development of a thorough environmental analysis, and decisions 
based on a complete record and consideration of the public interest. 
The Commission's close working relationship with these entities is 
reflected not only in the Commission's licensing regulations, but also 
memoranda of understanding with those agencies and hundreds of 
licensing decisions.
    On March 17, 2009, the Secretary of the Interior and the 
Commission's Chairman issued a Joint Statement on the Development of 
Renewable Energy Resources on the OCS. As explained in the Joint 
Statement, the Commission will have the primary responsibility to 
manage the licensing of hydrokinetic projects in offshore waters 
pursuant to the Federal Power Act, with the active involvement of 
relevant federal and land resource agencies, including the Department 
of the Interior. Interior and Commission staffs are working together to 
prepare an MOU that describes the process by which MMS leases, 
easements, rights-of-way, and Commission licenses for hydrokinetic 
projects in offshore waters will be developed. The MOU will clarify 
jurisdictional understandings of the two agencies regarding renewable 
energy projects in the OCS and develop a cohesive, streamlined process 
that will help accelerate the development of wind, solar, and 
hydrokinetic energy projects. The MOU is nearing completion and I 
expect that it will be signed in the near future.
    Question 3. Concerns have been raised in the past regarding the 
imposition of so-called 4(e) conditions proposed by resource agencies 
at the Departments of the Interior and Commerce and the Forest Service. 
Issues have been raised regarding whether our natural resources are 
being adequately protected and the complexity of the process. I 
recently asked GAO to review how this process is working.
    Do you expect that resource agencies will impose 4(e) conditions on 
FERC licenses granted on the OCS? How can we be assured that using this 
process on the OCS will adequately protect the natural resources of the 
OCS?
    Answer. Whether or not resource agencies impose 4(e) conditions on 
FERC licenses, the Commission is well-versed in reviewing and 
authorizing critical energy infrastructure projects, and in 
establishing a regulatory regime that encourages the development of 
appropriate energy projects, while at the same time protecting the 
interests of consumers and safeguarding the environment. Commission 
staff is committed to working cooperatively with the MMS and other 
resource agencies to ensure that their planning responsibilities and 
concerns regarding protection of OCS resources will be fully considered 
in the licensing process, and to avoid unnecessary regulatory 
duplication for the offshore energy hydropower industry. The MMS has a 
critical role to play in all hydrokinetic developments proposed on the 
OCS.
    The Commission's existing licensing processes provide many 
opportunities for land management agencies to be involved. These time-
tested and comprehensive processes provide for the seamless integration 
of valuable input and coordination from the MMS and other resource 
agencies with regard to managing the OCS. The Commission's regulations 
detailing the licensing processes allow for pre-application 
consultation with MMS and other parties to facilitate early 
identification and resolution of potential issues or concerns, provide 
several commenting periods for the MMS to give input at every stage of 
the decision making process, specify that the MMS can participate in 
study plan development with the Commission and other parties, detail 
specific procedures for resolution of study request disputes, and 
describe how the MMS can be involved with the environmental review 
process.
    Question 4. What role do you think the Interior Department should 
play in the siting of transmission facilities across lands administered 
by that Department?
    Answer. Similar to the siting of interstate natural gas facilities 
across such lands, it is expected that the Interior Department would 
continue to oversee and execute its statutory obligations in the siting 
of electric transmission facilities across Interior-administered lands. 
As you know, several bills now before the Senate Energy and Natural 
Resources Committee would assign new authority to the Commission with 
regard to siting of electric transmission facilities that meet 
specified criteria. If Congress decides to take that step, then it will 
likely be most efficient for the Commission to act as the ``lead 
agency'' for purposes of coordinating all applicable federal 
authorizations and complying with National Environmental Policy Act of 
1969. Drawing on decades of natural gas and hydropower proceedings, the 
Commission has extensive experience in that role, which includes 
establishing schedules for all federal authorizations and maintaining a 
consolidated record of all such decisions made or actions taken. 
Importantly, such lead agency authority does not usurp or replace other 
agencies' authorities or abilities to oversee their statutory 
responsibilities, but adds discipline by means of a schedule and 
expedites the siting of needed energy infrastructure.

   Responses of Philip D. Moeller to Questions From Senator Murkowski

    Question 1. I'm very pleased that FERC and MMS were able to come 
together on a solution to give certainty to this nascent industry 
rather than asking Congress to intervene legislatively. Under this new 
agreement, how do you see FERC and MMS working together to move this 
industry forward and realize the potential of hydrokinetic energy?
    Answer. On March 17, 2009, the Secretary of the Interior and the 
Commission's Chairman issued a Joint Statement on the Development of 
Renewable Energy Resources on the OCS. As explained in the Joint 
Statement, the Commission will have the primary responsibility to 
manage the licensing of hydrokinetic projects in offshore waters 
pursuant to the Federal Power Act, with the active involvement of 
relevant federal and land resource agencies, including the Department 
of the Interior. Interior and Commission staffs are working together to 
prepare an MOU that describes the process by which MMS leases, 
easements, rights-of-way, and Commission licenses for hydrokinetic 
projects in offshore waters will be developed. The MOU will clarify 
jurisdictional understandings of the two agencies regarding renewable 
energy projects in the OCS and develop a cohesive, streamlined process 
that will help accelerate the development of wind, solar, and 
hydrokinetic energy projects. The MOU is nearing completion and I 
expect that it will be signed in the near future.
    The Commission staff is committed to working cooperatively with the 
MMS as well as other resource agencies to ensure that its planning 
responsibilities and concerns regarding protection of OCS resources 
will be fully considered in the licensing or exemption process, and to 
avoid unnecessary regulatory duplication for the offshore energy 
hydropower industry. As the agency with specific authority to issue 
leases, easements, and rights-of-way for energy projects on the OCS, 
the MMS has a critical role to play in all developments proposed on the 
OCS. The role of the MMS in the licensing process would be similar to 
that of the U.S. Forest Service for national forests and the Bureau of 
Land Management for federal lands it administers, and of the U.S. 
Bureau of Reclamation and the U.S. Corps of Engineers for waterpower 
projects at their federal facilities.
    The Commission and its predecessors have worked closely with these 
agencies for almost a century to promote the comprehensive development 
of the nation's hydropower resources, and the close working 
relationship is reflected not only in the Commission's licensing 
regulations, but also memoranda of understanding with those agencies 
and hundreds of licensing decisions.
    Question 2. Can you comment on Secretary Salazar's recent 
``Secretarial Order'' calling for DOI to not only establish renewable 
energy zones on public lands, but also to handle the permitting and 
environmental review? Should FERC be given the coordinator role 
instead? Should we expedite environmental or judicial reviews?
    Answer. Secretary Salazar's Order establishes as a priority ``the 
permitting and appropriate environmental review of transmission rights-
of-way applications'' necessary to deliver renewable energy generation 
to consumers. I believe that taking full advantage of our capacity to 
develop clean, renewable power is essential to meeting our nation's 
energy goals, and I applaud Secretary Salazar's work on this important 
issue.
    At present, the Commission's authority with regard to siting of 
electric transmission facilities is limited to National Interest 
Electric Transmission Corridors (NIETC) designated by the Department of 
Energy. In addition to responsibilities that Congress assigned directly 
to the Commission in Section 1221 of the Energy Policy Act of 2005, the 
Secretary of Energy has delegated to the Commission authority to serve 
as lead agency to coordinate all applicable federal authorizations and 
related environmental reviews associated with NIETC siting 
applications, and to prepare a single environmental review document.
    As you know, several bills now before the Senate Energy and Natural 
Resources Committee would assign new authority to the Commission with 
regard to siting of electric transmission facilities that meet 
specified criteria. If Congress decides to take that step, then it will 
likely be most efficient for the Commission to act as the ``lead 
agency'' for purposes of coordinating all applicable federal 
authorizations and related environmental reviews. Drawing on decades of 
natural gas and hydropower proceedings, the Commission has extensive 
experience in that role, which includes establishing schedules for all 
federal authorizations and maintaining a consolidated record of all 
such decisions made or actions taken. Importantly, such lead agency 
authority does not usurp or replace other agencies' authorities or 
abilities to oversee their statutory responsibilities, but adds 
discipline by means of a schedule and expedites the siting of needed 
energy infrastructure.
    You also raise the important issue of judicial review. Judicial 
review can be expedited by providing for all actions to be subject to 
review in a single United States court of appeals (either in the 
circuit where the proposed facility is to be sited or in the District 
of Columbia Circuit). The review would be based on the single record 
developed by all affected agencies and administered by the lead agency.
    Question 3. FERC has moved forward with hydrokinetic projects in 
state waters and currently has permits pending before it that represent 
about 10,000 megawatts of energy. Now that you've reached agreement 
with MMS on how to proceed on the Outer Continental Shelf, do you 
expect to see more activity out in the OCS or will the action still be 
in state waters in the near term?
    Answer. The recent Joint Statement on the Development of Renewable 
Energy Resources on the OCS is an important step toward providing 
needed certainty for prospective developers of OCS hydrokinetic 
resources. However, other considerations--including further analysis by 
prospective developers of costs associated with transmitting power from 
more remote sites on the OCS--will also affect the extent to which 
hydrokinetic development increases on the OCS. We expect to see 
continued interest in hydrokinetic projects to be located in state 
waters, due in part to the abundance of potential sites and the 
generally shorter transmission lines needed to bring this power to 
market, as compared to more remote sites on the OCS.
                                 ______
                                 
      Responses of Dan Arvizu to Questions From Senator Murkowski

    Question 1. You noted in your testimony that the process must 
minimize any opportunity for administrative delay; have workable 
timelines for project approval in place; and safeguard against misuse 
of the leasing system. Please tell us more about the problems you've 
identified.
    Answer. There is a concern that reported problems with federal oil 
and gas leasing could be replicated in leases for wind, solar, 
geothermal, and other types of renewable energy development. For 
example, if a lease holder never moved forward with the project after 
being awarded a lease, the program's objectives cannot be fulfilled. 
This not only runs contrary to the government's intent to promote 
renewable energy on federal land, but it also prevents others from 
stepping in to do the job.
    In addition, if early auctions avoid tracts with known 
environmental sensitivities, withholding leases obtained in these 
auctions could create more pressure to lease and develop areas that are 
more environmentally sensitive.
    Equally crucial, agency rules should be issued in a timely manner, 
and inter-agency conflicts should be resolved in ways that prevent new 
delays caused by jurisdiction uncertainty or dispute.
    Question 2. You noted in your testimony that a significant 
challenge for the federal agencies, as well as for renewable energy 
developers, is the time and cost of compliance with the National 
Environmental Policy Act. An EIS can cost more than $1 million and take 
18 months to complete--if everything goes according to schedule. How 
can we address the problems with NEPA compliance? Should Congress 
legislate an expedited environmental review and/or a consolidated 
judicial review process?
    Answer. One response would be to address ways to reduce time and 
cost of compliance within existing law. An approach taken by the 
Western Governors Association--in its work to anticipate renewable 
energy development within participating states--is to identify 
environmentally sensitive areas in advance, so that development can 
focus on areas less likely to pose concern. The NEPA process remains 
the same, but has a higher probability of going smoothly. The Bureau of 
Land Management's programmatic EIS model has a similar goal. This does 
not involve changing NEPA, but it does require input from agencies such 
as the U.S. Fish and Wildlife Service that have requisite expertise. 
The aim is to improve information, reduce risk, and preserve due 
process within existing law.
    Question 3. You testified that any process for permitting renewable 
energy development and transmission projects should have the twin goals 
of finding sites where the most economical renewable resources can be 
developed, with the least harm to the environment. In your opinion, 
which agency should be the lead for such an effort? Should we task DOI 
or FERC with coordinating environmental reviews and overseeing the 
permitting process? How is transmission development best addressed at 
the federal level?
    Answer. Regardless of who leads transmission siting and permitting 
efforts, the entire process will be smoother, quicker, and better-
informed if the Department of Interior takes the lead in mapping those 
locations that are too environmentally sensitive for development, and, 
alternatively, areas where development would pose the least risk. 
Companies developing large-scale wind, solar and geothermal plants 
would prefer not to go into an environmentally sensitive area with a 
prospective project. The problem often has been that they don't know 
the potential problems with a site until they're too financially 
invested in the project to turn back. DOI leadership on that piece of 
the puzzle would result in better coordination between FERC, DOE and 
other federal agencies, as well as between the federal government and 
state or regional transmission planning authorities.
    Question 4a. Dr. Arvizu, you point to a potential contribution of 
approximately 640 gigawatts from America's renewable resources. You 
correctly remind us to keep in mind is that wind and solar are 
intermittent, and thus produce less energy over time than this 640 
gigawatt figure would suggest.
    Do you have an estimate about how much less than the 640 gigawatts 
America's renewable sources might produce, in a best case scenario?
    Answer. If wind power were located at sites with the best wind 
regimes, the average capacity factor would be around 45 percent. In 
other words, actual production from available sources over the course 
of a year would equal 45 percent of what would be produced if the 
equipment ran at full capacity, 24 hours a day, 7 days a week, 52 weeks 
a year. To put this in perspective, the overall capacity factor for all 
coal plants in the US last year was 72 percent and 25 percent for units 
using natural gas. Nuclear plants had an average capacity factor of 92 
percent.
    If we take the Energy Information Agency's U.S. generation data for 
all of 2008 as a benchmark, total electricity production in all 50 
states plus the District of Columbia was 4,115 terawatt-hours. Of the 
640 GW mentioned in my testimony, we estimated wind to contribute 80 
GW. On moderately good sites, that 80 GW of equipment would have a 
capacity factor of about 35 percent, and, therefore, would produce 
about 6 percent of the electricity generated in all of 2008. On the 
best sites, the capacity factor would go up to 45 percent, or higher, 
and would be equivalent to 8 percent of U.S. production in 2008.
    Concentrating solar power currently has a capacity factor of around 
30 percent at a moderately good site, and above 40 percent in areas 
with the most annual sunshine. Current technologies can store thermal 
energy for about six hours after the sun goes down, so there is 
necessarily some drop off in production at night. With these capacity 
factors, the 400 GW of concentrating solar power in our estimate could 
equal between 26 percent and 34 percent of overall generation capacity 
for last year.
    Photovoltaic technologies generally have a lower capacity factor: 
22 percent to 25 percent for moderately good to high-quality locations. 
At that range, the 140 GW of photovoltaics we estimated would amount to 
7 percent of what the U.S. generated in 2008.
    We also included 20 GW of geothermal potential in our estimate. 
That technology functions very well for baseload power, as it has a 
very high capacity factor. At a 90 percent capacity factor, that much 
geothermal would contribute the equivalent of 4 percent of 2008 total 
production.
    In the best scenario, with renewable technologies located in areas 
that could achieve the highest respective capacity factors, the 640 GW 
included in my estimate could theoretically have provided more than 
half of the electricity produced nationwide in 2008.
    Question 4b. In a situation where something less than 640 gigawatts 
total came from renewable sources in America, would it be fair to say 
that about half of America's electricity demand will still come from 
traditional sources?
    Answer. A large portion would come from traditional sources, but we 
may see these resources managed in non-traditional ways. We've only 
begun to think about how smart grid technologies will change the way 
traditional and non-traditional generation resources are managed, and 
once entrepreneurial innovations take hold, there's no telling what 
advances may be beyond the horizon. We may also see conventional 
natural gas resources co-scheduled and co-managed with renewables as 
wind and solar forecasting techniques improve, thereby reducing the 
need to rely on coal as a baseload resource. So, even though by our 
estimates, 640 GW would equate to about half of the electricity 
produced in 2008, it's far from certain that the remaining half would 
remain in a ``business as usual'' mode.
    Question 4c. Do you consider natural gas to be the correct baseload 
power generation as a complement to wind and solar power?
    Answer. With increasing variable (intermittent) generation such as 
wind and solar, the need increases for flexibility in the other parts 
of the power generation system to handle the variability and 
uncertainty. Combustion turbine and combined cycle units that burn 
natural gas and liquid fuels can provide a substantial part of this 
needed flexibility. Hydropower plants, internal combustion plants, and 
certain other technologies can also provide this flexibility. In this 
role, the plants providing this flexibility are not operating in a 
baseload function (baseload resources typically run at the same output 
level day and night for extended periods of time).
    Our ability to operate wind and natural gas units conjunctively on 
the grid is improving every day. The key factors are day-ahead and 
hour-ahead wind forecasting--two areas where NREL is leading 
significant research. Greater day-ahead accuracy ensures that the 
correct and most efficient units are committed for the next day's 
operation, while greater hour-ahead accuracy allows grid operators to 
effectively reserve sufficient quick-responding units, so the net 
output of the dispatched and the variable resources matches the load. 
With accurate forecasting, conjunctive operation of wind and natural 
gas units can reduce the need for baseload coal generation
    Today's solar power technologies, on the other hand, are not 
baseload resources but are typically identified as intermediate 
resources--beginning operation in the morning as demand rises, and 
decrease in the evening as demand drops off. As such, utility-scale 
concentrating solar power tends to replace the conventional 
intermediate resources, which are typically natural gas or small coal 
units.
    Geothermal and biomass technologies are likely to provide an 
increased share of baseload power, as both of these technologies can 
run at a constant level, 24 hours a day. In addition, large-scale 
energy storage could provide options for managing variable renewable 
resources with reduced reliance on natural gas. Sophisticated 
application of smart-grid technologies could also enable customers to 
provide equivalent demand response capability in exchange for lower 
rates or other incentives.
                                 ______
                                 
    Responses of Hon. Ken Salazar to Questions From Senator Bingaman

    Question 1. I understand that the oil and gas permit processing 
pilot offices have been successful in improving coordination among 
federal agencies and states for permitting. Do you believe that the 
mandatory funding for these offices should be extended?
    Answer. We believe the oil and gas permit processing pilot offices 
have been successful in bringing together the right staff from multiple 
agencies to ensure that permits undergo proper reviews and are 
processed in a more timely manner. The additional program funding 
provided in recent years has made implementation of these process 
changes possible.
    The President's Budget proposes to terminate (beginning in 2011) 
the mandatory funding set aside for these pilot offices in the 2005 
Energy Policy Act (EPAct) and we do not support the extension of this 
funding. In transitioning away from this mandatory funding, the Budget 
proposes a commensurate increase in the regular BLM oil and gas 
appropriation, so that the program is held harmless during the 
changeover. The pilot offices would continue to operate as intended 
under EPAct. The BLM appropriation would be offset by cost recovery 
fees, which unlike rental receipts, are directly tied to the costs BLM 
incurs in processing industry permits.
    Question 2. I have a longstanding concern that the BLM inspection 
and enforcement program does not have the resources necessary to ensure 
that oil and gas operations are conducted in a safe and environmentally 
sound manner. How much has been allocated to this program in each of 
the last 5 years? Have monies from the BLM Permit Processing 
Improvement Fund been used for the I&E Program? If so, how much has 
been provided on an annual basis?
    Answer. The amount of funding spent on Inspection and Enforcement 
for the last five years is in the table below. Funds from the Permit 
Processing Improvement Fund have been used for the Inspection and 
Enforcement program and are included in the table (row 9141).

                          FUNDS USED FOR INSPECTION AND ENFORCEMENT (Bureau full cost)
                                             (dollars in thousands)
----------------------------------------------------------------------------------------------------------------
            Activity                        Name            FY 2004    FY 2005    FY 2006    FY 2007    FY 2008
----------------------------------------------------------------------------------------------------------------
1310                                 Oil & Gas Management     28,479     30,024     30,970     33,046     32,663
----------------------------------------------------------------------------------------------------------------
1630                                      Law Enforcement          2         31          7          1          8
----------------------------------------------------------------------------------------------------------------
9131                                 Geothermal Steam Act          0          0         40        198        263
                                           Implementation
----------------------------------------------------------------------------------------------------------------
9141                                    Permit Processing          0          0      3,808      4,197      6,858
                                         Improvement Fund
----------------------------------------------------------------------------------------------------------------
9641                              Naval Petroleum Reserve          0          0        155        118         96
                                               Numbered 2
----------------------------------------------------------------------------------------------------------------
Total                                                         28,481     30,055     34,980     37,560     39,888
----------------------------------------------------------------------------------------------------------------

    Question 3. An analysis completed in May of 2007 by the GAO at my 
request concluded that the U.S. federal government receives ``one of 
the lowest government takes in the world'' from the production of oil 
and gas from federal lands and waters. I understand that you plan to 
review the fiscal terms of federal leases including the royalties being 
charged by the Federal government. Is that correct?
    When do you expect to have this review completed?
    Answer. We will be looking closely at the issue of whether or not 
the U.S. is getting an appropriate return for our national oil and gas 
resources, both onshore and offshore. At this time, we do not have an 
established schedule for when this review will be completed, but I hope 
to have a better sense of timing once my full management team is in 
place and can focus on the issue.
    In looking at this issue, we will consider how the return to the 
U.S. from Federal lands compares to that of other countries, as well as 
to the return state and private resource owners in the U.S. receive 
from development. This involves looking not only at direct bonuses, 
rents, and royalties collected from Federal lands, but at other 
revenues (e.g., severance and other taxes) collected from oil and gas 
operations here and abroad.
    There are a couple of ongoing bureau-level efforts that should help 
inform our analysis. The Bureau of Land Management is currently 
analyzing various alternatives regarding rents and royalties on oil and 
gas leases. Factors such as price fluctuation and generally lower 
prices for oil and gas have complicated the BLM's analysis. The 
analysis is ongoing and a deadline for its completion has not yet been 
established.
    The Minerals Management Service (MMS) has contracted for a 2-year, 
independent, extramural study entitled, ``Policies to Affect the Pace 
of Leasing and Revenues in the Gulf of Mexico.'' That study is 
evaluating a variety of auction formats and fiscal term conditions as 
they relate to the objectives of the offshore oil and gas leasing 
program. The final draft of the extramural study is scheduled to be 
submitted this August. Subsequently, its findings will be reviewed by 
various MMS offices and recommendations will be transmitted to the MMS 
Director and further considered by my management team as we conduct our 
comprehensive review.
    Question 4. I am interested in your concept of renewable energy 
zones. Could you please elaborate on what criteria you would apply for 
these zones?
    Answer. I support the concept of renewable energy zones, and I am 
working to further their establishment. The Bureau of Land Management 
(BLM) and Fish and Wildlife Service (FWS) are currently providing input 
to the Western Governors' Association (WGA) Western Renewable Energy 
Zone (WREZ) electric transmission study. The WGA released a preliminary 
map of renewable energy Qualified Resource Areas in February 2009 for 
public review and comment. These preliminary maps have considered a 
variety of exclusion and avoidance areas based on statutory and 
administrative restrictions, including National Parks, Wildlife 
Refuges, Wilderness Areas and Wilderness Study Areas, and other special 
management areas and sensitive lands. The BLM, FWS, and other Federal 
and State agencies are also involved in a similar effort in California 
as part of the Renewable Energy Transmission Initiative (RETI) process 
to assist in electric transmission planning. Other western States are 
engaged in similar efforts as well.
    Question 5. The BLM permit coordination offices--so-called permit 
processing pilot offices--have been quite successful in facilitating 
the processing of permits. Do you think it would be helpful to extend 
this approach with dedicated funding for the permitting of renewable 
projects on Federal lands?
    What level of funding would be required?
    Answer. I strongly support committing the resources necessary to 
support the processing and permitting of environmentally sound 
renewable energy projects and electric transmission projects on Federal 
lands. That is why I recently announced that the Department is 
dedicating $41 million in BLM funds provided under the Recovery Act to 
support the environmental reviews and analyses necessary to support 
future decisions on renewable energy and transmission projects on 
Federal lands.
    The establishment of Renewable Energy Coordination Offices will 
provide an opportunity to focus resources in areas with the greatest 
workloads and to improve coordination with other Federal and State 
agencies involved in the permitting process. The President's Budget 
requests another $16 million for BLM's renewable energy program, 
including $11 million for staffing and operations of Renewable Energy 
Coordination Offices. As further evidence of the high priority we place 
on this work, we recently submitted a reprogramming request to get a 
jumpstart on the establishment of these offices in 2009.
    The oil and gas pilot offices currently receive mandatory funding 
under the provisions of Section 365 of the Energy Policy Act of 2005 
(EPAct). As you know, the President's Budget proposes to terminate 
(beginning in 2011) the mandatory funding set aside for these pilot 
offices in EPAct. So notwithstanding the laudable goals, we do not 
support the extension of this funding concept to renewable energy 
projects. The oil and gas mandatory funding is derived from onshore 
rental receipts that are normally deposited in the Treasury, and the 
year-to-year funding level provided from these receipts is not tied in 
any way to actual program needs. As explained in the response to 
question #1, we believe funding for regular operating programs such as 
this are best decided through the annual appropriations process. In 
addition, some program costs may be offset by user fees, which unlike 
rental receipts, are directly tied to the costs BLM incurs in 
processing permit applications.
    Question 6. I understand that some states have leasing programs for 
solar and wind energy production from state lands. Currently, the 
federal government authorizes this production through the use of 
rights-of-way as opposed to leases.
    Do you think we should consider a leasing system for wind and solar 
energy on federal lands?
    Answer. The BLM currently issues rights-of-way for the 
authorization of wind and solar energy projects on the public lands as 
required by the provisions of Section 501(a)(4) of the Federal Land 
Policy and Management Act (FLPMA) for electric generation facilities. 
Individual states use a variety of procedures to authorize wind and 
solar projects on state lands. Many states use a leasing process, but 
in many cases, the terms of those leases are negotiated between the 
State and the lease holder. I am willing to work with the Committee to 
explore different program options for solar and wind energy development 
on public lands. Creating a leasing program may be among several 
options that we could further evaluate in order to increase the revenue 
to the Federal government and stimulate production of these renewable 
energy sources. The establishment of a competitive program also may be 
achieved under the current rights-of-way framework.
    Question 7. What role to you think the Interior Department should 
play in the siting of transmission facilities across lands administered 
by the Department?
    Answer. The BLM should continue to site and authorize renewable 
energy and transmission projects on the public lands under our Right-
of-Way program, pursuant to the provisions of the Federal Land Policy 
and Management Act (FLPMA). The Department should also continue to play 
a leadership role in coordinating transmission facilities across 
Federal lands. I am currently working with the Secretaries of Energy 
and Agriculture, as well as the Chairman of the Federal Energy 
Regulatory Commission (FERC) to coordinate our respective efforts to 
identify renewable energy zones and to facilitate transmission access 
to them. Siting long-distance transmission lines is a complex exercise 
that requires coordination among numerous entities, including all 
levels of government, tribes, transmission planning entities, and the 
public. For example, FWS is providing information on wildlife and their 
habitats. In particular, FWS has included federal land management 
agencies in the review of the proposed recommendations and guidelines 
from the Federal Advisory Committee on Wind Siting and Development. I 
have directed my staff to work closely with regional transmission 
planning entities, such as the Western Energy Coordinating Council, and 
to continue our participation with state and regional transmission 
planning efforts such as the Western Governors' Association's Western 
Renewable Energy Zone project.
    Question 8. Please provide for the record the status of wind and 
solar production from BLM lands and National Forest System lands. With 
respect to each category of lands and energy type, please provide for 
the past 10 fiscal years (by state and total) the following:

   Number of projects approved.
   Total number of rights-of-way issued.
   Number of new rights-of-way issued during the year.
   Amount of production during the year.

    Answer. There are currently no approved solar projects on either 
BLM lands or National Forest System lands. There are no approved wind 
development projects on National Forest System lands. The BLM does not 
authorize the rights-of-way for National Forest System lands. The BLM 
has a total of 28 approved wind development projects on the public 
lands with a current installed capacity of 327 megawatts (MW) and an 
additional 249 MWs under construction. Annual rents collected for wind 
energy rights-of-way are based on installed capacity, so the BLM does 
not collect data on the amount of production during the year; 
consequently, the data I am providing identifies installed capacity 
instead of production. The attached table shows that wind development 
is occurring on BLM land in CA, WY, ID, UT, and AZ.
    Question 9. Please provide for the record the following information 
for the last 10 fiscal years (by state, total, and land category) 
regarding production of geothermal resources from BLM lands and 
National Forest System lands:

   Total number of geothermal leases in effect.
   Total number of acres under lease during the year.
   Number of new leases issued during the year.
   Number of new acres leased during the year.
   Number of producing leases.
   Number of producing acres.
   Number of APDs approved during the year.
   Number of lease sales conducted during the year.

    Answer. The attached tables include data regarding production of 
geothermal resources from BLM land and National Forest System land.
    Question 10. Please provide for the record the following 
information for fiscal years 1994 through 2009 (by state and total) 
regarding production of oil and gas from onshore Federal lands:

   Total number of oil and gas leases in effect.
   Total number of acres under lease during the year.
   Number of new leases issued during the year.
   Number of new acres leased during the year.
   Number of producing leases.
   Number of producing acres.
   Number of APDs approved during the year.
   Number of wells started during the year.

    Answer. The Bureau of Land Management does not have data for Fiscal 
Year 2009 as of yet but the data for FY 1994 through FY 2008 are 
included in the attached tables.
    Question 11. Please provide for the record the following 
information for fiscal years 1994 through 2009 (by OCS area and total) 
regarding production of oil and gas from the Outer Continental Shelf:

   Total number of oil and gas leases in effect.
   Total number of acres under lease by year.
   Number of new leases issued during the year.
   Number of new acres leased during the year.
   Number of producing leases.
   Number of producing acres.
   Number of exploration plans approved during the year.
   Number of plans of operation approved during the year.
   Number of wells started during the year.

    Answer: Please see the attached statistical information for FY 1994 
through March 26, 2009 for the Pacific, Alaska and Gulf of Mexico OCS 
Regions.
    Question 12. Please provide for the record the following 
information for fiscal years 1994 through 2009 (by state and total) 
regarding production of coal from Federal lands:

   Total number of Federal coal leases in effect.
   Total number of acres leased.
   Number of new leases issued during the year.
   Number of acres leased during the year.
   Number of producing leases.
   Number of producing acres.

    Answer. Please see the FY94-08 Federal Coal Leasing Statistics 
attachment for these data.
   Number of plans of operation approved during the year.
    Answer. A coal lease does not require a ``plan of operation'' but 
instead requires a mining plan approval document. A mining plan 
approval document includes two separate components: 1) a permit under 
the Surface Mining Control and Reclamation Act of 1977 (SMCRA), which 
is issued by whichever entity has SMCRA regulatory authority in the 
state where the mine operation is located; and 2) a Resource Recovery 
and Protection Plan, which is prepared by the BLM. In addition, permits 
may be required through the EPA and Army Corps of Engineers under the 
Clean Water Act. The table below represents the Office of Surface 
Mining's data on mining plan approval documents that were processed for 
signature by the Department of the Interior's Assistant Secretary, 
Lands and Minerals Management, for mining Federal coal within the 
Fiscal Year indicated. These actions may have included new permits or 
permit modifications that needed approval. The data are current as of 
March 31, 2009, but may contain inadvertent omissions, particularly for 
some of the earlier years.



    Question 13. Please provide for the record a listing and 
description of the applications submitted to MMS and the approvals 
granted by the agency to date relating to alternative energy 
development on the OCS.
    Answer. Following enactment of the Energy Policy Act of 2005, MMS 
assumed responsibility for processing two applications under the 
``savings provision'' of section 388. MMS has conducted a review of the 
Cape Wind project under the National Environmental Policy Act (NEPA) 
and other relevant laws, completing a final EIS in January 2009. 
Additional related reviews and the preparation of a Record of Decision 
are pending. MMS also began a similar review for the Long Island 
Offshore Wind Project, but the project developer suspended that project 
in late 2007.
    In November 2007, MMS instituted an interim policy to authorize 
resource assessment and technology testing activities related to 
renewable energy development on the OCS. To date we have received 44 
nominations for limited leases related to wind, wave, and current 
energy resources. Please see attached table entitled, ``List of 
Nominations Received by MMS Under the Interim Policy.'' In April 2008, 
MMS selected 16 nominations to move forward for the issuance of 
noncompetitive limited leases. As of now, after some nominators dropped 
out, MMS is considering for limited leasing the 13 projects listed in 
italics in the attached table. On June 23, 2009, the Department issued 
five exploratory leases for renewable wind energy production on the 
Outer Continental Shelf offshore New Jersey and Delaware.
    Question 14. For the last 10 fiscal years please provide (by state 
and total) the revenues provided to the states as a result of the 
production from federal lands of each of the following: federal onshore 
oil and gas; geothermal resources; coal; and oil and gas from the OCS 
(display separately the 8(g) revenues, Coastal Impact Assistance 
Program revenues, and revenue sharing pursuant to the Gulf of Mexico 
Energy Security Act).
    Answer. Please see attached spreadsheets presenting onshore and 
offshore oil, gas, coal, and geothermal revenues distributed to the 
states for FY 1999 through FY 2008. In addition to the revenues shown 
in these tables, certain coastal states will also receive additional 
payments under the Coastal Impact Assistance Program (CIAP) and from 
revenue sharing pursuant to the Gulf of Mexico Energy Security Act.
    Because CIAP is operated as a grant program and requires MMS 
approval of state spending plans, the CIAP payments shown below are not 
included in the attached revenue allocation tables. After a State's 
plan has been approved, grant funding applications are filed for each 
individual project and funds are approved and disbursed. There is also 
a lag between the year in which funds are authorized and when states 
receive this funding for specific projects, so the majority of the CIAP 
funds shown below have not yet been released to the states.



    Question 15. There are several circuit court decisions, which 
basically hold that the construction and operation of certain 
structures--such as oil platforms, drilling barges, and the like, that 
are permanently or temporarily fixed to the seabed of the OCS--do not 
require the use of U.S. workers in constructing, operating, or 
maintaining these facilities. What is the view of the Administration on 
this issue? Would the Administration support policy or statutory 
changes to require such foreign employees to obtain visas, which would 
require certification by the Secretary of Labor that American workers 
are not available to construct and operate these structures, before oil 
companies are allowed to hire foreign workers?
    Answer. The OCS Lands Act (1356(a)(3)) requires that rigs, 
platforms, and vessels be manned by U.S. citizens or aliens lawfully 
admitted to the U.S. for permanent residence. Section 1356(c) provides 
for limited exceptions to these provisions. We believe the U.S. Coast 
Guard has administered these provisions in a balanced manner that has 
protected the interest of U.S. workers without compromising OCS safety 
and pollution prevention objectives.

   Responses of Hon. Ken Salazar to Questions From Senator Murkowski

    Question 1. MMS and FERC have reached a resolution on the 
jurisdictional issue to develop ocean energy resources, rather than 
asking Congress to intervene legislatively. Please explain the 
``Agreement in Principle'' DOI has reached with FERC. When do you 
expect a Memorandum of Understanding to be signed by the two agencies?
    Answer. The agreement in principle between DOI and FERC is that MMS 
will issue leases for hydrokinetic activity on the OCS, and FERC will 
issue licenses regulating construction and operation of energy-
generating facilities on those leases. The two agencies also have 
agreed to coordinate the leasing and licensing processes to ensure 
efficiency.
    On April 9, 2009, Federal Energy Regulatory Commission Chairman Jon 
Wellinghoff and I signed an agreement which establishes a cohesive 
process through which Interior's Minerals Management Service (MMS) and 
the FERC will lease, license and regulate renewable energy development 
activities from hydrokinetic sources (wave, tidal and ocean current) on 
the OCS,
    Under the agreement, MMS has exclusive jurisdiction with regard to 
the production, transportation, or transmission of energy from non-
hydrokinetic renewable energy projects, including wind and solar. MMS 
also has exclusive jurisdiction to issue leases, easements, and rights-
of-way regarding OCS lands for hydrokinetic projects. MMS will conduct 
any necessary environmental reviews, including those under the National 
Environmental Policy Act, related to those actions.
    FERC has exclusive jurisdiction to issue licenses and exemptions 
from licensing for the construction and operation of hydrokinetic 
projects on the OCS and will conduct any necessary analyses, including 
those under the National Environmental Policy Act, related to those 
actions. FERC's licensing process will actively involve relevant 
federal land and resource agencies, including Interior.
    A copy of the Memorandum of Understanding is attached.
    Question 2a. Your announcement on prioritizing renewable energy 
from public lands includes a commitment to assign a high priority to 
identifying renewable energy zones and completing the permitting and 
appropriate environmental review of transmission rights-of-way 
applications. Please explain your Secretarial Order more fully.
    How will DOI identify and define these renewable energy zones?
    Answer. The Bureau of Land Management (BLM) and Fish and Wildlife 
Service (FWS) are currently providing input to the Western Governors' 
Association (WGA) Western Renewable Energy Zone (WREZ) electric 
transmission study. The WGA released a preliminary map of renewable 
energy Qualified Resource Areas in February 2009 for public review and 
comment. These preliminary maps have considered a variety of exclusion 
and avoidance areas based on statutory and administrative restrictions, 
including National Parks, Wildlife Refuges, Wilderness Areas and 
Wilderness Study Areas, and other special management areas and 
sensitive lands. The BLM and other Federal and State agencies are also 
involved in a similar effort in California as part of the Renewable 
Energy Transmission Initiative (RETI) process to assist in electric 
transmission planning. Other western States are engaged in similar 
efforts as well.
    Question 2b. Are you proposing that DOI handle the siting for 
renewable energy projects and needed transmission as well?
    Answer. The BLM will continue to site and authorize solar and wind 
projects and renewable energy transmission projects on the public lands 
under our Right-of-Way program, pursuant to the provisions of the 
Federal Land Policy and Management Act (FLPMA). As discussed above, we 
are coordinating transmission siting on Federal lands through a multi-
stage process involving all relevant Federal and State permitting 
agencies. For renewable energy project sites, we will identify 
locations as suitable for development as part of our land use planning 
process and in compliance with all relevant laws, including the 
National Environmental Policy Act, and we will review and authorize 
specific renewable energy and transmission projects in accordance with 
pertinent laws, regulations, and policies. The Department does not have 
authority to site renewable energy projects or transmission on non-
Departmental lands, but has coordinated closely with other entities 
through the Federal Advisory Committee on Wind Siting and Development, 
chaired by the FWS, to ensure that Departmental actions are consistent 
with regional planning and development objectives.
    As you know, Section 368 of the 2005 Energy Policy Act directed DOE 
and the land management agencies to designate Rights-of-Way Corridors 
on Federal western lands for oil, gas, and hydrogen pipelines, as well 
as for electricity transmission lines.
    Question 2c. How does your announcement comport with the Rights-of-
Way work DOI just completed?
    Answer. My Secretarial Order comports well with the work just 
completed to designate energy transport corridors on Federal land 
pursuant to Section 368 of the Energy Policy Act of 2005. We engaged in 
an intensive interagency process to site and designate over 5,000 miles 
of energy corridors on BLM lands, out of a total of over 6,000 miles on 
Federal lands in the eleven contiguous Western states. These corridors 
form the backbone for future transmission planning in the region but 
were completed prior to the definition of renewable energy zones as 
specific areas for future renewable energy development. Therefore, the 
Department will continue to work with our interagency colleagues to 
review and, where appropriate, amend the Section 368 corridors as 
necessary to ensure they provide access to renewable energy. In 
addition, the Department is currently participating in the second phase 
of the Section 368 process, to designate energy corridors on Federal 
lands in the rest of the United States, including Alaska. The goals 
expressed in my Secretarial Order also apply to this phase of the 
Section 368 process.
    Question 2d. How would this work with Majority Leader Reid's 
transmission proposal that calls for the development of renewable 
energy zones with 1 gigawatt of energy potential?
    Answer. Section 3 of the Clean Renewable Energy and Economic 
Development Act (S. 539) would amend provisions of the Federal Power 
Act, specifically Section 402, to provide for the designation of 
national renewable energy zones by the President. Section 402 (e) of S. 
539 allows for the use of ``existing processes'' for the designation of 
these renewable energy zones. The WGA Western Renewable Energy Zone 
study, the California RETI process and other similar western State 
planning efforts, and the land use planning efforts of federal land 
management agencies (as described above) are examples of those 
``existing processes'' that could be considered in the designation of 
renewable energy zones. Section 402 (a) (3) of S. 539 also identifies 
the types of land with special resource values that would be excluded 
from potential designations as renewable energy zones. These types of 
land are very similar to the types of land that are being identified as 
exclusion or avoidance areas in the WGA study, the RETI process and 
other State planning efforts, and in federal land use planning efforts.
    Question 3. Your announcement cites the need to ``steer the nation 
in a new energy direction'' in order to preserve jobs. At the same time 
I am worried that oil and natural gas jobs are in jeopardy when they 
are faced with a one-two punch of low prices and restricted access. 
Conoco Phillips just had a major layoff in my state. Will the 
Department of the Interior commit to preserving all energy jobs--
meaning that we aren't trying to switch out oil and natural gas 
development for the potential jobs in renewable projects?
    Answer. Developing domestic oil and gas resources remains critical 
to strengthening our economic and national security. Traditional fossil 
fuels will continue to be used for the foreseeable future as the United 
States expands its renewable energy capacity. Renewable and non-
renewable energy resources are essential components of a comprehensive 
and effective national energy strategy, and both provide important jobs 
that are vital to our economy.
    Question 4. The Department of Energy's loan guarantee program 
provides an important source of government support to a wide range of 
clean energy technologies including wind, solar, and nuclear energy. 
The loan guarantee program allows these clean energy projects to obtain 
advantageous financing at very low risk to the taxpayer. You may be 
aware that the Congressional Budget Office recommended language be 
added to the 2009 Omnibus Appropriations bill that would have 
restricted loan guarantees for projects that used Federal Government 
property. This would be a significant restriction for many renewable 
energy projects as well as some nuclear energy projects. While the 
appropriators attempted to solve the problem created by CBO, they 
recognize that it is only a partial solution. What impact do you 
believe the current language will have on the loan guarantee program 
and its ability to support clean energy projects in the future?
    Answer. The financing available under the loan guarantee program is 
a tool that can facilitate development of important alternative energy 
projects. The program is administered by the Department of Energy, and 
is not a program with which I am intimately familiar as the Secretary 
of the Interior. However, my understanding is that projects to be 
located on Federal land pursuant to a lease or a right-of-way agreement 
are eligible for the program under the Omnibus Appropriations Act of 
2009 so long as the fair market value (as determined by the head of the 
relevant Federal agency) of the lease or right-of-way is paid to the 
Treasury.
    Question 5. Your announcement correctly points out that we have to 
connect the sun of the deserts and the wind of the plains with the 
places where people live. The shipping lanes, roads, and pipelines we 
use to transport oil, gas, and coal are not going to transport 
renewable electricity, so we are entering into a new generation of 
environmental consultations, siting concerns, and probably litigation 
from people who do not want these projects in their backyards. Should 
renewable projects receive the same level of scrutiny as conventional 
energy development?
    Answer. Yes. Renewable energy projects and electric transmission 
proposals will be reviewed to ensure consistency with Federal land use 
planning efforts and will require compliance with all laws and 
regulations. The review of these projects will include compliance with 
the requirements of the National Environmental Policy Act and other 
laws and provide for opportunities for public review and comment as 
part of the decision-making process. These review procedures will 
ensure that we are permitting environmentally sound renewable energy 
projects and electric transmission projects on the federal lands.
    Question 6. You were recently quoted as saying that directional 
drilling, from what you've seen, would not work well enough as a way to 
access ANWR's oil reserves from outside the restricted area. My 
question is what have you seen as far as directional drilling, and if 
it won't work well enough, what would work well enough to produce this 
huge energy resource?
    Answer. While advancements in directional drilling show promise for 
reducing the impacts of oil and gas production, I am not convinced that 
directional drilling in the Arctic National Wildlife Refuge can be done 
in a way that eliminates the possibility of impairing its ecological 
values. I share President Obama's position that the Arctic Refuge is a 
very special, treasured place, and that some special places we will not 
disturb.

     Responses of Hon. Ken Salazar to Questions From Senator Wyden

    Question 1. On March 11, 2009, you issued Order No. 3285, 
``Renewable Energy Development by the Department of Interior.'' 
Although the Order repeatedly references specific renewable energy 
technologies in its individual instructions, at no point are ocean 
energy technologies included in such references. As a result, ocean 
energy is not included in the charge to quantify potential 
contributions (Sec. 5(a)(1), identify and prioritize specific locations 
(Sec. (5(a)(2), or reassess existing policies (Sec.(5(a)(7). In light 
of the announcement this morning that Interior and the Federal Energy 
Regulatory Commission reached an agreement in principle for offshore 
energy development that included wave and tidal energy, this omission 
appears to have been an oversight. Nonetheless, ocean energy 
technologies remain excluded from the scope of the order. What steps 
will you take to ensure that ocean energy technologies are included in 
your directives and policies governing renewable energy development?
    Answer. I fully intend to ensure that ocean energy technologies are 
covered in the Department's implementation of Secretarial Order No. 
3285. Section 5 states that the Task Force on Energy and Climate Change 
will develop strategies applying to renewable energy development on the 
OCS.
    Question 2. Order No. 3285 calls for the Department to develop 
specific policies for the development of solar energy on public lands. 
I agree that the Department should develop such policies. Currently the 
Department is developing a programmatic environmental impact statement 
that addresses solar energy development in six Southwestern states and 
excludes other states with solar potential such as Oregon. What steps 
will you take to ensure that Departmental policies assist in the 
development of solar energy in all states with solar energy potential, 
not just the six Southwestern states currently under consideration?
    Answer. The Programmatic EIS focuses on those areas that have 
utility-scale solar energy applications and the highest potential for 
solar energy development. However, we recognize that there are 
opportunities for distributed solar energy development and other solar 
energy uses on public lands outside of the six southwestern states. 
Opportunities for potential development in these other areas will not 
be precluded by the current scope of the Programmatic EIS. The 
Programmatic EIS will also assist in the identification of best 
management practices to mitigate potential environmental impacts and 
resource conflicts from solar energy development on the public lands. 
Those best management practices would be applicable to distributed 
(decentralized) solar energy projects in other areas as well.
    Question 3. As discussed in the hearing this morning, biomass 
development needs to be part of a much larger effort of sustainable use 
of forest resources, forest management and hazardous fuels reduction. 
It also needs to be coordinated across Federal agencies because of the 
role the U.S. Forest Service in managing adjacent forest lands. As 
such, biomass energy development presents a challenge at least as great 
as other technologies for which you have called for the development of 
specific policies, such as solar. Would you agree to develop a more 
directed and comprehensive Federal biomass energy policy than we have 
right now and than appears to have been proposed in your renewable 
energy order?
    Answer. The Department of the Interior (DOI) recognizes the 
importance of a coordinated biomass policy, and we are working to 
expand biomass utilization on public lands. An MOU signed in 2003 
between the DOI and the Departments of Agriculture and Energy, 
established eight policy principles for the increased utilization of 
woody biomass. The BLM developed a biomass utilization strategy in 2004 
and is currently updating the strategy to increase its focus on 
renewable energy, and to concentrate biomass use in areas that have a 
long term supply and the potential for utilization. Additionally, DOI, 
DOE, the U.S. Forest Service, and other departments and agencies have 
chartered a Woody Biomass Utilization Group under the Biomass Research 
and Development Board, which is working to coordinate and increase the 
utilization of woody biomass from restoration treatments across 
forested landscapes. The group has developed desk guides and common 
websites and is coordinating strategies for biomass utilization. 
Biomass is an abundant resource that is an important part of a 
comprehensive renewable energy strategy, and I would be interested in 
discussing your ideas for improving the DOI's biomass energy program.

     Responses of Hon. Ken Salazar to Questions From Senator McCain

    Question 1. Please provide a complete and precise map of the areas 
within the Outer Continental Shelf that the Department of Interior is 
currently leasing or ready to open for lease sales.
    Answer. Attached is a page size map showing OCS planning areas that 
have been available for leasing and the areas open for leasing, but not 
offered in the current 5-Year Leasing Program. The following is a link 
to this same map: http://www.mms.gov/ld/assets/JPG/ocs--status--map--
8f.JPG
    The D.C. Circuit Court of Appeals has recently issued a decision in 
litigation over the 2007-2012 5-Year Plan requiring reconsideration of 
that leasing schedule.
    Question 2. Is the technology available and viable for horizontal 
drilling in the areas inside and surrounding the Arctic National 
Wildlife Refuge?
    Answer. Currently available drilling and infrastructure technology 
do not appear advanced enough to eliminate the possibility of impacts 
to the Arctic National Wildlife Refuge from the production of oil and 
gas using directional drilling.

       Response of Hon. Ken Salazar to Question From Senator Burr

    Question 1. Secretary Salazar, during the hearing you indicated 
several times that we do not have current or complete data on offshore 
resources off the Atlantic coast. What steps is the Department of the 
Interior taking to ascertain the oil, gas, wind and tidal resources off 
the Atlantic coast so that we can make more educated decisions about 
exploration?
    Answer. With respect to oil and gas resources, the MMS has acquired 
virtually all of the existing exploration seismic data in frontier OCS 
areas from prelease exploration permits as well as selected datasets 
from neighboring areas (such as, Canada (Scotian Shelf), Bahamas, Cuba 
and various adjacent coastal State waters). Most of the seismic data 
acquired in the Atlantic OCS are more than 25 years old. While these 
data provide for a reasonable resource assessment, newer, more 
sophisticated data would improve our assessment and provide a better 
idea of the oil and gas resources that we could expect to be found in 
specific areas of the Atlantic OCS, especially in the deeper water 
areas of the easternmost Atlantic OCS where data coverage is 
exceptionally sparse to non-existent. Currently, the MMS is reassessing 
some of the Atlantic oil and gas information as well as moving forward 
to find a way to prepare the environmental analysis needed prior to 
issuing any permits for new seismic data to be acquired. MMS has 
received ten permit applications from six geophysical companies to 
acquire seismic data on the Atlantic OCS. Thee applications total 
270,000 line miles of 2-D data, covering all or part of the three 
Atlantic Planning Areas from Maine to Florida.
    With respect to renewable energy, MMS has been consulting with the 
Department of Energy's National Renewable Energy Laboratory to obtain 
their most up-to-date resource estimates. In addition, as we authorize 
resource assessment activities by developers under our interim policy, 
we will have access to the data they collect, which could contribute 
significantly to our knowledge about OCS wind, wave, and current 
resources.
    In response to President Obama's vision for energy independence for 
our Nation, I have outlined a four-part strategy for developing a new, 
comprehensive approach to energy resources of the OCS. This approach 
includes development of a report by the MMS and United States 
Geological Survey (USGS) on conventional and renewable offshore energy 
resources. The report assembles the information that is currently 
available regarding the nature and scope of offshore oil and gas and 
renewable energy resources on the OCS and identifies information 
regarding sensitive environmental areas and resources in the OCS. The 
report also identifies information gaps regarding available data on 
conventional and renewable resources on the OCS and environmental 
issues connected with OCS development. A copy of the report can be 
found at: http://www.doi.gov/ocs/report.pdf.

    Responses of Hon. Ken Salazar to Questions From Senator Barrasso

    Question 1a. I believe that a energy task force that does not 
incorporate all of our energy resources--including nuclear, clean coal, 
oil and natural gas--into its strategy is doing a disservice to 
American families and American small businesses, whose budgets are 
dramatically impacted by high energy costs.
    Your Energy and Climate Change Task Force focuses only on renewable 
energy. Given the vast amount of fossil energy available in America, 
what is the logic behind ignoring these vital resources as part of your 
Energy task force?
    Answer. Under my leadership, the Department of the Interior will 
continue to responsibly develop fossil energy resources on public 
lands. An important goal I had in mind when I established the Energy 
and Climate Change Task Force is developing our Nation's non-carbon 
emitting sources of energy. With this focus, the Energy and Climate 
Change Task Force can facilitate a rapid and responsible move to large-
scale production of solar, wind, geothermal, and biomass energy. These 
new clean energy projects will help to create new jobs and put America 
out in front of new, growing industries, promoting investment and 
innovation here at home.
    Question 1b. The Task Force is assigned a high priority for 
identifying renewable energy zones. How do plan to identify and define 
a renewable energy zone?
    Answer. We have to connect the sun of the deserts and the wind of 
the plains with the places where people live. I have directed the 
Energy and Climate Change Task Force to identify and prioritize the 
specific locations in the United States best suited for large-scale 
production of solar, wind, geothermal, incremental or small 
hydroelectric power on existing structures, and biomass energy avoiding 
environmentally-sensitive areas, such as wildlife refuges or National 
Parks.
    Question 2a. I think it is preferable to utilize public land over 
private land, where possible, for the siting of transmission lines. We 
need to expedite the permitting and environmental review process for 
permitting all transmission lines on public lands, not just renewable 
energy.
    Answer. Do you agree that using public land in lieu of taking land 
from private owners should always be the top priority?
    Answer. I support the siting and development of transmission 
facilities on Federal land where such uses of the land do not conflict 
with sensitive resource values or other constraints. However, I cannot 
guarantee that siting transmission facilities across Federal lands is 
the best possible option in every instance. There are circumstances 
that preclude development on Federal land. For example, in many places, 
there are landscape constraints such as dangerous or difficult 
topography, where lands are withdrawn for military operations or 
national security, or where environmental considerations predominate 
such as designated wilderness areas or National Parks. In such 
instances, the Department can and will work with all concerned parties 
to strive for the best locations for transmission, and to fully examine 
options and alternatives on the public lands. Takings can often be 
avoided when private landowners agree to the use of their land, with 
payment, for transmission facilities.
    Question 2b. What ways will the review process for putting 
transmission on public land be improved?
    Answer. The BLM currently has in place a Right-of-Way (ROW) program 
to process applications for transmission projects across the public 
lands. The Department has also recently completed an intensive 
interagency effort to designate over 5,000 miles of energy corridors on 
BLM-managed lands out of a total of 6,000 corridors in eleven Western 
states. These corridors were sited to avoid land use and environmental 
conflicts to the maximum extent possible, to connect across agency 
boundaries, and to provide coordinated, consistent management practices 
across jurisdictions for those companies that use them.
    We have good practices in place but more can be done to improve the 
review process for transmission projects on public lands. My recent 
Secretarial Order establishes a Departmental Task Force on Energy and 
Climate Change that is charged, among other things, to develop a 
strategy to increase development of renewable energy transmission on 
public lands and to review and, if necessary, revise the West-Wide 
Corridors. We plan to establish Renewable Energy Coordination Offices, 
modeled after the pilot offices established for oil and gas permit 
processing under Section 365 of the Energy Policy Act of 2005, to 
process renewable energy and transmission applications. The 
Departmental bureaus are working to facilitate and coordinate their 
expertise to support transmission planning, siting, and development 
while protecting significant environmental values. We are also engaging 
with multiple entities on regional transmission planning to identify 
and facilitate essential transmission development. Improving the 
process for authorizing transmission on the public lands is a top 
priority, and I will continue to explore appropriate ways to accomplish 
it.
    Question 2c. How much more State, local, and landowner 
participation do you plan to provide?
    Answer. I plan to provide maximum opportunities to states, local 
entities, and landowners to participate in a transparent and open 
process to plan, site, and authorize transmission projects across 
public lands. Any additional planning to identify or revise 
transmission corridors on public lands will be accompanied by 
consultation with affected stakeholders, consistent with land use 
planning and National Environmental Policy Act (NEPA) policies and 
regulations. Actual project development must also undergo NEPA review, 
and is subject to an open process for public review, consultation, and 
comment.
    Question 3a. More than 50 percent of Wyoming is public land. There 
is great potential for wind energy development in Wyoming. As we 
explore ways to utilize this land for energy production, we must give 
careful consideration to the impact on the landscape.
    Do you know how many windmills will be needed to offset the annual 
production of a major coal power plant, which can generate 7,000 
gigawatt-hours of electricity over the course of a year?
    Answer. An average 1000 MW coal plant operates at 80% capacity, 
producing approximately 7,000 gigawatt-hours of electricity annually. 
This would be approximately equivalent to a 2,300 MW-sized wind energy 
facility that operates at 35% capacity. The number of wind turbines 
required depends on the turbine size, but if each turbine were capable 
of producing 2 MW, it would require the construction of 1,150 large 
capacity wind turbines to replace the coal generating facility.
    Question 3b. According to the American Wind Energy Association, a 
utility-scale wind plant will require about 60 acres per megawatt of 
installed capacity. How many acres will be needed to generate 7,000 
gigawatts of wind electricity per year?
    Answer. The land requirements for a wind energy facility vary 
significantly depending on the topography of a site, the wind energy 
resource, the layout or spacing of the wind turbines, the size of the 
turbines, and other factors. Using the American Wind Energy Association 
average of 60 acres per MW of installed capacity would result in a 
total land requirement of approximately 138,000 acres for a 2,300 MW-
sized wind energy facility. It should be noted, however, that the 
actual footprint or land disturbance required for a wind energy 
facility is much less than the total acreage of a wind farm area. The 
actual footprint or land disturbance is typically less than 10% of the 
wind farm area, and the land not covered by actual development can 
often continue to be used for other purposes (e.g., grazing).
    Question 3c. Do you believe there must be a balance between 
renewable energy sources and conventional resources like coal, given 
the cost and land required to develop renewable resources like wind and 
solar?
    Answer. It is important that we proceed ahead aggressively to 
develop a new energy strategy for our country and create a clean 
energy-based economy to ensure our future energy security. The 
development of our renewable energy resources will reduce our 
dependence on foreign oil, provide for the responsible use of our other 
domestic energy resources, and reduce greenhouse gas emissions. At the 
same time, I recognize that we will likely be dependent on conventional 
energy resources--oil, gas and coal--for a significant portion of our 
energy needs for many years to come. All energy development must be 
done in a thoughtful and balanced way, and in a way that allows us to 
protect the environment, signature landscapes, natural resources, 
wildlife and cultural resources.
    Question 4a. There are currently 2,675 applications for drilling 
permits in the Bureau of Land Management office in Buffalo, WY. Many of 
the small, independent producers in my state have waited longer than 
months, if not years, to receive a decision. What is the problem? How 
are you going to fix it?
    Answer. A variety of factors account for the number of pending 
Applications for Permits to Drill (APD) in the Buffalo Field Office. 
The APDs are located in areas with complex wildlife and Greater Sage-
Grouse issues. Accordingly, the Plan of Development (POD) processes and 
National Environmental Policy Act (NEPA) document preparation require 
more in-depth study, resulting in a longer processing time.
    In addition, there is an overall slowdown in development in the 
Powder River Basin. The Buffalo Field Office has an excellent working 
relationship with operators and has been coordinating with them to 
prioritize work on APDs and PODs based on operator priorities. The BLM 
has stopped work on other APDs and PODs at the operators' request when 
operators are unprepared to work on those PODs or APDs. As a result of 
this flexibility, BLM has allowed APDs and PODs to remain on the 
pending list versus returning them and clearing them off the list. The 
operators have appreciated this flexibility.
    Question 4b. Do you think this backlog takes BLM attention away 
from its other core responsibilities?
    Answer. The pending APDs are not diverting BLM's attention from its 
other core responsibilities. The pilot office staffing has allowed BLM 
to maintain an overall resource balance in this and other programs. It 
also allows us to put an emphasis on important environmental 
inspections.

    Responses of Hon. Ken Salazar to Questions From Senator Sessions

    Question 1. Can we access oil shale it in a way that makes 
environmental sense?
    Answer. We need to push forward aggressively with research, 
development and demonstration of oil shale technologies to see if we 
can find a safe and economically viable way to unlock these resources 
on a commercial scale. The research, development, and demonstration 
leases can help answer critical questions about oil shale, including 
the viability of emerging technologies on a commercial scale, how much 
water and power would be required, and what impact commercial 
development would have on land, water, wildlife, and communities.
    Question 2. Given that as a Senator, you voted against oil shale 
development 33 times, how confident should we be that the Department of 
Interior will move forward with oil shale development?
    Answer. As Secretary of the Interior, I want to see if we can find 
a safe and economically viable way to unlock these resources on a 
commercial scale. On February 27, 2009, the Department published a 
notice in the Federal Register seeking advice from industry, local 
communities, states and stakeholders, on what the terms and conditions 
of a second round of oil shale research, development and demonstration 
(RD&D) leases should be. That 90-day comment period remains open. Based 
on sound policy and public input, the Department will then move forward 
with a solicitation for RD&D leases.
    Question 3. If the oil shale regulations are reopened for any 
reason and the royalty rates in the oil shale regulations are 
increased, do you believe that developers will choose to continue to 
invest in research and development in the US? Will increasing the 
royalty rate improve or hurt American energy security.
    Answer. I believe that it remains to be determined, through the 
RD&D leases, whether there is an economically viable way to develop oil 
shale on a commercial scale. If oil shale technology proves to be 
viable on a commercial scale, taxpayers should get a fair rate of 
return from their resource.

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

            Statement of Forrest McCarthy, Outdoor Alliance

    Mr. Chairman and Members of the Subcommittee:
    I am Forrest McCarthy. I live in Jackson Hole, Wyoming and I am the 
Public Lands Director of Winter Wildlands Alliance. I also serve on the 
Teton County Planning Commission, and have been an alpine mountain and 
backcountry ski guide for almost twenty years. As a mountain guide, I 
have had the privilege to spend a great deal of time in places like 
Antarctica, South America, Alaska and my home state of Wyoming.
    Today, I submit this written testimony on behalf of the Outdoor 
Alliance, a coalition of six national, member-based organizations 
devoted to conservation and stewardship of our nation's public lands 
and waters through responsible human-powered outdoor recreation. 
Outdoor Alliance includes: Access Fund, American Canoe Association, 
American Hiking Society American Whitewater, International Mountain 
Bicycling Association, and Winter Wildlands Alliance and represents the 
interests of the millions Americans who hike, paddle, climb, backpack, 
mountain bike, backcountry ski and snowshoe on our nation's public 
lands, waters and snowscapes.
    Not unlike indicator species, human-powered outdoor pursuits can be 
seen as ``indicator activities'' with respect to climate change because 
we are some of the first people to experience the impacts of climate 
change on our public lands. Declining snowpack shortens ski and 
snowshoe seasons, makes alpine climbing more dangerous and can 
eliminate ice climbing altogether. Less snowpack also means less water 
in our creeks, rivers and lakes for paddling. Higher temperatures and 
prolonged droughts create severe imbalances in forest, alpine, desert, 
and river ecosystems that stress native species and degrade the quality 
of the outdoor recreation.
    The outdoor community's interest in climate protection is 
axiomatic--the places where we conduct our outdoor pursuits and that 
support the $730 billion annual outdoor recreation economy are 
imperiled by a warming climate. Our self interest in combating climate 
change, however, is coupled with some distinct insight as to how our 
federal lands can help us meet this challenge, particularly with 
respect to renewable energy development on federal land.

        THOUGHTFUL RENEWABLE ENERGY DEVELOPMENT ON FEDERAL LAND

    To adequately reduce carbon emissions, alternative energy sources 
and technologies must be developed and much of this development will 
take place on federal land. While the outdoor community heartily 
welcomes the chance to reduce the nation's reliance on energy sources 
and technologies that compromise our climate, we insist that this path 
is pursued in a manner that takes into account other aspects and values 
of federal land. Given the scale of renewable energy projects needed to 
adequately deal with climate protection, the landscape impact of 
renewable energy projects, including solar arrays, wind farms (and the 
necessary transmission lines) may very well dwarf the landscape impacts 
of traditional energy projects.
    As evidenced by our nation's current hardrock mining policy, when a 
single use of federal land is generally allowed to trump all other 
uses, the costs will eventually outweigh the benefits. Thankfully, 
there are other federal laws on the books that balance the multiple 
uses of federal land more evenly, such as the Federal Power Act, 16 
U.S.C. Sec.  791a, et. seq. In outlining the powers of the Federal 
Energy Regulatory Commission (FERC) to issue licenses for the 
construction of hydropower projects, the statute requires FERC to:

          [G]ive equal consideration to the purposes of energy 
        conservation, the protection, mitigation of damage to, and 
        enhancement of, fish and wildlife (including related spawning 
        grounds and habitat), the protection of recreational 
        opportunities, and the preservation of other aspects of 
        environmental quality.

    Federal Power Act Sec.  797(e), 16 U.S.C. Sec.  791a (2008). The 
practical effect of the equal consideration language, and the fact that 
hydropower projects are subject to a fixed term of 30 to 50 years, is 
that FERC must balance power and non-power values in their decision 
process. When rivers are developed for hydropower, mitigation measures 
ensure that the needs of fish and wildlife are addressed, recreational 
opportunities on the river are provided, and local communities' needs 
are considered. In other cases where ecosystem and recreation values 
outweigh the value of the river for hydropower development, projects 
are not constructed or in some cases removed at the end of their 
license term.
    The outdoor community believes that analogous language to the 
Federal Power Act's equal consideration clause should be used to guide 
the pending development of alternative and renewable energy projects on 
federal land, including transmission projects.

 REINVESTING SOME OF THE REVENUES GENERATED FROM ENERGY DEVELOPMENT ON 
             PUBLIC LAND BACK INTO PUBLIC LANDS AND WATERS

    More than forty years ago, Congress created the Land and Water 
Conservation Fund. The underlying concept is well known and straight 
forward--authorize some of the revenues generated in the process of 
recovering our nation's offshore energy wealth to be spent on 
preserving and protecting open space for habitat and recreation across 
the country on both federal and state lands. This core concept is even 
more relevant these days as the nation takes another long, hard look at 
our federal lands and the energy potential that they contain. We thus 
encourage Congress to explore not only new, renewable energy resources, 
but also the possibility that some material part of the potential 
royalties may be reinvested into our public lands and waters to 
preserve habitat and protect open space.
    Climate protection will be a decades-long process and create uneven 
costs and burdens across society. A number of recent legislative 
proposals seek to use the proceeds from a carbon trade or tax system to 
help address these costs, especially to regions and communities that 
need the most help. However, some of these legislative proposals also 
direct part of the trade or tax proceeds back towards public lands and 
waters, particularly to assist with flora and fauna adaptation.
    The Outdoor Alliance and our members feel that among the many 
prudent and appropriate uses of potential royalties associated with new 
energy development on public lands, funding for the protection of open 
space should be included especially considering the direct and indirect 
ways that open space can assist with climate protection efforts. 
Furthermore, because new energy development and transmission will 
plainly impact the landscape, a federal effort to mitigate against 
these impacts seems appropriate to consider.
    First, open space can facilitate ecosystem and wildlife adaptation. 
A warming climate will stress the nation's ecosystems and the flora and 
fauna residing therein. Migration corridors are one way to alleviate 
some of this stress, but require preserving long tracts of open space. 
Potential royalties from energy development on federal land and waters 
may be able to help secure the protection of contiguous public lands 
and conservation easements to private lands (from willing landowners) 
in an effort to further adaptation policy.
    Second, securing open space will enhance the ability of federal 
forests and grasslands serve as carbon sinks. Protecting and enhancing 
forest carbon sinks can be pursued in a number of ways, but primarily 
through land designations and strategic acquisitions that protect 
existing forests and reduce development sprawl. We support a portfolio 
approach to land designation that includes wilderness areas, national 
scenic areas, national recreational areas, and especially open space 
designations in close proximity to population centers.
    Third, open space on healthy public lands provides a tangible 
reward for our sacrifices and commitment to protecting our climate and 
the ecosystems that depend on it. Public lands provide citizens with 
the opportunity to view wildlife, play in the rivers and snow, test 
one's skills on a steep rock or a single track, and experience first-
hand the natural world. The importance of our public lands transcends 
the simple sum of energy production potential, refuge space for 
wildlife and carbon sinks--they enable Americans to stay connected to 
the natural world. Only through this connection will we have the 
commitment and collective endurance to achieve the goal of stabilizing 
our climate.

                               CONCLUSION

    Thank you for the opportunity to submit this written statement to 
the Committee.
                                 ______
                                 
           Statement of the American Wind Energy Association

    Federal agencies have a key role to play in enabling the rapid 
growth in renewable energy development. The Senate Energy and Natural 
Resources Committee is to be commended for holding this important 
hearing. The American Wind Energy Association would like to work with 
the Committee going forward to ensure federal agencies have the right 
policies in place to meet President Obama's near-term and long-term 
renewable energy goals.
    AWEA is the national trade association of America's wind industry, 
with more than 1,900 member companies, including project developers, 
manufacturers, and component and service suppliers.
    The wind energy industry is extremely grateful to President Obama, 
Secretary Salazar, and this Committee for the priority you have placed 
on the deployment of clean, renewable energy resources.

                               BACKGROUND

    The growth in the wind energy sector in the United States over the 
last several years has been incredible. Wind energy is no longer a 
boutique energy source. It is mainstream and deployable immediately on 
a wide scale. We do not need to wait for a new energy future. It is 
here.
    Last year was the 4th straight year of record growth in the wind 
industry. More than 8,300 megawatts of wind energy were installed, 
second only to natural gas for the fourth year running. Total wind 
energy capacity is now over 25,000 megawatts.
    Our industry employs at least 80,000 workers in good paying jobs. 
We are the backbone of the new energy economy. And, we're just getting 
started.
    In May 2008, the U.S. Department of Energy (DOE) released a report 
on the feasibility of achieving 20% of our nation's electricity from 
wind energy alone by 2030. The DOE concluded that it is doable with no 
technological breakthroughs and that achieving that level of deployment 
would have significant benefits for the environment and our economy, 
including employing 500,000 people.
    But, to achieve this potential, we need federal land management 
agencies to have policies that facilitate responsibly sited wind farms 
and associated transmission.
    The Department of Interior (DOI) and its agencies, the Bureau of 
Land Management (BLM), the Minerals and Management Service (MMS), and 
the Fish and Wildlife Service (FWS), are playing an increasingly 
important role in siting wind farms. The Department of Agriculture, 
through the U.S. Forest Service (USFS), is also actively considering 
proposed wind projects.
    This testimony summarizes AWEA's recommendations for policies 
related to federal land management agencies. We are pleased to say that 
one of the recommendations in AWEA's New Wind Agenda document has 
already been seized upon by Secretary Salazar: issuing an executive 
order prioritizing development of responsibly sited renewable energy 
projects on federal lands. A fuller explanation of this and other 
recommendations can be found at www.newwindagenda.org

                          KEY RECOMMENDATIONS

Government-wide
   Agencies should have a mandate to annually assess 
        requirements associated with accommodating the 20% wind vision.

    DOE's 20% report identifies delays and limits associated with 
        government review as a potential barrier to increased wind 
        energy development. Some agencies do not have sufficient 
        resources to handle expansion of wind development. Other 
        agencies are likely to be unaware of the impacts that an annual 
        wind power installation rate of 16 gigawatts will have on their 
        operations.

    A larger issue is the cumulative effect of overlapping land use 
        restrictions put in place by different agencies. For example, 
        if you overlay wildlife setback areas and military airspace 
        restrictions with macro wind resource data, you may end up with 
        very little land available for wind development. Agencies 
        should consider their collective actions within the context of 
        the overall national goal of expanded wind energy development 
        to achieve environmental, economic and energy security 
        objectives.

   Agencies should be directed to proactively engage with the 
        wind energy industry and the Department of Energy, consistent 
        with existing federal law, when drafting policies that impact 
        the siting, construction or operation of wind energy 
        facilities, to ensure that the resulting policies are workable 
        and will not unnecessarily limit wind energy deployment.
Bureau of Land Management (BLM)
   BLM leaders should offer clear directives to field offices 
        about the importance of accurate and consistent implementation 
        of the wind development policy, additional staff training for 
        field staff, and hiring of staff dedicated to processing wind 
        energy permits.

    In 2003, BLM initiated a Programmatic Environmental Impact 
        Statement (PEIS) to address and plan for the impacts of future 
        wind energy development on public lands. The wind industry 
        supports the BLM's Wind Energy Development Policy, but the 
        agency needs to more effectively and consistently administer 
        it.

   To help deal with staffing constraints at the BLM, Congress 
        should consider legislation to dedicate rental revenue from 
        wind and solar projects on BLM lands expressly for the purpose 
        of increasing staff to process additional wind and solar 
        applications.

    As of November 2008, there were more than 215 applications pending 
        with BLM for wind energy permits, including both applications 
        for site testing (to set up temporary poles to test wind speed) 
        and to construct actual wind farms. This is up from 150 pending 
        in January 2008. Due to limited staffing, site testing permits 
        for wind energy are taking 18 months or longer (by contrast, 
        application for development permits for oil and gas drilling 
        generally take 6-7 months). Given the time-limited incentives 
        for renewable energy included in the American Recovery and 
        Reinvestment Act (P.L. 111-5), delays of this magnitude can 
        make or break the economic viability of a project.

    Wind and solar energy development are the only major activities on 
        BLM lands for which there is neither revenue nor staff 
        dedicated solely to ensuring the timely processing of permit 
        applications. For other activities, including oil and gas, 
        geothermal, film production and communications towers, a 
        portion of rental and/or royalty payments is recycled back into 
        the BLM to fund staff specifically to process additional 
        applications for that activity. Legislation is needed to 
        dedicate rental revenue from wind and solar development on BLM 
        lands back to the agency for the purpose of processing 
        additional renewable energy applications.
U.S. Forest Service
   The USFS should release an ``interim final'' draft of siting 
        guidelines so the industry has an additional opportunity to 
        comment to help create a workable final document.

    In September 2007, the USFS released draft directives to guide wind 
        energy development on National Forest Service land. The draft 
        directives included a number of suggestions that are unworkable 
        for the industry. Given the significant flaws in the first 
        draft, the wind power industry has serious reservations as to 
        whether the necessary changes will be made in the next draft to 
        make it workable. In order to give the wind industry another 
        opportunity to comment on and improve the proposal before it 
        becomes final, the next draft should be an ``interim final'' 
        document.
Minerals and Management Service (MMS)
   MMS needs to complete offshore wind regulations in a timely 
        manner and to address any remaining concerns by amending the 
        regulations after adoption rather than delaying them further.

    In the Energy Policy Act of 2005, Congress directed MMS to complete 
        regulations for siting offshore renewable energy projects 
        within one year. Completing the necessary review process and 
        drafting the regulation has taken considerably longer--four 
        years and counting. It is our understanding that the issuance 
        of the final rule is held up due to a dispute with the Federal 
        Energy Regulatory Commission (FERC) over jurisdiction of siting 
        ocean energy projects. AWEA does not have a position on how 
        this dispute should be resolved, only that it needs to be 
        resolved immediately as the delay in issuing the final rule is 
        unnecessarily slowing the advancement of offshore wind energy 
        in the U.S.
Fish and Wildlife Service (FWS)
   Support the work of the Wind Turbine Guidelines Advisory 
        Committee

    The Department of the Interior established the Wind Turbine 
        Guidelines Advisory Committee in October 2007. The 22-person 
        federal advisory committee has been charged with making 
        recommendations to the Secretary of the Interior to minimize 
        impacts to wildlife from wind project development. The 
        Committee has a two-year charter through October 2009. The 
        membership is divided among the wind energy industry, federal 
        agencies, state agencies, and environmental organizations.

    The USFWS intends to use the Committee's recommendations to inform 
        a rewrite of the 2003 interim guidance document, criticized by 
        the wind industry and others as not including wind/wildlife 
        expertise. As it stands, the 2003 interim guidance is still the 
        official policy of the USFWS with regard to siting wind energy 
        projects in a manner which protects wildlife.

    In the context of achieving 20% wind energy in the U.S., wildlife 
        issues will continue to be a concern among permitting officials 
        and policymakers. The work of this Committee is necessary to 
        allow for industry expansion without overly restrictive 
        mandatory regulations. It will be critical for the final 
        recommendations to protect wildlife while not overly 
        constraining wind energy development. Committee deliberations 
        are progressing in a positive direction, and their work is now 
        reaching the question of how the voluntary guidelines will be 
        balanced with incentives for wind companies to follow them. The 
        new Administration should continue this work and incorporate 
        its final recommendations into a new voluntary federal guidance 
        document.
                                 ______
                                 
 Statement of Tom Fry, President, National Ocean Industries Association

    Mr. Chairman and members of the Committee, thank you for inviting 
me to speak before you today about leasing and development of oil and 
natural gas resources on the nation's Outer Continental Shelf (OCS). My 
name is Tom Fry, and I am the President of the National Ocean 
Industries Association, which represents nearly 300 companies working 
to explore for and produce energy resources from the OCS in an 
environmentally sensitive manner.
    I am here today also representing the Independent Petroleum 
Association of America, the US Oil & Gas Association, the American 
Exploration and Petroleum Council, the International Association of 
Drilling Contractors, the American Petroleum Institute, the Natural Gas 
Supply Association, and the Petroleum Equipment Suppliers Association. 
Together, we represent thousands of companies, both majors and 
independents, engaged in all sectors of the U.S. oil and natural gas 
industry, including exploration, production, refining, distribution, 
marketing, equipment manufacture and supply, and other diverse offshore 
support services.
    Through the development and application of technology, as well as 
adherence to a scientifically rigorous regulatory process, the 
companies of the offshore industry continue to improve their ability to 
bring new supplies of oil and natural gas online. For over fifty years, 
these companies have learned how to operate in deeper and deeper waters 
and locate resources that were once not accessible. At the same time, 
the technological advances pioneered by these companies have allowed 
for less impact on the environment and a wise stewardship of the 
resources beneath the ocean.
    The need to safely harness these domestic energy sources is 
amplified by recent trends which show still-increasing American 
dependence on foreign sources of oil amidst a global economic downturn 
which has stifled energy prices from their record highs of last year. 
But when global economic conditions improve in the future, demand for 
energy will increase and we must begin preparing for this reality 
today.
    Certainly, conservation and efficiency gains are the most immediate 
means to lowering energy use and helping to moderate prices in the 
short term. Simultaneously, renewable and alternative energy sources 
are growing every day and aggressive investment in these sectors must 
continue. As witnesses from the U.S. Energy Information Administration 
and the International Energy Agency recently testified before this 
committee, we must also face the fact that traditional fossil energy 
will continue to play the predominant role in meeting our energy needs 
for decades to come.
    This reality dictates that responsible domestic production of these 
resources be encouraged, not hindered; and that risk and innovation 
aimed at improving our understanding of how better to find and produce 
oil and natural gas be rewarded, not punished.
    Simply stated, given renewable energy sources' limited contribution 
to the current energy portfolio, and the massive investments and long 
time horizons needed to grow them to any meaningful level, the world 
will require more oil and natural gas to meet future energy demand. The 
oil and gas industry can increasingly produce these resources here in 
America safely and cleanly, including from the OCS.

                    NEW AREAS HOLD UNKNOWN POTENTIAL

    The United States' OCS is conservatively estimated by the Minerals 
Management Service (MMS) to hold undiscovered technically recoverable 
resources of over 419 trillion cubic feet of natural gas and 86 billion 
barrels of oil.
    That's estimated to be enough natural gas to heat 100 million homes 
for 60 years, and enough oil to drive 85 million cars for 35 years or 
to replace current Persian Gulf imports for almost 60 years.
    In fact, there may be even more than that. In the parts of the Gulf 
of Mexico (Gulf) where industry has been allowed to buy leases and 
explore, they have found about five times as much oil and three times 
as much natural gas as was once thought to be there. In 1987, MMS 
estimated that the Gulf of Mexico held about 10 billion barrels of oil 
and 100 trillion cubic feet of natural gas; yet, earlier this decade 
the Gulf was estimated to have 45 billion barrels of oil and 230 
trillion cubic feet of gas yet to be discovered, in addition to the 6 
billion barrels of oil and 75 trillion cubic feet of gas already 
produced since the 1987 estimates. The more industry explores, the more 
they find.
    I know the Chairman has personally seen OCS oil and gas facilities 
such as Independence Hub and Thunder Horse on a past offshore trip with 
MMS officials, and recommend that all committee Members see it for 
themselves. Twenty years ago, the part of the Gulf visited by the 
Chairman was not well understood and exploration had not started, thus 
explaining the significantly underestimated resources.
    Technology and the actual act of drilling led to some of the 
incredible finds of the OCS. Independence Hub has the capability of 
producing a billion cubic feet of gas per day. Thunder Horse has the 
capacity of producing 250,000 barrels of oil per day. The five fold 
estimate increase may not be the case in all places, but it does appear 
to be clear that the more industry looks, the more they find. Imagine 
the potential of those places where exploration has been off-limits for 
over 25 years. We need that information and we can have it with no cost 
to the taxpayer.
    Another way to quantify the energy potential held within new OCS 
areas is to examine the size of those offshore areas producing our 
energy now. The OCS currently is producing 27% of the entire U.S. oil 
production. However, that 27% of domestic oil production comes from 
only one half of one percent of the 1.7 billion acres of OCS lands.
    When you consider how much oil is coming from a comparatively small 
amount of land, it becomes increasingly clear just how much potential 
resource may exist in areas in which we haven't looked.
    As decision makers, Congress doesn't have all of this information. 
The information we do have is often over thirty years old and reliant 
on outdated technology. We know there are plenty of areas where oil and 
gas exploration may not be compatible with the landscape. We also know 
there will be parts of the ocean where resources will not be present or 
will not be economic. With talk of opening up areas or closing some 
down, shouldn't we increase our knowledge base so we can have an 
informed discussion about the consequences?

                    SAFELY PROVIDING ENERGY AND JOBS

    Producing energy from previous moratoria areas in the OCS also 
holds the potential for hundreds of thousands of jobs and hundreds of 
millions of dollars in revenue. According to a recent study, oil and 
natural gas resources in former or current OCS moratoria areas could 
generate $1.3 TRILLION in additional federal, state, and local 
government revenue, and over 76,000 jobs. Importantly, we already know 
that these will be family-supporting jobs, as oil and gas exploration 
and production wages averaged $93,575 per year, according to 2007 
Bureau of Labor Statistics data--over twice the average annual pay of 
$44,458 across all US industries.
    These are significant resources that can be developed safely and 
that we ignore to our consumers' disadvantage. Yet until last year, 
more than 85 percent of the nation's OCS around the lower 48 states was 
off limits to oil and gas exploration because of presidential 
withdrawals and congressional moratoria, even though 1.4 million 
barrels of oil is produced from the OCS every day with less than .001 
percent spilling into the ocean from drilling and extraction, according 
to MMS.
    Similarly, as Chairman Costa often notes, a 2002 National Academy 
of Sciences (NAS) report entitled ``Oil in the Seas III'' found that 
less than 1% of oil in North American waters is from drilling and 
extraction, while 63% comes from natural seepage and the remainder from 
non-point sources. Cleary, the offshore oil and gas industry enjoys an 
enviable environmental record, and we appreciate committee members and 
witnesses alike recognizing this fact in hearings earlier this year.

                         MOVING BEYOND SLOGANS

    Also mentioned in earlier hearings was the Chairman's desire to 
move beyond the ``Use It or Lose It'' and ``Drill, Baby, Drill'' 
slogans of last year. I agree it is important to have a serious 
discussion about the pace and development of offshore leases and 
appreciate these hearings presenting such a forum. Perhaps citing a 
real world example may help in this regard.
    In the mid 1990's deep water was considered anything over 1,000 
feet and not terribly far offshore, operating on what is known as ``the 
shelf''. But at that same time some companies bought leases in 
thousands of feet of water over a hundred miles from shore. They 
essentially placed a bet on themselves and advancing technology that 
might allow them to deal with water depths of almost two miles and 
drilling and producing depths of six miles or more. In addition, much 
of this area beneath the ocean floor is patterned with thick layers of 
salt, in some cases thousands of feet, that at the time prevented 
accurate seismic readings.
    While some of these leases ended up having producible resources, 
many did not. Even many of the leases that had economically recoverable 
quantities were too technically difficult to produce for many 
companies. This resulted in leases that were turned back into the 
government because either the lease term had run its course or the 
tract was not deemed prospective enough.
    Then in March of last year, the federal government conducted the 
largest lease sale in OCS history. Why? While not the only factor, a 
large part can be attributed to the availability of some of these same 
deep water tracts that had been turned back in. Seismic technology has 
greatly improved to get a better understanding of resources below the 
salt. Platforms and drill ships now can work and handle the water 
depths and pressures associated with 10,000 feet of water and total 
depths over 30,000 feet.
    That sale is the very essence of ``use it or lose it.'' The 
companies that made it work are producing. The ones that could not 
turned in their leases after having previously paid bonuses and 
rentals, while those same blocks were leased back out for a combined 
sale of over $3.6 billion dollars to the taxpayer.
    Looking at utilization rates of offshore drilling rigs can also 
help to illustrate the pace with which offshore leases are being 
developed. Toward the end of last year, nearly 90 percent of the 
roughly 700 offshore drilling rigs in the global fleet were being 
utilized. In the U.S. Gulf, about 90 rigs were working, including a 
record of close to 15 drillships in deep water and ultra-deep water. 
Daily rental rates for the newest generation of drillships reached as 
high as $650,000 a day.
    While the global economic downturn is expected to lead to some 
reductions in the exploration and production budgets of some companies, 
the drilling market in the deep Gulf should remain fairly positive, 
according to many drilling contractors. At the start of 2009, about 120 
rigs were on order in shipyards. Subsea equipment suppliers predict an 
active year for components such as subsea completions and shut off 
valves.

              A PROCESS SHAPED BY SCIENCE AND STAKEHOLDERS

    Another commonly discussed issue in previous committee hearings is 
the desire that science-based decision making guide our national energy 
and environmental policy. This standard certainly is worthy of 
following, and indeed the current process of allowing for offshore 
exploration and production of natural gas and oil is rich with public 
input, deliberate in its manner, and is certainly exposed to the utmost 
scientific scrutiny and examination.
    In order for oil and gas to ultimately be produced from the 
offshore, the process must essentially go through four separate phases: 
development of a Five Year OCS Leasing Program, planning for a specific 
lease sale within that Program, preparation of an Exploration Plan, and 
finally the preparation of a Production Plan. During the course of 
these various phases, no less than half a dozen separate environmental 
reviews are conducted.
    Additionally, under the Coastal Zone Management Act (CZMA), all 
these activities must be consistent with a given coastal state's 
science-based Coastal Zone Management Plan. Enacted in 1972, the CZMA 
created a national, science-driven program intended to comprehensively 
manage and balance competing uses of, and impacts to, coastal 
resources. The CZMA's consistency provisions require the federal 
government to certify that its activities are consistent with the 
scientific policies of a state's federally approved coastal management 
plan.
    In fact, when working their way through the regulatory processes 
inherent with offshore production, oil and gas companies must abide by 
a long series of statutes which ensure science-based decision making, 
including: CZMA, the National Environmental Policy Act, the Endangered 
Species Act, the Marine Mammal Protection Act, the National Marine 
Sanctuaries Act, the Outer Continental Shelf Lands Act, the Clean Air 
Act, the Clean Water Act, and many others.
    Stringent regulatory oversight helps maintain environmental 
performance, as offshore operators work under at least 17 major permits 
and must follow numerous sets of federal regulations from across 
several different federal agencies--including MMS, the Environmental 
Protection Agency, the U.S. Coast Guard, the National Oceanic and 
Atmospheric Administration, the National Marine Fisheries Service, and 
the U.S. Fish and Wildlife Service--each of which impart their own 
scientific rigor into their various rulemaking and permit granting 
processes.
    For decades, the offshore oil and gas industry has relied upon 
science-based decisions to guide their operations; and will continue to 
do so as new innovations allow them to explore more areas.

             A SOURCE OF CONSTANT TECHNOLOGICAL INNOVATION

    Today's offshore technology allows us to produce more energy by 
reaching places that would never before have been possible. New world 
records are always being set.
    Industry recently set one of these records by drilling a well in 
water depths exceeding 10,000 feet. That's the equivalent of 
successfully navigating nearly two miles down from the surface of the 
ocean before even beginning to drill, sometimes another 30,000 feet 
into the earth below the sea floor. The technology required to drill, 
complete and produce this type of well must overcome an environment of 
high pressure (in excess of 20,000 pounds per square inch) and high 
temperature (exceeding 350F). Deep wells such as this are expensive, 
costing as much as $100 million apiece.
    After coming from the ground, the oil or natural gas then travels 
through a pipeline where the temperature is just above freezing and the 
formation of ice crystals threatens to block the flow unless constantly 
supervised and adjusted. At depths far beyond where humans can travel, 
sometimes as much as 5,000 feet or more below the ocean surface, 
Remotely-Operated Vehicles (ROVs) are used to perform maintenance and 
repairs.
    All this is possible with fewer facilities and less impact--even 
visual--than ever before. For example, multiple subsea wells can be 
connected by tiebacks to a single platform over great distances. Such 
an installation is capable of reaching wells on the ocean floor dozens 
of miles away in all directions while connecting to an ocean surface 
platform one mile above.
    Directional drilling also allows for extraction of resources which 
are miles away from the point where the actual well is drilled.
    This cutting edge technology doesn't come cheap, however. The total 
cost of this type of project, including wells drilled and the subsea 
connection system, can exceed $5 billion.

    AN EXEMPLARY RECORD OF ENVIRONMENTAL PROTECTION AND STEWARDSHIP

    The outstanding environmental record of U.S. companies operating 
offshore around the world is well recognized as . . . technologies are 
allowing the offshore industry to venture into deeper waters than ever 
before, while protecting marine life and subsea habitats. . . \1\--even 
in the most challenging areas such as the Arctic and North Sea and in 
otherwise catastrophic weather.
---------------------------------------------------------------------------
    \1\ Clinton Administration DOE report: Environmental Benefits of 
Advanced oil and Gas Exploration and Production Technology, 1999.
---------------------------------------------------------------------------
    Off the part of our coast in which exploration and production has 
historically been allowed, the safety of our operations was recently 
demonstrated in the most severe hurricane situations. Though many of 
the exploration and production facilities in the Gulf of Mexico were 
severely damaged or destroyed, the high-tech safety and environmental 
protection equipment and processes worked.
    Careful scientific environmental study and operational planning 
always precede OCS activity. For example, our offshore geophysical 
companies, which conduct seismic work that allows us to ``see'' 
geologic structures beneath the seabed, have worked with the National 
Marine Fisheries Service and MMS to implement many procedures and 
practices designed to avoid harm to marine mammals, including:

   Monitoring for the presence of animals of concern
   Shutdown or no start-up when they are too close
   Slow, gradual ramp-up of operations just in case

    During exploration, jack-up or semi-submersible rigs and drill 
ships have multiple systems and physical barriers to ensure that no 
spill occurs. Most important, along with multiple, redundant remote 
control systems, are ``blowout preventers'' which in deepwater are 
installed on the well at the seabed and are capable of immediate 
closure in event of any emergency.
    Also, a ``downhole safety valve'' in the well itself below the 
seabed provides an added protection barrier in the event of some 
catastrophic event.
    As a result of these safeguards, the offshore oil and gas industry 
has a laudable environmental record, as noted in the previously 
mentioned ``Oil in the Seas III'' NAS study, which finds that although 
the amount of oil produced and transported on the sea continues to 
rise, improved production technology and safety training of personnel 
have significantly reduced both blowouts and daily operational spills.
    The industry remains under intense scrutiny by its two primary 
regulators--the MMS and the U.S. Coast Guard--as well as a host of 
other governmental agencies with oversight responsibilities such as the 
Environmental Protection Agency and the National Oceanic and 
Atmospheric Administration. However, it is the MMS that regulates all 
exploration, development, and production activities on about 8,000 
active leases to ensure that these activities are conducted safely and 
in an environmentally sound manner. The MMS reviews and approves 
industry exploration and development plans before allowing any 
operations to commence, monitors all lease operations to ensure that 
industry is in compliance with relevant requirements, and conducts 
scheduled and unscheduled inspections. In 2008, MMS conducted over 
25,000 inspections of OCS facilities.
    To summarize, the latest technology and sound management practices 
not only allow for the continued production of domestic energy 
resources, but they have also made the U.S. offshore industry the envy 
of the world. Its environmental record is superb:

   Since 1985, more than 8 billion barrels of oil were produced 
        in federal offshore waters with less than 0.001 percent 
        spilled--a 99.999 percent record for clean operations.
   There has not been an incident involving a significant oil 
        spill from a U.S. exploration and production platform in nearly 
        30 years (since 1980).
   Government statistics show that the injury and illness rate 
        for offshore workers is about 70 percent lower than for all of 
        private industry.
   Today's modern technology includes such environmental 
        protections as automatic subsea well shut-in devices, including 
        sub-seabed safety valves.

    As mentioned earlier, the industry's performance during the 2005 
hurricanes, which moved through a core area of offshore operations, is 
instructive. While it is true that 115 platforms were destroyed, the 
storm threatened over 3,000 facilities, the vast majority of which 
survived. Despite sustained winds reaching 170 miles per hour and 
towering waves and the resulting destruction of numerous platforms and 
rigs, there was no significant spill from production wells and no 
injury or loss of life among the 25,000--30,000 workers who are 
offshore at any given time.
    Because today's weather forecasting capabilities provide ample 
lead-time as storms approach, operators are able to follow routine 
shutdown and evacuation procedures. In the case of the Katrina, Rita, 
Gustav, and Ike hurricanes, 100% of oil production was shut-in ahead of 
the storms.

                               CONCLUSION

    The offshore oil and natural gas industry will continue to make 
advances in the development of new technologies, and to abide by the 
science-based regulatory processes which guide their operations. This 
innovation and adherence to scientific rigor will allow the industry to 
keep bringing reliable supplies of energy to market while also ensuring 
the safe and efficient management of the nation's energy resources.
    Thank you for allowing me to be here with you today.

    [Supplemental materials have been retained in committee files.]
                                 ______
                                 
     Statement of the Independent Petroleum Association of America

    This testimony is submitted on behalf of the Independent Petroleum 
Association of America (IPAA). The IPAA represents independent oil and 
natural gas explorers and producers, most of which are small business 
entrepreneurs with fewer than 20 employees and operate in more than 30 
states and offshore. Our members develop 90 percent of America's 
natural gas and oil wells; produce 82 percent of U.S. natural gas and 
68 percent of our nation's petroleum and hold 90 percent of the leases 
in the Gulf of Mexico.
    It is essential to understand the role of oil and natural gas in 
America's energy supply, now and in the future. They are critical. 
Currently, natural gas and oil account for about 65 percent of 
America's energy supply. Clearly, people recognize the role that oil 
plays in fueling most of the nation's transportation. Similarly, the 
role of natural gas for heating is widely understood. But, it is 
equally important to understand that natural gas is an essential 
feedstock for many chemical processes and for fertilizer manufacturing. 
It is a key source for process heating in both the chemical and 
manufacturing segments of American industry. Consequently, in addition 
to their direct role in energy supply, natural gas and oil are linked 
to the success of other energy supply options. Ethanol requires 
fertilizer for the crops and natural gas for processing. Windmills and 
solar cells must be manufactured and transported. Moreover, these are 
technologies that are intermittently available and when they are not 
providing power, it is most likely that natural gas will be the fuel 
used to meet that power need.
    Through aggressive development efforts, IPAA members helped to 
increase American natural gas production by nine percent in 2007. The 
Energy Information Administration (EIA) forecasts that U.S. energy 
consumption will grow by 30 percent over the next 25 years. Even with 
major increases in renewables like wind and solar, the nation's energy 
mix stays roughly the same because of the overall growth in demand. 
Natural gas and oil will be an integral part of the solution to develop 
cleaner energy, improve national energy security and restore the 
economic strength of the nation.
    Many anti-development groups claim that domestic oil and natural 
gas producers should not be issued new federal offshore and onshore 
leases until current ones are developed. These groups also claim that 
companies are sitting on leases simply to inflate their reserve 
estimates. Natural gas and oil exploration is not a business of rash 
decision making. Detailed planning, permitting timetables and 
regulatory requirements must be met and that takes time. Producers 
simply don't buy a lease and begin drilling--and they certainly don't 
drill every lease all at once. There is a process that balances 
business decisions with safety and environmental concerns. It would be 
irresponsible to conduct business any other way. Companies must conduct 
detailed environmental assessments, secure permits, collect seismic 
data and do various other ``pre-production'' activities on leases.
    Unfortunately, independent producers face many challenges from 
Washington that inhibit production of American natural gas and oil. It 
is important for Congress to understand the federal energy policy 
issues important to small business producers. These issues include:

          1. The importance for the federal government to develop 
        reasonable environmental regulations that create sound and cost 
        effective regulations with real environmental benefits;
          2. Federal tax policy designed to enhance American energy 
        security that does not reduce critical investment capital which 
        equates to less new production;
          3. The federal leasing and permitting processes determine the 
        pace of access to onshore and offshore federal natural gas and 
        oil resources. Unfortunately, both the National Environmental 
        Policy Act (NEPA) and the Federal Land Policy and Management 
        Act (FLPMA) are being used to stall, disrupt and stop 
        responsible resource development on federal lands.

    The entrepreneurs of America's natural gas and oil industry will 
continue to make advances in the development of new technologies that 
will keep our nation on the cutting edge of energy production. Through 
the use of cutting-edge technology innovation and tireless efforts to 
increase efficiency independent producers will keep bringing reliable 
supplies of energy to market while also ensuring the safe and efficient 
management of the nation's energy resources.
    Our nation needs to develop an energy policy that utilizes all of 
our nation's abundant energy resources. Instead of punishing one sector 
of the energy industry by implementing new and ineffective taxes, 
environmental regulations and restrictions on independent natural gas 
and oil producers, we should be striving to utilize all of the pieces 
in America's energy ``puzzle.'' The challenges are too steep and the 
stakes are too high for our country to ignore the reality of our 
national energy picture. Natural gas and oil cannot be the only pieces 
in our nation's energy puzzle, but we also cannot ignore the essential 
role they will play now and in the foreseeable future.
    Thank you for the opportunity to submit this testimony.
                                 ______
                                 
                                           American Rivers,
                                    Washington, DC, March 16, 2009.
Hon.  Jeff Bingaman,
Chairman, Energy and Natural Resources Committee, U.S. Senate, 
        Washington, DC.
Hon.  Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, U.S. Senate, 
        Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski: On behalf of 
American Rivers' 65,000 members and supporters across the nation, thank 
you for scheduling a hearing on March 17 to address energy development 
on public lands. While new renewable energy development must be a top 
priority, energy projects must also be designed, sited, operated, and 
managed in a manner that also protects local ecosystems.
    As you conduct this oversight, we urge you to consider how the 
Federal Energy Regulatory Commission (FERC) has exercised its authority 
under the Federal Power Act to license hydroelectric facilities. In our 
experience, the Commission frequently fails to live up to its mandate 
of giving ``equal consideration'' to the environmental and social 
consequences of energy development, particularly over the past eight 
years.
    In its analysis of license applications for hydropower projects, 
FERC regularly fails to identify and analyze an adequate range of 
reasonable alternatives to the proposed action. FERC's environmental 
documents prepared pursuant to the National Environmental Policy Act 
(NEPA) typically feature only one action alternative in addition to the 
applicant's proposal. Of the nineteen NEPA documents prepared by FERC 
for licenses issued over the past two years, we found that FERC did not 
give detailed consideration to a single action alternative other than 
the applicant's proposed action and FERC's staff recommendation. This 
practice is inconsistent with the plain language of NEPA and the 
Council on Environmental Quality's (CEQ) implementing regulations, 
which direct agencies to ``rigorously explore and objectively evaluate 
all reasonable alternatives.''\1\
---------------------------------------------------------------------------
    \1\ 40 C.F.R. Sec.  1502.14(a)
---------------------------------------------------------------------------
    Instead of performing a transparent analysis of complete action 
alternatives, FERC considers proposals from state and federal 
environmental and public land managing agencies and other interested 
parties in a piecemeal, ``black box'' fashion. FERC frequently avoids 
quantifying the benefits of environmental resources or the costs 
imposed on the public by the loss and damage of these resources. 
Instead, FERC routinely rejects proposed mitigation measures, claiming 
that they are not worth the costs of implementing them. When asked to 
provide supporting evidence for these assertions or even documentation 
of how it performed its calculations, FERC refuses to show its work, 
even to other Federal and state agencies with regulatory 
responsibilities in the same proceeding.\2\
---------------------------------------------------------------------------
    \2\ See November 9, 2006 letter response to a Department of 
Interior request for working papers and other information (enclosed).
---------------------------------------------------------------------------
    FERC also consistently fails to give serious consideration to 
evidence submitted by the expert agencies or consultants retained by 
third parties into the decisional record for a proceeding, all the 
while relying upon evidence supplied by the applicant. For example:

   In its Final Environmental Analysis for the Augusta Canal 
        project, FERC staff accepted the applicant's projected water 
        use information while rejecting without adequate explanation 
        conflicting evidence submitted by federal agencies that 
        demonstrated that actual use was significantly less.
   In its Draft Environmental Assessment for Pacific Gas and 
        Electric's Poe project, FERC accepted the applicant's argument 
        that a segment of river left dry by a hydropower project had 
        limited potential for boating use. It failed to acknowledge a 
        declaration submitted by a recreational planner with decades of 
        experience that demonstrated a potential use of 100,000 
        recreation-days per year.
   During FERC's analysis of the Klamath Project, the 
        Department of the Interior pointed out to FERC that contrary to 
        the applicant's characterization of the Project as dependable, 
        the applicant had argued before the California Public Utility 
        Commission in 2005 that the project was highly unreliable. FERC 
        not only failed to respond to DOT's comment, it cited the 
        Project's dependability--without any supporting evidence--as 
        justification for the Staffs preferred alternative in its Final 
        EIS for the project.
   After a Federal Administrative Law Judge ruled in favor of 
        federal natural resource agencies in a dispute over the merits 
        of supporting evidence for environmental conditions to the 
        Klamath project, FERC refused to accept that determination. 
        FERC instead relied upon the license applicant's discredited 
        evidence.

    Even where FERC is required by law to include state and federal 
agency environmental conditions in its licenses, it does so grudgingly. 
It has taken multiple federal court decisions to force FERC to include 
these conditions in thenr licenses as a matter of practice.
    We believe that these issues are not confined to FERC's analysis of 
hydropower projects. Indeed, Commissioner Jon Wellinghoff--now the 
Commission's acting Chair--identified a number of similar flaws in 
FERC's analysis of energy projects in a September 18, 2008 dissent to 
FERC's order issuing a license for the Bradwood Landing Liquefied 
Natural Gas Terminal. We applaud Acting Chairman Wellinghoff for his 
willingness to conduct a thoughtful independent review of staffs 
conclusions. and we hope that he will continue to ask similar questions 
in the future.
    As you address the critical question of energy development on 
public lands and in public waters, we urge you to consider carefully 
how the Commission exercises its authority to permit such development. 
American Rivers stands ready to work with you and other members of the 
committee on this important issue.
            Sincerely,
                                              John Seebach,
                            Director, Hydropower Reform Initiative.
                                 ______
                                 
                                           Trout Unlimited,
                                    Washington, DC, March 31, 2009.
Hon.  Jeff Bingaman,
Committee on Energy and Natural Resources, U.S. Senate, Washington, DC.
    Dear Chairman Bingaman and Members of the Committee: We appreciate 
the opportunity to comment on the full Committee's hearing on March 17, 
2009 to evaluate energy development on public lands and the outer 
Continental Shelf. Trout Unlimited (TU) is the nation's largest 
coldwater fisheries conservation group dedicated to the protection and 
restoration of our nation's trout and salmon resources and the 
watersheds that sustain them. TU has more than 140,000 members in 400 
chapters across the United States. Our members generally are trout and 
salmon anglers who give back to the waters they love by contributing 
substantial amounts of their personal time and resources to fisheries 
habitat protection and restoration. As Congress considers new energy 
legislation and the promise of renewable energy resources, we encourage 
you to ensure that renewable energy development is done in a prudent 
manner that protects key fish and wildlife habitats and we ask that our 
comments be included in the record.
    A great opportunity exists to develop renewable energy in a 
responsible manner, involving the public and carefully siting the 
developments and transmission corridors in areas that minimize damage 
to fish and wildlife habitats. The development of renewable energy 
provides the opportunity to reduce the impact of traditional oil and 
gas by replacing developments that are planned in sensitive habitats. 
We also request that energy legislation this year include an onshore 
oil and gas title. Over the past several years, expedited oil and gas 
development has strained our valuable fish, wildlife and water 
resources--causing untold damage to our public lands and vital natural 
resources. Immediate legislative action addressing traditional oil and 
gas resource development, as well as renewable energy sources, will 
help ensure the security of our energy supply while alleviating many of 
the threats to our public lands.
    Specifically, a new onshore oil and gas title should require the 
following:

          1) The BLM should evaluate the long-term, cumulative effects 
        of oil and gas development projects. This evaluation should 
        include a comprehensive assessment of foreseeable future 
        projects and a comprehensive assessment of existing projects 
        and mitigation measures.
          2) The BLM should review all oil or gas leases currently 
        under protest or in litigation to ensure there was adequate 
        analysis of impacts to fish, wildlife, water and air resources. 
        The BLM should rescind any leases with inadequate analysis.
          3) The BLM should conduct a review of all resource management 
        plans (RMP) for oil and gas lands issued within the last five 
        years to ensure they adequately consider potential impacts to 
        fish, wildlife, water and air resources from oil and gas 
        development. The BLM should refrain from issuing any new leases 
        or permits for oil or gas operations under any RMP that the BLM 
        determines to be inadequate until the RMP is revised.
          4) The BLM should seek to promote public participation and 
        input throughout the planning, leasing and permitting process. 
        Energy Development on public lands can have a dramatic affect 
        on local communities and the fish, wildlife, water and air 
        resources upon which they depend. Public involvement is 
        critical to ensure oil and gas development on public lands is 
        conducted in a responsible manner without sacrificing important 
        natural resources.
          5) The BLM should improve the monitoring and mitigation of 
        oil and gas lands. This requires the BLM to develop a set of 
        consistent, widely endorsed monitoring protocols that identify 
        baseline information, short-term inventories and long-term 
        inventories for important fish, wildlife, plant, water and air 
        resources, and a process for regular review of data and 
        information.
          6) The BLM should mandate protective stipulations and 
        conditions of approval for all new projects that are sufficient 
        for the protection of fish, wildlife, water and air resources. 
        These stipulations and conditions of approval should be based 
        on the best available scientific data and provide a reasonable 
        expectation that they will be effective in protecting important 
        fish, wildlife, water and air resources. These conditions of 
        approval should include best management practices that prevent 
        the spread of exotic and invasive species. The BLM should 
        refrain from issuing waivers, modification or exception to 
        existing and future lease stipulations or permit conditions 
        unless there is adequate evaluation of the consequences, public 
        participation, and the documented assurance that the action 
        will not compromise important fish, wildlife, water or air 
        resources.

    A responsible energy policy will provide for our energy needs while 
protecting the important fish, wildlife, water and air resources that 
sustain our communities and the western way of life. While we support 
the responsible development of renewable energy resources and recognize 
the important role they should play in our national energy policy, 
expedited oil and gas development continues to threaten our public 
lands. Our valuable natural resources and public lands require 
immediate attention.
    On behalf of our members, we thank you for your commitment to the 
protection of our vast natural resources and encourage you to include 
an onshore oil and gas title that protects important fish, wildlife, 
water and air resources in this year's energy bill.
            Sincerely,
                                               Brad Powell,
                                          Energy and ORV Director, 
                                    Sportsmen Conservation Project.

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