[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
 RHETORIC VS. REALITY: DOES PRESIDENT OBAMA REALLY SUPPORT AN ``ALL-OF- 
                      THE-ABOVE'' ENERGY STRATEGY? 

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 31, 2012

                               __________

                           Serial No. 112-153

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

75-111 PDF                       WASHINGTON : 2012 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 




              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 31, 2012.....................................     1

                               WITNESSES

Mr. Michael Krancer, Secretary, Pennsylvania Department of 
  Environmental Protection
    Oral Statement...............................................     5
    Written Statement............................................     7
Ms. Kathleen Sgamma, Vice-President of Government and Public 
  Affairs, Western Energy Alliance
    Oral Statement...............................................    10
    Written Statement............................................    12
Mr. Mark J. Perry, Scholar, American Enterprise Institute
    Oral Statement...............................................    15
    Written Statement............................................    17
Mr. Daniel J. Weiss, Senior Fellow and Director of Climate 
  Strategy, Center for American Progress Action Fund
    Oral Statement...............................................    28
    Written Statement............................................    30
Mr. Charles T. Drevna, President, American Fuel & Petrochemical 
  Manufacturers
    Oral Statement...............................................    47
    Written Statement............................................    49
Mr. Peter S. Glaser, Partner, Troutman Sanders LLP
    Oral Statement...............................................    64
    Written Statement............................................    66

                                APPENDIX

The Honorable Elijah E. Cummings, a Member of Congress from the 
  State of Maryland, Opening Statement...........................   118
The Honorable Mike Quigley, a Member of Congress from the State 
  of Illinois, Opening Statement.................................   120
Committee on Oversight and Government Reform Staff Report, Rising 
  Energy Costs: An Intentional Result of Government Action.......   124


 RHETORIC VS. REALITY: DOES PRESIDENT OBAMA REALLY SUPPORT AN ``ALL-OF-
                      THE-ABOVE'' ENERGY STRATEGY?

                              ----------                              


                        Thursday, May 31, 2012,

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 9:30 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Platts, McHenry, Jordan, 
Walberg, Lankford, DesJarlais, Ross, Farenthold, Kelly, 
Cummings, Tierney, Quigley, Davis, Welch, Murphy, and Speier.
    Staff Present: Kurt Bardella, Majority Senior Policy 
Advisor; Robert Borden, Majority General Counsel; Will L. 
Boyington, Majority Staff Assistant; Molly Boyl, Majority 
Parliamentarian; Lawrence J. Brady, Majority Staff Director; 
Joseph A. Brazauskas, Majority Counsel; Sharon Casey, Majority 
Senior Assistant Clerk; Steve Castor, Majority Chief Counsel, 
Investigations; John Cuaderes, Majority Deputy Staff Director; 
Adam P. Fromm, Majority Director of Member Services and 
Committee Operations; Linda Good, Majority Chief Clerk; Ryan M. 
Hambleton, Majority Professional Staff Member; Mark D. Marin, 
Majority Director of Oversight; Kristina M. Moore, Majority 
Senior Counsel; Laura L. Rush, Majority Deputy Chief Clerk; 
Cheyenne Steel, Majority Press Assistant; Rebecca Watkins, 
Majority Press Secretary; Lisa Cody, Minority Investigator; 
Kevin Corbin, Minority Deputy Clerk; Ashley Etienne, Minority 
Director of Communications; Jennifer Hoffman, Minority Press 
Secretary; Carla Hultberg, Minority Chief Clerk; Chris Knauer, 
Minority Senior Investigator; Dave Rapallo, Minority Staff 
Director.
    Chairman Issa. This hearing of the Government Oversight 
Reform Committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles: first, Americans have a right to know that the 
money Washington takes from them is well spent and, second, 
Americans deserve an efficient, effective government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights. Our solemn responsibility 
is to hold government accountable to taxpayers, because 
taxpayers have a right to know what they get from their 
government. We will work tirelessly in partnership with citizen 
watchdogs to deliver the facts to the American people and bring 
genuine reform to the Federal bureaucracy. This is the mission 
of the Oversight and Government Reform Committee.
    In his 2012 State of the Union, President Obama declared 
this Country needs an all out, all-of-the-above strategy that 
develops every available source of American energy. 
Unfortunately, the actions of the Obama Administration reflects 
a much narrower approach. The reality is the Obama 
Administration has taken several actions that would limit the 
production and use of oil, natural gas, and coal energy 
sources. I might add they have also shut down Yucca, 
effectively dooming nuclear.
    These actions are justified by the advancement of rhetoric 
and reliant on distortion of the actual facts. For example, the 
President frequently states that the U.S. only has two percent 
of the world's oil reserves. Nothing could be further from the 
truth. The statement of proven reserves has been disproven for 
my entire life.
    The fact is that America ignores potential a multi-trillion 
dollar barrels of oil that we know exist that have not yet been 
proven. Saudi Arabia, on the other hand, talks of proven 
reserves counting virtually every drop of oil, while America 
talks only about an amount roughly equal to the amount that we 
said we had in the 1950s, when I was born.
    According to the Institute of Energy Research, the U.S. has 
1.4 trillion barrels of technically recoverable oil, enough to 
meet the demand for at least the next 200 years. The President 
likes to take credit for increased oil production, but in 
reality the dramatic increase in production that has happened 
has happened on private lands in spite of the Administration's 
policy of obstructing all use of Federal lands. Today we enjoy 
a 36 percent reduction in new drilling on Federal lands as a 
result of these policies.
    The Congressional Research Service reports that 96 percent 
of U.S. oil production increases in 2007 have occurred on non-
Federal lands. This as the Obama Administration has closed off 
public lands to exploration and drilling that would have been 
available just a few years ago.
    While many Americans believe that construction of the 
Keystone pipeline is key to relieving escalating gas prices, 
the President has stood in the way and even had the audacity to 
claim that an executive order that specifically does nothing 
new, advances nothing new, expedites nothing new, and only 
fails to stop that which would occur without any effort at the 
same time line in fact was his initiative.
    It is ironic that the President stood in front of empty 
green oil pipeline for his photo shot, because the empty green 
promise of this Administration should be in fact the key to 
understanding Obama's all-of-the-above strategy: any energy 
made above ground counts; any energy found below ground is off 
limits.
    We should harken back to the period of time in which the 
Democrats controlled the House, the Senate, and the White 
House. During that period of time, on the President's 
insistence, cap-and-trade was passed out of the House, which 
would have curtailed virtually all coal production in this 
Country and severely limited other sources. It failed in the 
Senate, but not for a lack of leadership from the President. 
Today, by regulatory fiat, the President is effectively 
shutting down 26 gigawatts of electric power produced from coal 
as we speak.
    The bottom line is virtually all of the success and 
security of our Nation to develop avenues of oil and natural 
gas have either come from the previous administration and 
simply are a legacy that continues in spite of this one, or in 
fact have occurred on private lands in spite of the best 
efforts by the Federal Government to stop it.
    We cannot exist as a modern day superpower unless we have 
means to fuel a 21st century economy. President Obama has to 
make a choice. He can either be part of the problem or he can 
be part of the solution. All-of-the-above is only half of the 
solution. We have to have an all-of-the-above and all-of-the-
below mentality if we are in fact going to deliver affordable 
energy for the American people.
    It is often said, but needs to be said as often as 
possible, the Stone Age did not end because we ran out of 
stones; it ended because we harnessed energy.
    With that, I recognize the distinguished Ranking Member for 
his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. I want to 
thank you for calling today's hearing.
    The title of today's hearing poses the following question: 
Does President Obama really support and all-of-the-above energy 
strategy? In my opinion, the answer is clearly yes, resounding 
and obvious.
    Under President Obama, total domestic oil production in the 
United States has increased by 14 percent since the final year 
of the Bush Administration. Every year since Mr. Obama became 
President total U.S. crude oil production has increased. In 
2011, over 2 billion barrels of oil were produced in the United 
States. This is the highest rate of domestic oil production 
since 2003. In 2011, onshore oil production on Federal lands 
was the most productive since 2003, with 112 million barrels 
produced; offshore oil production at its most productive year, 
in 2010, with 618 million barrels produced.
    As part of this all-of-the-above strategy, natural gas 
production is also now at record levels. In fact, it is at its 
highest level in 30 years, with more than 28 trillion cubic 
feet produced in 2011.
    The Administration has also pursued nuclear power. It 
approved an $8.3 billion conditional loan guarantee for nuclear 
reactors in Burke County, Georgia, which is the first nuclear 
plant to receive a construction license in more than three 
decades. After touring the facility, Energy Secretary Steven 
Chu stated, ``Nuclear energy is a critical part of the 
President's all-of-the-above energy strategy.'' The President 
has also requested an additional $770 million for nuclear 
programs in his budget for 2013.
    In a stark difference from the previous administration, the 
Obama Administration has also invested significantly in clean 
energy technologies of the future that promote our global 
competitiveness and enhance our energy independence.
    Because of investments in solar, biofuel, wind, geothermal, 
and electric vehicle technologies that were included in the 
Recovery Act, the United States is now home to the world's 
largest photovoltaic generation facility, one of the world's 
largest wind farms, and the world's largest concentrated solar 
power plants.
    In addition to taking these steps, the Administration's new 
fuel economy standards will reduce oil consumption by 2.2 
million barrels a day, saving American families an average of 
$8,000 at the pump.
    I understand that many of the witnesses invited by the 
Chairman today will express their desire to drill for even more 
oil and to remove existing health and safety protections to 
allow them to do so. They will also argue that the 
Administration is somehow blocking their efforts.
    To the contrary. Arguments that the Administration has been 
refusing to approve drilling permits in the Gulf are a complete 
myth. Following the monumental BP disaster, the Administration 
worked quickly with industry to develop and implement new 
offshore drilling rules to reduce the chances that such a 
catastrophe would ever happen again. Since enacting these 
rules, the Administration has issued more than 400 deepwater 
drilling permits and Gulf operations have resumed more safely 
as a result.
    In addition, in 2011, the Administration offered 21 million 
acres for new offshore oil and gas development, and next month 
an additional 38 million acres will be offered as part of a 
lease sale in the Gulf of Mexico, an area estimated to hold 
close to 31 billion barrels of oil and 134 trillion cubic feet 
of natural gas.
    The record is abundantly clear. President Obama has pursued 
an aggressive strategy to significantly boost domestic energy 
production from all sources--oil, natural gas, nuclear, clean 
energy--and he deserves an enormous amount of credit for his 
accomplishments.
    With that, Mr. Chairman, I yield back.
    Chairman Issa. I thank the gentleman.
    All members will have seven days to submit opening 
statements for the record.
    We now recognize our opening panel.
    Mr. Michael Krancer is the Secretary of Pennsylvania's 
Department of Environmental Protection; Ms. Kathleen Sgamma is 
the Vice-President of Government and Public Affairs at the 
Western Energy Alliance. Welcome. Mr. Mark Perry is a scholar 
at the American Enterprise Institute for Public Policy 
Research; Mr. Daniel J. Weiss is Senior Fellow and Director of 
Climate Strategy at the Center for American Progress Action 
Fund; Mr. Charles T. Drevna is President of American Fuel & 
Petrochemical Manufacturers; and, lastly, Mr. Peter Glaser is a 
partner at Troutman Sanders LLP.
    Pursuant to our Committee rules, just like on television, 
would you please rise to take the oath and raise your right 
hands?
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Chairman Issa. Let the record indicate that all witnesses 
answered in the affirmative.
    Please be seated.
    This is a large panel today and each of your full opening 
statements will be placed in the record, so I would ask you to 
observe the timer light in front of you. Try to stay as close 
to your five minutes, or under, as you can so that we can get 
to a sufficient amount of questions.
    Contrary to opening statements, we do not know whether what 
you are going to say today is accurate or inaccurate, 
regardless of presumption, so we would like to have a healthy 
dialogue so that we can get to a full and hopefully bipartisan 
understanding.
    Mr. Krancer.

                       WITNESS STATEMENTS

                  STATEMENT OF MICHAEL KRANCER

    Mr. Krancer. Thank you very much. It is an honor and a 
privilege to be here. I am from Pennsylvania. We are in the 
middle, as you all know, of a natural gas exploration and 
extraction revolution in Pennsylvania.
    I want to just react to Representative Cummings' statement. 
Nobody on this panel, certainly me above all, the DEP Secretary 
of Pennsylvania, has any desire to remove any health and safety 
protections. As a matter of fact, that is one of the points 
that we are here today on, and that is the States are already 
doing a very fine job regulating, for example, natural gas 
extraction. It is being done in Pennsylvania.
    I would also say that the point that natural gas production 
has increased, that is true, but it is true in spite of the 
Federal Government. It is true in Pennsylvania. Our production 
has quadrupled since 2009, and it is because the Federal 
Government is not intervening and interposing; it is because 
Pennsylvania is getting it right.
    What I see in Pennsylvania as DEP Secretary is--of course, 
we have a coal State. We are not totally a coal State, we are 
very diverse; we have nuclear, we have a very healthy nuclear 
industry, we have coal, natural gas, we have oil, we have wind 
and solar. But what I see is a Federal Government that seems to 
be picking winners and losers, attempting to be picking winners 
and losers, and promulgating a regulatory agenda that does not 
have an all-of-the-above flavor to it, it picks winners and 
losers. And I will just use a couple of examples.
    In my own State, with respect to the hydraulic fracturing, 
I think the Federal Government has created somewhat of a 
hostility. There is a hostile attitude towards the science of 
hydraulic fracturing, which has been ongoing in this Country 
for many years, 60 years, probably, and the Federal Government 
has never, until now, expressed any interest whatsoever to be 
involved in it, and I cover that in my testimony. And there 
seems to be some fear churning, going on as well.
    One of the matters in my State was in Dimock, Pennsylvania, 
where, after the State had taken control, had control of the 
matter, the Federal Government came in and started doing water 
testing this year. After four rounds of water testing, there 
are no problems indicated and now I think the Federal 
Government is looking for an exit strategy from Dimock, and I 
am not sure how they are going to do that or if they are going 
to do that before the election.
    In terms of air regulations, what I see is a severe 
hostility towards coal, absolutely. The air regulations are 
hostile to coal. I am talking about Utility MACT, I am talking 
about the transport rule, and I am talking about an incredible 
over-activity with respect to the NAAQS, the National Ambient 
Air Quality Standards.
    This Administration, in three and a half years, has done 
more with respect to NAAQS than has been done in history. Under 
Clinton, under Bush more. They have already announced four of 
the six that they are going to change, and for some very shaky 
technical reasons. And I will tell you with respect to my 
State, on the air regulations, EPA has refused to consider that 
those air regulations are going to kill waste coal-burning 
plants in my State, which provide an important environmental 
benefit.
    Another matter is the coal ash residuals regulation. Here 
is EPA headed towards, with the help of a friendly piece of 
litigation now, regulating coal ash residuals as hazardous 
waste. That would be devastating in my State, and other States, 
too. And I have written to Congress on that on several 
occasions. There is no scientific justification for it; there 
is no legal justification for it. It would cause the loss of 
between 180,000 jobs and 316,000 jobs and cost between $78 
billion and $110 billion over 20 years.
    Another area where my State has seen this is in the coal 
mining permits, the water aspects of coal mining permits. EPA 
has interposed more than they ever have in history and we think 
for a technically very questionable basis.
    I think the Chairman hit the nail on the head with respect 
to nuclear. We see the Federal Government not stepping to the 
plate to fulfill its promise to deal with the nuclear waste 
disposal issue and, in fact, reneged on its promise, and that 
is costing billions of dollars, or will cost billions of 
dollars, and really the Federal Government needs to deal with 
that.
    I did hear a quip the other day, and it follows on the 
Chairman's comment, that the all-of-the-above moniker, if you 
will, really means only the above, meaning only wind, only 
solar, only those things. We have assets here in our Country 
under the ground in my State and in other States that can be 
safely extracted in an environmentally manner, and all 
economies need available abundant domestic energy, and our 
potential in that regard, my State and in our Nation, is off 
the charts.
    With that, I will leave it to the next testifier and look 
forward to questions.
    [Prepared statement of Mr. Krancer follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you. I will note that as someone born 
and raised in Ohio, you were as close as I could get to 
somebody from our region with the same abundance.
    Mr. Krancer. Well, I have good news for you. I was born in 
Cleveland.
    Chairman Issa. East or West side?
    Mr. Krancer. Shaker Heights, is that it?
    Chairman Issa. Yes.
    Mr. Krancer. Shaker Heights. That was a long time ago and I 
don't remember very much, but I was born there, so I am told.
    Chairman Issa. You should come back. My family is in 
Cleveland Heights and Shaker Heights.
    Mr. Krancer. I will do that.
    Chairman Issa. I will give you that time back later from 
that round of questioning.
    Ms. Sgamma?

                  STATEMENT OF KATHLEEN SGAMMA

    Ms. Sgamma. Thank you, Mr. Chairman, Ranking Member 
Cummings, and members of the Committee.
    Western Energy Alliance represents about 400 companies 
engaged in all aspects of environmentally responsible oil and 
natural gas development in the West. Our members are proud to 
produce 27 percent of the Nation's natural gas and 14 percent 
of oil production, while disturbing 0.07 percent of public 
lands.
    It seems that my industry has figured into the 
Administration's strategy as an annoyance to be avoided in 
favor of its preferred energy sources. The attitude has 
translated into budgets intended to reduce so-called 
overproduction of oil and natural gas through increased taxes.
    One thing that particularly rings hollow with Western 
producers is the Administration taking credit for increased oil 
and natural gas production. Despite all the obstacles put in 
place by this Administration, oil and gas companies responding 
to market forces have dramatically increased productions on 
private lands and reduced foreign imports.
    But it is not just a matter of who should take credit for 
increased U.S. production. It is important that we recognize 
the role of policies and regulations that stifle economic 
growth. Where the Administration has the most controls, the 
Interior Department has put in place more obstacles to 
producers. On onshore public lands, oil production has declined 
by nearly 15 percent and natural gas increased by a scant half 
of a percent from 2010 to 2011. However, natural gas production 
on all Federal lands declined by 27 percent from 2009 levels, 
while natural gas production on State and private lands 
increased 28 percent.
    To deflect criticism, we continue to hear accusations and 
misleading statistics that industry is letting millions of 
acres sit idle. Yet, this tired rhetoric fails to take into 
account the fact that not every lease has recoverable oil and 
gas and the huge obstacles the Federal Government places in the 
way of producers.
    Western Energy Alliance recently released a study of the 
enormous economic potential of just 20 projects on public 
lands. These 20 projects, of about 3100 wells per year, would 
generate nearly 121,000 sustained jobs, $8 billion in wages, 
and $27.5 billion in annual economic impact, all from just 
about 3100 wells.
    However, once a project is proposed by a company, the 
Interior Department's Bureau of Land Management must complete 
environmental analysis under the National Environmental Policy 
Act. We are seeing even small 9-well projects take over four 
years and large projects take over seven years.
    In fact, if we look at projects waiting over three years, 
we see that government delays are preventing the creation of 
nearly 65,000 jobs and $15 billion in economic activity 
annually. These NEPA delays are the direct result of government 
inaction that prevents companies from operating on their 
leases.
    Other obstacles abound. Interior Secretary Salazar started 
his tenure by cancelling leases in Utah. He followed that up 
with policies that added three new layers of analysis to the 
leasing process, which has resulted in an 80 percent decline in 
leases offered in the Rocky Mountain States. If there was any 
doubt about his intention to slow oil and gas production, 
Secretary Salazar allayed those doubts when he introduced new 
policies by saying his agency would no longer be a candy store 
for the petroleum industry. The attitude that there was a new 
sheriff in town who needed to stop unfettered development, as 
if a responsible industry providing over a quarter of our 
Nation's natural gas production, while disturbing less than a 
tenth of a percent of acreage, was an industry gone wild.
    Secretary Salazar recently admitted that it takes the 
Government 298 days, on average, to process drilling permits 
and promised to reduce the time to 60 days. Since every 
proposed budget for the last four years has attempted to zero 
out funding for improving permit processing, again, the 
rhetoric doesn't match the reality.
    Interior has also decided to regulate hydraulic fracturing 
despite the lack of a single incident on Federal lands and 
successful State regulation. We estimate that will add another 
100 days on to permitting times.
    For the last three years we have been part of an anything-
but-oil-and-gas energy strategy. We are heartened that the 
Administration has changed the rhetoric. Now we are just 
waiting for reality to catch up.
    While I have only had time for a few instances of policies 
that are preventing development, I look forward to some more 
examples as questions come up.
    [Prepared statement of Ms. Sgamma follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you.
    Mr. Perry.

                   STATEMENT OF MARK J. PERRY

    Mr. Perry. Chairman Issa, Ranking Member Cummings, and 
other members of the Committee, thank you for the opportunity 
to appear today. In my written testimony I have provided 10 
pages of analysis on the topic you are considering and here is 
an oral summary of that testimony.
    My main point today I think is that, as the Chairman has 
indicated, it would be more accurate to describe President 
Obama's energy strategy as some-of-the-above, rather than all-
of-the-above, for the following reasons:
    President Obama has shown certain favoritism towards 
alternative energies, which he has described publicly as energy 
sources of the future, while he has publicly dismissed oil as 
an energy of the past; that some of the above favoritism has 
been demonstrated in several ways.
    Domestic production of fossil fuels on Federal lands fell 
to a 9-year low in fiscal year 2011, as crude oil production 
fell by 14 percent, the largest annual decrease in at least a 
decade, and natural gas production fell by more than 9 percent.
    The Administration's fiscal year 2013 budget targets oil 
and natural gas companies with eight proposals for higher 
taxes, which it is estimated would burden the oil and gas 
industry with almost $86 billion in higher taxes over the next 
10 years.
    There are drilling restrictions or limited permitting for 
oil and natural gas that continue off the mid-Atlantic coast 
and much of the Gulf of Mexico, in the Arctic National Wildlife 
Refuge, on Federal lands in the Rockies, where leases are down 
70 percent since 2009.
    Other actions taken by the Administration, including 
rejecting the Keystone XL pipeline, cancelling millions of 
acres in offshore lease sales, and closing the majority of the 
Outer Continental Shelf to new energy production for the next 
five years demonstrate an Administration that does not support 
an all-of-the-above energy strategy that includes increasing 
domestic production of fossil fuels that will remain critical 
to America's energy and economic future for many decades.
    In contrast, the President's proposed budget for fiscal 
year 2013 includes preferences for the politically favored 
green energy sector in the form of numerous tax subsidies, tax 
credits, public expenditures, procurement preferences, and 
grants for alternative energy. In my written testimony, I have 
identified nine specific budget provisions that favor 
alternative energy.
    Based on the Obama Administration's demonstrated preference 
for alternative energies that are supposed to be the energy 
sources of a future that is no longer dependent on traditional 
hydrocarbon energies of the past, a misleading message is being 
conveyed to the American people that our Country's need for 
substantial levels of oil, natural gas, and coal will soon be a 
distant memory. The reality, however, is much different.
    In its most recent forecast, in January of 2012, the U.S. 
Department of Energy estimated that the importance of fossil 
fuels for meeting the energy demands of the U.S. economy will 
decline only modestly over the next several decades, from 83 
percent of total U.S. energy consumption in 2010 to 77 percent 
in 2035. In contrast, despite all of the attention, preferences 
from the Obama Administration, loan guarantees and taxpayer 
subsidies for renewable energy, their contribution to U.S. 
energy consumption of 7.3 percent in 2012 was barely higher 
than the 7.1 percent share back in 1997. Current estimates from 
the Department of Energy predicted even by the year 2035 the 
renewable energy share of U.S. energy consumption would be less 
than 11 percent.
    Even the Government's own forecasts predict that renewable 
energy will continue to play a relatively minor role as an 
energy source over the next several decades out to the year 
2035, and traditional energy sources like oil, gas, and coal 
will continue to provide the overwhelming share, more than 
three-quarters of the fuel required to meet U.S. energy demand 
for the next three decades, at least.
    By favoring new, costly, subsidy-dependent alternative 
energy sources over traditional sources, and by not fully 
supporting the proven, job-creating, low-cost fossil fuels, it 
would be more accurate to describe President Obama's costly 
energy strategy as some of the most costly above instead of 
all-of-the-above. What we really want is an energy policy that 
is not based on all-of-the-above or some-of-the-above 
regardless of cost, reliability, and economic and scientific 
merits, but, rather, an energy policy as grounded in the logic 
of all of the energy sources that are actually cost-
competitive.
    President Obama might wish for an energy future of 
alternative energy, but the scientific and economic realities 
suggest that the fuels of the future will mostly do the same as 
the fuels of the past: dependable, reliable, low-cost oil, 
natural gas, coal, and nuclear.
    Thank you.
    [Prepared statement of Mr. Perry follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Mr. Weiss.

                  STATEMENT OF DANIEL J. WEISS

    Mr. Weiss. Chairman Issa, Ranking Member Cummings, and 
members of the Committee, thank you very much for the 
opportunity to testify today. I am a Senior Fellow at the 
Center for American Progress Action Fund, a tax-exempt 
organization dedicated to progressive values and ideas.
    First, I would like to address the assumption that 
producing more oil will lower gasoline prices. In fact, the 
Associated Press examined 30 years of monthly production and 
gassing price data and found ``no statistical correlation 
between how much oil comes out of U.S. wells and the price at 
the pump.'' In other words, the idea that we can drill our way 
to lower oil prices is rhetoric, not a record. If so, then 
Canada would have had very low gasoline prices this year 
because they produce nearly all their own oil. In fact, Canada 
also had high gasoline prices this year, according to The Wall 
Street Journal.
    Now, let's address the question posed for this hearing: 
Does President Obama really support an all-of-the-above energy 
strategy? What is an all-of-the-above energy strategy? To most 
Americans it means we must do three things: first, develop the 
energy resources of today while using them more efficiently; 
second, invest in the new cleaner technologies of tomorrow; 
third, reduce public health threats from pollution generated by 
producing and burning coal, oil, and other fossil fuels.
    We have just heard all the rhetoric. Now let's review the 
Obama record on the all-of-the-above energy strategy checklist.
    First, develop energy resources. U.S. oil production is at 
its highest since 1998. The Energy Information Administration 
just demonstrated that annual oil production for Federal lands 
and waters was higher under the first three years of President 
Obama than under the last three years of his predecessor. In 
all, this was 646 million barrels, 12 percent higher than 2008.
    Let's look at oil imports and are we using oil efficiently. 
In 2011, the United States imported only 45 percent of its oil, 
the lowest since 1997. When the modernization of fuel economy 
standards is complete in 2025, we will use 2 million fewer 
barrels of oil per day and drivers will save $8,000 per car in 
lower gasoline purchases. And I say this as the son-in-law and 
brother-in-law of car dealers.
    Nuclear power. The first two nuclear reactors in a 
generation were just approved in February for a plant in 
Waynesboro, Georgia.
    Coal employment. U.S. Mine Safety and Health Administration 
reports that there were more coal miners employed in the United 
States in 2011 than in any year since 1997.
    So it looks like we are producing more of the resources we 
have and using them wisely.
    Are we investing clean energy in jobs? In 2011, U.S. clean 
energy investments moved ahead of China for the first time in 
2008, according to Bloomberg. The non-hydro renewable 
electricity generation will nearly double between 2008 to 2012, 
according to Energy Information Administration. And the Bureau 
of Labor Statistics recently reported that ``In 2010, 3.1 
million jobs in the United States were associated with the 
production of green goods and services.
    Last question: Are we protecting public health from 
pollution? The Cross-State Air Pollution Rule and mercury air 
toxic standards will reduce smog, acid rain, mercury, and 
cancer-causing pollution from power plants. These rules will 
protect children, seniors, and the infirm from air pollution, 
and will save up to 45,000 lives annually.
    The record demonstrates that President Obama passes the 
all-of-the-above test. What about the House of Representatives? 
We know that it supports expanded oil and gas production. What 
about the other essential elements of all-of-the-above? Is the 
House of Representatives supporting clean energy investments in 
jobs? Will the House pass fiscal year 2013 budget, which 
slashes these investments, according to the Office of 
Management and Budget? ``Clean energy programs will be cut by 
19 percent.''
    Instead, the House budget would retain $40 billion in tax 
breaks for big oil, even though the five largest companies 
earned $137 billion in profits in 2011. And the House has not 
extended the production tax credit for wind and other renewable 
energy sources, even though it expires at the end of this year. 
There is a bipartisan extension bill that has languished since 
last November.
    Would the House protect public health from pollution? Last 
year the House held 209 votes to weaken public health 
safeguards or environmental protection, including blocking 
protections from mercury.
    So President Obama has successfully pursued an all-of-the-
above energy strategy by increasing oil production, reducing 
imports, and using oil more efficiently and protecting public 
health from pollution. The House of Representatives has ignored 
oil use production, slashed investments for new clean energy 
technologies, and would eviscerate public health protection 
from hazardous pollutants. This is an oil-above-all strategy 
that would benefit big oil companies at the expense of everyone 
else. Hopefully, the House of Representatives will join 
President Obama in supporting his all-of-the-above energy 
strategy.
    Thank you very much.
    [Prepared statement of Mr. Weiss follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you.
    Before I go to the next witness, just so you are prepared 
when we go to questioning, I heard the Ranking Member use the 
exact same term you used, the $8,000 per family, so your source 
is probably the same. If I do my calculation on gasoline 
correctly, at $4.00 a gallon, $8,000 is 2,000 gallons. Two 
thousand gallons at 20 miles per gallon would take a family, 
for free, 40,000 miles. Be prepared to answer how you are going 
to get that much savings and have your sources ready.
    No, no. I just want to make sure you were fully informed 
because both of you used a term that we have never seen on this 
side of the dais before.
    Mr. Drevna.

                 STATEMENT OF CHARLES T. DREVNA

    Mr. Drevna. Chairman Issa, Ranking Member Cummings, and 
members of the Committee, thank you for giving me the 
opportunity to testify today. I am Charlie Drevna and I am 
President of AFPM, the American Fuel & Petrochemical 
Manufacturers.
    We are a trade association that was formerly known as the 
National Petrochemical & Refiners Association until earlier 
this year. We represent high tech American manufacturers who 
use oil and gas to make almost all the fuels, heating oil, and 
petrochemicals used in our Nation.
    Let me first echo the statements of Secretary Krancer. We 
are not here, sir, to dismantle health and safety provisions, 
and any suggestion to the contrary is totally inaccurate. Quite 
honestly, I think that is part of the problem that we see as we 
have categorized the war on fossil fuels.
    In response, on the global markets and increasing domestic 
supply and it will not lower prices, I only have to reference 
President Obama when he suggested that we can release oil from 
the strategic petroleum reserve to lower prices. I can also 
look to President Obama when he went to Brazil and asked the 
Saudis to increase production so we can lower prices.
    Markets react to a stimulus, and if the United States can 
send that stimulus, that message to the world markets that we 
are dead serious about our energy and national security, it 
could go a long way to moderating prices throughout the globe.
    The entire oil and natural gas sector supports more than 9 
million American jobs and pays more than $31 billion in taxes 
to the Government, making it the largest taxpayer to the 
Federal Government, plus additional funds to State and local 
governments, and the tax provisions that American oil and 
natural gas refiners get are the same provisions that every 
manufacturer gets; they are not subsidies, they are not 
anything special than anyone else gets. And even though these 
companies make big profits, it is better than losing money and 
going bankrupt like other companies that the Federal Government 
has tried to prop up.
    Contrary to popular opinion about an energy crisis and our 
long-term dependence on foreign oil, the fact is the United 
States is an energy giant and we can meet all our needs 
domestically by 2025 without the need for taxpayer money.
    The Shell gas revolution currently underway in States like 
Pennsylvania, Ohio, Oklahoma, the Dakotas, Colorado underscores 
the vast potential of U.S. resources. Just four years ago, 
proved reserves of natural gas were estimated to be 10 to 15 
years. Today those estimates are 40 to 100 years, a staggering 
change in a very small time frame.
    These vast new resources have driven down natural gas 
prices and have led to a manufacturing renaissance in 
industries that use natural gas as electricity or as a feed 
stock, such as petrochemical manufacturing, which is actually 
building new plants and infrastructure in Pennsylvania, 
Oklahoma, Texas, and Louisiana; and, ladies and gentlemen, that 
is just the beginning. This renaissance happened because of 
continuous innovation and ingenuity of the industry. There were 
no government plans or policies, or blue ribbon panels 
involved. There were no subsidies and no government-favored 
winners or losers. Rather, the drastic turnaround came about 
through free market incentives to find and produce more supply. 
The same could be said for crude oil.
    However, government actions are threatening the future of 
this renaissance. In debating energy policy, it is important 
that we do not lose sight of the regulatory environment that 
fuel and petrochemical manufacturers face currently. The recent 
resignation of EPA Region 6 Administrator, Mr. Armendariz, 
shined a bright public light on an issue we already knew and 
confront daily: the EPA and this Administration are hostile to 
fossil fuels.
    Fuel manufacturers are being hit with costly and, in many 
cases, conflicting regulations that threaten refinery 
operations in our Nation. These include Tier 3 regulations to 
reduce sulfur in gasoline, greenhouse gas regulations, lengthy 
permitting delays. You have to really think about how a 
permitting delay impacts investment, impacts future operations 
and, therefore, jobs in this Country.
    Finally, we can't go without mentioning the unachievable 
requirements under the renewable fuels standard involving 
biofuels. Our recommendations are simple: the Administration 
should allow the oil and gas industry to fully develop domestic 
resources and immediately approve the Keystone XL pipeline; 
they should consider the cumulative impact of new regulations 
prior to imposing them and eliminate costly, contradictory, or 
ineffective regulations.
    Last week The Wall Street Journal ran an excerpt from a 
November 16, 1980 memo to President-elect Ronald Reagan from 
his coordinating committee entitled Economic Strategy for the 
Reagan Administration. One quote is particularly beneficial: 
``The battle between government regulation and the private 
market is nowhere more apparent than in energy. Where the 
market has a decisive comparative advantage, government 
intrusion into energy production and use provides a glaring 
example of how regulation costs us all dearly.''
    Thank you, and I look forward to your questions.
    [Prepared statement of Mr. Drevna follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you.
    Mr. Glaser.

                  STATEMENT OF PETER S. GLASER

    Mr. Glaser. Mr. Chairman, Ranking Member Cummings, members 
of the Committee, my name is Peter Glaser. I am a partner in 
the Washington, D.C. office of the law firm of Troutman 
Sanders. I greatly appreciate the opportunity to give this 
testimony today concerning the effect of the Administration's 
policies on coal. Let me say at the outset that although I 
represent clients in the coal industry, my testimony today is 
my own and does not necessarily represent the views of any of 
my clients, and neither I nor my firm is being compensated by 
any client for this testimony.
    Based on a review of this Administration's policies towards 
coal, it can only be concluded that coal does not represent a 
portion of the Administration's all-of-the-above energy policy. 
This conclusion is plain from a review of the policies the 
Environmental Protection Agency is implementing that affect the 
use of coal in new and existing coal field electric generating 
stations and in industrial boilers, and it is also clear from 
the policies of EPA and the Office of Surface Mining for the 
permitting of coal mines.
    EPA's policies are having their intended effect. The Agency 
now has one rule, the so-called MATS rule, or UMACT rule, that 
effectively prohibits the construction of new coal-fueled 
electric generation, and it has another proposed rule, the 
greenhouse gas New Source Performance Standards rule, that will 
accomplish the same result. It is also in the process of 
implementing a suite of power sector regulations that is 
leading to a larger number of retirements of existing coal-
fueled electric generation and it is making it extremely 
difficult to permit coal mines in Appalachia and other places, 
threatening the ability to continue mining in those regions and 
creating the possibility of the loss of hundreds of thousands 
of mining and related jobs.
    EPA's anti-coal policies are motivated by what appears to 
be the misplaced conclusion that such policies are needed to 
protect the public health and welfare, but EPA's own statistics 
show that over the last several decades, even as the use of 
coal increased, emissions of traditional pollution from coal-
fueled electric generation has steadily declined. Coal and 
environmental protection are compatible.
    Moreover, EPA has far, far, far overstated the health and 
welfare benefits its rules will supposedly create for reasons 
that I go to in my written testimony. Indeed, EPA's anti-coal 
regulations will actually harm public health and welfare. 
Studies show that the rules will cause very large increases in 
cost to electric ratepayers, will eliminate jobs, even net of 
so-called green jobs created, and will harm the economy. These 
costs will fall on those least able to afford them, 
disproportionately fall on those least able to afford them, and 
it is a truism that wealth equals health, and the corollary is 
that reducing disposable income through increased energy costs 
will create negative health outcomes as people are forced to 
cut off their air-conditioning in the summer, reduce 
expenditures for health services, or lose their health 
insurance because of lost jobs.
    EPA's policies are also impairing the reliability of the 
electric grid, threatening blackouts which tend to occur when 
the weather is the hottest and air-conditioning is needed the 
most. EPA's estimates of the number of retirements, electric 
generation retirements its rules will cause are dramatically 
understated, far below even the number of retirements that have 
already been announced as a result of EPA's regulations. Yet 
EPA has never produced a valid study of how its regulations 
will affect the reliability of the grid and, indeed, it has 
disregarded recommendations from the Federal Energy Regulatory 
Commission that it cumulatively assessed the effect of all of 
its regulations on grid reliability. Indeed, the business 
community has been asking EPA from the beginning of this 
Administration to cumulatively assess how all of its 
regulations together will affect the electric, mining, and 
other sectors. Yet, despite the fact of Executive Orders of 
Presidents Obama and Clinton require cumulative analysis, EPA 
has refused to produce such a study.
    In the end, EPA appears to fail to grasp that coal is good 
for the economy and good for Americans. As global economic 
conditions become increasingly competitive, America must look 
to where it has competitive advantage as compared with other 
countries. Coal is one of our competitive strengths. There is 
more heating value in coal in America than there is in Saudi 
oil reserves. Coal is comparatively low cost to produce and 
transport, its price has been low and stable over time, it is 
easy to stockpile, and it has been the bedrock of the American 
electric system for a very long time. It would be a serious 
mistake to think that America can be competitive without coal. 
Certainly, some of our main international competitors, such as 
India and China, are increasing their use of coal.
    In sum, this Administration, and particularly EPA, has been 
actively adverse to coal and that policy hurts America.
    Thank you again for this opportunity to testify.
    [Prepared statement of Mr. Glaser follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Issa. Thank you all for your testimony.
    I will now recognize myself for a round of questioning and 
I will start with Mr. Drevna. There is a map they are going to 
put up on the screen here. Just happens to show the Keystone 
pipeline. Now, when you work with refiners and you get North 
Dakota, American. We will ignore the part--I don't want to 
attach any jobs to Canada. I do look at the $100,000 per 
employee, including bonuses, that currently are being paid for 
North Dakota jobs, $70,000 plus bonuses. And, by the way, I 
understand that they are paying a couple thousand dollars in 
bonuses just to go to work for McDonald's because they have 
less than 1 percent up there. But when you look at that, when 
you get oil from those refineries today, my understanding is 
because there is no pipeline, you get the oil from North 
Dakota, you would get it by truck or train, is that correct?
    Mr. Drevna. If it were to come from the Bakken Reserves. 
That is the only way to get it.
    Chairman Issa. Okay. Which means that they would have a 
higher carbon footprint by transporting a less efficient way. 
Literally, by not building the pipeline, we are burning more 
carbon to inefficiently deliver oil that we are going to 
ultimately use from somewhere in the world, isn't that right?
    Mr. Drevna. Mr. Chairman, the most inefficient way to 
transport oil is either by rail or by truck.
    Chairman Issa. So not building the pipeline is in fact 
environmentally hazardous because, if you care about the carbon 
footprint, you are increasing it through that inefficiency.
    Mr. Drevna. Chairman, absolutely right, especially when you 
consider our good friends and neighbors to the north, Canada, 
that oil is going to go somewhere; it is not going to stay in 
the ground up there.
    Chairman Issa. No, it is not.
    Mr. Weiss, I am going to ask unanimous consent that the 
President's March 2012 plan in which the--or actually 
propaganda piece--what was it actually called? This is hot off 
the presses, pretty much. A Secure Energy Future Progress 
Report that cites that $8,000. I will note that is cites it 
over an undescribed period of time, not per year. In fact, it 
appears to cite between now and 2025. But we will leave that 
alone because ultimately the American family doesn't spend 
$8,000 per year today on gasoline----
    Mr. Weiss. Can I address that?
    Chairman Issa. No, you can't.
    In order to get that savings, you must necessarily 
quadruple prices and then get your 54 miles per gallon. But we 
will put that entire thing in the record and I will ask my 
staff to file a counter report.
    Unidentified Speaker. Would you let him answer that?
    Chairman Issa. No. I didn't ask him a question.
    But I do have a question for Mr. Glaser.
    If we will put up the chart that the President came out 
with for his all-of-the-above strategy. It was on his campaign 
website.
    [Slide.]
    Chairman Issa. Mr. Glaser, I know it is hard to see, but 
will you note there that nuclear is included, biofuels, but 
coal is omitted?
    Mr. Glaser. Yes. And I don't think that is a mistake, 
either.
    Chairman Issa. Well, he must have considered it a mistake 
because he corrected it when being pointed out that he had no 
coal.
    Would you put up the next slide?
    [Slide.]
    Chairman Issa. The next slide says clean coal. So is that 
to imply that the coal of today is unacceptable and, thus, he 
has no plan for coal, only a plan for coal when it is somehow 
different than it is here today?
    Mr. Glaser. Yes. I actually don't know what that means. 
Coal, as I indicated in my testimony, is being burned in an 
increasingly clean fashion. There is no reason that we need to 
dial coal out of the American energy equation.
    Chairman Issa. But isn't the Administration currently, by 
new standards that are shutting down at least 26 gigawatts of 
electric power because these coal plants are shutting down, 
essentially taking the 46 percent of our energy that comes from 
coal and ratcheting it down as we speak?
    Mr. Glaser. Yes. Right. And that 26 gigawatts figure, of 
course, is only currently announced retirements; the 
projections are much higher than that.
    Chairman Issa. Okay, Mr. Weiss, I do have a question for 
you. Now, you stated that more oil would not reduce the cost. 
You wouldn't make the same statement about natural gas, would 
you?
    Mr. Weiss. [Remarks made off microphone.]
    Chairman Issa. No, that is a yes or no. Would you or 
wouldn't you make the same statement about natural gas?
    Mr. Weiss. No, I would not because that is not priced on 
the global market in the way that oil is----
    Chairman Issa. Very good. So when you put more into a 
market, you reduce price. In other words, even progressives 
believe that supply and demand actually works, that more supply 
with a given demand will in fact reduce cost.
    Mr. Weiss. I do not agree with that when the price is set 
by a cartel----
    Chairman Issa. Let's go through that. Isn't it----
    Mr. Weiss.--percent of our reserves----
    Chairman Issa. Mr. Weiss, that wasn't a question. And, by 
the way, a fraction, a fraction of the world's oil comes from 
cartels. The fact is that natural gas is proof. We have the 
lowest cost of natural gas of anyone in the world. We deliver 
clean, natural gas throughout the world. As a matter of fact, 
if Mr. Markey wasn't blocking it from going to New England, 
they would be taking out fuel oil and putting in natural gas. 
But let me just get to the main point. The assumption that the 
world does not have enough oil, and that if the world had an 
abundance of oil and other fuels that, in fact, the world price 
would go down, you would have to agree with us, wouldn't you, 
that ultimately if non-cartel states like Canada and the United 
States were producing an abundance of oil, we would in fact 
break the back of the cartels, bring down the price on a global 
basis, wouldn't we?
    Mr. Weiss. I do not agree. The price is set by a cartel----
    Chairman Issa. But why don't we go through----
    Mr. Weiss. Excuse me, Mr. Chairman----
    Chairman Issa. No, no, no. Mr. Weiss, you answered the 
question----
    Mr. Weiss.--and they have the same high gasoline prices 
that we have here.
    Chairman Issa. Well, thank you very much for deciding that 
you are going to be an economist here after you agreed that it 
worked in natural gas.
    Mr. Drevna, perhaps you are a little bit more reasonable. 
If in fact the world supply reaches a glut, as it periodically 
does, as it did in the early part, I believe, of the Bush 
Administration when we got down to, like $9 or $10 a barrel for 
a short time, ultimately, with supply and demand, on a global 
basis, it is a world market because it is so transportable, 
don't we in fact reduce the cost per barrel? Weren't your 
refiners paying dramatically less when, for a period of time, 
there was an excess?
    Mr. Drevna. Absolutely, Mr. Chairman.
    Chairman Issa. Isn't it also true that the difference 
between a shortage that drives up the price to $100 a barrel 
and more and an excess that can drive the price down into the 
teens at times can be a very small amount relative to the world 
demand?
    Mr. Drevna. That is absolutely correct, Mr. Chairman. When 
you look at the cost of production of various wells throughout 
the world, it is the last burrow in that makes the difference. 
But if we are serious about our own energy and natural 
security, and if you will permit me some statistics----
    Chairman Issa. Of course.
    Mr. Drevna. Four years ago natural gas was $11.70 per 
million btu; today it is--a couple days ago it was $2.43. Four 
years ago West Texas Intermediate was $127 a barrel; today, a 
couple days ago, it was $87.57. And why is that? Because 
natural gas production is up dramatically, and even on State 
lands, I must admit again, on State lands crude oil production 
is up dramatically in this Country. If we want to send a 
message, if we want to take care of the American economy, if we 
want to let the rest of the world know that we are dead serious 
about our energy and national security, let's open up our own 
God given reserves.
    Chairman Issa. I will give the Ranking Member equal time, 
but, Mr. Krancer, the natural gas that you have in abundance in 
Pennsylvania and our common birthplace, Ohio, isn't it a highly 
substitutable fuel over the intermediate stage 4 oil and gas? 
In other words, can't your natural gas in greater numbers--and 
we had the Secretary of Energy here telling us about the 
advancements--be substituted? And, if so, isn't it true that 
you are talking about less than $1.50 a gallon for the 
equivalent amount of natural gas in today's prices?
    Mr. Krancer. Absolutely correct. It is substitutable on a 
number of fronts. I used to be in the electricity generation 
business. I work for a company. There is what is going on a 
dash-to-gas going on right now, gas-fueled power plants. Gas-
fueled liquid and compressed natural gas transportation 
vehicles could prove the key to clean air in urban areas like 
the area where I live near Philadelphia and in Pittsburgh and 
so forth. So you are absolutely right.
    Chairman Issa. So, in fact, our natural gas is just as much 
part of breaking the back of the world cartels as our oil 
production.
    Mr. Krancer. Absolutely correct.
    Chairman Issa. Thank you.
    I would ask the gentleman have nine minutes, please.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Weiss, so that the record will be clear, the Chairman 
asked you about the $8,000 figure, you never said annually, I 
never said annually. Would you clear that up? I will clear mine 
up, but you clear yours up.
    Mr. Weiss. Thank you, Mr. Cummings.
    Mr. Cummings. Because it was never said.
    Mr. Weiss. That $8,000 figure is over the lifetime of the 
vehicle, and it compares gasoline purchases by a 2025 average 
model, which will be 54.5 miles per gallon, compared to a 2010 
model, which was averaging at 27.5 miles per gallon. It is an 
$8,000 difference over the life of the vehicle. It was 
generated by the White House, I believe. Since I am under oath, 
I don't want to swear to it, but I believe it was generated by 
the White House using Department of Transportation data and it 
assumes a relatively low price for gasoline of $2.50 per 
gallon.
    So that is where that figure comes from.
    Mr. Cummings. Let me ask you this, Mr. Weiss. In 2001, 
under the Bush Administration, 2.12 billion barrels of crude 
oil were produced from U.S. fields and total oil production 
fell every single year since 2001. According to the Energy 
Information Administration, since 2001 through 2008, oil 
production of United States fields fell by more than 14 
percent. Mr. Weiss, have you seen this data and isn't it true, 
according to EIA data, that U.S. production of crude oil fell 
each year under the Bush Administration? Is that correct?
    Mr. Weiss. I would have to go back and look at that data, 
Mr. Ranking Member, but it is clearly up since President Obama 
took office. We were at about 4.7 million barrels per day, I 
believe, in 2008. This year, Energy Information Administration 
predicts we will be at 6.2 million barrels per day, which is 
about a 30 percent increase, if I did the math correctly, over 
what the last years of the Bush Administration.
    Mr. Cummings. Well, let me clarify that a little bit more. 
During the last year of the Bush Administration, 1.811 billion 
barrels were produced from United States fields. In 2009, the 
first year of the Obama Administration, this figure went up to 
1.956 billion barrels produced. In 2010, the figure continued 
to climb--folks want to talk about in spite of, but the fact is 
the numbers are going up--continued to climb to 1.998 billion 
barrels. This upward trend continued in 2011, when 2.066 
billion barrels were produced.
    Mr. Weiss, comparing the last year of the Obama 
Administration to the last year of the Bush Administration, oil 
production increased by 14 percent. This is based on data from 
the Energy Information Administration.
    Now, Mr. Weiss, what does this suggest to you in terms of 
the Obama Administration's record and its commitment to 
domestic oil production?
    Mr. Weiss. There is no question that we are producing more 
domestic oil now than we did under the previous administration. 
In fact, Energy Information Administration released a report in 
March of 2012 that looked at the production from public lands 
of oil, and 2011 was 646 million barrels; 2008, 575 million 
barrels. The 2011 production was bigger than any of the last 
three years under the previous administration, and that is from 
a March 2012 EIA report.
    Mr. Cummings. Mr. Krancer, you were talking about 
enforcement generally, I guess with regard to EPA, and I just 
want to refer an article to you. It is the Mercury News and it 
is dated yesterday, entitled, Oil Stats Belie Tough Enforcement 
Talk. Let me just read the first two paragraphs, but I just 
want you to take a look at this when you get a chance.
    It says in the three years since President Barack Obama 
took office, Republicans have made the Environmental Protection 
Agency a lightning rod for complaints that this Administration 
has been too tough on oil and gas producers. But an Associated 
Press analysis of enforcement data over the past decade finds 
that is not the case. In fact, the EPA went after producers 
more often in the years of Republican president George W. Bush, 
a former Texas oil man, than under Obama, and it gives a lot of 
details. I just refer that article to you and I understand what 
you said.
    Mr. Krancer. Well, I appreciate that, Ranking Member. I 
have not read that article and, of course, enforcement is 
perhaps a different issue than what we are talking about, and 
to some extent maybe statistics about what was produced when 
versus now, they may be a little bit of a red herring. What we 
are looking at is what we need to do in the future.
    Mr. Cummings. Mr. Krancer, I promise you I am not trying to 
create red herrings. I swear to God I am not. I am trying to 
make sure that credit is given where credit is due. The fact is 
that it seems like all the stats are going up, and I think the 
thing that upsets me more than anything else is how this 
President seems to be given credit for nothing. No matter what 
he does, he is given credit for nothing. Nothing. And when 
there are things that are happening positive, they say stuff 
like it is happening in spite of, you know, in spite of him, in 
spite of this. When they go bad they say, uh-oh, the President 
did that, he did something wrong. I hear that in almost every 
single committee I sit in, and at some point the question has 
to be asked. Oil production going up, oil companies making 
record profits, and everybody saying Obama, Obama, he has 
screwed up again. And when I see the numbers over and over 
again, I have to tell you it gets on my nerves.
    But, anyway, let me go back to you, Mr. Weiss. I didn't 
mean to get upset, but I have seen this all over. When the 
jobless rate comes down, they say, oh, it would have happened 
without him, or they will say, oh, it is going too slow. Nobody 
roots for the Country; they say stuff like this wouldn't have 
happened. Then sometimes the folks take credit for things that 
they didn't even do. So, anyway, the data shows that this is 
not just one year increase, but a sustained multi-year 14 
percent increase in overall domestic crude oil production.
    Mr. Weiss, what is your response to the argument that the 
Obama Administration does not deserve credit for those four 
years because it was reaping the benefit of the previous 
administration's policies?
    Mr. Weiss. Well, first, in response to earlier comments, it 
reminds me of the story that some people are like this, that 
when they see Jesus walking on water, the headline in the 
newspaper would be Jesus can't swim. So I think that is sort of 
the treatment that the President is getting.
    In terms of the--yes, a lot of this production began under 
the previous administration, but those people who claim that 
the President is not pursuing an all-of-the-above strategy or 
is launching a war on oil or a war on coal, when oil production 
is up, coal mining employment is up compared to the previous 
administration, it is hard to understand where is the record 
behind that. Not the rhetoric, but where is the record behind 
those charges?
    Mr. Cummings. In March of this year--this is my last 
question--the Energy Information Agency issued a report 
entitled Sales of Fossil Fuels Produced on Federal and Indian 
Lands FY 2003-2011. According to the report, the two best years 
for oil production, both offshore and onshore, occurred under 
the Obama Administration. In 2011, 112 million barrels were 
produced onshore on Federal lands, and in 2010 618 million 
barrels were produced offshore on Federal land.
    Mr. Weiss, are you aware of that report?
    Mr. Weiss. Yes, Mr. Cummings. That was the report that I 
referred to earlier that demonstrates conclusively that we are 
producing more oil from our Federal lands and waters in the 
last three years of this Administration than in the last three 
years of the previous administration.
    Mr. Cummings. Thank you, Mr. Chairman.
    Chairman Issa. Of course. Thank you all.
    We now go to the gentleman from Pennsylvania, Mr. Kelly, 
who was here at the start.
    Mr. Kelly. Thank you, Mr. Chairman.
    I am certainly not going to compare anybody to the Lord and 
their ability to walk on water, but, Secretary Krancer, as you 
know, I am from Pennsylvania and you are too, and I have been 
in your presence before. Pennsylvania has done an awful lot as 
far as the natural gas exploration. Could you just walk us 
through a little bit the opportunities? I know right now 
Pennsylvania is called the Saudi Arabia of natural gas. We are 
talking about at least two centuries of supply; we are talking 
about coal, two centuries' supply of coal; and we are talking 
about also our ability to sever our reliance on imported 
energy. And I wonder about fossils that are so greatly abundant 
and accessible and affordable, and why, when you look at the 
current Administration's record, as much as we would like to 
say that there is a lot more being found, a lot more being 
produced, a lot of that is coming from the private sector, 
people who have their own skin in the game, who are actually 
taking that step forward.
    If you could, tell us a little bit about what Pennsylvania 
has done. And I am trying to understand why anybody inside this 
Beltway would think that they are more concerned about air and 
water in Pennsylvania than you are.
    Mr. Krancer. Well, thank you for that. You are exactly 
right and I mentioned that early on. My job is to protect the 
environment. That is what we do and that is what my agency 
does. Your question is a good one, and let me follow up to what 
the Chairman said, Chairman Issa. He said that our natural gas 
production in Pennsylvania, and elsewhere, could provide the 
key to unlocking the cartels, the oil cartels. It is much 
broader than that.
    Right in our State now we are seeing a renaissance, and it 
was spoken about earlier in the testimony, of petrochemical 
industry in America, right here in Pennsylvania. For the first 
time in my lifetime, maybe in all of your lifetimes as well, 
the United States of America could potentially enjoy a cost 
advantage overseas in petrochemical, ethane to ethylene. We are 
seeing what has happened right now with respect to Shell and 
possibly Shell--and I mean possibly because we are only in the 
first inning of that situation--building a cracker facility in 
Beaver County. We are seeing the same thing in Southeastern PA, 
which is my backyard. We are seeing the potential petrochemical 
renaissance in one of our oil refineries that had been shut 
down. We are seeking the Bakken crude, for example, providing 
the economic turnaround for another one of our oil refineries 
in the southeast.
    So the potential here is gargantuan on my side of the 
ledger. And I can talk about the economics all day because I 
have an economics degree. I am an amateur compared to Mr. 
Perry, but I do know economics. The clean air potential, which 
I discussed earlier, in cities like mine, Philadelphia, cities 
like the governor's, Pittsburgh, and when you have clean air 
you have healthier people, you have more business opportunities 
and so forth. So the immense possibility for economic revival, 
environmental cleanup, environmental improvement and health 
improvement, they are all there and they are all there right 
under our footprints in Pennsylvania, in Ohio, in Oklahoma, and 
in many other States.
    Mr. Kelly. If you could, what advice would you give Federal 
regulators right now? When I am back home in Northwest 
Pennsylvania, I get a chance to talk to all these folks who are 
involved in this industry. They tell me how difficult it is to 
navigate the permitting process and the length of time that it 
takes to get these online. If you could, what kind of advice 
could we give the Feds?
    Mr. Krancer. Well, my prime advice would be to back off, 
because the States, including mine, including Oklahoma, 
including West Virginia, including Texas, Louisiana, you name 
it--and I don't mean to leave anybody out--are doing a good job 
regulating hydraulic fracturing--I will point to that--in their 
States where it takes place. The Federal Government, all of a 
sudden, out of the blue, despite the history--and I can go 
through the legal history about this--all of a sudden is 
showing an interest in hydraulic fracturing and regulating 
hydraulic fracturing. Never before had the Federal Government 
at any level, regardless of the administration, shown any such 
interest in doing so.
    I would also encourage the other branches of the Federal 
Government. It is not just about the EPA. The Army Corps, for 
example, with respect to developing infrastructure, is 
overstepping its review of projects and treating projects today 
differently, pipelines, than they ever had in the past.
    So my advice would be trust the States. The States in which 
this is happening know exactly what they are doing; they have 
been at it for generations and we are on top of it.
    Mr. Kelly. The length of the permitting is the thing that 
bothers me because, with the exception of something that the 
Federal Government would do, time is of the essence for those 
in the private sector, and it is the waiting and the not 
knowing and the uncertainty if you are even going to get your 
permit. And to think that you can keep crews on the sideline, 
you can keep equipment on the sideline and just keep it warm 
until they are ready to get in the game once they get a permit, 
it is absolutely stifling these folks; it is causing them great 
losses of income; and it is also keeping this Country from 
reaching the energy independence that we have been seeking 
since the early 1970s.
    Length of time. Just real quick, what is the length of 
time, do you think, for a permit, a guy who is going to do 
coal?
    Mr. Krancer. It varies, but let me just say this to sum it 
up. What I see is Federal overlay, which is adding no 
environmental protection on the ground, which is causing delay. 
Just look at the Environmental Protection Agency, the Federal 
Environmental Protection Agency. They have an unbelievable fast 
track on regulations. They produce more regulations in air, in 
NAAQS, in three and a half years than I think the total of 16 
years of prior two administrations. When you get to permitting, 
that is the snail track.
    Chairman Issa. I ask unanimous consent the gentleman have 
an additional minute. Without objection.
    Would the gentleman yield?
    Mr. Kelly. Because I think the critical aspect of this we 
are not seeing, and I was--earlier in the spring we were 
talking about there was no relationship between supply and 
demand, that no matter what there was no way we could control 
the price of gas because it was just going to go off the charts 
because of all these people that gamed the situation. But is a 
basic economic belief that supply and demand are the drivers of 
the cost of energy.
    Chairman Issa. I agree with the gentleman. Would the 
gentleman yield?
    Mr. Kelly. Yes, I will.
    Chairman Issa. Following up on the gentleman's question, 
Mr. Perry, since it is widely considered accurate on both sides 
of the aisle that it takes as much as 10 years from the 
beginning of a drilling process to a productive well, when the 
folks on the dais keep talking about the last three years of 
President Bush and the first three years of President Obama, 
how would that 10 years work from the standpoint of when 
product would come online, thus giving that increase? When 
would you have to begin in order to get a benefit, let's say, 
this year? What administration, what year?
    Mr. Perry. Mr. Chairman, I am not really an expert on the 
permitting process, but I do know that----
    Chairman Issa. The chart is up on the board showing the 
lease/sale ratio. Oh, I am sorry. Why don't you explain your 
chart? And that will end the questioning on it.
    Ms. Sgamma. Great. I appreciate that. Right now we are 
seeing permitting times taking, on average, 298 days. But 
before you even get to where you can drill a well and where you 
can permit that well, you have to go through the environmental 
analysis process. We are right now seeing environmental 
analysis taking over 7 years, and that is the study I cited in 
my testimony, where we have just 20 projects in the West, 3100 
wells a year. The projects are over 10 to 15 years. Those 20 
projects could generate 21,000 jobs and $27.5 billion in 
economic activity every year, except that they are now sitting 
in the environmental analysis phase.
    So what we are seeing--one of the long points on that time 
line is the environmental analysis. So you start with you get 
your lease, there is some exploratory work done, you drill an 
exploratory well that might take you three years to get that 
environmental analysis done; and that is not the operating 
doing that, that is the Federal Government. So even a small 
project, even a 9-well project can take 4 years to get that 
environmental analysis done. So let's say your well is 
successful. Then you need to go and maybe do a larger project, 
maybe it is 100 or 1,000 wells. That environmental analysis is 
now taking over 7 years in many cases. So that is the long pole 
in the tent, so to speak, where it can take you over 10 years 
until you are actually fully producing on the lease; not 
because it can't be done by the operator, but because of 
government delays.
    We see on corresponding State and private lands where it 
can take a matter of months to a year to start producing.
    Chairman Issa. So it is fair to say that President Clinton, 
his oil production was--in fact, the Reagan-Bush years. 
President Bush, the son, his oil production was the Bill 
Clinton years; and, in fact, Obama's are the W. Bush years. 
Essentially every president in four or, preferably, eight years 
for most, they are in fact the period of time that the next 
enjoys in that roughly 8 to 10 years.
    Ms. Sgamma. Exactly. It is a minimum 3 to 5 years before 
you can start operating on Federal lands, compared to a year 
for private or State lands.
    Chairman Issa. Thank you.
    We now go to the gentleman from Massachusetts, Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman. You know, I don't 
want to spend a lot of time going back and forth on this 
political stuff. I just note that the facts are somewhat clear. 
Since 2008, total U.S. crude oil productions climbed 14 
percent. In 2010, the United States natural gas production 
reached a record of 26.9 trillion cubic feet, which was a 5 
percent increase from 2008 and the highest level in more than 
30 years. The two best years since 2003 for the production of 
natural gas on onshore Federal lands occurred in 2009 and 2010. 
In 2011, the Department of the Interior offered approximately 
21 million additional acres for offshore oil and gas 
development. In 2012, an additional 38 million acres will be 
offered as part of a lease sale in the central Gulf of Mexico 
and in the area estimated to hold close to 31 billion barrels 
of oil and 134 trillion cubic feet of natural gas. So on and so 
forth on the public lands.
    So I think this debate or trying to make the President look 
bad or something like that is a little silly, but I want to go 
to another aspect of this.
    Mr. Weiss, the oil and gas industry has been around for 
about 100 years, would you agree? Been in operation?
    Mr. Weiss. [Remarks made off microphone.]
    Mr. Tierney. And oil and gas, I don't think you could call 
them an emerging technology any longer. Do you think so?
    Mr. Weiss. No, sir. I believe the first oil was produced in 
Pennsylvania in the 1850s. I would defer to Mr. Krancer on that 
one.
    Mr. Tierney. So the first quarter of 2012, the top five oil 
companies, earned $30 billion.
    Mr. Weiss. Actually, $33.5 billion, that is correct.
    Mr. Tierney. And over the last 10 years, the top five oil 
companies garnered more than $850 billion in profits, is that 
about right?
    Mr. Weiss. Yes. And we estimate it is over a trillion 
dollars if you use 2011 dollars, just for inflation.
    Mr. Tierney. So Exxon alone made $80 billion last year, 
which is about $5 million an hour.
    Mr. Weiss. Yes, about that.
    Mr. Tierney. So my point on all of this is that the 
Congressional Research Service tells us that in the fiscal year 
2013 budget, they will be getting $39 billion in taxpayer 
subsidies. And if subsidies are for helping emerging 
technologies, would you agree with me it seems we are beyond 
that point and this is taxpayer money just thrown out the 
window?
    Mr. Weiss. Yes. In fact, one of the tax breaks that applies 
only to the oil industry dates back to 1916. Meanwhile, the tax 
incentives that go for wind, power, expires at the end of this 
year.
    Mr. Tierney. Since 1918 to 2009, the oil and gas average 
subsidy is $4.86 billion a year, taxpayer money to an 
incredibly profitable industry on that basis. From 1994 to 
2009, renewable energies got about $370 million a year. So it 
was quite a disparity. So we have the emerging industry, which 
is the renewables, getting a fraction of what this mature, 
extremely profitable industry is getting. Can you explain any 
public policy rationale behind that?
    Mr. Weiss. Well, I couldn't explain it on a policy 
rationale. My guess is you could guess the political rationale 
for that. And I think it is important to note that although 
some from the oil industry will say don't take away these tax 
breaks because that is like a tax increase on it. In fact, a 
number of Republican leaders, including a chief economist for 
Ronald Reagan, have all said that these tax breaks are just the 
same as government spending, just done through the tax code 
rather than a direct grant. And it is important to remember 
that when we are looking at these huge tax expenditures.
    Mr. Tierney. Well, I also know, look, between 2004 and 
2008, the top five oil companies spent an average of 42 percent 
of their profits on stock repurchases. So they are just buying 
back their own stock and making themselves more valuable on 
that. So I guess the policy question would be why, Mr. Weiss, 
should the United States taxpayers be forced to subsidize stock 
repurchases from oil and gas companies.
    Mr. Weiss. To me, there is no apparent policy goal that is 
being served by that, particularly when the amount of money is 
trivial compared to the amount of profits that this industry is 
making. The big five oil companies will get about $2.4 billion 
in tax breaks for this year and they are on track to make 
around $120 billion in profits. They buy back their own stock 
with about a third of that money and they are sitting on about 
$60 billion in cash reserves. They don't need the $2.5 billion 
a year in tax breaks, especially when we are cutting money for 
wind, for Pell grants, for other very important needs. It seems 
to me not a good----
    Mr. Tierney. Or, I might note for keeping the need-based 
interest on student loans at 3.4 percent instead of 6.8 
percent. That is just a personal interest. My bill would pay 
for it by taking away just one of those subsidies.
    Let me ask you a little bit about the nuclear industry. 
That is also a mature industry, would you agree?
    Mr. Weiss. Yes. It first began in 1947 is when we first 
began subsidizing the nuclear industry.
    Mr. Tierney. And yet the American taxpayer continues to 
absorb the risk for that because they can't find private 
insurers, is that correct?
    Mr. Weiss. Well, that is under the Price Anderson Act. But 
in addition we are giving them a loan guarantee to build the 
two new reactors in Georgia that were the first approved in 30 
years, and it was approved by this President.
    Mr. Tierney. So it seems to me, Mr. Chairman, rather than 
sitting around here playing politics with the President did 
this or didn't do that, maybe we ought to be talking about the 
policy going forward for the American taxpayer, spending their 
money on the things that are going to build this Country and 
build our foundation for future jobs, as opposed to loading up 
on the oil and gas industry----
    Chairman Issa. I don't have any question that that could be 
valuable. I would also suggest that perhaps your witness could 
tell us all how much taxes those oil companies paid.
    Mr. Tierney. Well, I would suggest that is sort of 
irrelevant. I hope they are paying their fair share of taxes. 
But I also hope they are not getting our tax money to buy back 
their own stock when they are making tremendous profits. That 
would be a good hearing to have here today, instead of loading 
up five to one.
    Mr. Weiss, what do you think?
    Mr. Weiss. Well, in fact, Reuters just did an analysis of 
this and found that Exxon Mobil paid 13 percent of its U.S. 
income in Federal taxes after deductions and benefits in 2011, 
and that compares to the typical business rate of 35 percent. 
ConocoPhillips and Chevron were at about 18 and 19 percent last 
year, according to Reuters News Service.
    Mr. Tierney. So, Mr. Chairman, let's have that hearing.
    Chairman Issa. Mr. Drevna, you want to elaborate on that to 
fill out the answer?
    Mr. Drevna. Well, at the risk, at the severe risk, when in 
this Country has it become wrong to employ 9.2 million people--
--
    Mr. Tierney. Let me----
    Mr. Drevna. No----
    Mr. Tierney. I reclaim my time.
    Chairman Issa. The gentleman's time has expired.
    Mr. Tierney. The issue is whether or not they are paying 
their fair share of taxes, whether they are getting subsidized 
by taxpayers when they needn't be subsidized----
    Mr. Drevna. There are no subsidies----
    Mr. Tierney. Of course they are hiring people. They are in 
business; they have to get people to extract their product and 
produce it so they can make their product. Every company does 
that. But a lot of companies pay their fair share and a lot of 
companies don't get subsidized to buy back their own stock when 
they are extremely profitable. So that was the issue and that 
was the question, not whether they are employing X amount of 
people.
    Chairman Issa. The gentleman may complete his answer.
    Mr. Drevna. And the answer is no, sir, they are not getting 
subsidies. There are no subsidies. If your desire is to change 
the tax code, fine, change the tax code; make it fair. Make it 
fair for everyone. But don't pick on oil companies and natural 
gas companies and refiners, who pay their fair share to the 
tune of $86 million a day in taxes. We are the most heavily 
taxed industry in this Country, and we do provide those jobs 
and you can't snuff off the jobs. You can't snuff off the jobs, 
the taxes that those 9.2 million people pay. And I would 
suggest, Congressman, that I think we would do better in this 
Country with a lot more Exxon Mobils, Chevrons, and 
ConocoPhillips, and a few less Solyndras, and maybe this 
Country would be moving forward in a better way. Thank you.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Oklahoma, a place in which 
we receive a lot of tax revenue, for five minutes, Mr. 
Lankford.
    Mr. Lankford. There are a lot of companies in Oklahoma that 
do provide a lot of revenue to the Federal Government.
    Let me just mention a couple things that I find ironic in 
this conversation. One is to talk about Chevron only pays 18 
percent tax after everything else, when GE pays zero. And if 
you look at the top five energy companies in America on the new 
Fortune 500 list and compare them to the top five technology 
companies, guess who makes more profit? That would be the 
technology companies, not the energy companies. But I hear 
scant from anyone saying we need to go after that Apple, we 
need to go after Microsoft, we need to go after Intel; they 
make too much money. Instead, it is a pet project to try to 
diminish fossil fuels in traditional energy and to go after 
them. This is not about tax dollars; this is about a political 
process to say we want to try to wipe out traditional energies 
to try to benefit solar and wind and such.
    Now, if we are going to have all of the above, let's do all 
of the above. Let's stop trying to pick on one industry and to 
say the way we will benefit solar and wind is by trying to 
destroy another industry.
    Let me hit on just a couple things.
    Mr. Perry, economically, what would happen if the United 
States became energy independent? What would happen to our 
economy if we really were truly energy independent?
    Mr. Perry. Well, I think we could look to what some people 
call the economic miracle state of North Dakota and see what 
happens when we have abundant energy that is actually produced. 
North Dakota has an unemployment rate of 3 percent. In the 
heart of the Bakken, Williston, North Dakota, Williams County 
have unemployment rates less than 1 percent. The State has a 
budget surplus. In terms of State income growth, personal 
income growth, they lead the Country in terms of prosperity. So 
I think in addition to being energy independent, I think 
producing energy within the United States, using the treasures 
beneath the lands that we have, I think we can look to what is 
happening in North Dakota and in Pennsylvania, and now in 
Oklahoma and Eagle Ford in Texas, and places like that, to see 
the economic stimulus that it would have in addition to helping 
in terms of energy independence.
    Mr. Lankford. We are currently on a model that the Federal 
Government has to fund new energy sources versus what can we do 
to unleash the energy that we have and unleash our economy. So 
I am astounded by the fact that if we were to really become 
energy independent, to really go after the energy that we have, 
to produce that and to use it ourselves, the job creation, the 
tax revenue that would be the least money that we would acquire 
from Federal lands, the royalties and such, it is unbelievable 
the amount of money that is sitting on the sidelines, literally 
under our feet, that we are restrained from being able to go 
after on that.
    Ms. Sgamma, I want to ask you about this private versus 
public lands. You mentioned that a couple times. We understand 
now current production that is happening on public lands was 
permitted in previous administrations and is now occurring. 
What is the permitting process right now? How many permits are 
going out? How many new projects are starting or being 
permitted on public lands right now?
    Ms. Sgamma. Well, if you look at the NEPA, which is really 
the long period of time that it takes to get a project through, 
we are seeing NEPA taking over 7 years. So this Interior 
Department has approved just two large projects in----
    Mr. Lankford. Two?
    Ms. Sgamma. Just two, right. And there are 20 projects that 
have been proposed that could create 121,000 jobs.
    Mr. Lankford. So out of 20 projects proposed, two have been 
approved. So talking 10 years from now, what happens in 
production on Federal lands?
    Ms. Sgamma. Well, exactly. That is pushing out into the 
future. That means we are going to have much less production in 
the future because of the long lead times on Federal lands.
    Mr. Lankford. The President and the Administration talk 
often about production and how production has increased. Can 
anyone identify an element that this Administration has done to 
increase production; that they can point to and say because the 
Administration did that, this Administration, because this 
Administration did that action, we have increased production?
    Ms. Sgamma. I can only see a lot of obstacles that have 
been put in place by producers on Federal lands, both from the 
EPA, from the Interior Department, regulations that are making 
it more difficult, time-consuming, costly. The Interior 
Department admits to 298 days to process a permit----
    Mr. Lankford. That is a long time to do a permit.
    Ms. Sgamma. It is, considering that States get it done in 
about 30 days.
    Mr. Lankford. Okay.
    Mr. Weiss, it sounds like you want to be able to jump in.
    Mr. Weiss. Yes. I believe that Shell is going to be 
exploring in the Arctic Ocean, in the Chukchi Sea off the 
Northern Coast of Alaska this summer, which was approved under 
this Administration.
    Mr. Lankford. Okay, but that is something that will 
actually be done years from now. I was talking about current 
production. You mentioned often that this Administration has 
more production than the previous administration. What has this 
Administration done proactively to create that? Can anyone name 
anything?
    [No response.]
    Mr. Lankford. See, this is a product of the actions of the 
previous administration and of the free market and of drilling 
on private lands. This Administration is taking credit for 
increased production, when this Administration proactively has 
done nothing to do that. It is as if the train is moving and 
they ran and jumped in the engineer's position and said, hey, 
look, I'm at the front of the train. And I have to tell you I 
am glad that we are increasing production, but it is always 
tough for me when someone in politics takes credit for 
something they didn't do.
    With that, I yield back.
    Chairman Issa. Would the gentleman yield? I'm sorry, the 
gentleman's has expired.
    We now go to the gentleman from Illinois, Mr. Davis, for 
five minutes.
    Mr. Davis. Thank you very much, Mr. Chairman. I must note 
that unfortunately for much too long my State has been sending 
more revenue to Washington than it has been getting back. I 
also have to note that we have one county that has more people 
than half the States in America in it. So those are interesting 
comparisons relative to employment statistics and opportunities 
that do in fact exist.
    But it seems to me that the premise of this hearing appears 
to be that the Obama Administration is not doing enough to 
encourage development of all sectors of the energy economy, and 
I would like to understand how natural gas production has 
faired under the Administration as compared to the previous 
administration.
    According to the Energy Information Administration, in 
2008, President Bush's last year in office, about 25.6 trillion 
cubic feet of natural gas was produced. In 2009, the first year 
of the Obama Administration, this figure increased to 26 
trillion cubic feet produced. This trend has continued and in 
2011 almost 29 trillion cubic feet were produced.
    Mr. Weiss, let me ask you. Based on this data from the 
Energy Information Administration, it appears that natural gas 
production has hit record levels during the Obama 
Administration. Is that accurate?
    Mr. Weiss. I believe so, that it is, sir, yes.
    Mr. Davis. Well, critics have argued that President Obama 
wanted to curtail natural gas production, but these statistics 
suggest otherwise. These figures suggest that President Obama 
has continued many of the same policies as his predecessor in 
terms of natural gas production. Is that right?
    Mr. Weiss. When it comes to onshore, yes. With offshore, 
they are making sure, like with the oil rigs, that the natural 
gas rigs are produced in a much more safe manner so that way it 
protects the workers on the rigs and reduces the prospects of 
another oil disaster. In fact, even though they put in tighter 
rules, we expect, by the end of the year, I think Bloomberg 
reported that there will be as many rigs operating in deepwater 
in the Gulf of Mexico, but more safely than before the BP 
deepwater disaster; and those rigs, most of them, will produce 
both oil and gas.
    Mr. Davis. Well, let me ask you are there any significant 
differences between the policies of President Obama and the 
policies of President Bush as it relates to natural gas 
production?
    Mr. Weiss. There is one, which is that under the Clean Air 
Act the Administration was required by law to produce standards 
for the release of air pollution from oil and natural gas 
production, and so the President has implemented those laws and 
proposed final standards that would protect humans from some of 
those emissions from those facilities.
    Mr. Davis. Well, Mr. Drevna, let me ask you doesn't this 
relatively steady trend of production suggest that there are 
minimal differences between how the two administrations have 
managed natural gas production?
    Mr. Drevna. I am sorry, Mr. Davis, the difference being, as 
has been said before, it has been innovation and ingenuity by 
entrepreneurs on State and private lands and on Federal lands 
that have increased dramatically the numbers that you so 
rightfully suggested. If you look at the percent of natural gas 
developed on Federal lands, it is down 14 percent over that 
time frame. So let's not sit and say this versus that; let's 
say what are we going to do going forward. What are we going to 
do to make this Country energy secure and nationally secure? 
The best way to do it is, again, the all-of-the-above approach, 
which includes all the above and all the below, as we said 
before. Going forward, that is what we need to do.
    Mr. Davis. And I can agree with that, but I also can agree 
that in order to determine how you need to go and where you 
need to go, it is good to look at where you have been and to 
look at where you are.
    Mr. Drevna. You are absolutely right, Mr. Davis. And the 
question is, then, did all this production start on January 
20th of 2009? No. It was in the pipeline, going forward. When 
we developed the horizontal drilling with a combination of 
hydraulic fracturing, it opened up vast new reserves throughout 
the Country, as Secretary Krancer has said. Let's go forward. 
Let's see how we are going to do it. Let's open up these lands 
and let's give the American people and the consumer what they 
deserve.
    Mr. Davis. Well, thank you very much. I just simply have to 
agree with Mr. Cummings that it seems as though President Obama 
gets no credit for the massive increases in oil and gas 
production during his administration and President Bush gets no 
blame for the oil and gas reductions during his administration.
    Thank you very much, Mr. Chairman.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentleman from Texas, Mr. Farenthold. 
And I would ask if you would yield just for one quick point.
    Mr. Farenthold. I would be happy to yield, Mr. Chairman.
    Chairman Issa. Mr. Drevna, is there any appreciable--I will 
put it that way to make sure we don't leave a little what if--
any likelihood that there is any Federal lands producing new 
oil or natural gas that was begun during the last three and a 
half years?
    Mr. Drevna. I can't see how.
    Chairman Issa. So with zero coming online during the Obama 
Administration, it is reasonable to say 100 percent of the gain 
comes from the previous administration.
    Mr. Drevna. Or previous administrations.
    Chairman Issa. Or even previous administrations. Thank you.
    I thank the gentleman. Yield back.
    Mr. Farenthold. Following up on that same line of 
questions, Ms. Sgamma, my family has been in the oil and gas 
business since my great-grandfather was an independent 
producer, and even back when I was practicing law 20 or so 
years ago, we would give leases with 90-day primary terms; 
drill a well within 90 days or it is gone. Even today my 
friend, Michael Bergsama, just leased some property that we 
owned about a year ago; we gave him a two year lease. And on 
private lands we are able to get that done in two years with no 
significant environmental--can you just go down a laundry 
list--I mean, it has taken 7 plus 10 years on Federal. How can 
we fix that?
    Ms. Sgamma. Well, I think just having the government do its 
job. Right now we are seeing--we don't even get our leases 
issued within 90 days; sometimes we are waiting years. In fact, 
Western Energy Alliance had to sue the government because it 
was holding leases for two to five years. We are still 
appealing that because we didn't get a full victory on that 
one.
    We are seeing, then, environmental analysis for even small 
projects taking three, four years. You can't even go and submit 
your permit to drill until you have gotten through that 
environmental analysis; and for larger projects that is taking 
seven years to eight years.
    So once you get through that, then you have to submit for a 
permit to drill, and that averages 298 days, but it is not 
uncommon for a permit to take two to three years.
    Mr. Farenthold. Let's talk about unemployment rates now. We 
were talking about North Dakota, where we are down to one 
percent unemployment. I know in Victoria, which is in the Eagle 
Ford, I was told by an economic development folks, though 
nominally in the six percents, they are at full employment. If 
you can pass a drug test and are willing to work, there is a 
job for you. We are hearing they are having to import people 
into the Dakotas to work. I know in Corpus Christi, our hotels 
are full of workers that are working in the Eagle Ford shale in 
Victoria, a Best Western Hotel, $230 a night housing oilfield 
workers. I mean, this is a huge, huge economic boom.
    I guess, Mr. Drevna, can you talk about some of the jobs 
that are coming out of that, what type of jobs and what kind of 
salary levels we are looking at? To me, these are good, high-
paying, middle to upper middle class jobs.
    Mr. Drevna. Absolutely, Congressman. These are jobs that 
you don't really need a college education for. You need some 
skills, and we can train; that is what we do. You can have a 
great middle class life, get paid very well, send your kids to 
school, take vacations. These are the kinds of opportunities 
the U.S. oil and natural gas and refining businesses provide.
    And going back to my old hometown, with all deference to 
Philadelphia and Cleveland, back in Pittsburgh, you go back to 
my old hometown, where Shell is proposing to build that 
ethylene cracker up the Ohio Valley there, it is unbelievable--
--
    Mr. Farenthold. Do you think they are going to actually 
build that? I am hearing a lot about decreased refining 
capacity in the United Stats and the inability to permit new 
refineries or large increases in capacity in refining. And that 
also, our refining capacity, has a direct impact on gasoline 
prices, does it not?
    Mr. Drevna. Oh, it does. And not only the refining 
capacity, but the regulations, including the renewable fuel 
standard that year after year after year takes away more and 
more of the market of refiners, and little or absolutely no 
benefit to the economy and no benefit to the environment.
    But you are right, and I think the secretary mentioned it 
briefly before. We are in step one of many, many steps----
    Mr. Farenthold. All right, I am running out of time. It 
looks like we have a war on additional refining capacities, or 
at least a very difficult.
    And it looks like, Mr. Glaser, we have an issue with a war 
on coal. I know there was a county just south of Houston that 
was talking about building a coal plant, which escapes me with 
the price of gas what it is, but they believe in diversity of 
fuels, and the EPA basically descended on that town, 
threatening to put them in noncompliance in air quality, 
despite the fact they were basically upwind from Houston. Are 
we seeing that all over?
    Mr. Glaser. Yes. As I mentioned in my testimony, the 
Administration has one rule in place, the MATS or UMACT rule; 
another rule proposed, the greenhouse and New Source 
Performance Standards rule, under which you can't build a coal 
plant. You just can't build a coal plant. That is a policy that 
is inconsistent with the notion of an all-of-the-above energy 
policy; it is reflective of what we are seeing throughout the 
Administration's, and particularly EPA's, policies; and they 
are having an effect.
    Contrary to what Mr. Weiss said, that implies that coal 
employment is at an all-time high, I would simply suggest that 
looking at 2011 figures is a little disingenuous because all of 
these policies are just coming into effect right now. The 
pollution rules that the Administration has adopted have begun 
this year, and if you look at what is going on in the 
marketplace right now, you would be hard pressed to say that 
coal employment was up.
    Mr. Farenthold. Thank you very much.
    I see my time has expired.
    Chairman Issa. I thank the gentleman.
    I now ask unanimous consent that the Committee report of 
May 23rd, 2011, be inserted at this time. Without objection, so 
ordered. And particularly take note of the portion of this 
report that related to the $2.1 billion that Shell had spent 
from 2008 on the very project that Mr. Weiss now takes credit 
for in an election year, three and a half years in, for the 
permit being granted, a permit that was delayed for those three 
and a half years.
    With that, we recognize the gentleman from Vermont for his 
five minutes.
    Mr. Welch. Thank you, Mr. Chairman.
    Mr. Krancer, you are from Pennsylvania. Mr. Kelly, I 
listened to his questions. My understanding is that there is 
this explosion in energy development because of gas. That is a 
real competitive advantage for us and you are leading the way 
in Pennsylvania, is that your view?
    Mr. Krancer. Well, that is certainly part of the story. 
Natural gas is now accessible, it wasn't accessible before, 
and, as I said, the production in Pennsylvania has quadrupled 
since 2009.
    And by the way, referring to, I think it was Representative 
Davis, the Federal Government has absolutely nothing to do with 
the fact that production in Pennsylvania of natural gas 
quadrupled. As a matter of fact, by definition, because the 
Federal Government was not involved, that is what happened.
    Mr. Welch. Well, there has been discoveries across the 
Country of this huge reservoir of natural gas and that fracking 
is a device by which that can be extracted.
    Mr. Krancer. Well, more accurately, there have been 
discoveries of ways to access and obtain the gas in a much more 
efficient manner, by the way----
    Mr. Welch. Right. And you have a lot of responsibility to 
make sure that that is done in a way that doesn't degrade the 
environment, particularly water quality, correct?
    Mr. Krancer. Water quality, air quality----
    Mr. Welch. Right.
    Mr. Krancer. The whole----
    Mr. Welch. And my understanding of what you were 
recommending was not that there be no regulatory oversight, but 
you believe that that regulatory oversight is better done at 
the State, rather than the Federal level. Is that more or 
less----
    Mr. Krancer. Oh, I not only believe it; I see it every 
single day.
    Mr. Welch. Right. So you don't have an opposition, in fact, 
you believe in appropriate regulatory behavior to protect air 
and water quality, is that right?
    Mr. Krancer. I am the Secretary of the Department of 
Environmental Protection.
    Mr. Welch. Right.
    Mr. Krancer. I believe in adherence to rules----
    Mr. Welch. So we are not having a debate about whether 
there has to be some degree of regulation. There is always room 
for improvement and you get to an answer sooner rather than 
later.
    Would the members of the panel more or less agree with 
that? Mr. Drevna, how about you?
    Mr. Drevna. I agree with the secretary that we take these 
things seriously----
    Mr. Welch. Okay, let me go to Mr. Glaser. How about you? 
Coal obviously has some side effects, or is that not anything 
you agree with?
    Mr. Glaser. No, we absolutely believe that coal is 
compatible with good environmental protection. No doubt about 
it.
    Mr. Welch. Is there any mercury contamination that is 
affected by the downwind on places from the coal plants?
    Mr. Glaser. There is no question that power plants in the 
United States emit relatively minute amounts of mercury, 
particularly compared with the amount of mercury blowing in 
from overseas. There is also no question that mercury can be 
controlled.
    Mr. Welch. So----
    Mr. Glaser. There is, finally, no question that the rule 
that the Administration adopted to control mercury in fact 
doesn't really do that.
    Mr. Welch. Hold on. Let's stay--let me ask the questions, 
all right? So you are acknowledging that there is some mercury 
pollution from coal plants, correct?
    Mr. Glaser. There is, as I said, relatively----
    Mr. Welch. Is that a yes?
    Mr. Glaser.--relatively minute----
    Mr. Welch. Wow.
    Mr. Glaser. Yes, but there are relatively minute amounts. 
And the coal industry--and, again, I am speaking for myself 
now. But there is no doubt that reasonable regulation is a good 
thing throughout American energy production, and I would 
include coal. There is no dispute with that whatsoever.
    Mr. Welch. And you would acknowledge that mercury 
contamination, as it gets into the food chain, as it gets into 
soil, is hazardous to the health, hazardous to air quality?
    Mr. Glaser. I would point to the regulatory impact analysis 
that EPA did in support of the rule and conclude that those 
benefits are vanishingly small.
    Mr. Welch. So you won't answer my question.
    Mr. Glaser. I think I just did.
    Mr. Welch. Okay.
    How about you, Ms. Sgamma. Do you believe that there has to 
be some appropriate level of regulation to look out for the 
interest of air and water quality?
    Ms. Sgamma. Absolutely. The oil and gas industry is one of 
the most heavily regulated industries. It is when that new 
regulation is not in balance with economic and job growth, and 
when it is not well thought out, it is too much, too fast, 
excessive, and that is killing jobs in my industry.
    Mr. Welch. Well, see, I am actually sympathetic to the 
concern of the regulated community that the regulatory process 
be straightforward, clear, that you can get an answer and you 
get a reasonable turnaround. I think that is a reasonable 
thing. What is not reasonable is to believe that we can waive 
away the necessity to protect air and water quality when there 
are processes that have an impact on it.
    Ms. Sgamma. I don't know anyone in my industry who is 
calling for waiving regulation. We are calling for it to be 
done more at the State level, though.
    Mr. Welch. Well, here would be my suggestion. This is 
something we did in Vermont. We asked--and, actually, you did 
this, Mr. Chairman, and I thought it was okay. You get specific 
examples of what you think can be improvements, where it is 
about the process working better as opposed to trying to do 
away with the underlying obligation, my view that the 
government has to protect the air and water quality. That is 
something I would be interested in, and I think you asked some 
of those questions and I thought that was a fair question in 
the beginning. But this back and forth about who is the better 
is the better president and whose policy, my view is it doesn't 
really get us anywhere.
    I want to go on to another topic. We are having huge 
debates here about whether those of us, and I am one of them, 
that thinks that we should be trying to give a boost to 
alternative energies. It is local; it is renewable; it is jobs. 
This is my view. That does not mean that we have to tear apart 
other traditional sources of fuel. You are not going to be able 
to turn the lights off by going to solar overnight, let's say.
    So the other thing is that a lot of us believe that 
whatever fuel source you believe in, whether it is gas or oil 
or coal, energy efficiency should be a major component of 
American energy policy, and it is an area where, presumably, 
there could be some agreement.
    We had a bipartisan bill last year that was going to give a 
boost to homeowners and, to some extent, building owners if 
they put some of their own money into retrofitting their 
buildings, and they would get some taxpayer money to help out. 
No big bureaucracy, because if you own a home and you can save 
some money, and you put some of your money in, get some 
government money, you are going to want to get the best deal on 
that.
    I am curious to know whether all of you would favor an 
approach that would allow for retrofitting of our residential 
and commercial buildings with some taxpayer help.
    Mr. Krancer. Representative, could I take a shot at that?
    Mr. Welch. Yes, go ahead.
    Mr. Krancer. Because the electricity business used to be a 
business I had been in. Energy efficiency is already a part of 
the way we are implementing energy policy, and commercially. It 
is not from the government, by the way; it is by the way of the 
competitive markets. And energy efficiency is something that 
clears a market in what we call PJM. PJM is the grid operator 
that spans from I think it is New Jersey all the way over to 
Illinois, Michigan; 50 million people. It is the biggest grid 
operator in the Country. So energy efficiency is already a part 
of the way competitive markets are thinking.
    And let me just say one thing, and I know Representative 
Tierney mentioned it with wind and solar, so on and so forth. 
Wind has been something that has been part of the power mix 
since 1870, so I am not sure that that is a brand new 
technology either. And I don't want to get into the PTC, 
because I know that is not what this is about, but if we are 
getting into subsidies of one, it, by definition, impacts the 
other, because when you have other resources that generate 
power, nuclear, coal, gas, whatever it is, but you have a 
subsidized wind component, and especially at certain hours of 
the day, that wind farm can actually bid into the market at 
less than zero.
    Mr. Welch. Right. I am over my time, but the question I did 
ask----
    Chairman Issa. Just a wee bit.
    Mr. Welch. Well, it was the answer more than the question, 
all right? But answer the question I didn't ask. What I was 
curious about, Mr. Chairman, was whether there would be general 
support for an efficiency program that doesn't require us to 
pick winners and lowers; where, if you are a homeowner and 
using coal or you are a homeowner and using gas, you get some 
opportunity to make your home or your commercial building more 
energy efficient, so you use less fuel, save money, and the 
people who do the retrofit are local, out-of-work contractors.
    Chairman Issa. I certainly would agree with the gentleman 
that we need to figure out ways to do it. My State, unlike your 
State, is fairly not terribly hot or cold for most of it, but 
we actually have done that for a generation. All of our 
electric providers have annual programs, sometimes supplemented 
by State money for just that; a little more pink, a fan, better 
sealing of windows, and so on. I certainly agree with the 
gentleman that that is a component. I think today a lot of our 
hearing was on the time to market, the idea that on private 
lands you can get a permit in Texas in 90 days on an existing 
site, while it can take you 10 years if you want to go to 
Federal lands; and, of course, you pay for a lease for that 
whole 10 years.
    But I do think the gentleman's point is good and I would 
love to explore it further.
    Mr. Welch. Thank you.
    Chairman Issa. And with that we go to an important and 
patient witness, the gentleman from Michigan, Mr. Walberg, for 
five minutes.
    Mr. Walberg. Thank you, Mr. Chairman. Before I ask Mr. 
Glaser to expand on the answer you started when Congressman 
Farenthold offered you the chance to talk about the regulations 
from the Federal Government, especially Utility MACT.
    Let me preface it by saying I had the opportunity as part 
of my responsibility of chairing the Subcommittee on Workforce 
Protections, looking at MSHA, the mine industry and the coal 
mine operations, to go out to North Dakota this past August and 
to see the surface mining operations taking place there. 
Revolutionary in my mind to see what was being done; the 
reclamation of land, the enhancement of land, the opportunities 
for agriculture expanded as a result of that, the clean coal 
technologies that were taking place, the expansion of coal-
fired plants that provided necessary energy not only for North 
Dakota, but for Minnesota as well. Amazing job opportunities 
for people, stable employment. People coming from other States 
to work there. And then having a chance to look at the Bakken 
Reserve and the oil exploration going on there as well was 
amazing. The unemployment level that was there, that is the 
right direction for unemployment, as opposed to what I 
experienced for too long back in Michigan.
    And then just recently to hold a town hall meeting in 
Coldwater, Michigan, and to have a lady pop up and say, you 
know, Congressman, I have a husband that is working out there 
in the Bakken Reserve. He is out there because he can't have a 
job here in Michigan. He doesn't want us to move out there 
because he wants to ultimately come back to Michigan to work, 
but he is doing what is necessary and he has a good paying job 
out there and there is an opportunity for us.
    And then to find out--and I don't know if we have this 
chart available--that the EPA regulations have already forced 
25 gigawatts of generating capacity off the grid. In my State 
alone, over 1200 megawatts have been forced off through energy 
regulation, excessive regulation, unreal regulation that is 
going on. In my own district, 345 gigawatts alone that makes it 
more difficult when we see a turnaround taking place in 
Michigan in the auto industry that requires energy, that 
requires fuel sources. And this lady, who wants her husband 
back in Michigan working, when we see now a capacity necessary 
to deal with the increased job opportunities that are taking 
place in manufacturing finally again in the auto industry and 
supplier industries, the need for more energy to have things 
like we are going to talk about and I want you to expand upon, 
isn't it true that new coal-fired electric generating units, 
which are able to install the newest technologies, are unable 
to comply with Utility MACT rule?
    Mr. Glaser. Yes, that is exactly the case. And you don't 
have to take my word for it; the major association of pollution 
equipment vendors went to EPA and they told EPA that they, 
frankly, could not guarantee that their equipment would meet 
the level of EPA standards; it was so low as to be beyond the 
ability of the equipment to actually measure that level of 
emissions. And we have the same thing with the greenhouse gas 
New Source Performance Standard. EPA has said, well, in order 
to build a new coal plant in the United States, you have to 
meet a level of CO2 emissions that EPA says coal plants, 
frankly, can't meet.
    So that, to me, is something that I don't understand, 
again, how you can say that you have an all-of-the-above energy 
policy that includes coal and at the same time say----
    Mr. Walberg. So there is a Catch-22 going on here that says 
commence construction and cease construction.
    Mr. Glaser. Yes. The Catch-22 that EPA has put out there is 
they have said, well, under our greenhouse gas rule we 
recognize that there are about 15 plants out there that have 
spent a great deal of money and a great deal of time trying to 
get--and have received permits and they are just about ready to 
go with construction. So what we will do in recognition of that 
huge investment, we will say you all have a year, and if you 
can get built, if you can start construction in a year, then 
you won't be subject to this requirement that you can't meet as 
to your CO2 emissions.
    Yet at the same time they have finalized a rule, the MATS 
rule or MACT rule, that these companies can't meet because the 
emissions are so low because the pollution control vendors 
won't guarantee performance of the equipment. So these 15 
contracts are effectively being strangled because, on the one 
hand, EPA says you have a year to get into construction, but on 
the other hand they have a rule that prevents them from getting 
it to construction, and that is the concern.
    Mr. Walberg. Well, I appreciate that testimony.
    Mr. Chairman, just this past week I had the opportunity to 
fly over and be in China, India, South Korea, and I saw stacks, 
I saw emissions taking place there. Nothing like I have seen in 
Monroe, Michigan or Jackson, Michigan with Consumers Energy, 
Detroit Energy, coal-fired plants that are being put in this 
Catch-22 situation right now, if they have not already been put 
out of production, because of the untenable regulatory climate 
that goes beyond the necessity and goes beyond reality and 
rationality of what is necessary to move our economy forward, 
and do it in a sustainable and quality environmental fashion as 
well.
    Thank you. I yield back my time.
    Mr. Ross. [Presiding.] Forgive me for just walking in; I 
have been going back and to from other hearings. But I want to 
make sure I understand that probably one of the biggest 
obstacles has been the permitting process for environmental 
impact studies. Is that correct, Mr. Krancer?
    Mr. Krancer. Well, I think it has been discussed before 
that certainly at the Federal level the NEPA process takes a 
very, very long time.
    Mr. Ross. And actually you say process, but there is no 
procedure in NEPA, is there? In other words, what one agency 
may start, another agency may ignore, and it could last 
forever.
    Mr. Krancer. My experience in the private sector is that it 
could last a very long time and the outcome was often 
unpredictable.
    Mr. Ross. Mr. Drevna, would you agree that a procedure 
should be in place in order for the process under NEPA to be 
followed in a timely manner?
    Mr. Drevna. Absolutely, Mr. Ross. Not only the process 
under NEPA, but the entire process, where at every turn there 
is another lawsuit or litigation that tries to stop--and they 
are not concurrent or consecutive.
    Mr. Ross. And so would standing also be an issue that 
something should be addressed?
    Mr. Drevna. Absolutely. I think everybody wants to do it 
right. No one is saying not to do it right. It is just when you 
create the uncertainty, when you have these interminable time 
delays, what are you going to do with your profits? You can't 
put them back in; you have to take them somewhere else.
    Mr. Ross. And, Mr. Weiss, are you familiar with the fact 
that there has been a delay even in the permitting of green 
energy programs?
    Mr. Weiss. Yes, I am, and I think that one way to address 
that would make sure that the people who are responsible for 
reviewing these analyses and issuing the permits have adequate 
resources and adequate staff to do that, particularly at a time 
when we are expanding the number of permit requests. We need to 
make sure that we provide them with the resources they need.
    Mr. Ross. I agree with you, and I think that what you hit 
on there is when you have sequential evaluation, when you have 
sequential review of the permitting process, you have what I 
consider to be a disparate allocation of resources. So would 
you not agree that it would be more in line with having a 
concurrent review process, as opposed to a sequential review 
process with agencies?
    Mr. Weiss. Certainly we have proposed, when it comes to the 
citing of transmission lines, that the process be telescoped 
down in the way that you suggest, which is to make it sort of 
get everyone together and do it all together; local, Federal, 
and State.
    Mr. Ross. Correct.
    Mr. Weiss. You speed up the time that it takes to permit 
transmission lines.
    Mr. Ross. And, further, would you not say that that is a 
fault in NEPA, is that there is no procedure in place for 
concurrent review in the permitting process?
    Mr. Weiss. I am not qualified to answer that.
    Mr. Ross. Mr. Krancer?
    Mr. Krancer. NEPA--it is a great question, and if there is 
one thing I could leave with this Committee, and this is at the 
Federal level, of course, not the State level, is take another 
look at NEPA and redo it.
    Mr. Ross. Would it also be advantageous to have a procedure 
in place that would allow for a time period by which those 
agencies who feel they are affected or have a need to be 
involved, get involved, concurrent review of the permitting 
process, and let's say in four and a half years the permit must 
either be issued or not?
    Mr. Krancer. I would say four and a half years is a very 
long time. I would also say that some of these--and these folks 
on the panel might have a better sense for this, but to the 
extent there have been increased in production, I bet you 
donuts to dollars those must have come from private lands, not 
public lands.
    Ms. Sgamma. Right. I represent producers on public lands in 
the West, so, because the West is so predominated by public 
lands, we are affected by those NEPA delays more than anything 
else. We are seeing 20 projects held up that could create 
121,000 jobs, but the NEPA is taking seven years or more.
    Mr. Ross. Correct.
    Ms. Sgamma. NEPA should be taking two years. And we would 
love to see something where the government gets so much time 
and then the project is presumed complete.
    Mr. Ross. Even this President has suggested that we do some 
sort of expediting of the process under NEPA.
    Ms. Sgamma. And our producers pay for contractors to do the 
NEPA, and government still can't get it done.
    Mr. Ross. Mr. Weiss?
    Mr. Weiss. It is important to note that the lands that Ms. 
Sgamma is talking about are owned by all Americans and, under 
the law, they are there for multiple use; not just for oil 
production, not just for coal production or whatever.
    Ms. Sgamma. And taxpayers own the energy under those lands.
    Mr. Weiss. Therefore, we need to make sure that we know 
what the impacts are----
    Mr. Ross. I agree.
    Mr. Weiss.--for all Americans, not just on their companies.
    Mr. Ross. And would it not be better to have an economy of 
scale, a centralization of review, and an expedited process by 
which those who are involved in these, whether they be on 
private lands or public lands, know that the investment of 
their dollars is going to have an outcome where they are going 
to have--and a time certain. I mean, we all agree that that is 
good.
    Yes, sir, Mr. Drevna.
    Mr. Drevna. I think it would be an interesting exercise to 
look at what would happen, interpose NEPA and all the other 
requirements that you have to do on Federal lands, interpose 
those on the development with what we have seen in 
Pennsylvania, Ohio, West Virginia, and see if that production 
would be there today as it is now. I would suggest absolutely 
not.
    Mr. Ross. Okay. I see my time has expired and I am the last 
questioner, so we will stand adjourned.
    Thank you all for your time. I appreciate you being here.
    [Whereupon, at 11:30 a.m., the committee was adjourned.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                                 
