[Senate Hearing 112-371]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-371
 
            SIEMINSKI, BURKE, CLARK, AND NORRIS NOMINATIONS 

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   TO

CONSIDER THE NOMINATIONS OF ADAM SIEMINSKI, TO BE ADMINISTRATOR OF THE 
ENERGY INFORMATION ADMINISTRATION, MARCILYNN BURKE, TO BE AN ASSISTANT 
SECRETARY OF THE INTERIOR, ANTHONY CLARK, TO BE A MEMBER OF THE FEDERAL 
 ENERGY REGULATORY COMMISSION, AND JOHN NORRIS, TO BE A MEMBER OF THE 
                  FEDERAL ENERGY REGULATORY COMMISSION

                               __________

                             MARCH 20, 2012


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               Committee on Energy and Natural Resources

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           MIKE LEE, Utah
BERNARD SANDERS, Vermont             RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan            DANIEL COATS, Indiana
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

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


































                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Burke, Marcilynn A., To Be an Assistant Secretary of the Interior 
  (Land and Minerals Management).................................    11
Clark, Anthony T., To Be a Member of the Federal Energy 
  Regulatory Commission..........................................    16
Grassley, Hon. Chuck, U.S. Senator From Iowa.....................     3
Harkin, Hon. Tom, U.S. Senator From Iowa.........................     3
Hoeven, Hon. John, U.S. Senator From North Dakota................     7
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Norris, John R., To Be a Member of the Federal Energy Regulatory 
  Commission.....................................................    13
Rowe, Robert C., President and CEO, NorthWestern Energy, Butte, 
  MT.............................................................    38
Sieminski, Adam E., To Be Administrator of the Energy Information 
  Administration.................................................     8

                                APPENDIX

Responses to additional questions................................    41


            SIEMINSKI, BURKE, CLARK, AND NORRIS NOMINATIONS

                              ----------                              


                        TUESDAY, MARCH 20, 2012

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

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

    The Chairman. OK, why don't we get started here? The 
committee will meet this morning to consider 4 nominations.
    Adam Sieminski, to be the Administrator of the Energy 
Information Administration.
    Marcilynn A. Burke, to be the Assistant Secretary of the 
Interior for Land and Minerals Management.
    Anthony Clark, to be a Member of the Federal Energy 
Regulatory Commission.
    John Norris, who has been nominated for a second term as a 
member of the Federal Energy Regulatory Commission.
    Mr. Sieminski is currently the Senior Director of Energy 
and Climate Change on the staff of the National Security 
Council. He previously was the Chief Energy Economist for 
Deutsche Bank. He was appointed to the National Petroleum 
Council by Secretary Bodman. He's been a Senior Advisor to the 
Center for Strategic and International Studies Energy and 
National Security Program.
    Ms. Burke is currently the Acting Assistant Secretary of 
Interior for Land and Minerals Management. She previously was 
the Deputy Director for Programs and Policy at the Bureau of 
Land Management. She is on an unpaid leave of absence from the 
University of Houston Law Center where she is a tenured 
Associate Professor of Law.
    Mr. Clark is currently the Chairman of the North Dakota 
Public Service Commission and has been a member of that 
Commission since 2001. He previously was North Dakota's Labor 
Commissioner, the Administrative Officer for North Dakota's Tax 
Department and a member of North Dakota's House of 
Representatives. He has also served as the President of NARUC, 
the National Association of Regulatory Utility Commissioners.
    Mr. Norris has been nominated for a second term on the 
Federal Energy Regulatory Commission where he has served since 
January 2010. He previously was Chief of Staff to Agriculture 
Secretary, Tom Vilsack, before that he was Chairman of the Iowa 
Utilities Board.
    The President has nominated 4 experienced and well 
qualified individuals to these important posts. I support all 4 
of their nominations. I'm glad to welcome them before the 
committee this morning.
    Let me call on Senator Murkowski for her statement. Then we 
have two of our colleagues, who are here to introduce nominees 
as well.
    Senator Murkowski.

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

    Senator Murkowski. Thank you, Mr. Chairman. It's nice to 
welcome our colleagues from Iowa here this morning and I look 
forward to their comments in support of the nominee. I'd also 
like to welcome the 4 nominees.
    These 4 have been chosen for their key role at one of the 
agencies under our committee's jurisdiction. I look forward to 
hearing how each of them will undertake those jobs if 
ultimately confirmed.
    To Mr. Sieminski, I think it's important to recognize that 
we rely on the Energy Information Administration to provide 
timely and accurate data about our Nation's energy usage and 
policies. He's been asked to take over as Administrator at a 
very consequential moment for our Nation's energy policies. If 
confirmed, we'll be counting on him to provide the facts that 
we and others need to make informed decisions, particularly 
when shortcomings in our policies may be harming our refining 
sector and impacting gasoline prices.
    We welcome Ms. Burke. We count on the Department of the 
Interior to manage our public lands and to facilitate the 
production of our Nation's tremendous resource base. As the 
Acting Assistant Secretary clearly you've got some knowledge of 
what that requires. We're going to be counting on her to boost 
domestic production on Federal lands, just as we've seen with 
our State and our private lands. I look forward to hearing from 
her exactly how we're going to accomplish that.
    To Mr. Norris and Mr. Clark, I think it's very clear that 
we depend on the FERC to make sure that our electricity supply 
stays reliable and affordable to enable our Nation's pipeline 
infrastructure to, likewise, be safe, dependable and reasonably 
priced and to regulate hydroelectric facilities, licensing new 
hydro dams when the opportunity presents itself, such as may be 
the case in Alaska with our Watana project.
    Mr. Chairman, I have not yet made up my mind about all of 
the nominees. I have several questions to ask each of them 
today ranging from issues such as wild lands initiative, the 
BLM/OSM merger, take on world oil markets and views on how new 
environmental regs may affect electric reliability.
    So we've got a lot on the plate this morning. I look 
forward to questions and answers from our nominees. Again, 
welcome to all.
    The Chairman. Now we'll call on our colleagues. Senator 
Grassley and Senator Harkin, as I understand it, are here to 
introduce John Norris and make a statement in support of his 
nomination. Following that Senator Hoeven would like to make a 
statement, as I understand it, of introduction for Tony Clark, 
in support of his nomination.
    So Senator Grassley, why don't you begin or Senator Harkin, 
which ever order you prefer.
    Senator Grassley.

        STATEMENT OF HON. CHUCK GRASSLEY, U.S. SENATOR 
                           FROM IOWA

    Senator Grassley. Thank you, Senator Bingaman and Senator 
Murkowski.
    Obviously I'm here to support John Norris, as I was, two or 
so years ago, to support his nomination. I'm very enthusiastic 
this time, as I was last time, but more so because he's had two 
or more successful years already serving in this position and 
his re-nomination.
    Mr. Norris was first nominated by President Obama. He was 
confirmed December 24, 2009. I believe Commissioner Norris has 
the necessary experience and understanding of our energy 
markets to continue his service as a Commissioner on FERC.
    As Commissioner, Mr. Norris has pursued his objective of 
ensuring the consumers have access to reliable and efficient 
energy services. Prior to his appointment he was Chief of Staff 
for Secretary of Agriculture, Tom Vilsack. In March 2005, John 
was appointed by then Iowa Governor, Tom Vilsack, to the 3 
member Iowa Utilities Board and served as Chairman for 4 years, 
2005 to 2009.
    It was during this period of time of Iowa service he was 
co-Chair of the 2009 National Electricity Delivery Forum. He 
also served as member of the National Association of Utility 
Commissioners, serving on the Electricity Committee and as a 
member of the Demand Response Collaborative.
    Before his service on the Iowa Utilities Board, John was 
Chief of Staff to Governor Vilsack as well as Chief of Staff to 
Iowa Congressman Leonard Boswell.
    John received a BA degree from Simpson College, Indianola, 
Iowa. He graduated with distinction from the University of Iowa 
Law School in 1995.
    I'm pleased to support John during his re-nomination 
process. Hopefully it's one of these things that will rapidly 
go through the Senate because it is a re-nomination.
    Thank you.
    The Chairman. Thank you for your statement, Senator 
Grassley. We appreciate your views on the nominee.
    Senator Harkin, go right ahead.

      STATEMENT OF HON. TOM HARKIN, U.S. SENATOR FROM IOWA

    Senator Harkin. Thank you very much, Chairman Bingaman and 
Ranking Member Murkowski, members of this committee. Again, as 
my colleague said, it's an honor to appear before this 
committee to introduce and support John Norris, President 
Obama's nominee to serve a new 5 year term as Commissioner of 
the Federal Energy Regulatory Commission. There's no question 
that Mr. Norris is superbly qualified to continue his service 
in this critical regulatory responsibility.
    I won't go over all the things that my colleague, Senator 
Grassley, said about his background and just to note that he 
has had important executive positions in the past. Of course, 
Chair of the Iowa Utilities Board for 4 years from 2005 to 
2009. He was also a Board Member, Secretary and President of 
the Organization of Midwest Independent Operator States. As 
Senator Grassley said he was also a member of the Demand 
Responsive Collaborative of FERC and the National Association 
of Regulatory Utility Commissioners and he serves today on the 
Board of Directors of the National Regulatory Research 
Institute.
    I've know John Norris and his family since he was in high 
school in Red Oak, where he was born and raised, a small, rural 
town, where he was at one time, a Golden Gloves boxer. As 
Senator Grassley said he was a former Chief of Staff to our 
Governor, former Chief of Staff to Congressman Boswell. I might 
also add that Senator Grassley didn't mention that in 1992 he 
was the Director of my Iowa campaign when I ran for President, 
although I urge members of the committee not to hold this 
singular lapse of judgment against him.
    [Laughter.]
    Senator Harkin. Again, I've known him and his family, as I 
said, since his high school and watched him in all these 
capacities. He's just an excellent individual, obviously, 
extremely smart, but also committed to public service. The one 
thing I'm interested in and commend him to you for is that he 
has a profound understanding of Energy Regulatory Policies and 
their impacts on ordinary Americans, especially those who live 
in small towns and rural America.
    That's something that's really absolutely needed there. As 
we look ahead to major shifts in our electricity systems in the 
years ahead it will be valuable to have a Commissioner of 
John's knowledge and expertise to help ensure fair and 
equitable treatment of all parties, including consumers, 
utilities, generators and transmission developers. I might also 
add that last year, John helped shape and support an important 
rulemaking at FERC that directs electric power industry to 
address the regional planning and cost allocation of 
transmission to better meet the transmission needs of our 
country. This new order 1000 will expedite the development of 
critical transmission systems by providing the framework for 
regional planning as well as rules and guidelines for 
addressing cost allocation.
    I might also just say that I know he's going to introduce 
them, but I'll beat him to the punch. His wife Jackie Norris is 
here with their twin sons, Hunter and Cole and their son, Sam. 
Jackie also I've known for a long time, a former schoolteacher 
in Iowa. As a matter of fact a visitor to her classroom one 
time in Perry, Iowa and then later when she taught in Ames. So 
a long, long history on both of them of being dedicated public 
servants.
    So again, Mr. Chairman, members of the committee, I join 
with my colleague in recommending a public servant of 
exceptional intelligence, confidence and experience. I urge the 
committee to send his nomination to the full Senate with a 
unanimous recommendation.
    The Chairman. Thank you both very much for your statements 
and strong endorsements of the nominee and we appreciate that. 
We will allow you to go on with your other responsibilities.
    I know Senator Hoeven was going to make a statement at this 
time of introduction and support for Tony Clark and his 
nomination. Did you want to go ahead and do that?
    Senator Hoeven. Yes, thank you, Mr. Chairman. Are you going 
to have the witnesses come forward at this point?
    The Chairman. Yes, as soon as we finish all the statements 
we're going to bring them forward and have them take the oath 
and make whatever statements they'd like.
    Senator Hoeven. Alright.
    The Chairman. If you'd like to wait til after that, we can.
    Senator Hoeven. Why don't we do that and then I'll 
introduce Tony once he's at the----
    The Chairman. Alright. Why don't we ask all the 4 nominees 
to please come forward and we will administer the Oath of 
Office.
    It's not the, excuse me, it's not the Oath of Office, 
it's----
    [Laughter.]
    The Chairman. I was getting ahead of myself.
    [Laughter.]
    The Chairman. Let me ask each of you to stand and raise 
your right hand.
    Do you solemnly swear that the testimony you're about to 
give to the Senate Committee on Energy and Natural Resources 
shall be the truth, the whole and nothing but the truth?
    [Witnesses sworn.]
    The Chairman. Please be seated.
    Before you begin your statement I'll ask 3 questions that 
I'll address to each nominee and that we, as a committee, 
always address to each nominee that comes before our committee.
    The first question. Will you be available to appear before 
this committee and other congressional committees to represent 
departmental positions and to respond to issues of concern to 
the Congress?
    Mr. Sieminski.
    Mr. Sieminski. I will.
    The Chairman. Ms. Burke.
    Ms. Burke. I will.
    The Chairman. Mr. Norris.
    Mr. Norris. I will.
    The Chairman. Mr. Clark.
    Mr. Clark. I will.
    The Chairman. Alright.
    Second question. Are you aware of any personal holdings, 
investments or interests that could constitute a conflict of 
interest or create the appearance of such a conflict should you 
be confirmed and assume the office to which you have been 
nominated by the President?
    Mr. Sieminski.
    Mr. Sieminski. My investments, personal holdings and other 
interests have been reviewed both by myself and the appropriate 
ethics counselors within the Federal Government. I have taken 
appropriate action to avoid any conflicts of interest. There 
are no conflicts of interest or appearances thereof to my 
knowledge.
    The Chairman. Thank you.
    Ms. Burke.
    Ms. Burke. My investments, personal holdings and other 
interests have been reviewed both by myself and the appropriate 
ethics counselors within the Federal Government. I have taken 
appropriate action to avoid any conflicts of interest. There 
are no conflicts of interest or appearances thereof to my 
knowledge.
    The Chairman. Thank you very much.
    Mr. Norris.
    Mr. Norris. Thank you. My investments, personal holdings 
and other interests have been reviewed by both myself and the 
appropriate ethics counselors within the Federal Government. I 
have taken appropriate action to avoid any conflicts of 
interest. There are no conflicts of interest or appearances 
thereof to my knowledge.
    The Chairman. Thank you.
    Mr. Clark.
    Mr. Clark. Thank you. My investments, personal holdings and 
other interests have been reviewed by both myself and 
appropriate ethics counselors within the Federal Government. 
I've taken appropriate action to avoid any conflicts of 
interest. There are no conflicts of interest or appearances 
thereof to my knowledge.
    The Chairman. Thank you all for your answers.
    The third question we ask is are you involved or do you 
have any assets that are held in a blind trust?
    Mr. Sieminski.
    Mr. Sieminski. No, I do not.
    The Chairman. Ms. Burke.
    Ms. Burke. No, Mr. Chairman.
    The Chairman. Mr. Norris.
    Mr. Norris. No, I do not.
    The Chairman. Mr. Clark.
    Mr. Clark. No, Mr. Chairman.
    The Chairman. Alright. At this point it's our tradition to 
invite nominees to introduce any family members they would like 
to introduce before we go on to hear their statements.
    Mr. Sieminski, did you have anyone you wanted to introduce?
    Mr. Sieminski. Thank you very much, Senator. My wife, Lori, 
my son, Adam and my daughter, Ellen and her husband, John are 
here and a bunch of friends in the back, Senator.
    The Chairman. Alright, well we welcome all of them.
    Ms. Burke, did you have anyone you wish to introduce?
    Ms. Burke. Yes, thank you, Mr. Chairman.
    I'd like to introduce my cousin, Dr. Jacqueline Henry and a 
number of my colleagues from the Department. Thank you.
    The Chairman. Thank you very much.
    Mr. Norris, did you have anyone you want to introduce?
    Mr. Norris. Yes, thank you, Mr. Chairman.
    I have my 3 sons here, Hunter, Cole and Sam Norris, and my 
wife, Jackie, with me today.
    The Chairman. Alright. We welcome all of them to the 
hearing.
    Mr. Clark, did you have anyone that you want to introduce?
    Mr. Clark. I understand that my kids are getting out of 
school today to watch on the Internet. So they're back home in 
Bismarck and weren't able to make the trip this time.
    The Chairman. Alright. We hate to be the cause of anyone 
missing school, so.
    [Laughter.]
    The Chairman. Why don't we go ahead with opening 
statements? If each of you could make your opening statement, 
of course your full opening statement will be made part of the 
record, but if you could give us the short--oh, Senator Hoeven, 
did you want to go ahead and make your statement with regard to 
Mr. Clark at this point?

 STATEMENT OF HON. JOHN HOEVEN, U.S. SENATOR FROM NORTH DAKOTA

    Senator Hoeven. Thank you, Mr. Chairman. I appreciate that.
    I'm very pleased to introduce to the committee today, Tony 
Clark. Tony has a distinguished career in North Dakota. I'm 
very pleased that he's been nominated for the position on the 
FERC.
    Tony and I have known each other for many years. I'm not 
sure just how long, but he started his career in public service 
in our legislature. He was elected to the legislature from 
Fargo and did an outstanding job in the North Dakota 
legislature.
    Subsequent to that he was then appointed Labor Commissioner 
by Governor Ed Schafer, who was Governor right before I was 
Governor and did a fine job in that post as well.
    Tony and I actually spent a fair amount of time together on 
the campaign trail. He ran for office for the Public Service 
Commission in 2000 which is the year that I first ran for 
Governor. So we traveled the State and I got to know Tony very 
well and see him not only in the context of talking to the 
public and interacting with the citizens of our State, but also 
in a private, one on one context as well. He's always 
demonstrated great judgment, great integrity and great 
character.
    As a matter of fact as we'd go around we used to all give 
presentations. I think that year we had about 14 candidates for 
State-wide offices, something like that, maybe it was 12. I 
can't remember exactly.
    But we'd all make our presentations and whenever my wife, 
Mikey, watched all the presentations, you know, afterwards 
sometimes I'd after I finished up I'd, you know, come and ask 
her, well how did I do? She'd say either, you know, OK or 
terrible, depending on how I did that day, but--or good. But 
invariably she'd comment on how well Tony did addressing the 
public and encourage me to kind of watch him and develop some 
of his techniques. That's a true story. She really did.
    But he served on the PSC now for a dozen years, Public 
Service Commission, in North Dakota for two full terms, two 6-
year terms including serving as the chairman of our Public 
Service Commission. Outstanding job.
    He has also been elected by his peers as the President of 
the National Association of Regulatory Utility Commissioners 
which is not only a tremendous honor, but really demonstrates 
what his peers think of him. All 50 States across the country 
elected him to that position. He's just finishing his service 
in that position.
    The other and final comment that I would make is it's not 
just reflective of his abilities that he was elected the 
National President of the NARUC, but it also means that he 
brings to this job with the FERC a working knowledge and 
relationship with regulators across the country, as well as 
companies across the country that are working to produce more 
energy for all Americans. I think when you think about the FERC 
and what they need to do and the challenges that we face in 
energy right now, I think that that is a tremendous background 
and exactly the kind of grassroots background we need. Not only 
that experience at the local level, but the knowledge and the 
relationships that he has across the country that he's 
developed in his role as the National President.
    So I'm very pleased today to welcome, to introduce and 
welcome, Tony Clark to this hearing.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much for your strong 
statement. Let me also just mention that I have a statement 
that Senator Conrad provided indicating that he was not able to 
come today, but strongly supports this nomination as well and 
wanted that to be noted.
    Why don't we go ahead now?
    Mr. Sieminski, why don't you make your statement and then 
we'll go just down the line and hear from each of the nominees?

TESTIMONY OF ADAM SIEMINSKI, TO BE ADMINISTRATOR OF THE ENERGY 
                   INFORMATION ADMINISTRATION

    Mr. Sieminski. Mr. Chairman, Ranking Member Murkowski, 
distinguished members of the committee, it's an honor and a 
privilege to appear before you today as President Obama's 
nominee for Administrator of the Energy Information 
Administration. I'm grateful to the President and to Secretary 
Chu for their confidence entrusting me with this important 
assignment. I'd also like to thank my family and friends for 
their constant support.
    If confirmed by the Senate I will bring to this position 
the experience of 40 years of energy research and analysis. 
I've spent my career drawing on a wide variety of government, 
academic, NGO and industry sources in an effort to understand 
and be able to explain the ever changing energy markets with a 
particular focus on petroleum and refined products and natural 
gas. To be confirmed for this position would be the highpoint 
of my career.
    As a customer of EIA for virtually my entire professional 
career, I can attest to the fact that EIA's mission is as 
critical today as it was when it was created by Congress in 
1977 as the Nation's premier source of unbiased energy data 
analysis and forecasting. EIA is required by law to prepare its 
products independently of policy positions taken within the 
Federal Government. As an analyst in investment research I 
fully understand the critical need for independence in 
preparation and delivery of products like this.
    Energy is a complex subject touching every aspect of daily 
life and the overall economy involving a wide variety of 
technologies and deeply affecting our interactions with the 
rest of the world. Understanding the situation here and abroad 
is critical, especially with regard to oil and gas and 
increasingly diesel and gasoline trade. In the U.S. the 
collection of energy information straddles numerous regulatory 
authorities.
    EIA is uniquely qualified to deal with the complications 
that arise from this structure to make sure that the data is 
relevant, timely and accurate and that the analyses are 
performed with integrity, that data and projections are 
available widely. I valued these qualities as a user of EIA's 
output. If confirmed would do my utmost to ensure its 
continuing credibility.
    This is a sector where capital investments of billions of 
dollars are made in long lived infrastructure projects. I'm 
acutely aware of the significance of those investments that 
supplies equally to mature elements of the sector as it does to 
emerging technologies such as renewable energy, energy storage, 
smart grids and natural gas fueled vehicles. Understanding 
structural change in trends and efficiency on the part of 
consumers is also key. Ensuring the quality and timeliness of 
the data and focusing on EIA's finite resources on those 
elements that provide the most value to EIA stakeholders will 
be my highest priority.
    I've watched the transition from price controls to open 
access competitive energy markets that we see today. EIA 
statistics and analysis have been invaluable in understanding 
these shifts, particularly in the natural gas industry from the 
early restructuring days to taking on the storage report which 
is a national economic indicator for the current dramatic 
transformation on the supply side. The resource base and 
technology that revitalized natural gas is now on the verge of 
playing a similar role in oil production. EIA is now being 
called on to provide insights as policymakers grapple with 
these changes.
    If confirmed as EIA Administrator I would carry on the work 
started by recent administrators to understand and assess the 
interrelated roles played by fundamentals, financial market 
behavior and other factors in energy price formation.
    If confirmed I look forward to working with members of this 
committee and others both inside and outside of government in 
order to improve the information and analytical base used for 
making sound energy decisions, in doing so I will draw on a 
vast network of experts from energy, economic communities and 
will strive to raise public understanding of these issues.
    Finally, Senator Murkowski I want you to know that I got my 
start in the energy sector as a draftsman for the Golden Valley 
Electrical Association in Fairbanks, Alaska during the summer 
of 1968. My first job in Washington was following air pollution 
policy and investment issues after the passage of the Clean Air 
Act in 1970. More recently I contributed to my former company's 
efforts in carbon markets, renewable energy and clean energy 
investment.
    I understand the important roles of all of our fuels are 
playing in delivering energy to consumers. I look forward to 
answering any questions the members of the committee may have 
either now at this hearing or in writing for the record. Thank 
you very much.
    [The prepared statement of Mr. Sieminski follows:]

 Prepared Statement of Adam Sieminski, Nominee To Be Administrator of 
                 the Energy Information Administration
    Mr. Chairman, Ranking Member Murkowski, distinguished members of 
the Committee--it is an honor and a privilege to appear before you 
today as President Obama's nominee for Administrator of the Energy 
Information Administration. I'm grateful to the President and to 
Secretary Chu for their confidence in trusting me with this important 
assignment. If confirmed by the Senate, I will bring to the position 
the experience of 40-years of energy research and analysis. I have 
spent my career drawing on a wide variety of government, academic, NGO, 
and industry sources in an effort to understand, and be able to 
explain, the ever-changing energy markets, with a particular focus on 
petroleum, refined product and natural gas markets. To be confirmed for 
this position would be the high point of my career.
    As a customer of EIA for virtually my entire professional career, I 
can attest to the fact EIA's mission is as critical today as when it 
was created by Congress in 1977. As the Nation's premier source of 
unbiased energy data, analysis and forecasting, EIA is required by law 
to prepare its products independently of policy positions taken within 
the Federal Government. As an analyst in investment research, I fully 
understand the critical need for independence in its preparation and 
delivery.
    Since 2006 when I was appointed to the National Petroleum Council 
(NPC) by former Energy Secretary Bodman, I have been engaged in the 
work of the NPC, starting with the 2007 Global Oil and Gas Study, The 
Hard Truths, as well as its 2011 report, Prudent Development, requested 
by Energy Secretary Chu, which deals with ways to realize the potential 
of North America's abundant natural gas and oil resources. As the NPC 
and virtually everybody who has ever looked at these issues emphasizes, 
the American people are very concerned about energy--its availability, 
reliability, cost, and environmental impact.
    Energy is a complex subject, touching every aspect of daily life 
and the overall economy, involving a wide variety of technologies, and 
deeply affecting our interaction with the rest of the world. 
Understanding the situation both here and abroad is critical, 
especially with regard to oil and, increasingly, diesel and gasoline 
trade. In the US, the collection of energy information straddles 
numerous regulatory authorities. EIA is uniquely qualified to deal with 
the complications that arise from this structure and to make sure that 
the data is relevant, timely and accurate, that the analyses are 
performed with integrity, and that the data and the projections are 
available widely. I valued these qualities as a user of EIA's output, 
and if confirmed would do my utmost to ensure its continuing 
credibility.
    This is a sector where capital investments of billions of dollars 
are made in long lived infrastructure projects. I am acutely aware of 
the significance of those investments. This applies equally to mature 
elements of the sector as it does to emerging technologies such as 
renewable energy, energy storage, smart grids, and natural gas fueled 
vehicles. Understanding structural change and trends in efficiency on 
the part of energy consumers is also key. Ensuring the quality and 
timeliness of data and focusing EIA's finite resources on those 
elements that provide the most value to EIA's stakeholders will be my 
highest priorities.
    I have watched the transition from price controls to the open-
access competitive energy markets we see today. EIA's statistics and 
analysis have been invaluable to understanding the shifts in the 
natural gas industry from the early restructuring days to taking on the 
storage report--a national economic indicator--to the current dramatic 
transformation on the supply side. The resources base and technology 
that revitalized natural gas now appear on the verge of playing a 
similar role in oil production. EIA is now being called on to provide 
insights as policymakers grapple with these changes.
    As EIA Administrator, I would carry on the work started by recent 
Administrators to understand and assess the interrelated roles played 
by fundamentals, financial market behavior and other factors in energy 
price formation. If confirmed I look forward to working with members of 
this committee and others both inside and outside of government in 
order to improve the information analytical base used for making sound 
energy decisions. In doing so, I will draw on a vast network of experts 
from the energy economics community and will strive to raise public 
understanding of these energy issues.
    Finally I want to note that I got my start in the energy sector as 
a draftsman for the Golden Valley Electrical Association in Fairbanks, 
Alaska, during the summer of 1968. My first job in Washington was 
following air pollution policy and investment issues after the passage 
of the Clean Air Act of 1970. More recently, I contributed to my former 
company's efforts in carbon markets, renewable energy, and clean energy 
investing. I understand the important roles that all of our fuels are 
playing in delivering energy to consumers.
    I look forward to answering any questions members of the Committee 
may have--either now at this hearing or in writing for the record. 
Thank you.

    The Chairman. Thank you very much.
    Ms. Burke, go right ahead.

TESTIMONY OF MARCILYNN A. BURKE, ASSISTANT SECRETARY-DESIGNATE, 
                   DEPARTMENT OF THE INTERIOR

    Ms. Burke. Thank you, Mr. Chairman, Senator Murkowski and 
members of the committee. It is an honor and a privilege to 
appear before you today as President Obama's nominee for the 
position of Assistant Secretary for Land and Minerals 
Management at the U.S. Department of the Interior. I have 
appeared before this committee several times for legislative 
and oversight hearings. I appreciate the opportunity to come 
before you today for consideration of my nomination.
    Before I begin I would like to thank President Obama for 
the confidence he has shown in me through this nomination. In 
addition I would like to express my deep appreciation to 
Secretary Salazar for his unwavering support of me and his 
steadfast leadership at the Department. Finally I want to thank 
my family and friends for their support, love and guidance.
    I was born in Raleigh, North Carolina, the second of two 
children. I attended public schools in North Carolina and 
graduated from the University of North Carolina at Chapel Hill. 
I obtained my law degree from Yale Law School.
    My parents, Doris and Johnnie Burke, who are unable to be 
here with me today, spent their careers as public school 
educators. At a young age I came to appreciate the value of 
education both as a tool for personal growth and as a means of 
helping others to achieve their potential. In addition to my 
love for education I have a passion for the law. After 
practicing law in a variety of areas, my interest in the law 
and education merged and led to a law teaching career.
    It was from my position as an Associate Professor of Law at 
the University of Houston Law Center that I first came to the 
Department. When called to become the Bureau of Land 
Management's Deputy Director for Programs and Policy in 2009 it 
was a great honor and opportunity for someone who had spent the 
last 8 years teaching about the management of Federal lands. 
During my tenure with the Department of the Interior I've been 
able to work on a variety of complex and challenging natural 
resources issues.
    Diverse as they have been, these issues share certain 
characteristics.
    First, they almost never lend themselves to easy solutions.
    Second, their resolution requires a thoughtful, balanced 
approach that is informed by the needs and perspectives of our 
stakeholders both here in Washington and throughout the Nation.
    Third, they have real and direct consequences for the 
places where people live, work and play.
    I recognize and appreciate the importance of the Office of 
the Assistant Secretary for Land and Minerals Management. The 
Bureaus over which the Assistant Secretary has administrative 
oversight span a vast geographical distance and encompass a 
wide spectrum of responsibilities. I am committed to the 
Administration's ``All of the Above? approach to developing 
conventional and renewable energy resources in the right places 
in the right way. That means that we are always mindful of our 
responsibilities as stewards for other natural resources as 
well as cultural resources.
    I'm keenly aware of the events that surrounded the Deep 
Water Horizon oil spill. I stand ready to continue to provide 
leadership and policy guidance to the Bureau of Ocean Energy 
Management and the Bureau of Safety and Environmental 
Enforcement. As we strive to improve how we fulfill our 
responsibilities to promote safe and environmentally sound, 
offshore energy development.
    By virtue of my tenure as the Deputy Director of the BLM, I 
am well acquainted with the competing demands of our public 
lands. In meeting its multiple use mission the BLM must balance 
a wide array of uses and resources from mining to energy, to 
grazing, to timber harvesting, to recreation, to the protection 
of unique, special and sensitive cultural and archeological 
resources, as well as land species and habitats.
    Finally, I appreciate and support the mission of the Office 
of Surface Mining Reclamation and Enforcement. As it works 
closely with States, tribes, industry, coal mining communities 
and public interest groups. Its nationwide program to protect 
society and the environment from adverse effects of surface 
coal mining operations while balancing the need for coal 
production as a part of our energy portfolio is vitally 
important.
    The opportunity to serve at the Department of the Interior 
stands alone among my professional experiences. It has been the 
most challenging, rewarding and enjoyable professional 
experience of my life. If confirmed, I would look forward to 
working with this committee and continuing this important work 
with a deep understanding of the awesome responsibility that we 
have as public servants to manage the lands and waters in our 
care.
    Thank you for the opportunity to appear before you today. 
I'm happy to answer any questions.
    [The prepared statement of Ms. Burke follows:]

     Prepared Statement of Marcilynn A. Burke, Assistant Secretary-
                 Designate, Department of the Interior
    Chairman Bingaman, Senator Murkowski, and Members of the Committee, 
it is an honor and a privilege to appear before you today as President 
Obama's nominee for the position of Assistant Secretary for Land and 
Minerals Management at the U.S. Department of the Interior. I have 
appeared before this Committee several times for legislative and 
oversight hearings on public land management issues, and I appreciate 
the opportunity to come before you today for consideration of my 
nomination.
    Before I begin, I would like to thank President Obama for the 
confidence he has shown in me by nominating me for this important 
position. In addition, I wish to express my deep appreciation to 
Secretary Salazar for his unwavering support of me and his steadfast 
leadership of the Department. Finally, I want to thank my family and 
friends for their support, love, and guidance. My gratitude to them 
knows no bounds; without them, I would not be here today.
    I was born in Raleigh, North Carolina, the second of two children. 
I attended public schools in North Carolina and graduated from the 
University of North Carolina at Chapel Hill with a bachelor's degree in 
International Studies. I obtained my law degree from Yale Law School. 
My parents, Doris and Johnnie Burke, who are unfortunately unable to be 
here today, spent their careers as public school educators. As a result 
of the example set by my parents, I came to appreciate the value of 
education--both as a tool for personal growth and as a means of helping 
others to achieve their potential. In addition to my love for 
education, I have a passion for the law. After practicing law in a 
variety of areas, including environmental law, antitrust, and civil and 
criminal litigation, my interest in law and education merged and led to 
a law teaching career.
    It was from my position as an Associate Professor of Law at the 
University of Houston Law Center that I first came to the Department of 
the Interior. When called to become the Bureau of Land Management's 
Deputy Director for Programs and Policy in 2009, it was a great honor 
and opportunity for someone like me who had spent the past 8 years 
teaching in the areas of property law, land use law, and the management 
of Federal lands and its natural resources.
    My professional experiences, both in teaching and in private law 
practice, have honed in me a natural instinct to listen and learn 
first, before making recommendations or decisions. These instincts are 
further reinforced by my sincere belief in the value of collaboration, 
consensus building, and transparency in the development and 
implementation of policies governing the management of the public lands 
and waters. During my tenure with the Department of the Interior, I 
have been able to work on a wide variety of complex and challenging 
natural resources issues. Diverse as they have been, these issues share 
certain characteristics. First, they almost never lend themselves to 
easy solutions. Second, their resolution requires a thoughtful, 
balanced approach that is informed by the needs and perspectives of our 
stakeholders, both here in Washington and throughout the Nation. Third, 
they have real and direct consequences for the places where people 
live, work, and play. I recognize and appreciate the importance of the 
Office of the Assistant Secretary for Land and Minerals Management. The 
bureaus over which the Assistant Secretary has administrative oversight 
span a vast geographical distance and encompass a wide spectrum of 
responsibilities. I am committed to the Administration's ``all of the 
above'' approach to developing conventional and renewable energy 
resources both onshore and offshore, in the right places and in the 
right way. That means that we are always mindful of our 
responsibilities as stewards for other natural as well as cultural 
resources. And if confirmed, I would be ready to help advance Secretary 
Salazar's ``Smart from the Start'' approach to the development of 
energy resources, both on-and offshore.
    I am keenly aware of the tragic events surrounding the Deepwater 
Horizon explosion and oil spill. I stand ready to continue to provide 
leadership and policy guidance to the Bureau of Ocean Energy Management 
and the Bureau of Safety and Environmental Enforcement as we strive to 
improve how we fulfill our responsibilities to promote safe and 
environmentally sound offshore energy development.
    By virtue of my tenure with as a Deputy Director of the Bureau of 
Land Management (BLM), I am well acquainted with the myriad of 
competing demands that are placed on our public lands. As a result of 
significant population growth in the West over the past several 
decades, the need for balanced, consensus-based public land management 
has never been greater. In meeting its multiple use mission, the BLM 
must balance a wide array of uses and resources--from mining; to 
energy--conventional and renewable--to grazing; to timber harvesting; 
to recreation; to the protection of unique, special, and sensitive 
cultural and archeological resources, land, species, and habitats.
    Finally, I appreciate and support the mission of the Office of 
Surface Mining Reclamation and Enforcement as it works closely with 
states, tribes, industry, coal mining communities, and public interest 
groups. Its nationwide program to protect society and the environment 
from the adverse effects of surface coal mining operations, while 
balancing the need for continued coal production as part of our energy 
portfolio is vitally important.
    The opportunity to serve at the Department of the Interior stands 
alone among my professional experiences. It has been the most 
challenging, rewarding, and enjoyable professional experience of my 
life. If confirmed, I would look forward to working with this Committee 
and continuing this important work with a deep understanding of the 
awesome responsibility that we have as public servants to manage the 
lands and waters in our care. Thank you for the opportunity to appear 
before you today. I would be happy to answer any questions.

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

  TESTIMONY OF JOHN R. NORRIS, TO BE A MEMBER OF THE FEDERAL 
                  ENERGY REGULATORY COMMISSION

    Mr. Norris. Thank you, Chairman Bingaman, Ranking Member 
Murkowski, Senator Hoeven. I'm honored to be here today to 
appear before this committee. I also want to express my 
appreciation to President Obama for nominating me to the 
Federal Energy Regulatory Commission. Thank you, Chairman 
Bingaman and Ranking Member Murkowski, for scheduling this 
hearing here today.
    I also want to acknowledge and thank my two great Senators 
from Iowa, who took the time today to introduce me and just say 
how much I appreciate, admire and respect their many years of 
service to Iowans and this country. It's an honor to have them 
here on my behalf.
    I'm also pleased to be here with my fellow nominee to the 
FERC, Tony Clark. I've known Tony since I was on the State 
Public Service Commissioner of Iowa's Utilities Board in 2005. 
I have a great respect for both his abilities and his long time 
commitment to public service. I look forward, hopefully if 
given the opportunity, to serve with him at the Commission.
    I enjoyed my 2 years in the Commission. I'll enjoy even 
more having a full term in 5 years. So let me just say and I 
know we have a lot of issues you want to talk about.
    So I'll make this brief and just say, I think the 2 years 
I've had at the Commission, my 4 years as chairman of a State 
public service commission. As the Senators noted, I worked both 
in the district and on Capitol Hill for a Member of Congress, 
Members of Congress. I've worked in the executive branch of 
State government and Federal Government.
    I have worked for a non-profit sector during the farm 
crisis in Iowa in the 1980s. I've owned my own business and ran 
my own business with 20 plus employees. So I get what it means 
to have government regulations.
    Maybe most importantly I grew up on a family farm in Iowa 
and consider my degree, the best degree, to be in common sense 
where you kind of learn in the end stuff has to work. I bring 
that to this experience. Those many lab experiences that I 
think are an asset to being a regulator to get different 
perspectives of what you do and how it impacts folks because we 
can talk about policy and due process and a number of factors 
in this regulatory arena, but when you throw physics on the 
table as well and in the end it has to work. That's what I 
strive to do at FERC is make this a reliable system that's as 
cost efficient and effective as possible. I will continue to 
strive to do that.
    I also, since my first month at the State Commission in the 
State of Iowa and to this day on my desk calendar you have on 
your desk, I write at the top of that calendar, the uncompleted 
sentence. This decision affects--benefits the consumer because, 
dot, dot, dot. Every decision I make I want to be able to 
provide a reasonable answer to that question.
    So that drives my thinking. How this benefits the consumer 
and how this helps maintain a reliable infrastructure for an 
energy system that is so important for our economy and health 
and safety of our citizens. I would greatly appreciate the 
opportunity to have a full term to continue that work.
    Thank you very much.
    [The prepared statement of Mr. Norris follows:]

  Prepared Statement of John R. Norris, Nominee To Be a Member of the 
                  Federal Energy Regulatory Commission
    Chairman Bingaman, Ranking Member Murkowski, and distinguished 
members of the Committee, I am honored to be here today as a nominee 
for the Federal Energy Regulatory Commission (FERC). I would like to 
express my appreciation to President Obama for nominating me to this 
position and I want to thank Chairman Bingaman and Ranking Member 
Murkowski for holding this hearing.
    I am also pleased to be here today with my fellow FERC nominee, 
Tony Clark. I have known and worked with Mr. Clark since my time as 
Chairman of the Iowa Utilities Board, beginning in 2005, and I have the 
highest regard for his abilities and his long-time commitment to public 
service.
    I am grateful to have had the opportunity to serve my country the 
past two years as a member of the Federal Energy Regulatory Commission. 
I would be honored if allowed to serve an additional, full five-year 
term. The energy issues we are working on at FERC are critical to 
America's economy and to the safety and well-being of our citizens. I 
believe the experience I have gained in the past two years, along with 
my years as Chairman of the Iowa Utilities Board, are assets that I 
would bring to further service. In addition, I have worked for the U.S. 
Congress, and in both the state and federal executive branches, all of 
which provided important experiences that help me weigh policy choices. 
I also believe my experiences outside of government have given me 
valuable perspective that I bring to the Commission. For example, as a 
small business owner, I had to understand and comply with government 
regulations. And, perhaps most importantly, I earned a ``degree'' in 
``common sense'' growing up working on our family farm, and that 
experience has always and will always ground my judgment and decision-
making. When it comes to making any decision, but particularly when it 
comes to our energy infrastructure, I am grounded in the realization 
that, in the end, it has to work.
    While we can debate economics, due process, and other important 
issues with policy implications, in the industries we regulate, physics 
provides a reality check on what we can do if we want our complex, 
interconnected energy infrastructure to work. I strive to find the 
correct balance among economics, due process, and the limits and 
reality of the physics in all decisions before me. However, every month 
of my service at the Iowa Utility Board and as a Commissioner at FERC, 
I write one question on top of my desk calendar to answer for in every 
decision I make: ``How does this decision benefit the consumer?''
    I believe, for example, that consumers benefit from a reliable and 
efficient electric grid. I believe they also benefit when there is an 
open and honest discussion of the costs to maintain a reliable grid. 
So, I take very seriously FERC's responsibility under the Federal Power 
Act to work with the North American Electric Reliability Corporation 
(NERC) to develop and enforce reliability standards, and have worked to 
help strengthen our relationship with NERC and its stakeholders and 
foster an open and transparent dialogue of critical bulk power system 
reliability issues.
    I have also worked to achieve for the benefit of consumers the 
efficiencies of a fair and transparent wholesale competitive market, 
and to see that consumers are protected from harm through the firm and 
fair enforcement of rules prohibiting market manipulation under 
legislation enacted by Congress in 2005.
    I believe we have made progress during my time at FERC to increase 
efficiencies in the transmission of electricity to consumers, but more 
work remains to be done. Open and transparent regional transmission 
planning processes that include a diverse set of interests and that 
find the most efficient solutions for maintaining reliability, 
relieving economic congestion, and meeting public policy directives 
will yield a more efficient and cost-effective supply of energy for 
consumers. I also believe there are efficiencies to be gained from 
increased coordination among regions to find locations where jointly 
planned and constructed transmission facilities, with a fair allocation 
of the costs of those facilities among benefiting consumers, will 
result in a more efficient energy system.
    In addition to our nation's existing energy assets, I believe the 
United States has tremendous potential to make our energy supplies more 
sustainable and secure. The increased supply of natural gas from shale 
gas discoveries, technology advancements that are bringing down the 
costs of wind, solar and other renewable resources, an abundance of 
hydroelectric power, and the continued push for energy efficiency and 
demand side resources all hold great promise to modernize our 
infrastructure and build a sustainable energy system for the future of 
America. With much of our energy infrastructure quite old and in need 
of upgrading or replacement, the timing is right to seize this 
potential.
    At FERC, we can help seize this potential not only through the 
wholesale electric market and electric transmission policies I note 
above, but also by continuing to build on our impressive track record 
of fairly and efficiently siting needed natural gas pipeline 
infrastructure, by providing flexible licensing procedures for new 
hydroelectric technologies, and taking other steps to ensure that new 
energy infrastructure can be brought online at just and reasonable 
rates. My continued goal will be to make sure we meet our needs for 
today and the future in the most efficient way possible, for the 
benefit of consumers and America's economy.
    Thank you again for the opportunity to testify before you today and 
I am happy to answer any questions you may have.

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

   TESTIMONY OF ANTHONY CLARK, TO BE A MEMBER OF THE FEDERAL 
                  ENERGY REGULATORY COMMISSION

    Mr. Clark. Thank you, Chairman Bingaman, Ranking Member 
Murkowski, Senator Hoeven and members of the committee. I'm 
greatly honored to be before you today as a nominee for the 
FERC. I'd like to thank President Obama for nominating me and 
I'd like to thank Senator McConnell for his support as well.
    I'm especially pleased to acknowledge my own two Senators 
from North Dakota. Senator Hoeven, thank you for your kind 
words and Senator Conrad's support both means a great deal to 
me.
    Last, but most importantly, I want to acknowledge my 
family, who has been so supportive of my career in public 
service. To my wife, Amy, our 3 boys, Thomas, Alex and Michael 
and to my parents, they've always been there for me. As I 
indicated the distance between North Dakota and Washington 
prevents them from being here in person today. But I did want 
them to know how much they mean to me.
    FERC does extremely important work on behalf of the 
American people. Its work plays a critical role in protecting 
our energy consumers and the infrastructure that provides them 
with some of the necessities of life in the modern world. If 
confirmed for the Senate I'd look forward to putting to good 
use the experiences that I've gained over the last, 
approximately, 18 years. I've had the tremendous honor of 
serving the people in North Dakota since I was in my early 20s. 
First as a State Legislator, then as a State employee, the head 
of a cabinet level agency and for the last 12 years, as a 
member of the Public Service Commission, the State's top 
utility regulatory body.
    Perhaps the best way to introduce my experience to the 
committee is to tell the story of North Dakota over the last 
decade. Since January 2001, I've served as the Public Service 
Commissioner for the State and I'm currently the Senior Member 
and Chairman of the NDPSC. When I first joined the Commission 
our State had a regionally important energy sector comprised of 
several base load lignite-fired power plants and one large 
Western Area Power Administration hydro dam.
    In the year 2000, North Dakota was effectively 50th in wind 
energy production with no commercial wind energy. As recently 
as 2006, we were the Nation's ninth largest oil producing 
State. What a difference a few years has made in the life of my 
home State.
    Today North Dakota is amongst the top ten wind energy 
producing States with approximately 1,400 megawatts of 
commercial capacity. We've sited or in the process of siting 
hundreds of miles of new electric transmission line. North 
Dakota is a leader in clean coal and innovative carbon capture 
and sequestration projects.
    Hundreds of millions of dollars have been invested in oil 
and gas pipelines and processing infrastructure. It was just 
announced that North Dakota is now the Nation's third largest 
oil producing State and is expected to be second only to Texas 
within as little as a year. North Dakota has truly become an 
example of an ``All of the Above'' energy State.
    Much like the FERC at the Federal level, the NDPSC is the 
lead regulatory agency at the State level for jurisdictional 
matters related to investor owned utilities, pipelines and the 
siting of energy development projects. In my tenure in office 
I've participated in proceedings that have authorized 
approximately $6 billion in energy infrastructure projects. 
Having a hands on experience in helping to regulate and shape 
energy policy during this period of rapid change has given me 
insights into both the opportunities and the challenges 
associated with energy development. It's this unique experience 
that I hope to bring to the Commission should I be confirmed.
    Another experience that I've had, and Senator Hoeven 
indicated some of it, which was the, my tenure as President at 
NARUC, the National Association of Regulatory Utility 
Commissioners. Within NARUC, I worked hard to ensure that all 
voices were heard successfully working across regional lines, 
philosophical lines, party lines for consensus oriented 
solutions that I hope benefited our Nation's consumers. The 
experience, perhaps more than any other one that someone could 
have, has deepened my respect for and my understanding of the 
regional diversity that exists across this country.
    If I'm confirmed, I hope to take this broad understanding 
of how energy regulation works at both the State and Federal 
level with me to the FERC. It's probably safe to say that 
there's not a single State across the country with which I have 
not had at least some interaction. Should I be confirmed I will 
be a much better commissioner for that experience.
    Mr. Chairman and members of the committee, the FERC has big 
issues ahead of it. Developing infrastructure in the right way, 
facilitating American's access to affordable, reliable, 
environmentally responsible forms of energy, protecting our 
Nation's critical assets, these are all top of mind issues for 
me as I know they are for you. If confirmed, I look forward to 
engaging with you on these important issues and would be happy 
to provide whatever expertise I may have in the furtherance of 
your important work.
    Mr. Chairman, that concludes my testimony. I'd be happy to 
answer any questions you may have.
    [The prepared statement of Mr. Clark follows:]

  Prepared Statement of Anthony Clark, Nominee To Be a Member of the 
                  Federal Energy Regulatory Commission
    Thank you Chairman Bingaman, Ranking Member Murkowski and members 
of the Committee. I am greatly honored to be before you today as a 
nominee for the Federal Energy Regulatory Commission (FERC). I would 
like to thank President Obama for nominating me. I also wish to thank 
Senator McConnell for his support. And I am especially pleased to 
acknowledge my own two Senators from North Dakota. Senator Hoeven's and 
Senator Conrad's support means a great deal to me, and I appreciate 
their kind words regarding my nomination. Last, but most importantly, I 
want to acknowledge my family, who has been so supportive of my career 
in public service. To my wife, Amy and our three boys Thomas, Alex and 
Michael, and to my parents; you have always been there for me. The 
distance between North Dakota and Washington, DC keeps them from being 
able to be here in person today, but I know they are with me in spirit 
and are watching on the Internet and I just wanted them to let know how 
much they mean to me.
    FERC does extremely important work on behalf of the American 
people. Its work plays a critical role in protecting our energy 
consumers and the infrastructure that provides them some of the basic 
necessities of life in the modern world. If confirmed by the Senate, I 
would look forward to putting to good use the experiences I have gained 
over the last approximately 18 years. I have had the tremendous honor 
of serving the people of North Dakota since I was in my early 20's; 
first as a state legislator, then as a state employee, the head of a 
cabinet-level agency, and for the last nearly 12 years as a member of 
the state's top utility regulatory body.
    Perhaps the best way to introduce my experience to the committee is 
to tell the story of North Dakota over the last decade. Since January 
2001, I have served as a Public Service Commissioner for the state of 
North Dakota and today I am the senior member and Chairman of the North 
Dakota Public Service Commission (NDPSC). When I first joined the 
NDPSC, our state had a regionally important energy sector, comprised of 
several base load lignite-fired power plants, and one large Western 
Area Power Administration hydro dam. In the year 2000, North Dakota was 
effectively 50th in wind energy production, with no commercial wind 
farms. And as recently as 2006, North Dakota was the nation's 9th 
largest oil producing state.
    What a difference a few years have made in the life of my home 
state. Today, North Dakota is amongst the top 10 wind energy producing 
states, with approximately 1,400 MW of capacity. We have sited, or are 
in the process of siting, hundreds of miles of new electric 
transmission lines. North Dakota is a leader in clean coal and 
innovative carbon capture and sequestration projects. Hundreds of 
millions of dollars have been invested in oil and gas pipelines and 
processing infrastructure. And it was just announced that North Dakota 
is now the nation's third largest oil producing state, and is expected 
to be second only to Texas within as little as a year. When taken 
together with our large biomass and biofuels potential, North Dakota 
has truly become an example of an ``all-of-the-above'' energy state.
    As Senator Hoeven has often said, both as our Governor and now as 
our Senator, this dynamic energy economy is the result of not only 
North Dakota's god given natural resources, but also having the right 
legal, tax and regulatory climate in place. In my current job, I cannot 
take much credit for our legal and tax policy. I can report the NDPSC 
has a lot to say about regulatory policy. In authorizing projects, we 
take pride in not cutting corners. In many ways, we have some of the 
most comprehensive policies related to what is expected of projects in 
terms of mitigating impacts on the welfare of citizens and on our 
state's natural, cultural and historic resources. At the same time, we 
have worked to ensure that unnecessary bureaucracy does not hold up 
regionally or nationally needed projects.
    Much like the FERC at the federal level, the NDPSC is the lead 
regulatory agency at the state level for jurisdictional matters related 
to investor owned utilities, pipelines and the siting of energy 
development projects. In my tenure of office, I have participated in 
proceedings that have authorized approximately $6 billion in energy 
infrastructure projects. At the same time, our state's consumers pay 
some of the lowest energy rates in the nation, and our environment is 
among the best. North Dakota is a leader in meeting air quality 
standards. And programs such as those carried out by the NDPSC's Mine 
Reclamation Division, are considered world-class. Having hands-on 
experience in helping to regulate and shape energy policy during this 
period of rapid change has given me insights into both the 
opportunities and challenges associated with energy development. It is 
this unique experience that I hope to draw upon should I be confirmed.
    Another experience that I have had that I would draw upon is one 
that extends beyond the borders of North Dakota. In November of 2010, I 
was unanimously elected by my state commissioner colleagues across the 
nation to serve a one year term as President of the National 
Association of Regulatory Utility Commissioners (NARUC). In that role, 
I was the lead state commissioner responsible for representing the 
association before numerous stakeholders. My experience leading this 
organization of regulatory professionals gave me a valuable 
understanding that can perhaps only be developed through a position 
like the one I held.
    As a leader within NARUC, I worked hard to ensure that all voices 
were heard. I successfully worked across regional lines, philosophical 
lines and party lines for consensus oriented solutions that benefitted 
our nation's consumers. This experience, perhaps more than any other 
that one could have, deepened my respect for, and my understanding of, 
the regional diversity that exists across the country.
    If I am confirmed, I will take this broad understanding of how 
energy regulation works at both the state and federal level with me to 
the FERC. Since my nomination, I have been truly humbled by the support 
I have received from my state colleagues across the country, and I want 
to acknowledge them at this time. Over the years, I have learned much 
from them. It is probably safe to say there is not a single state 
across the country with which I have not had at least some interaction. 
And should I be confirmed, I will be a much better Commissioner for 
that experience.
    Mr. Chairman and members of the Committee, the FERC has big issues 
ahead of it. Developing infrastructure in the right way, facilitating 
Americans' access to affordable, reliable, environmentally responsible 
forms of energy, protecting our nation's critical assets; these are all 
top of mind issues for me, as I know they are for you. As someone who 
first cut his teeth in public service as an elected member of the state 
House of Representatives, I have a tremendous respect for the 
legislative branch of government and a tremendous respect for the 
sacrifices you have all made to serve your constituents. If confirmed, 
I look forward to engaging with you on these important issues, and 
would be happy to provide whatever expertise I may have in the 
furtherance of your important work.
    That concludes my testimony. I would be pleased to answer any 
questions you may have.

    The Chairman. Thank you very much. Thank you all for your 
excellent statements. I'll start with a few questions.
    First, let me ask the two FERC nominees. In your view would 
it be advisable for Congress to give the Federal Energy 
Regulatory Commission additional authority to have 
transmissionsited?
    Mr. Norris.
    Mr. Norris. To have transmission siting?
    The Chairman. Yes, siting authority. At the FERC level do 
you think we are, under current law, able to build all the 
transmission we need in this country or do we need to change 
the law?
    Mr. Norris. I wouldn't say we need to change the law yet. I 
think the biggest hurdle in my mind for getting transmission 
built in this country has been the inability to reach consensus 
on cost allocation. Which is why in Iowa 1000, we gave great 
deference to the regional planning entities to come up with a 
cost allocation formula based on the principle of beneficiary 
pace.
    I believe if we can give that a chance to work that will 
help remove a major barrier in building transmission in this 
country. Of course with the 2005 legislation, EPACT 2005, and 
the backstop siting authority there's still, I think, a fair 
question out there as to what, how far that statute and that 
law goes with the 4 circuit decision that it only applies if a 
State fails to act. I think there's still some uncertainty 
about would that be adequate if we don't resolve cost 
allocation, planned entities don't move forward with 
transmission build and if States begin to withhold siting 
approval on much needed projects.
    I would say there's a chance we would need to revisit that. 
But I think it would probably be premature at this time.
    The Chairman. Mr. Clark, did you have a point of view on 
this?
    Mr. Clark. Sure. In my role as a Commissioner on the North 
Dakota Commission, I've been supportive of the Federal backstop 
authority which probably places me a little bit outside. Maybe 
even of some of the mainstream of State commissioners, many of 
whom would prefer that it be left strictly as a State matter.
    I do think that backstop Federal authority is a good idea. 
As Commissioner Norris references, there may be cases where 
there may be a regionally or nationally important line. I don't 
know that we'd want to have a situation where maybe one State 
or one township or one county in the middle of a very important 
reliability line, for example, is able to block that.
    So there may be, as Congress recognized in EPACT 2005 the 
necessity of having that Federal backstop authority. I would be 
hesitant though to go much beyond that. In my experience as a 
State Commissioner it's best to at least have States and local 
government have a first crack at siting electric transmission.
    Electric transmission, in my experience and I've sited both 
a lot of it and pipelines, is the most difficult infrastructure 
to site. So I think it's important that we have that point of 
local contact that ability of land owners to go directly to a 
more local commission, like a State commission, first.
    The Chairman. Alright.
    Ms. Burke, let me ask you. Your position, as I understand 
it, involves oversight or jurisdiction over the Office of 
Surface Mining and the Bureau of Land Management. The 
Department has announced plans to consolidate certain 
Administrative and support functions in those two departments 
or those two offices. Both of the agencies report to you.
    Are you satisfied that the proposed reforms will improve 
efficiency, but still ensure the independence of the offices 
and preserve their ability to perform their statutory duties?
    Ms. Burke. Thank you for that question, Mr. Chairman. In 
short, yes, I do believe that the recommendations will yield 
certain efficiencies and make the both bureaus more effective 
while at the same time allowing them to carry forward with 
their regulatory responsibilities on the OSM side as well as 
the leasing responsibilities on the BLM side.
    The Chairman. Alright.
    Let me ask, Mr. Sieminski, if you could tell us what some 
of the key areas of strength and areas that you think need 
improvement in the current Energy Information Administration 
programs and how you would proceed to provide improvement in 
areas that you see as lacking?
    Mr. Sieminski. Senator Bingaman, thank you. I've got, sort 
of, 4 basic ideas, I think, that guide my efforts at the Energy 
Information Administration.
    First of all I think we need to take advantage of new ways 
to get data faster and cheaper. I met, about 6 weeks ago, with 
one producer out in Oklahoma that was still faxing information 
on natural gas storage into the EIA. I think that web based 
systems would be far more accurate and ultimately cheaper. I 
would like to see things like that happen.
    I would love to get the Energy Information Administration 
to promote best practices in data collection and management by 
all of our State and Federal partners. I'm struck, actually, by 
one of my fellow panel members here. One of the best States in 
terms of the accuracy, timeliness and comprehensiveness of its 
data is North Dakota. I would like to find some way to, maybe 
through NARUC and EIA working together to find ways to get 
other States to adopt similar policies so that we get data on 
energy production and use in a more timely basis.
    I'd like to make it a big part of my tenure, if confirmed 
for the EIA position, to find ways to retain good people to 
analyze the data and look for insights. Over the course of my 
career I've been involved in putting together award winning, 
global teams. I want to, hopefully, carry on that tradition at 
the Energy Information Administration.
    Finally, we need to find ways to make the data in forecast 
that EIA creates more readily available to its stakeholders 
including the Congress, the public and others. There are some 
wonderful innovations actually in the last year or so at EIA. 
The daily energy briefs, the weekly energy updates that are 
shorter, punchier, more market relevant and that's what I was 
involved in my prior job. I'd like to see EIA carry on with 
that.
    Thank you.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Sieminski, thank you for your 4 areas where you think 
that we can make some positive changes within EIA. Let me 
continue on in that questioning because in addition to getting 
the data or making the data readily available, which we all 
agree is key, of course what we're hoping for is that you're 
able to accurately forecast. I recognize that forecast means 
that we don't know with exact precision.
    But how difficult is it really to predict the commodity 
prices, 25, 35 years out, to predict the supply and demand 
trends? We're making policy decisions based on the efficiency 
of the data, the adequacy and recognize, again, that these are 
forecasts, these are predictions. But in your job as an 
economist, recognizing what you've been able to do within the 
private sector, how can you translate this into also making 
sure that we've got a level of accuracy to the fullest extent 
possible?
    Mr. Sieminski. Senator Murkowski, as you know, there are a 
huge number of factors.
    Senator Murkowski. Right.
    Mr. Sieminski. That impact the energy markets, the economic 
activity, geopolitics, weather and then all of the supply/
demand and pricing issues that make forecasting a challenge. I 
think that EIA has done and I would hope to continue to be very 
explicit about the assumptions that go into the EIA analyses so 
that everybody is working or understands the basic driving 
factors behind the analyses.
    EIA does often show variations in their forecasts.
    What would happen if the economy grew faster or slower?
    What would happen if oil prices or electricity prices were 
higher or lower?
    That is absolutely essential to do and to continue.
    One of the things that EIA is now doing that basically 
started on--in the financial community is to use information 
available in the options markets to try to put probabilities on 
price developments. This is how EIA is now bracketing the high 
and low oil price forecasts and gasoline price forecasts that 
they're making. It is a better way, I think, of trying to use 
market based information to inform the decisionmaking process 
and analyses that EIA publishes.
    I think that continuing to innovate in that way is very 
important. I would hope to be able to do that, if confirmed.
    Senator Murkowski. Let me ask you the question that 
everybody in America is asking.
    [Laughter.]
    Senator Murkowski. That is what can be done about the high 
price of gasoline? I think we recognize that there are long 
term solutions. There are those who are looking for that 
shorter term solution, that silver bullet.
    I don't believe that there is one silver bullet. I agree 
with the President on that. But are there any regulations that, 
whether it's seasonal fuel specs or regulations that target 
refineries specifically, might provide some short term steps 
that in your opinion could influence the price of gas at the 
pump?
    Mr. Sieminski. Senator, the things like fuel 
specifications, of course, are under the jurisdiction of the 
Environmental Protection Agency and not the Energy Information 
Administration. It's certainly possible for EIA, through its 
data collection analysis operations, to point out what that 
means and how different specifications for fuel in different 
parts of the country make it more difficult from a logistical 
standpoint to supply fuels during emergencies.
    Senator Murkowski. So if EPA were to deal with those regs, 
it could have an impact on this?
    Mr. Sieminski. It could. I believe things like that are 
actually being looked at. With the closure of the refineries in 
the Philadelphia area, the city of Pittsburgh is having some 
difficulty associated with getting the right specifications for 
gasoline in the summer time.
    It's things like that that can be looked at. One of the 
things that EIA, of course, could do, would be to help map out 
some of that and show the logistical issues associated with 
that.
    Senator Murkowski. Do you know if EIA is doing that 
currently? Doing this sort of charting?
    Mr. Sieminski. They have and they've been pointing that 
out, particularly in the East Coast Refining report that was 
just issued a month ago.
    On other issues, in terms of gasoline prices, how to deal 
with it. It is supply and demand. Anything that could be done 
to improve supply and not just of gasoline itself, but 
alternative fuels and anything that could be done to reduce 
demand such as fuel efficiency standards, would contribute to 
the move toward stabilizing gasoline prices.
    Again, not really under the jurisdiction of the Energy 
Information Administration, but certainly the data and analyses 
associated with understanding the supply and demand factors are 
something that EIA does and will continue to do.
    Senator Murkowski. Thank you, Mr. Chairman. My time is 
expired. So I'll wait for a second round.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you very much, Mr. Chairman. I want to 
focus some questions about natural gas on Mr. Norris and Mr. 
Clark.
    I think we all understand with natural gas prices and 
abundant supply this is an area where America has got a 
competitive economic advantage. This is good news. This is a 
shot in the arm to the economy.
    What we're going to need is sensible policies that in 
effect, nurture this economic advantage. That's why I want to 
ask you both about the matter of natural gas exports. Now you 
can't talk about specific cases that are pending before the 
Commission, but you can talk about the underlying principles 
that you'd follow in addressing these cases.
    Now under the Natural Gas Act, I want to be very specific 
about this, because I indicated in the office when we discussed 
this that we really expect some answers from you all this 
morning and as part of this confirmation process. DOE approves 
the exports of natural gas. But FERC approves the physical 
terminals that are needed to carry out the exports and any 
pipelines that are needed to connect them to gas supplies.
    FERC's record on approving import terminals including the 
Oregon, you know, terminals where we've had some very 
passionate debates, raises real questions in my mind about how 
the Commission is going to go about tackling these issues 
related to export terminals. For example, FERC refused to look 
at whether the terminals were even needed to serve their 
markets. So it ended up approving terminals, like one in Coos 
Bay, Oregon, that now wants almost overnight to convert to 
exports because they don't have an import market.
    So my question to both of you and this will be central to 
my judgment with respect to confirming you all. Do you believe 
that FERC has an actual obligation to make a finding that an 
export terminal is in the public interest?
    Mr. Norris, let's start with you.
    Mr. Norris. Let me first say I totally agree. Our export 
policy nationally is 20 years old, huge change in circumstances 
from 1992 to the present. We are seeing incredible dependence 
upon this new technology for extracting shale gas and the 
supply.
    It's providing jobs to the manufacturing sector. It's 
changing our base load generation in this country where 
everyone is building new base load with gas. It's maintaining 
regional prices for consumers.
    So I agree we need to look at this as a bigger, broader 
issue that's changed. I think it's broader than the Federal 
Energy Regulatory Commission. I would encourage the Congress to 
take it up as well.
    Senator Wyden. I understand that. But you all----
    Mr. Norris. Yes.
    Senator Wyden. You can't export the gas unless somebody 
approves the terminals. That is your statutory responsibility. 
I want to know how you're going to measure the public interest 
as part of that responsibility.
    Mr. Norris. So let me say that I think it's a big, broad 
issue. When you look at it in terms of after the Secretary of 
Energy, which is largely prescripted for the Secretary as well. 
It's deemed in the public interest to export to free trade 
States. The Secretary has to prove it's not in the interest to 
go to non-free trade agreement countries.
    Then it would come to FERC in terms of a license for the 
construction and operation of a facility. Which is largely to 
make sure it's a safely and environmentally safe run facility. 
There is a public interest balance.
    Having said that I think it would be a stretch. When you 
look at our current applications before the FERC they revolve 
around existing facilities. The ability to adapt an existing 
facility for export really only involves minor modifications. 
They certainly aren't major modifications.
    So I think it would be a stretch to say that we could find 
a way to analyze the public interest of this great, big, 
broader issue regarding export of LNG juxtaposed or balanced 
against the minor modifications for altering an existing LNG 
facility. Perhaps----
    Senator Wyden. But Coos Bay is not an existing facility, 
for example. I mean we're going to have instances where you 
don't have existing facilities. The Congress and the country 
deserves to know how FERC is going to look at that.
    Mr. Norris. That's the case before us. I don't want to talk 
about Coos Bay directly because it's still under a hearing.
    Senator Wyden. Just hearing about the principle.
    Mr. Norris. But the principle of if there's a new, brand 
new, facility be constructed. That may, and I don't want to 
pre-judge that. But that will certainly be, I think, it would 
be reasonable to think that we can weigh the public interest of 
the policy when you're talking about something, a substantial 
new facility.
    But it's a stretch to get there for minor modification of 
current facilities.
    Senator Wyden. Alright.
    Mr. Clark, we're making a little progress now.
    Mr. Clark. Senator Wyden.
    Senator Wyden. Mr. Norris indicated that there was a public 
interest responsibility when we were talking about a new 
facility. My time is up. I thank you Mr. Chairman, if Mr. Clark 
could just respond.
    Mr. Clark. Sure. As we talked about last week and thank you 
for the question, coming from perhaps the most land locked 
piece of land on the entire North American continent means I 
haven't had to deal a lot with LNG terminals. I'm certainly 
familiar with siting processes, however.
    I would say that the notion of whether there exists a need 
standard or a public interest standard may be one that's right 
for bringing to the Commission and maybe become part of a case. 
So I hesitate to pre-judge that notion. But I would simply say 
that, again, not having had to take a position on LNG, I would 
bring to the table a fresh set of eyes and an open mind to 
those sorts of arguments.
    Senator Wyden. Mr. Chairman, thank you. I hope on the 
second round we can get into some issues with Ms. Burke.
    The Chairman. Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman.
    Mr. Clark, if you would talk a little bit about how, as we 
develop more energy in States like North Dakota, how can the 
FERC and I understand you play a regulatory role. But how can 
the FERC help us get that energy to market?
    Mr. Clark. Mr. Chairman, Senator Hoeven, I think there are 
a number of ways. Speaking to the electricity side, for 
example, one of the things I think the FERC can do is to try to 
support, as much as possible, a bottoms up approach to system 
planning. A lot of the decisions that are made in electricity 
policy have impact in other States throughout the region in 
whatever region you happen to be in.
    So I found and I know as you have, as Governor of our State 
and now as a Senator, that things like the upper Midwest 
Transmission Development Initiative to the degree that they can 
be supported by FERC for information sharing, so on and so 
forth. I think that can do a lot to improve regional planning 
for things like transmission, transmission cost allocation. 
What you develop then are coalitions of the willing who are 
willing to move forward and build out needed energy 
infrastructure projects.
    The other thing that I would say is and I think we've had 
some success in this regard in North Dakota is you have to do 
as much as you can to provide regulatory clarity and certainty. 
You've spoken a lot eloquently in North Dakota about the need 
for legal tax regulatory structure that supports investment. 
While the FERC doesn't have a lot to do with tax policy or 
maybe even legal policy, it has a lot to do with regulatory 
policy.
    I think the notion would be that as a regulatory agency you 
want to provide, as much as possible, a clear, consistent set 
of rules so that all stakeholders who are involved, public 
interest stakeholders, industry stakeholders, have a sense for 
how the process works.
    Senator Hoeven. Talk a little bit about how we or how the 
FERC can drive that certainty because I agree with you. Mr. 
Norris talked about pricing certainty and understand pricing 
and you know, understanding pricing. But how does the FERC help 
create that certainty both in terms of the current regulatory 
environment, but help move us to greater certainty in the 
regulatory environment.
    If you would address the pricing issue which is very 
complicated? Then also address a little bit, the role both in 
terms of making the regulations understandable, but also how do 
the regulators both enforce the regulations but empower 
investment in the infrastructure development that we need?
    Mr. Clark. What I have found, Senator, is that as a 
regulator when you make decisions and you put out those orders 
that's the one time that the Commission, be it at a State or 
Federal level, really speaks as one. That you do so in such a 
way that you're very tied to a strict reading of the law, that 
you're not, sort of, pushing the boundaries further than it 
needs to go. Because what you expose yourself to if you play a 
little too fast and loose, is that you end up with situations 
where you're constantly in litigation. Then the Commission is 
being overturned.
    To me that is, as much as anything, drives away investment 
from a regulated sector. If there's a sense that they don't 
ever really know that the Commission's findings are going to 
stick in court. So it's been true on the State level.
    I think that on the Federal level it's the same policy. You 
have to be very careful in how you interpret those laws. That 
you interpret them in such a way that you have, that you as a 
regulator in the industry as well, has a high degree of 
confidence in those rules that you promulgate, those orders 
that you issue, that they'll be upheld in the courts.
    Senator Hoeven. Touch on for a minute the, ``Not in my 
Backyard? challenge of siting transmission or gas pipelines. I 
think both you and Mr. Norris referred to it when Chairman 
Bingaman asked about backstop authority. But this is a real 
challenge and a real balancing act.
    We have States that are producing a lot more energy. Then 
we have States that are the energy consumers. We've got to link 
them up.
    This is an interstate issue. As a Governor and certainly 
you, as a Public Service Commissioner, saw the state 
perspective where they want to have, you know, a say and a 
certain level of control in siting within their jurisdiction. 
But at the same time, you know it's a national issue that we're 
able to move this energy. So touch on how do we do this in a 
way that works?
    Mr. Clark. Sure. I think it's very important to get local 
input. One of the things that I think I've been blessed with as 
a State Commissioner is we have a State law that says when you 
site a project, you have to hold a hearing in that actual 
county. It can't just be in Bismarck in the capital. You have 
to go out and meet with the folks who are actually affected.
    So I think you have to have a high degree of local input. 
That helps make the process at the end of the day, although it 
can be a little more time consuming up front. At the end of the 
day, I think it really saves time because you can get some 
public acceptance.
    By in there, of course, sometimes, comes a time when there 
may be a project that absolutely has to be built because it 
supports the reliability of the grid. It keeps the lights on, 
so on and so forth. Then you just have to make a call.
    They're tough calls. They're not always fun. But they're 
ones that you have to make in order that we have safe, 
reliable, affordable electricity and natural gas energy for 
American consumers, but base it on a record.
    Senator Hoeven. Thank you, Tony.
    The Chairman. Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman.
    Ms. Burke, it's my understanding that you were a member of 
the Defenders of Wildlife Litigation Committee from 2005 to 
2006. The Defenders of Wildlife is one of many radical 
environmental groups that tries to block access to our Nation's 
public lands. The Defenders of Wildlife routinely sues the 
Interior Department to stop energy production, timber 
harvesting, grazing and even public recreation.
    In fact, the Defenders of Wildlife uses taxpayer dollars to 
block access to our Federal public lands. That's right through 
the Equal Access to Justice Act, the Defenders of Wildlife uses 
taxpayer dollars to prevent taxpayers from accessing our public 
lands. So I look at this and I'm trying to think why we would 
put someone who has spent her time blocking access to public 
lands in charge of an agency with responsibility for providing 
access to public lands.
    Isn't this a little bit like, you know, putting the fox in 
charge of the hen house?
    Ms. Burke. Thank you for your question, Senator Barrasso.
    Yes, I was a member of the Litigation Committee for the 
Defenders of Wildlife for approximately 1 year in making 
decisions about what litigation would be appropriate to bring. 
Now I sit on the other side of the table from organizations 
like Defenders of Wildlife defending the actions that the 
agencies under my recite take. So it is, in a sense, a role 
reversal.
    In that instance I was part of a committee and not a sole 
voice as I am at the Department, part of a group of 
policymakers. What we had in common though was to move forward 
with our missions. The mission at the Department of the 
Interior and for all the Bureaus for which I have oversight is 
to balance the need for the development and production of 
natural resources including energy, resources on public lands 
while at the same time making sure that we take appropriate 
care for our other natural resources in the environment.
    Senator Barrasso. In this role reversal, my question would 
be: when you look at the legal positions that the Defenders of 
Wildlife took with you involved in the decision-making process 
(2005/2006), do you agree with the legal positions that the 
Defenders of Wildlife took in those years? If not, what 
specific legal positions do you disagree with and why?
    Ms. Burke. Thank you, Senator Barrasso.
    My participation to say was quite minimal on the committee 
having met twice I believe to discuss litigation, none of 
which, I think actually had an impact on any of the 4 Bureaus 
that I deal with now. They were Park Service issues and 
forests, Fish and Wildlife service issues. But I don't recall 
any of the specific cases in which I was involved in the 
discussion.
    But I was not the ultimate decisionmaker in any of those.
    Senator Barrasso. Thank you.
    Mr. Norris, I'd like to ask you about your exchanges with 
the Administration on the impacts of the EPA's proposed rules 
on the reliability of the electric grid. Did you discuss the 
EPA's Mercury and Air Toxics Standards Rule and its impact on 
reliability with anyone in the Administration?
    Mr. Norris. I certainly had a meeting with EPA. I can't 
remember the date now, prior to the issuance of the rule to get 
a briefing on what it was they were considering.
    Mr. Norris. It was with Administrator McCarthy.
    Senator Barrasso. She's testifying upstairs. I've been back 
and forth between the two meetings.
    Can you talk a little bit about what you discussed about 
the impacts on the reliability of the grid with the 
Administrator?
    Mr. Norris. It was more of a briefing. I wanted to know 
what they were considering. I think from my input to them was I 
encouraged them to make sure that there's a communication with 
the water division. I forget the exact name of the--so they 
realized that the joint impact of the MERC and the CSPAR and 
the 301B and once through coolings that this will have a 
cumulative impact on liquid generation which means, from our 
standpoint, it all affects reliability.
    So that was my main message in that meeting.
    Senator Barrasso. Ms. Burke, just a final question for you.
    You previously served as the BLM's Deputy Director for 
Programs and Policy. I understand that you played a critical 
leadership role in the development and implementation of the 
BLM's Wild Lands Policy, and the so-called onshore oil and gas 
leasing reforms. Both policies were efforts by the 
Administration to block access to our Nation's public lands.
    The Wild Lands policy was effectively a means of the 
Administration to create wilderness without the approval of 
Congress. The so-called onshore oil and gas leasing reforms 
added more red tape to onshore oil and gas production. So would 
you agree that there's a common theme in your work at the 
Defenders of Wildlife as well as at the BLM that appears to be 
blocking access to our Nation's public lands?
    Ms. Burke. Senator Barrasso, I would respectfully disagree 
that there's not a common theme here. The common theme is that 
of one of balance and that recognizing that the public lands 
play a very important part in our Nation's energy future. But 
there are a number of resources for which the BLM was 
responsible.
    With the Wild Lands policy, it was an attempt to carry out 
the mandate under FLPMA, BLM's authorizing statute, to make 
sure that it takes inventory of all resources on the public 
lands which would include lands with wilderness characteristics 
and to use that information in its land use planning process. 
In which case, as the BLM does today, make a decision about 
whether or not to make a decision about what types of 
activities would be appropriate in those areas.
    With respect to the oil and gas leasing reform, I think 
that those reforms actually will do more to make the 
appropriate land available for oil and gas development. At the 
time of the beginning of this Administration by all accounts we 
had a broken system. We had more than half of the leases that 
were being sold, being protested either through an 
administrative process or in litigation. So it was very 
difficult for us to actually do the work.
    So through the land shore leasing reforms the BLM is able 
to address those issues. Do a lot of that work up front. So 
that both the BLM and industry can have confidence that at the 
time of a lease sale the BLM will actually be able to issue the 
lease that it sold.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. I think everyone has had a chance to ask a 
first round of questions. Why don't we go ahead with a second 
round? Let me start with Senator Murkowski.
    Any questions that you have for the second round? Go right 
ahead.
    Senator Murkowski. Thank you, Mr. Chairman.
    Let's go to Mr. Norris, if I may. This follows a little bit 
on Senator Barrasso's question here.
    As you know, I have been pushing the issue of reliability 
and trying to get some real, clear answers as to the impact of 
the new EPA rules that apply to power plants. I'm assuming that 
you would agree with me that this cumulative impact has the 
potential to be quite serious in terms of reliability.
    Mr. Norris. Yes, it will certainly impact reliability and 
anything that impacts reliability, I take seriously, yes.
    Senator Murkowski. I noted your statement that whether this 
decision benefits the consumer because and again, we're very 
cognizant of that.
    But you have received, subsequent to the technical 
conference that was held in the fall, you've had testimony 
there. You've had filings made in response to the Commission's 
notice of that conference.
    You've had assessments done by the NERC and the Planning 
Authorities.
    You've got staff papers.
    A whole series of evidence has been gathered not to mention 
the retirement announcements that we're seeing are already 
greater than was predicted by the EPA.
    You made a statement last fall, and I will use your words, 
that the, ``Reliability of the electric grid can be adequately 
maintained as compliance with EPA regulations is achieved.'' I 
guess the question to you is in light of what we have seen come 
forward since the November technical conference. In light of 
these recent retirements, is that still a statement that you 
stand by?
    Mr. Norris. Yes. I think there are sufficient tools in 
place to address the reliability of the grid. I think there 
were, as you well know, a range of studies with a range of 
predictions. I probably think the EPA's prediction is now, yes, 
it's more than that. It's less than some doomsday predictions. 
But it's going to land somewhere in the middle.
    The main thing in my mind is we have the tools to deal with 
it as it comes forward. I think most of those assessments said 
we will be OK from a resource adequacy standpoint across the 
region. It will be a much more localized concern which is why I 
think the process is in place to have the 3 years to comply, 
the additional year and then the fifth year of Administrative 
order and how EPA is seeking input from both the FERC and the 
industry and other stakeholders.
    I believe there is sufficient tools to address reliability 
concerns going forward.
    Senator Murkowski. As you may know, I am working to address 
that because I'm not certain that we do have the sufficient 
tools. We're looking at a safety valve concept. But I want to 
make sure that we're always answering that question that you 
have on your desk, whether or not what we're seeing, how it 
would impact the consumer there.
    Ms. Burke, I would like to go to you in my remaining time 
here. You've indicated in response to Senator Barrasso that 
what you're trying to do is find this balance here. On some 
Alaska specific issues I'm curious.
    We have NPR-A planning. This is the National Petroleum 
Reserve Alaska. It is the last petroleum reserve under Federal 
control in the Nation. In your view what should be the priority 
for NPR-A as we look at the planning?
    Is it to use the lands to produce the oil and gas that is 
contained within or is it to set aside acreage for purposes of 
conservation?
    Ms. Burke. Thank you for your question, Senator Murkowski.
    Unfortunately with BLM lands it's rarely and either/or 
situation. Obviously it's a petroleum reserve and so we're 
looking to ways in which we can responsibly make land available 
for oil and gas development. But at the same time we have to 
take account for the sensitive resources that are found there.
    So the planning, as you know, is well underway. We'll be 
releasing a plan this spring so that we can move forward in 
NPR-A.
    Senator Murkowski. What about in those areas where we're 
dealing with ANILCA and the no more clause?
    I'm sure that you're very, very familiar with Section 1326. 
That basically says that there shall be no more wilderness 
within the State of Alaska. So the question that we're 
wondering in Alaska is you've got this push by Fish and 
Wildlife to move forward a new land management plan for ANWR 
that may very well result in a recommendation for additional 
wilderness created there within the ANWR region in direct 
contradiction to the provisions set out in ANILCA.
    So I guess the question to you is specifically what is your 
view of the meaning of section 1326 that calls for no more 
wilderness within that region? Then explain how the process, 
the planning process that is currently underway within the ANWR 
region, is not somehow then in conflict with the no more 
clause.
    Ms. Burke. Thank you, Senator Murkowski.
    As you know ANWR, as you said, is under the Fish and 
Wildlife service's jurisdiction. If there were to be any 
development in that area the BLM would be responsible for 
managing that development. But it is not responsible for that 
planning process.
    Also, and when I joined the Department I took an oath not 
to practice law at the Department. So I'm very cautious about 
my offering my interpretation of the statute here. We're very 
mindful of the statute and the solicitors are part of this 
analysis at each step of the way to make sure that we do not 
run afoul of any statutes governing ANWR, in particular ANILCA, 
with respect to whether or not there would be designation of 
new wilderness in that area.
    Senator Murkowski. We are very cognizant of the effort to 
find balance while we access our resources. But we are up 
against an Administration that has been, oftentimes, very 
difficult to work with as we try to do just that. Sometimes it 
seems that we're being shut down because the effort is more to 
lock up rather than to access.
    So we'd be working with you to try to find strong balance.
    Thank you, Mr. Chairman.
    The Chairman. Senator Wyden and then Senator Risch.
    Senator Wyden. Mr. Chairman, I'd be willing
    Senator Risch. I yield to Senator Wyden. I have to run to a 
meeting.
    Senator Wyden. You sure? If you do, I'd be----
    Senator Risch [continuing]. The nominees most of them come 
from Iowa, so I've had the opportunity----
    The Chairman. Whichever order you folks want to ask.
    Senator Wyden. I thank my friend.
    Ms. Burke, I want to talk to you and I appreciated the 
visit in our office about this question striking the balance. 
Because I think that's so key. On this committee we try to put 
together a bipartisan coalition for some of these questions and 
that's right at the heart is achieving a balance to bring 
people together.
    Now you heard me talk about natural gas. I think, 
particularly you look at these prices. You look at the supply. 
This is an advantage for us. We've got to figure out how to 
nurture it and build on it.
    One of the areas that I've been particularly interested in 
is saying that natural gas development on public lands, in 
effect, is a kind of natural laboratory for us to cultivate 
what amounts to best practices. In other words this is a place 
we can bring together industry folks, environmental folks, the 
scientists, the people that you need to strike the kind of 
balance the colleagues are talking about up here in the 
committee and show that we can make policy in the most, kind 
of, thoughtful way.
    You could, for example, use this kind of process on the 
fracking, you know, issue. Where there's concern to come up 
with what amounts to a model on issues like disclosure of the 
fracking, you know, fluids. What do you think about the idea, 
if confirmed, about trying to use the public lands on issue 
like natural gas where we have an advantage and we want to 
nurture it. Use that as a place to try to bring people together 
and reflect the kind of balance that makes sense for the 
country?
    Ms. Burke. Thank you, Senator Wyden. I do appreciate the 
opportunity to discuss this with you last week as well. We, at 
the Department, agree that hydraulic fracturing technologies 
and the advancements that have been made are integrals for our 
continued ability to facilitate the expansion of exploration 
and development of natural gas on public lands.
    At the same time we know that the public has grown 
concerned about whether or not hydraulic fracturing may cause 
contamination to underground water sources. So in an effort to 
facilitate development while at the same time addressing those 
concerns, we have engaged in quite an extensive effort. To work 
with industry, to work with environmental groups, to work with 
State regulators and regional regulators to develop what we 
think would be a model rule for the regulation of well 
stimulation activities which include hydraulic fracturing.
    So as you know those rules would include public disclosure 
of chemicals used in hydraulic fracturing operations, 
confirmation that the wells that are fractured meet the 
appropriate construction requirements with respect to cement 
and its ability to withstand pressure. Also a requirement that 
operators put into place appropriate plans for managing flow 
back waters from fracking operations. So in developing this 
rule we tried to pull together and synthesize really the best 
elements of regulation that's occurring across the States to 
make sure that we have consistent oversight and a disclosure 
model that will work well on the public lands.
    Senator Wyden. I just hope, I appreciate the direction 
you're trying to outline, that you all will really look at the 
public lands as a place where we can think about best 
practices. Bringing together all of the parties because what 
you've heard up here is Senators talk about how we're going to 
strike the balance. You've got an opportunity to bring the 
parties together given what you're faced with on the public 
lands.
    One last question, if I might, involves renewable energy 
development and how we're going to come up with a consistent 
approach toward renewable energy development particularly on 
the lands in your Department on BLM.
    We've got geothermal energy development essentially done by 
lease.
    We've got solar and wind energy development done by right 
of way.
    You just, kind of, look at this sort of hodge podge of 
approaches and you say, well, Ms. Burke, this is your 
Department.
    How can we figure out a way to come up with a consistent 
approach that would again bring the kind of predictability and 
certainty that would allow us to strike the kind of balance 
we've been talking about today? So would you support a 
consistent approach toward renewable energy development and 
what are some of your thoughts on it?
    Ms. Burke. Thank you, Senator Wyden.
    As you know, the BLM is currently working under existing 
authorities. They are quite varied from whether or not it's a 
lease or right of way. The BLM is currently undertaking a 
rulemaking to make solar and wind, to make that a competitive 
bidding situation so it would make it more comparable to a 
lease.
    But I do agree that a consistency will be important for 
industry and for the agency in order to progress even further 
than we already have with respect to renewable development. If 
confirmed, I would look forward to working with you to make 
sure we are able to develop a consistent process.
    Senator Wyden. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Franken. No, excuse me, I think----
    Senator Hoeven. I'm certainly willing to defer to Senator 
Franken since he hasn't had an opportunity.
    The Chairman. I thought Senator Risch was going to ask 
questions, but I guess he had to leave.
    Senator Franken. Has Senator Hoeven already had a chance to 
ask questions?
    The Chairman. He did. He had a first----
    Senator Franken. Yet you called on him?
    The Chairman. He had a first round of questions.
    Senator Hoeven. They were very, very good questions.
    The Chairman. Very insightful questions. Now if you have 
similar insightful questions, go right ahead.
    Senator Franken. OK. I don't. But I have some questions 
nevertheless. I'll go ahead. I'm sure Senator Hoeven's 
questions were stellar.
    Mr. Sieminski, as you know, people are feeling the pain at 
the gas pump. While part of the problem is, I guess, due to 
tight supplies and I just don't think supply and demand alone 
is enough to explain what's going on. That's why many of us on 
this committee have supported efforts to stop speculators who 
we believe are artificially driving up costs.
    Just yesterday Senator Sanders, myself and others 
introduced legislation that requires the Commodity Futures 
Trading Commission to invoke emergency powers to curb 
speculation. Yet when I look at the Energy Information 
Administration's Annual Energy Outlook report, I don't see 
really adequate attention paid to this issue.
    What are your views on the role of speculators on current 
gas prices?
    Mr. Sieminski. Thank you, Senator Franken.
    There are many factors that influence global oil markets 
and prices in my view. Speculation is certainly one of those 
things. It, price formation, involves supply, demand, 
geopolitical issues and many others.
    The Energy Information Administration under Dr. Richard 
Newell did launch an Energy and Financial Markets Initiative 
that would help to improve the understanding and analysis 
associated with price formation and what drives oil, gasoline 
and natural gas prices. I fully support that effort and would 
hope to continue with it.
    I think one of the things that I bring to this job, let me 
mention, that my career in the financial services industry was 
in research, not trading. But I worked with traders, very 
closely. I understand the language. I think I know the kinds of 
questions to ask that might help us get to a better 
understanding of issues like that.
    I think it's critical that we have transparency so that 
everybody is operating on the same page. I would love to be 
able to work with the Commodities Future Trading Commission and 
other relevant agencies to try to make that understanding and 
transparency more obvious to the public and others to allay 
their concerns or to deal with other issues if they should be 
found.
    Senator, one of the things that I've found in looking at 
this issue over the years is that the adequacy of the data to 
actually do really good analysis is not good. The Commodity 
Futures Trading Commission improved the disaggregation of its 
data on trading activity back in 2008 and 2009. But some of 
that data is still not available to academic and other 
researchers who would love to have access to it to accurately 
be able to put better numbers on this.
    I would support the EIA and CFTC acting together if that's 
appropriate to try to get the data available so that 
researchers everywhere could----
    Senator Franken. We do have, actually, some data. Some 
members of public and private sector have done some. They've at 
least made some statements about this. Let me cite a quote from 
a Goldman Sachs study as described in Forbes Magazine.
    Goldman Sachs believes that each million barrels of 
speculation in the oil futures market adds about ten cents to 
the price of a barrel of oil. This means that in theory the 
speculative premium in oil prices due to speculation is as much 
as $23, 39 cents a barrel on the price of the NYMEX crude oil. 
So if there were no speculation in oil futures the price of a 
barrel of oil might be as low as $74.61. The present price is 
$108 a barrel.
    Speculators now make up 70 percent of the open interest in 
crude oil futures whereas physical end users make up less than 
30 percent. I have quotes from the Research Division from the 
Federal Reserve Bank of St. Louis. They're doing this research.
    So I would ask you will you commit to raising the profile 
of this issue at the EIA? Will you incorporate and analyze the 
issue of oil speculation in future EIA Energy Outlook reports?
    Mr. Sieminski. Senator, I would be happy to do that and to 
do my best to carry on with the Financial Markets Initiative 
that is already underway at the Energy Information 
Administration.
    Senator Franken. Thank you, and I thank Senator Hoeven for 
his indulgence and the Chairman.
    The Chairman. Senator Hoeven.
    Senator Hoeven. Ms. Burke, you mentioned 3 components of 
new BLM regulations pertaining to hydraulic fracturing. As I 
understand it those rules are currently undergoing review by 
the Office of Management and Budget and have not been formally 
proposed yet. They're not public yet.
    Should we consider the items you listed as a finite list of 
what's contained in those rules or is there more?
    Ms. Burke. Thank you, Senator Hoeven.
    Those are the primary components of the proposed rule as 
drafted. Public disclosure, well integrity and management of 
flow back water.
    Senator Hoeven. OK.
    In the last 3 years we've seen increase on private lands in 
oil and gas production but declining production on public 
lands. Obviously gas prices going up everyday creating great 
hardship for American consumers. Clearly supply, I believe, is 
the most important way to help bring prices down increasing 
supply both domestically and with our dependable friends like 
Canada.
    So are you concerned about the fact that production is 
declining on public lands? What do you attribute it to and how 
do you intend to address it?
    Ms. Burke. Thank you, Senator Hoeven.
    With respect to whether or not production is declining on 
public land, we see that we are leasing, still holding 
quarterly lease sales, that there are a number of APDs that 
applications from permit to drill that we have approved where 
industry has not taken advantage of that authorization. So the 
Bureau is taking every reasonable action to make sure that we 
are having sufficient development on the public lands. I think 
in your State, where production is booming, most of that 
activity is in fact occurring on private land. But if you take 
out what is happening in North Dakota and look at the rest of 
the public lands, you will see that production is not 
decreasing.
    Senator Hoeven. Repeat the last part again, if you would, 
Ms. Burke?
    Ms. Burke. I say with respect to production on public lands 
setting aside the activity that is occurring on State land that 
you would not see a decline in the activity on public land.
    Senator Hoeven. I don't follow that statement. We are 
seeing a decline on public land.
    Ms. Burke. I think that it depends on the snapshot that 
you're taking with respect to when you're evaluating production 
on public land. That number is adjusted over time. So depending 
on when you take a look at that information, you may find that 
the numbers change rather frequently.
    Senator Hoeven. How would you work with the industry to 
increase development on Federal lands, public lands, deploy new 
technologies which can not only produce more energy, but do it 
with good, solid, sound, environmental stewardship?
    One of the things that I've referred to in trying to get 
legislation passed for the Keystone pipeline is that 80 percent 
of the new development in the Canadian oil sands is in situ, 
meaning drilling, which reduces both the footprint and the 
greenhouse gas emissions. That means both more oil, better 
environmental stewardship. We can do that but we've got to have 
a regulatory regime, a permitting regime that empowers it.
    How do you propose to do that, No. 1?
    Are you willing to come out to places like North Dakota and 
other areas with Federal lands and meet with the people that 
are working on these challenges?
    Ms. Burke. Thank you, Senator Hoeven.
    I'll start with the second part of your question, first. I 
have had the opportunity to travel to North Dakota and go out 
in the field with our, the BLM's Dickinson Field Office, and to 
meet with a number of industry representatives as well as 
tribal representatives to discuss development and the impacts 
of development in North Dakota. I would welcome that 
opportunity to visit other locations and discuss that with 
other stakeholders.
    With respect to how I would increase development over time. 
One of the things that we were doing, while the hydraulic 
fracturing rule may be viewed by many as a way that dampens 
development, I think that in fact the hydraulic fracturing rule 
has the opportunity to allow this very important development to 
continue and to move forward. Because it will give the public 
the confidence that we are taking all necessary precautions to 
make sure that this vitally important resource is able to be 
developed in a way that is environmentally responsible.
    But we continue to work with industry, for example on the 
API standards working with those groups and incorporating those 
into our regulations. So we're working on a number of fronts. 
If I'm confirmed, I would welcome the opportunity to work with 
you and your stakeholders to make sure that we are, in fact, 
taking advantage of this Nation's vast natural resources.
    Senator Hoeven. Do you believe that with technology 
development we can produce more energy, more oil and gas on 
Federal lands, on public lands and achieve the stewardship that 
you want to achieve?
    Ms. Burke. Yes, I do believe that.
    Senator Hoeven. You're committed to helping to do that?
    Ms. Burke. If confirmed, yes, sir.
    Senator Hoeven. How do you see the hydraulic fracturing 
rules applying on Federal lands where we have States with 
primary regulatory authority? In other words when you bring 
these rules forward how do you work with the States on 
regulating hydraulic fracturing in a way that the industry can 
understand. They can work with. They can address. That provides 
disclosure, but still empowers energy development in a good, 
solid, sound way?
    Remember because you're talking both your rules, your 
Federal rules and the State rules. This gets complicated and 
difficult for people that are trying to invest and produce the 
energy. So are you willing to work with the States in a way 
that follows the State's regulatory regime so that the industry 
is kind of working with one set of rules instead of two?
    Ms. Burke. Thank you, Senator Hoeven.
    Yes, we're very cognizant of the overlapping jurisdictions 
in this area. We will work in concert with other regulators and 
their requirements so that we won't introduce complicated, new 
procedures that are difficult for industry and the public and 
the regulators to understand. Our concern is that we provide 
consistent oversight for the Federal lands, but we always work 
with the State regulators and industry to make sure that we are 
able to balance these competing interests both the need for 
more energy production as well as for environmental protection.
    Senator Hoeven. Thank you.
    The Chairman. Ms. Burke, let me ask a couple of questions 
along the same subject area on this hydraulic fracturing rule 
that's being developed.
    A concern I've heard from industry in my State is that they 
believe it's very possible that a second permit would be 
required under this new rule. So there'd be one permit to get 
to drill in the first place, and a second permit if you wanted 
to proceed with hydraulic fracturing.
    They question the workability of this and the idea that 
industry would make a very substantial investment without 
having, in hand, the permits that they need to go ahead and 
complete a well. So that's one question.
    Also, they've questioned whether or not the Department has 
the resources to staff up to deal with anything like this, if 
this is required. I know this is not a public regulation yet. 
But there is a great deal of concern that I've begun to hear 
about what this rule might contain.
    Could you give us any more insight into this?
    Ms. Burke. Thank you, Mr. Chairman.
    With respect to whether or not there will be a second 
permit necessary in addition to the application for permit to 
drill, we also have heard those concerns and have taken that 
into account in the drafting of the rule. Today I would say 
upwards of 90 percent of all wells, that new well starts on 
public lands involve hydraulic fracturing.
    So we're aware that normally, oftentimes, an operator can 
submit those at the same time. But we're looking at whether or 
not--one question is whether or not authorization will be 
required before or could be done afterwards. Those are all 
discussions that have been occurring with industry that have 
come into express their concerns with us.
    The second question about with respect to resources at the 
Department. As you know we are operating in a very tight budget 
environment. But we have taken that into account in developing 
these requirements about whether or not we have the resources 
in order to actually fulfill our mission.
    The Chairman. Let me ask on one other subject. I was with 
the Secretary, Secretary Salazar, when he visited Southeastern 
New Mexico and we had a useful meeting there with 
representatives of the potash industry and also representatives 
of the oil and gas industry. The upshot of that meeting was the 
establishment of a working group which the BLM was overseeing 
composed of potash companies and some of the larger 
independents in the area trying to figure out what changes 
could be made, if any, with regards to those two industries 
working together in that area.
    He established a deadline of April first for wanting to 
have a set of recommendations for what to do there. As that 
date is now quickly approaching I've begun to hear from small, 
independent oil and gas producers in that area saying that they 
have not had a chance to have their input considered or their 
point of view considered. I was just wondering if you could 
assure us that you will be sure that you do provide an 
opportunity to hear from all of the producers in that area, who 
have a point of view that they want to have considered before 
anything is finalized.
    Ms. Burke. Absolutely, Mr. Chairman. I will work with the 
BLM to make sure that all stakeholders? voices are heard.
    The Chairman. That will be a help. I appreciate it.
    Let me ask if Senator Franken has any additional questions.
    Senator Franken. Yes, really just one more. This is for 
Assistant Secretary Burke. It was a pleasure meeting with you 
yesterday in my office to discuss your nomination. I appreciate 
the work you've been doing at Interior.
    We discussed this certain issue. In these difficult 
budgetary times it's important to be extra careful with 
taxpayer's funds. That's why I'm concerned that taxpayers 
instead of oil and gas companies are funding programs that are 
beneficial to these companies.
    One example is a proposed $45 million program involving the 
U.S. Geological Survey, the EPA and the Department of Energy to 
better understand aspects of hydro fracking. So this is 
research that the taxpayers are going to pay for. I think it's 
needed research to make sure that this, the fracking, is done 
in an environmentally friendly way.
    But I'm, you know, this is a very mature industry. In my 
State we have, for example, the medical device industries which 
pay a user fee to the FDA when it gets its products approved. 
So in other words the medical device industry pays for the 
regulators to regulate them. Here is a very, very, very, 
profitable industry and yet this $45 million program is being 
footed by the taxpayers.
    My question is when you are confirmed how will you 
guarantee that oil and gas companies are the ones paying for 
these types of activities?
    Ms. Burke. Thank you, Senator Franken. Thank you for the 
opportunity to visit with you yesterday and discuss these 
important issues. I really appreciate your concerns in this 
tight budget environment that the user pays, if you will, for 
the use of the public resource.
    So after our conversation I did talk with the BLM about the 
types of fees that industry does pay today for the 
administration of the programs, such as the APD fee, the 
application for permit to drill for site specific environmental 
analysis under NEPA, for they contribute to mitigation whether 
it's air monitoring or wildlife monitoring or vegetation 
monitoring. In this year's budget proposal and also as in last 
year's proposal is an inspection fee so that just as we have 
for offshore development that industry would actually pay an 
inspection fee for that regulation.
    So the study of which you are concerned about is a study 
being undertaken by the U.S. Geological Survey, I believe and 
EPA and perhaps the Department of Energy. If I were confirmed I 
would look forward to working with you and other members of 
this committee to look at the ways in which we're funding the 
activities of the agency in order to support the development of 
oil and gas.
    Senator Franken. OK. You've listed some of the fees that 
the oil and gas industry pays. But my question is does the 
industry pay all the fees?
    Can you get me a list of oil and gas activities at the 
Department that are not paid for by oil and gas companies? I'm 
talking about environmental reviews, permitting, etcetera, 
leasing operations, oversight activities. Can you commit to 
getting me that information within 60 days?
    Ms. Burke. Yes.
    Senator Franken. Thank you so much. I really appreciate 
that. Again, I just want to say on behalf of the taxpayers of 
Minnesota I think when $45 million may not seem like a 
tremendous amount of money in our budget, but I think that it's 
something. It just seems to me that these industries, this 
industry, that's going to benefit from the study of how to do 
fracking in a way that makes the fracking possible to do.
    [Laughter.]
    Senator Franken. Should be the ones that foot the bill for 
the research. So thank you.
    Thank you, Mr. Chairman.
    The Chairman. Alright. Thank you all very much. I think 
it's been a useful hearing. We will try to move ahead with your 
nominations sometime in the near future.
    Thank you for being here.
    That will conclude our hearing.
    [Whereupon, at 11:52 a.m. the hearing was adjourned.]

    [The following statement was received for the record.]

                                       NorthWestern Energy,
                                         Butte, MT, March 26, 2012.
Hon. Harry Reid,
Majority Leader, S-221 Capitol Building, U.S. Senate, Washington, DC.
Hon. Jeff Bingaman,
Chairman, Committee on Energy & Natural Resources, 304 Dirksen Senate 
        Office Building, U.S. Senate, Washington, DC.
Hon. Mitch McConnell,
Minority Leader, S-230 Capitol Building, U.S. Senate, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Committee of Energy & Natural Resources, 304 Dirksen 
        Senate Office Building, U.S. Senate, Washington, DC.
    Dear Leaders Reid and McConnell and Senators Bingaman and 
Murkowski:

    I write in strong support of the nomination of Chairman Tony Clark 
from the North Dakota Public Service Commission to be a Commissioner to 
the Federal Energy Regulatory Commission (``FERC'').
    As the Chief Executive Officer of NorthWestern Energy and (while 
serving as a Montana Public Service Commissioner from 1993 to 2004) a 
past President of the National Association of Regulatory Utility 
Commissioners (``NARUC''), I have had the honor to know Chairman Clark 
on a personal and professional level. On both fronts, Chairman Clark 
has impressed me as a thoughtful public servant who maintains a 
reasonable and balanced perspective on the needs of customers and 
industry stakeholders. Tony's outstanding service as the NARUC 
President and in other capacities, and as a North Dakota Commissioner 
uniquely position him to be an effective FERC Commissioner.
    Thanks to the variety of positions in which he has served 
nationally, regionally and at home, Chairman Clark also brings valuable 
depth in technology and meeting the evolving needs for high quality 
infrastructure in more rural areas. Given the developing state of 
energy policy in the United States, his experience and perspective will 
be a strong asset at the FERC.
    Finally, Chairman Clark has been an effective leader and member of 
a multi-member regulatory body, with strong additional relevant 
experience at the national level. He understands what is required to 
help ensure that one of the nation's most important regulatory agencies 
continues to be effective.
    I commend President Obama for nominating such a qualified 
individual and urge his quick confirmation.
            Very truly yours,
                                            Robert C. Rowe,
                                                 President and CEO.
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

       Response of Adam Sieminski to Question From Senator Wyden
    Question 1. Financial speculation--Recently the Consumer Federation 
of America issued a study in which it estimated that 20% of the cost of 
gasoline that Americans are paying at the pump was due to speculation--
or roughly $600 a year for the average family. In the past, EIA has 
been reluctant to even consider the impact of speculation and trading 
on energy prices. Under your watch is this going to change? Will you 
ensure that all of the factors that go into energy prices, including 
the role of trading and speculation, be considered in EIA's work?
    Answer. If confirmed, I will make it a high priority to continue 
EIA's work on improving our understanding of the key determinants of 
oil prices, including both physical and financial factors. I would also 
work to increase interactions between EIA and other federal agencies 
involved in energy markets.
    In September 2009, EIA launched its Energy and Financial Markets 
Initiative with the aim of assessing the influences of financial 
activities and markets, such as speculation, hedging, investment, and 
exchange rates on energy price movements in addition to EIA's 
traditional coverage of physical fundamentals such as energy 
consumption, production, inventories, spare production capacity, and 
geopolitical risks. As part of that initiative, EIA produced the 
website, ``Energy & Financial Markets: What Drives Crude Oil Prices?'' 
Along with supply and demand factors, EIA discussed the increase in oil 
futures trading, the growth of oil as an investment, and the increase 
in correlations between oil prices and other commodity prices and other 
financial markets. EIA updates that website on a monthly basis. EIA 
also brought together many of the leading researchers in the area of 
oil price formation for a workshop in August 2011 to improve our 
understanding of physical and financial market linkages, and EIA 
continues its collaboration with other federal agencies and market 
participants to improve its data and analysis in this area. I have been 
very interested in EIA's work in this area, and over the past 18 months 
I organized a series of e-mail exchanges of papers and reports among a 
broad and diverse group of academics and policy analysts to provide a 
forum for exchanging views on this important topic. I strongly believe 
that energy economists should try to look at this issue from all 
possible angles.
    Responses of Adam Sieminski to Questions From Senator Murkowski
    Question 1. How important is spare capacity to the price of oil? If 
global spare capacity was several million barrels higher than it is 
today, do you think oil prices would be lower or less volatile?
    Answer. Spare oil production capacity can enhance the world oil 
market's ability to respond to oil supply disruptions and a high level 
of spare capacity can be reassuring to oil market participants. Low 
spare capacity indicates that markets are tight and that there is 
little cushion for supply to easily meet fluctuations in global oil 
demand. In its analysis of oil price formation, EIA identified low 
spare capacity as an important factor in the rise in oil prices from 
2003 to 2008. During that period, spare capacity remained below 2.5 
million barrels per day. Higher spare capacity usually provides 
assurances to the market that temporary disruptions in supply can be 
accommodated, and, other things being equal, would tend to lower the 
oil prices and volatility. However, the reason for the higher spare 
capacity is also important. If spare capacity is higher because members 
of the Organization of the Petroleum Exporting Countries (OPEC) have 
cut production, oil markets could still be tight despite higher spare 
capacity. Although important, spare capacity is just one of many 
factors that affect oil prices, including supply, demand, inventory 
levels, and financial market conditions.
    Question 2. As an economist and a long-time user of EIA's data, I'm 
curious if you have identified anything that the agency could be doing 
differently or doing better. If you are confirmed by the Senate, have 
you thought of any changes you would make at EIA?
    Answer. In my view, EIA is the world's premier energy statistical 
agency and there are very few areas where EIA falls short in its 
collection, analysis, and reporting responsibilities. If confirmed, 
there are a few things that I would like to emphasize:

   Take advantage of new ways to collect data faster and 
        cheaper with web-based systems;
   Promote ``best practices'' in data collection and management 
        by EIA's state and federal partners;
   Retain good people and deal with the ``retirement bulge'' 
        that is impacting virtually all energy businesses and 
        institutions;
   Find ways to make the data sets, analyses, and forecasts 
        more readily available to the public in different forms;
   Budget permitting: improve data on railroad shipments of 
        petroleum and petroleum products, including ethanol and 
        reinstate the International Energy Outlook; and
   Budget permitting, collect more timely monthly data on 
        domestic oil production directly from operators, as is now done 
        for natural gas, as well as timely data on exports of petroleum 
        products, which is necessary to understand changes in the 
        amount of products supplied to domestic consumers.

    Question 3. For years there has been debate about the importance of 
additional oil production and whether greater world supplies of crude 
oil will not only stabilize, but can drive down global oil prices. It 
has been assumed by many that to influence market prices significantly, 
new supply would have to rise by more than what OPEC members could 
afford to withhold from the market. and we have heard repeatedly the 
misleading statement that since America only has 2% to 3% of the 
world's proven reserves, increased U.S. production would have little 
impact on prices. What is your opinion? How much would non-OPEC 
production have to rise to be able to significantly drive down global 
prices for oil?
    Answer. In its analysis of oil price formation, EIA identified non-
OPEC oil production as an important factor in oil price formation. 
Other things being equal, higher levels of non-OPEC supply tend to put 
downward pressure on oil prices by increasing total global supply and 
reducing the ``call on OPEC''. The lower the call on OPEC, the lower 
its ability to influence prices. From 2005 to 2008, non-OPEC production 
changed little, and in the face of rising oil demand, this contributed 
to higher oil prices. If, in contrast, non-OPEC production began rising 
faster than global demand for crude oil, this could put substantial 
downward pressure on oil prices. Of course, non-OPEC oil production is 
just one of many factors that affect oil prices, including supply, 
demand, inventory levels, and financial market conditions. While higher 
non-OPEC production would put downward pressure on oil prices, the 
observed oil price level would be determined by overall market 
conditions.
    Question 4. In recent years there has been an increase in the 
forecasts for the amount of oil that North America can produce. 
Canadian oil sands production could rise nearly 2 million barrels a 
day, and U.S. production could rise by even more thanks to the Arctic 
coastal plain, OCS areas, oil sands, oil shales, tight oil, and 
biofuels. New forecasts for Alaska crude oil and shale oil production 
have now raised the mean estimate for total Alaska oil to 43.8 billion 
barrels and the total natural gas forecast to nearly 400 trillion cubic 
feet. In fact EIA now projects that total U.S. liquid fuel production 
will rise from less than 8 million barrels a day today to more than 13 
million barrels by 2035. If we accelerate that production through 
additional leasing and exploration, what would a rise of, say, 3 
million more barrels of daily domestic production, within a decade, do 
to global oil prices and thus to U.S. pump prices?
    Answer. Higher North American oil production, other things being 
equal, would tend to put downward pressure on oil prices and would 
reduce the influence of OPEC on oil markets. A three million barrel per 
day increase in 2022 would represent approximately a three percent 
increase in total global liquid fuels supplies, which could have a 
substantial effect on world oil prices. Of course, North American oil 
production is just one of many factors that affects oil and gasoline 
prices, including other supply, demand, inventory levels, and financial 
market conditions. While higher North American oil production would put 
downward pressure on oil prices, the observed oil price level would be 
determined by overall market conditions.
    Question 5. How has EIA's track record been in accurately 
predicting future commodity prices, both in the short-term and in the 
long-term? a.How difficult is it to predict commodity prices 25 or 35 
years--or even one year--into the future? b.How difficult is it to 
predict supply and demand trends? c.What kind of factors impact how 
these numbers move and how easy is it to predict those factors? d.Given 
how successful you have been in the private sector at forecasting 
trends and prices, is there anything about the way that EIA approaches 
this task that you might change, should you be confirmed?
    Answer. Since my experience has been principally dealing with oil 
production and price projections, I will focus mostly on that area in 
providing you a response especially concerning the short-term.
    Crude oil prices are volatile in the short-term, in part, because 
of the very slow response of supply to changes in market prices. An 
unexpected disruption to existing crude oil supply or increase in world 
demand can contribute to significant increases in crude oil prices. 
Because of the long lead times required to drill and begin producing 
from new resources, prices rise in order to ration consumption and 
maintain a balance with available supplies. Storage and underutilized 
or `swing' production capacity has developed in order to manage such 
disruptions, but cannot remove all price impacts. Financial markets 
also developed in this context, and can either dampen or enhance short-
term price movements.
    Oil prices can be relatively stable during periods when few 
significant and unexpected events occur. For example, in the January 
2010 Short-Term Energy Outlook (STEO), EIA projected that the West 
Texas Intermediate (WTI) crude oil spot price would average $79.83 per 
barrel during 2010, which was only slightly higher than the actual 2010 
average price of $79.40 per barrel. However, during the course of a 
year prices can also change dramatically. The January 2011 STEO 
projected the WTI spot price would average $93.42 per barrel during 
2011, slightly lower than the final realized $94.86 per barrel average 
for that year. But within this stable average price for 2011, the daily 
WTI spot price ranged from a high of $113.39 per barrel on April 29, 
2011, following the disruption to Libyan crude oil production, to a low 
of $75.40 on October 4, 2011.
    EIA has consistently emphasized the uncertainty of forecasting 
short-term energy wholesale and retail prices. Beginning in October 
2009, EIA began reporting crude oil price forecast confidence intervals 
and probabilities of prices exceeding or falling below given levels 
based on trading of NYMEX crude oil futures and options in the STEO. In 
January 2010, EIA began publishing the Market Price Uncertainty Report 
(MPUR) as a monthly supplement to the STEO. The MPUR also reports on 
trends in financial market activity in the futures and options markets.
    EIA also created a new ``Energy & Financial Markets: What Drives 
Crude Oil Prices?''' web page that reports on the relationship between 
crude oil prices and various market factors that influence prices, such 
as world crude oil supply and demand, as well as purely financial 
aspects including futures market open interest, futures contracts held 
by physical participants and financial money managers, and the 
correlation of crude oil prices with other commodities.
    In the long term, the challenges are somewhat different, as you 
don't have the rigidity of the system in responding to market 
surprises, but you have the difficulty of predicting unexpected events 
or trends from the perspective of today. Commodity prices are sensitive 
to trends in technology, economic growth, and political decisions, 
among others.
    While some of the influences on energy supply and demand trends are 
highly predictable, such as population or demographic trends, other 
factors are subject to uncertainty from the same factors that influence 
commodity prices. Of course, even the factors that are more predictable 
are subject to more uncertainty the longer the projection period.
    Trends in supply and demand, particularly in demand, tend to be 
more easily predicted than commodity prices. EIA tracks the accuracy of 
its long term projections summarizing the differences between actual 
energy indicators and past AEO projections.
    EIA currently uses several approaches to help to bracket the 
uncertainty in energy market prices and address shifts in energy market 
trends. While EIA completes numerous alternative cases, the focus of 
the analysis discussion tends to be on a single, reference case. It is 
important to highlight the uncertainty inherent in energy markets in 
discussions and de-emphasize a single point projection. There are other 
risk management tools available for dealing with this type of 
uncertainty that could be applied to EIA's work. I think this is an 
important issue and, if confirmed, I will want to see EIA extend its 
efforts to address uncertainty in its projections and other energy 
analyses, and effectively communicate about it with the public.
    Question 6. In reviewing the recent EIA report about the impact of 
U.S. LNG exports on domestic energy markets, I was struck by how 
aggressive EIA's build-out scenarios appear to be. I wonder if you 
could please explain your view on their likelihood.

          a. In all of the scenarios, EIA findings about the long-term 
        impact of exports appear to be somewhat minimal, yet the 
        conclusions about short-term impact seem quite extreme. This 
        may be based on the very aggressive export schedule EIA 
        modeled, but it appears likely that industry could respond to 
        such a shock reasonably quickly, by producing more gas. Do you 
        agree?
          b. How realistic is the short-term impact that EIA is 
        projecting, considering the low likelihood of the presumed 
        export schedule?

    Answer. The scenarios contained in the report, Effect of Increased 
Natural Gas Exports on Domestic Energy Markets, were specified by DOE's 
Office of Fossil Energy. EIA has not performed an analysis of the 
likelihood of these LNG export scenarios. EIA also notes that future 
U.S. exports of LNG would be affected by future U.S. natural gas 
prices. High U.S. natural gas prices would tend to discourage LNG 
exports while low U.S. natural gas prices would encourage exports. The 
EIA study did not attempt to model this relationship or other aspects 
of the worldwide natural gas market.
    The Office of Fossil Energy has indicated that these scenarios were 
specified to capture a wide range of possible outcomes. The shorter-
term rapid increase in prices shown in the report largely reflects 
expected increases in production costs due to the production of more 
natural gas, which occurs relatively quickly. Domestic production 
increases, on average, from 4 to 12 percent when exports are added. 
Production costs increase due to the increased demand for equipment 
(e.g., rigs) and labor to support the necessary drilling, as well as 
for lease rights. EIA did not consider other, slower, build-out 
scenarios other than those specified by the Office of Fossil Energy.
    Question 7. We are all concerned about rising gasoline prices and 
the impact that they have on our economic recovery. In your opinion, 
what are some immediate steps that the Administration could take to 
help?

          a. I am particularly interested to know if there are any 
        regulations that could be rolled back--for instance EPA 
        seasonal fuel specs or regulations targeting refiners 
        specifically. What kind of impact do you think this would have?
          b. In your opinion, what are some longer term solutions?

    Answer. The impact of such changes would depend on the specific 
circumstances. It is my understanding that the Department of Energy's 
Office of Policy and International Affairs has a very strong capability 
to provide analysis of the issue you raise. If confirmed as EIA 
Administrator, I would seek to utilize the combined capabilities of 
that office and EIA to provide analysis that bears on this issue.
    EIA is the statistical and analytical agency within the U.S. 
Department of Energy. EIA collects, analyzes, and disseminates 
independent and impartial energy information to promote sound 
policymaking, efficient markets, and public understanding regarding 
energy and its interaction with the economy and the environment. EIA, 
in keeping with its responsibility for impartial information and 
analysis, does not recommend policy positions. Nonetheless, EIA has 
historically worked with Congress and the Administration to help 
quantify the possible impacts of well-specified energy policy proposals 
on energy markets. If confirmed, I would look forward to continuing and 
extending EIA's activities in this area.
    Question 8. As Congress and the Administration refine our sanctions 
policy towards Iran, it is critical that we have accurate, up-to-date 
and non-biased information about the state of Iran's energy sector. To 
that end, Congress has called upon the EIA to produce a report every 60 
days, on the price and availability of alternatives to Iranian 
petroleum. Currently the President is required to impose sanctions on 
companies investing in Iran's energy sector, selling Iran energy 
technology, or providing Iran refined petroleum. Certain sanctions are 
dependent upon whether a country has significantly reduced its import 
of Iranian petroleum. In the past, the EIA has issued reports on these 
topics to the discomfort of the State Department which has failed to 
sanction companies identified in the reports. If confirmed, will you 
ensure country reports on Iran continue to identify foreign companies 
working in Iran's energy sector or providing Iran with refined 
petroleum?
    Answer. EIA is the statistical and analytical agency within the 
U.S. Department of Energy that provides independent and impartial 
energy information to inform policymakers. EIA has statutory 
independence with respect to its data, analyses, and forecasts. To the 
extent that resources are available, if confirmed, I would plan to 
continue the reporting of information related to commercial activity. 
In my experience, EIA has successfully maintained that independence, a 
practice I will scrupulously uphold if confirmed.
     Responses of Adam Sieminski to Questions From Senator Cantwell
                           future coal prices
    Question 1. According to Energy Information Administration (EIA) 
data (Annual Energy Review 2011, Table 7.9), coal prices in the United 
States rose by more than 5 percent annually, on average--from $18.93 to 
$32.2 per ton--between 2000 and 2010. However, the EIA's Annual Energy 
Outlook (AEO) 2012 Early Release projects rising U.S. coal production 
and exports, but average annual coal price increases of just 0.9% over 
the period 2009-2035.

          a. What factors do you think contribute to EIA's significant 
        departure from historical trends in coal prices?
          b. Do you think environmental regulations that effectively 
        limit U.S. coal use to relatively cleaner supplies are likely 
        to increase future coal prices?
          c. From 1999 through 2010, the AEO has consistently projected 
        a falling price per ton for Central Appalachia (CAPP) coal. 
        While AEO 2011 projected a price increase of only a small 
        margin through 2035, CAPP coal prices have risen consistently 
        since 1999, and by well over 100%. Why do you think the EIA's 
        coal price projections have been so consistently and 
        significantly off and what would you do as EIA Administrator to 
        address this problem?
          d. The National Research Council's 2010 report ``The Hidden 
        Costs of Energy'' showed that the average additional cost of 
        coal generation due to emissions of SO2, NOx, and particulate 
        matter was 3.2 cents per kilowatt-hour in 2005 and will 
        decrease to roughly 1.7 cents per kilowatt-hour by 2030. Do you 
        think EIA should incorporate these externalities into EIA's 
        models?
          e. If the additional cost of coal generation estimated by the 
        National Research Council's 2010 report ``The Hidden Costs of 
        Energy'' were included in EIA's modeling how would that change 
        the estimate for future coal consumption and the price through 
        2035?

    Answer. The increase in coal prices from 2000 to 2010 was due to 
many factors, including declines in coal mining productivity and the 
rising costs of mine equipment, parts and supplies, fuel prices, 
explosives, and labor. According to the AEO Early Release (AEO2012), 
the trend in coal mining productivity is expected to improve over that 
of recent years. As far as regulations driving coal prices, without 
details on specific requirements it is difficult to assess their 
potential impact. Generally, regulations that reduce the supply of 
usable coal would lead to higher coal prices. Conversely, regulations 
that would lower the demand (i.e. restrictions on power plant use of 
coal) would decrease the price of coal. In either case, the magnitude 
of the cost impact would depend on the specifics of the regulations.
    I do not believe EIA has analyzed the potential impacts of the non-
market externalities referred to in the NRC report. If externality 
costs of coal were incorporated into pricing, coal plant operators 
would have an incentive to abate emissions in order to reduce impacts 
on generation costs. What costs and how they could be included in EIA's 
modeling, at least for sensitivity cases is something I would be 
willing to explore, if confirmed.
               likely amount of coal consumed in the u.s.
    Question 2. In an investment analysis published about a year ago 
(http://www.anga.us/media/180381/deutsche%20bank%20report-
%20nov%202010.pdf), Deutsche Bank concluded that coal use for 
electricity production in the United States is likely to decline 
significantly in coming decades--from 47 percent in 2009 to 22 percent 
in 2030. Several factors contribute to coal's decline, including 
capital cost increases relative to gas, retirement of aging plants, 
increasingly stringent regulation of criteria pollutants, rising ash 
disposal costs, and financial barriers due to the regulatory 
uncertainty associated with greenhouse gas emissions. In contrast, 
EIA's Annual Energy Outlook 2012 Early Release projects that U.S. 
aggregate coal use will continue to rise and that coal will still 
account for 39 percent of U.S. electricity production in 2035.

          a. Were you involved in this Deutsche Bank analysis and do 
        you believe it is credible? If you do, please explain what you 
        think explains the stark differences between its conclusions 
        and those of EIA.
          b. Do you concur with the broad consensus that anticipated 
        plant retirements, increasing regulatory obligations, and 
        higher hurdles to capital finance for new coal plants will have 
        a profound impact on U.S. coal consumption?
          c. If you do agree with the consensus of plant retirements, 
        increasing regulatory obligations, and higher hurdles to 
        capital finance for new coal plants, what is driving future 
        increases in U.S. coal consumption in EIA's modeling and 
        analysis?
          d. Should EIA work with financial analysts and incorporate 
        what the private sector predicts will happen to coal usage?
          e. Based on the AEO, the proportion of high to low-sulfur 
        coal going to market will worsen for utilities using APP coal. 
        If EIA is correct also that power plants closure will be 
        nothing like industry projections, these plants will have to 
        accommodate high-sulfur coal with retrofits, which will be 
        charged to ratepayers or taxpayers. How will you reflect this 
        in the AEO for energy prices?

    Answer. The Deutsche Bank report Natural Gas and Renewables, A 
Secure Low Carbon Energy Plan for the United States (November 2010), 
was authored by DB Climate Change Advisors, a subsidiary of the 
Deutsche Bank Group that is not part of the division of Deutsche Bank 
that I worked for during my employment at the firm. My understanding is 
that the report in question provided an analysis of a policy-oriented 
initiative, specifically the identification of a low cost solution for 
achieving a 17-percent reduction in overall U.S. greenhouse gas (GHG) 
emissions by 2020 and an 83-percent reduction by 2050 relative to the 
2005 level. A statement to this effect is made at the beginning of the 
``Key Research Findings'' section on page 8 of the report. Those policy 
goals were not represented in the Annual Energy Outlook 2012 (AEO2012) 
Early Release. The AEO reference case, appropriately, does not include 
policy measures not already in law.
    EIA is currently projecting an overall increase in U.S. electricity 
generation with other technologies, especially natural gas and 
renewable, gaining an increased share of overall generation and coal's 
share experiencing a decline. A number of factors could affect the 
outlook for coal consumption including continuing natural gas prices at 
a level competitive with existing coal plants for electric power 
dispatch, slower economic growth reducing electricity demand, and new 
policy initiatives. Understanding and modeling all the various factors 
that affect current capacity and prospects for new generation requires 
a sophisticated understanding of the current regulatory and market 
environment. In my experience, this is best gained with ongoing 
dialogue with the private sector, financial analysts, regulators and 
other stakeholders. I know that EIA has participated in meetings and 
workshops with private sector analysts as well as a wide array of 
experts in the past. If confirmed, I would encourage and expand on such 
outreach.
                     future regional demand of coal
    Question 3. The Congressional Research Service documented in a 2007 
study that significant bottlenecks in rail transport caused billions of 
dollars in losses in previous years, and that many billions of dollars 
of improvements would be required to avoid such problems in the future.

          a. How much would these bottlenecks increase the true cost of 
        coal?
          b. What do you think must be invested to ensure the national 
        reliability of inputs to coal-fired power plants considering 
        that that EIA also projects coal mining to become more 
        geographically constrained?
          c. USGS and EIA data seem to be completely inconsistent 
        regarding the potential production of coal from NAPP, Central 
        Appalachia (CAPP), ILB, Rocky Mountain, and New Mexico/Arizona. 
        In each of these cases, USGS estimates that the total amount of 
        coal that is actually economic to mine is far lower than what 
        EIA projects will be mined by 2035--even as EIA projects to 
        increase only slightly. According to USGS, there is only 771 Mt 
        of economic coal left to mine in NAPP, but EIA projects 4,067 
        Mt will be mined through 2035; 976 Mt versus 3,435 Mt in CAPP; 
        1,074 Mt versus 3,326 MT in ILB; 1,078 Mt versus 1,526 Mt in 
        Rocky Mountain, and 214 Mt for AZ/NM versus 917 Mt in AZ/NM. 
        Given the importance of EIA's projections in various energy 
        models and public policy discussions, are you concerned about 
        these huge differences between EIA's projection for the 
        production and prices of coal from these major coal basins and 
        what USGS says is economically possible? Please detail what you 
        would do about these discrepancies as EIA Administrator.
          d. USGS estimates a 200 million ton shortfall of low-sulfur 
        coal in the Appalachian region. This is consistent with 
        industry projections about coal-fired power plant closures, 
        such as from Deutsche Bank, Brattle Group, and ICF. Why does 
        the AEO contrast with USGS and industry projections about this 
        shortfall of coal in the East?

    Answer. Coal transportation bottlenecks and reserve estimates have 
not been a specific focus of my past research, and I have not analyzed 
these issues in the specific context of the findings of the 
Congressional Research Service and the USGS. If confirmed, I would be 
willing to look at the differences between the EIA projections and 
other findings with a view to attempting to reconcile them. In my 
experience, reserve estimates often vary because of the exact 
definitions used and assumptions made by the estimators.
    Identifying and explaining changes in the regional composition of 
coal demand and the necessary supply linkages, including 
transportation, are certainly critical areas for EIA. While this is not 
an area in which I have done analysis, I recognize that collecting and 
disseminating accurate and timely data and analysis at the level of 
granularity needed in the marketplace would be a priority if I am 
confirmed as Administrator.
    I am aware that rail bottlenecks have occurred along various coal 
supply lines in the past. The growing demand for rail capacity for 
crude oil shipments is adding a new dimension. In fact, I mentioned 
this at the hearing. It is my understanding there is limited publicly 
available data related to rail infrastructure costs and capacity needs. 
The directional movements of coal and crude oil are likely to differ 
and it is not clear whether or not any enhancements to the rail system 
that may be needed could be managed within the normal range of railroad 
capital investments.
                discrepancies in coal reserves estimates
    Question 4. The U.S. Geological Survey (USGS) has been updating 
data on U.S. coal reserves in the last few years. The AEO 2012 updated, 
and reduced, previous estimates for technically recoverable reserves of 
shale gas based on new data from USGS. However, the AEO 2012 does not 
mention its reference for coal reserves.

          a. Do you believe the latest USGS data for coal reserves to 
        be reliable?
          b. Do you believe that EIA is, or should be, integrating the 
        latest numbers from USGS for reserves, recoverability factors, 
        etc.?
          c. Is there a reason that EIA does not use the CoalVal model 
        developed by USGS to analyze economic recoverability from coal 
        mines?
          d. In 2009 USGS published an analysis that included 
        evaluations on how to calculate economic recoverability, 
        estimating that 6% of the Demonstrated Reserve Base (DRB) was 
        'economically recoverable' without a rise in price per ton that 
        is well beyond current EIA projections. If USGS estimates on 
        economic recoverability were included in the AEO, how do you 
        think the projected prices, exports, and production for all 
        energy types be affected?
          e. If there is disagreement between USGS and EIA on analysis 
        of coal reserves, costs, and production, how would you work to 
        get that data resolved, and how can we be sure that EIA is 
        providing Congress with the best data?

    Answer. As I mentioned in my previous answer, if confirmed as EIA 
Administrator, I would attempt to pinpoint the reasons for disagreement 
between the USGS and EIA on the analysis of coal reserves, and oil and 
natural gas reserves as well. The best way to resolve such issues, in 
my view, is to work through the specific data and assumption being used 
in the analyses. EIA's mission is to deliver independent, objective, 
and timely data and analyses, and to assure it is integrity, accuracy 
and usefulness. If confirmed, I would do my best to assure the Congress 
that the EIA was doing the best possible job and explain the 
methodologies behind the findings.
                     impacts of fossil fuel exports
    Question 5. The 2011 Annual Energy Outlook shows U.S. exports of 
coal increasing annually by 1.8%, from 1.51 quadrillion Btu in 2009 to 
3.24 quadrillion Btu in 2035. In contrast, U.S. production of coal is 
only projected to increase by 0.3% annually, from 21.63 quadrillion Btu 
in 2009 to 23.51 quadrillion Btu in 2035. This suggests that exports 
will account for over 13% of coal production by 2035.

          a. Do you think coal prices increase substantially more than 
        projected if world demand increases faster than expected? If 
        exports were to increase annually at twice the projected rate 
        such that 20% of U.S. coal production was exported by 2035, 
        roughly in what range would coal prices be?
          b. As the rest of the world consumes an increasing percentage 
        of U.S. coal, do you think will coal act more like a fungible 
        commodity subject to prices set by the world market? Do you 
        think this dynamic would cause U.S. coal prices to increase and 
        become more volatile?
          c. Do you think it make sense for the United States to export 
        more raw energy commodities--and the resulting environmental 
        impacts--across the Pacific just to have finished goods such as 
        solar panels imported back to the U.S.?
          d. Do you think exporting coal and natural gas would make 
        them behave more like oil--a world market commodity, governed 
        by higher, more volatile day-to-day prices?

    Answer. In my experience, prices respond to supply and demand. 
Higher demand implies higher prices--but determining the change in 
prices depends on numerous other factors including but certainly not 
limited to the elasticities of supply and demand with respect to price 
and the elasticity of demand with respect to income. The EIA is not 
involved in the ``national interest'' determinations that are made by 
policy division of relevant agencies. I believe that volatility in 
commodity prices is determined by numerous market forces and that 
export determinations would be more likely to impact price levels than 
price volatility.
    EIA's role is one of observing and analyzing these markets. I am 
not privy to EIA's plans for the full AEO2012 due out in several 
months, but that or future analyses could include sensitivity cases 
along the lines suggested by the questions you raise.
                                  iran
    Question 6. As Congress and the administration calibrate our 
sanctions policy on Iran, it is crucial that we have accurate, up-to-
date and unbiased information on the state of Iran's energy sector. To 
that end, Congress has called on the EIA to produce every 60 days a 
report on the price and available of alternatives to Iranian petroleum. 
The first of these reports was issued last month, and I was impressed 
with the detail and professionalism in which the report was done.

          a. If confirmed, will you ensure the EIA's reports on Iran 
        are done in the timeframe established by Congress?
          b. Will you ensure the Iran reports are unbiased and are free 
        from outside political influence?
          c. Currently the President is required to impose sanctions on 
        companies investing in Iran's energy sector, selling Iran 
        energy technology, or providing Iran refined petroleum. Certain 
        sanctions are also incumbent upon whether a country has 
        significantly reduced its import of Iranian petroleum. In the 
        past, the EIA has issued reports on these topics but the 
        Administration has failed to sanction companies identified in 
        the reports. If confirmed will you ensure country reports on 
        Iran continue to identify foreign companies working in Iran's 
        energy sector or providing Iran refined petroleum?

    Answer. I am familiar with EIA's reporting responsibilities 
regarding sanctions policy on Iran and, if confirmed, would ensure any 
and all reports are unbiased, free from political influence and 
provided in the necessary timeframes. I understand EIA's recent budget 
constraints caused the reduction, even elimination, of some of the work 
it had done in the international area. To the extent that resources are 
available, if confirmed, I would plan to continue the reporting of 
information related to commercial activity.
                           open fuel standard
    Question 7. Proponents of an Open Fuels Standard, such as the one 
proposed by Senate Bill 1603 which I introduced with Senator Lugar, 
believe it would enable millions of gallons of petroleum alternatives 
to come online and effectively end the monopoly oil has on our nation's 
transportation system.

          a. If 20 to 30 percent of our nation's petroleum demand could 
        be replaced with alternative fuels such as methanol derived 
        from natural gas or ethanol from non-food biomass at prices 
        less than the current price of gasoline, what impact do you 
        think that would have on overall gasoline prices?
          b. Do you think that having competing fuels at the gas pump 
        would help lower prices because consumers can switch between 
        fuels?
          c. How much natural gas would it take to produce a million 
        gallons of methanol?

    Answer. I believe that if alternative fuels can be supplied to 
consumers at prices competitive with existing fuels that such 
competition would tend to lower prices. Converting natural gas to 
methanol is a complex procedure with the conversion rate depending on a 
number of factors including the specifics of the process and catalysts 
used. To the best of my knowledge, a method to convert ethane to 
methanol has not been commercially demonstrated.
    The impact of such a standard would depend on the cost and 
availability of alternate fuel vehicles compatible with methanol and 
other alternatives, sufficient concentration of like vehicles in an 
area to stimulate fueling infrastructure investment, as well as local 
codes and standards compatible with residential use and/or distribution 
of such fuels. Based on 65 percent conversion efficiency, 56,800 Btu 
per gallon of methanol, and 1,025 Btu per cubic foot of natural gas, 
production of one million gallons of methanol would require about 82.7 
million cubic feet of natural gas.
 relationship between gasoline prices to supply and demand fundamentals
    Question 8. There are few economic drivers more significant than 
prices at the pump. Even small gas price increases can significantly 
impact every family budget and the bottom lines of virtually every 
American business. Many industry analysts think we are just a few 
months away from $4 per gallon of gas, perhaps higher. And we'll shoot 
right past that if Iran reacts to additional economic sanctions by 
restricting its production or even attempting to close the Strait of 
Hormuz.
    While these geopolitical considerations have an understandable 
impact on prices at the pump, every year the oil markets seem to be 
getting further and further divorced from the laws of supply and 
demand. During a Finance Committee hearing last year, I asked Exxon-
Mobil CEO Rex Tillerson what he thought the price of oil should be if 
it were based on supply and demand fundamentals. His answer was $60 to 
$70 a barrel, rather than the $100--$115 we see today. I've studied 
this issue closely for many years now, and I think the evidence is 
clear that excessive speculation in the oil futures market drives 
disruptive behavior in the price of oil.

          a. What do you think is responsible for our new era of 
        volatile and elevated oil and gasoline prices?
          b. What role do you think excessive speculation in the oil 
        futures markets has on spot prices today?
          c. EIA recently reported that U.S. demand for gasoline fell 
        6.7% in February relative to a year ago to its lowest level 
        since 2001. What do you think explains this counterintuitive 
        finding?
          d. Are you concerned that flaws in EIA's methodology or other 
        unrelated mistakes undermine the credibility of its data 
        products?
          e. Do you think Americans and the rest of the world simply 
        have to live with high prices and high volatility until better 
        alternatives allow us to run our cars and trucks on something 
        other than oil, or make them all run on less oil?

    Answer. My research suggest that oil and oil product prices have 
been volatile over the entire course of the development of the oil 
industry. This volatility can be attributed to a variety of supply, 
demand, weather, geopolitical and financial factors. Over the past 
several months the oil market has gone through a period of rising 
prices. As I indicated at my nomination hearing and in the above 
answer, I believe there are a wide variety of factors involved in oil 
price movements, including financial market activity and its 
interaction with energy markets. Over the past few years, debate over 
the role of financial investment in commodity markets has heated up. 
Flows to commodity funds and commodity prices have surged in recent 
years. The impact of higher commodity prices on inflation and growth, 
as well as potential hardship for fuel and food consumers, have caused 
analysts and policymakers to look closely at the factors influencing 
prices and volatility.
    EIA has identified several factors that contributed to the increase 
in oil prices over the past 10 years. Strong economic growth in non-
Organization of Economic and Development (OECD) countries led to 
increases in oil consumption. Slow growth in non-OPEC oil production 
from 2005 to 2008 limited oil supply growth. Low spare capacity from 
2003 to 2008 reduced the cushion for supply to meet fluctuations in 
global oil demand. In addition to supply and demand factors, the 
increase in oil futures trading, the growth of oil as an investment, 
and the increase in correlations between oil prices and other commodity 
prices and other financial markets also contributed to changes in oil 
markets and oil prices.
    Understanding the contribution of these different factors to oil 
price formation is an area where EIA has been actively engaged. I have 
participated in several EIA workshops over the past few years ago with 
academic and regulatory economists dissecting and critiquing academic 
analyses of market data. As I said at the hearing, if confirmed as 
Administrator, I would continue and expand EIA's collaboration with 
other federal agencies and market participants to improve access to 
market data and support critical analysis in this area.
    As a professional analyst I am always concerned data quality. I 
understand the tremendous challenge for EIA to collect, verify and 
report high quality data in a timely manner, especially as markets 
evolve and the roles of market players change. The recent discussion of 
the percentage decline in gasoline demand and the difficulty of 
estimating exports is a case in point. EIA became aware of that the 
weekly data were understating exports, thereby overstating demand so it 
changed the methodology which was described in Today in Energy on the 
website. In my experience, EIA has been responsive to corrections and 
improving its systems when problems are discovered. I too have had my 
frustrations that data series were not adjusted sooner at times, but I 
do not underestimate the challenge of rebuilding the tracks while 
keeping the trains running on time. As I said at the hearing, if 
confirmed, my top priority will be to modernize and improve the data 
collection and dissemination systems.
                        elevated gasoline prices
    Question 9a. In 2011 we paid the highest average price for gasoline 
in history, and it looks like 2012 average prices will be even higher. 
Do you think there is any way that the average annual price for 
gasoline will go below 2011 levels in the next 20 years?
    Question 9b. Do you believe that given rapidly increasing 
international demand and only marginal increases in new oil supplies 
that there could be an oil shortage sometime in the next 20 years?
    Question 9c. It was just a decade ago that Saudi Arabia was trying 
to keep world prices in the range of $22 to $28 dollars per barrel to 
discourage the development of alternatives, why do you think $100 per 
barrel helping spur alternatives to gasoline?
    Question 9d. Please share your suggestions on how America can break 
oil's monopoly on our transportation system, and what will bring 
alternative fuels online on a scale to compete with fossil fuels?
    Question 9e. I understand that over the last three years the 
Chinese government has loaned around $120 billion to its state-owned 
oil industries to secure supplies of oil that will now not go onto the 
world oil market. Can you verify this information and analyze what 
impact it could have on world oil prices and U.S. gasoline prices in 
the coming years?
    Answer. Many analysts expect rising demand for oil in the 
developing world to push crude oil prices higher in real terms over the 
coming years, which would result in higher prices for gasoline and 
other petroleum products. However, past experience teaches analysts to 
be humble in making long-term price projections. Therefore, I think it 
would be unwise to completely rule out the possibility that annual 
average gasoline prices would fall below the 2011 level sometime within 
the next two decades.
    It is certainly possible that there could be an oil shortage 
sometime in the next two decades. The balance between demand and supply 
growth will determine whether or not an oil shortage occurs. The demand 
for oil is likely to increase in the developing economies, but to 
stagnate or decline in the traditional industrialized economies. 
Efficiency improvements, subsidy reforms, and the development of 
alternative fuels have the potential to slow the growth in demand for 
oil, while technological developments and institutional reforms have 
the potential to increase supply growth.
    At present price levels, oil remains an attractive fuel for 
transportation applications, but there are some indications that 
alternative fuels can expand their role. Because EIA does not promote 
or formulate policy proposals, I am reluctant to make suggestions 
regarding measures to accelerate the adoption of alternative fuels. 
However, if confirmed as EIA's Administrator, I would certainly 
continue EIA's traditional role in providing analysis of specific 
policy proposals in this and other energy-related areas.
    Oil's high energy density and ease of storage make it an excellent 
transportation fuel. The opportunities for natural gas (LNG, methanol 
conversion, and compressed gas) as well as improvements in battery 
technology could have a significant impact over the next decade.
    The balance between global demand and global supply is a key 
determinant of the future direction of future crude oil and petroleum 
product prices. China's contribution to both demand and supply affect 
the global balance. My understanding is that the government of China 
has been building its strategic petroleum reserves for the same reason 
that the United States and its IEA partners have pursued this option. 
Generally, investments that help to increase global supply help to 
ameliorate tightness in world oil markets, regardless of who makes 
those investment and where the oil that is produced as the result of 
any given investment is actually consumed.
      correlation between domestic oil production and pump prices
    Question 10. A recent statistical analysis of 36 years of monthly, 
inflation-adjusted gasoline prices and U.S. domestic oil production by 
the Associated Press shows no statistical correlation between how much 
oil comes out of U.S. wells and the price at the pump. For example, 
since February 2009, U.S. oil production has increased 15 percent when 
seasonally adjusted. Prices in those three years went from $2.07 per 
gallon to $3.58. And the AP similarly found no correlation between 
domestic production rates and inflation-adjusted gasoline prices going 
back to 1976.

          a. The AP concluded that this lack of casualty is due to oil 
        being a global commodity, meaning that U.S. production has only 
        a tiny influence on supply. Factors far beyond the control of a 
        nation or a president dictate the price of gasoline. Do you 
        agree with their conclusions?
          b. Similarly, the EIA found that even the most comprehensive 
        domestic drilling proposals would only decrease gasoline prices 
        by 3 to 5 cents--and not until 2030. Does this analysis make 
        sense to you, and, in your opinion, will any amount of 
        additional drilling lead to substantially lower prices at the 
        pump today, tomorrow, or any time in the next 20 years?

    Answer. I have not personally reviewed the AP analysis, but I do 
not find the results at all surprising. The balance between supply and 
demand on a global scale is a key fundamental determinant of crude oil 
prices, which are in turn the key driver of petroleum product prices. 
Future prices will be influenced by trends in both demand and supply on 
a global basis.
    Both supply and demand in the United States are a part of the 
global picture. Policies influencing U.S. supply and/or U.S. demand can 
affect world markets both directly and indirectly. Indirect effects may 
arise through the impact of U.S. policies and technologies on demand 
and supply throughout the world. For example, technologies used to 
raise the fuel economy of vehicles sold in the United States are also 
likely to be applied elsewhere, as are technologies developed to 
exploit new categories of resources, such as deepwater offshore 
resources and onshore resources in shales and other tight formations.
    The impact of drilling on prices will depend on the combination of 
its direct and indirect effects and on the extent of demand responses. 
Generally only modest price impacts would be expected if supply from 
drilling in one area is offset by reductions in supply from other 
areas, or if demand is relatively more responsive to changes in supply, 
as is possible over an extended time period. However, there are many 
other economic, environmental and geopolitical benefits that might 
accompany increases in domestic oil development.
                                 ______
                                 
     Response of Marcilynn A. Burke to Question From Senator Wyden
                      timber management/o&c lands
    Question 1. I have repeatedly raised the issue of timber management 
on the O&C lands with the Secretary and others in the BLM and we had a 
chance to discuss this issue as well. I applaud the Secretary for 
advancing new pilot projects. However, I still remain concerned that 
the volume of timber from these and other sales remains very low and 
will not support the remaining mills in my state. In order to turn this 
around I think we will need leadership and engagement from the top. Can 
I get your commitment that you will be engaged on these issues and help 
turn the timber volume numbers around?
    Answer. If confirmed, I will work to ensure that the BLM remains 
committed to providing a predictable, sustainable supply of timber and 
other forest products that help maintain the stability of local and 
regional economies, and contribute valuable resources to the national 
economy. The BLM's 2013 budget includes an increase for timber programs 
in Western Oregon. Just last month, Secretary Salazar announced that we 
are beginning the process of revising Resource Management Plans (RMP) 
for 2.5 million acres of forested lands across six BLM Districts in 
western Oregon. The BLM is seeking public input on the issues and 
alternatives that the new RMPs should address. This public scoping 
period began March 9 and will end June 7, 2012.
  Responses of Marcilynn A. Burke to Questions From Senator Murkowski
    Question 1. The BLM is responsible for completing the conveyance of 
some 5 million acres of Alaska's Statehood entitlement, promised to the 
state 53 years ago, and some 4 million acres of Alaska Native 
Corporations conveyances, which were promised 41 years ago. The 
Department, however, continues to propose lower funding to complete the 
conveyances, the budget having proposed to cut conveyance funding in 
half. At the current pace of conveyances of interim conveyances and of 
surveys to provide final patents, it might well take the Department 
another 50 years or more at the level of funding the Administration is 
currently proposing to complete all conveyances. I've heard of ``due 
deliberate speed'' but this seems anything but speedy.

          a. Would you agree that the government has a moral and legal 
        obligation to comply with legislation and to implement the 
        conveyances?
          b. Will funding for Alaska land conveyances be a priority for 
        you, if you are confirmed for the Assistant Secretary position?

    Answer. The BLM is eager to complete these conveyances. While 
funding has been reduced as part of an effort to reevaluate and 
streamline the conveyance process, conveyance work has been ongoing 
since the 1960s and the 2004 Alaska Land Transfer Acceleration Act has 
allowed the BLM to streamline the conveyance program and reduce program 
costs. The BLM is developing several procedures to enhance efficiency 
and continues to work to further streamline the program so that 
resources are focused on completing the goal of transferring title to 
150 million acres the agency is required to convey.
    If I am confirmed, I will make it a priority for the BLM to 
complete the transfer process, and commit to examining funding 
opportunities for the conveyance program.
    Question 2. The Bureau of Land Management that you will oversee in 
your new post is currently working on a new land plan for the National 
Petroleum Reserve-Alaska--the last petroleum reserve under federal 
control in the nation. In your view what should be the priority: to use 
the lands to produce the oil and gas this nation needs, or to set aside 
acreage in the area for conservation purposes?
    Answer. As I mentioned when I appeared before the Committee, the 
mission of the Department of the Interior and the bureaus for which the 
Assistant Secretary for Land and Minerals Management has oversight 
responsibility is to balance the need for development and production of 
energy on the public lands with the need to take appropriate care of 
our other natural resources and the environment. The Department 
recognizes the provisions of the 1976 NPR-A transfer act as amended 
which calls for an oil and gas leasing program while also recognizing 
and providing for the protection of other resources. The priority is to 
get that balance right through careful planning that gives due 
consideration to competing resource values. If confirmed, achieving the 
proper balance will be a priority for me.
    Question 3. Congress included several provisions in the Alaska 
National Interest Lands Conservation Act to preclude the withdrawal of 
tracts of greater than 5,000 acres in Alaska in the future. This makes 
sense, as the act resulted in the creation of 58 million acres of 
wilderness and nearly 130 million acres of new parks, monuments, and 
preserves just in my home state.

          a. What is your view of the meaning of Section 1326 of 
        ANILCA, the section that Alaskans call the ``No More'' Clause? 
        Is it that no further studies of wilderness leading to 
        withdrawals should be undertaken by your department unless 
        prior authorization is provided by Congress, or is it that the 
        Administration is free to propose additional wilderness 
        designations in Alaska, but just not to permanently place lands 
        in wilderness by use of the 1906 Antiquities Act?

    Answer. I am mindful of the provisions of ANILCA. The actions of 
the Department of the Interior must be consistent with the Act. While 
the Secretary has the legal prerogative to identify well-suited 
wilderness areas, Congress alone holds the power to designate 
wilderness.
    Question 4. Right now the Department's Fish and Wildlife Service 
seems to be progressing on a new land management plan for ANWR that may 
well result, based upon the draft plan, in recommendations for more 
wilderness to be created in ANWR.

          a. Please explain: how is the planning that led to wilderness 
        proposals in the draft plan not a clear violation of Section 
        1326 of ANILCA?

    Answer. If confirmed as Assistant Secretary for Land and Minerals 
Management, the U.S. Fish and Wildlife Service would not be under my 
supervision. However the Service advises me that preparation of the 
Revised comprehensive conservation plans (CCP) derives from the 
requirement in Section 102(A) of ANILCA that comprehensive conservation 
plans be prepared and periodically updated for each refuge. The revised 
plan is an update of the 1988 plan, and it is a management plan for the 
entire Refuge. While it includes a wilderness review, the revised plan 
is not being completed for the purpose of establishing a conservation 
system unit. Rather, it is being completed as a statutory requirement 
of ANILCA section 304(g) which requires the Plan revision include the 
``wilderness value of the refuge.'' No wilderness can be created 
without the consent of Congress.
    Question 4b. The Comprehensive Conservation Plan draft concedes 
that at least 40,000 acres are not suitable for Wilderness designation 
due to their continuing and foreseeable occupation by humans and 
motorized vehicles. The entire 1002 area has been covered in seismic 
surveys as well. The 1965 Wilderness Act defines wilderness as 
untrammeled by man and unoccupied by humans. Do you believe the rest of 
the 1002 area--or all of it--is suitable for Wilderness designation?
    Answer. If confirmed as Assistant Secretary for Land and Minerals 
Management, the U.S. Fish and Wildlife Service would not be under my 
supervision. However, the Service has provided the following response 
to your question.

          The Wilderness Act's definition of wilderness as ``an area 
        where the earth and its community of life are untrammeled by 
        man, where man himself is a visitor who does not remain'' is 
        part of the vision for wilderness. However, the definition is 
        not the standard by which lands qualify for entry into the 
        National Wilderness Preservation System. Congress has 
        designated wilderness areas that are located near population 
        centers and in areas that show evidence of past human use. 
        Three criteria derived from the Wilderness Act are used to 
        determine whether an area meets the minimum criteria of 
        wilderness: size, naturalness, and opportunities for solitude 
        or primitive recreation. The 1002 area arguably meets these 
        criteria. It is a large area, encompassing 1.4 million acres, 
        and it exhibits a high level of ecological integrity and 
        apparent natural condition. While scattered sections of seismic 
        trails from the 1984-1985 oil and gas exploration project are 
        visible, their natural recovery continues. The 1002 Area also 
        provides outstanding opportunities for both solitude and 
        primitive recreation.

    Question 5. Right now the National Park Service reports that it has 
several billion dollars of deferred maintenance needs in our national 
parks. We have significant facility needs in our wildlife refuges. If 
you are confirmed, what would your view be on spending of our 
increasingly scarce dollars--should the priority be to spend on 
maintenance of our existing parks and refuges, or should it be on 
buying/acquiring new lands for wilderness, park or refuge designations 
and additions?
    Answer. If confirmed as Assistant Secretary for Land and Minerals 
Management, neither the National Park Service nor the U.S. Fish and 
Wildlife Service would be under my purview. However, I agree with 
Secretary Salazar that we must balance the needs of existing parks, 
refuges, and resources while engaging in strategic conservation that 
yields measurable ecological outcomes and community benefits. As 
Secretary Salazar has said, conservation is a priority for the 
Administration, and we must continue to invest in land and water 
projects that have the support of communities who depend on the job 
creating power of the outdoor economy.
    Question 6. When the Administration was preparing to attempt to 
implement its Wildlands Policy, you briefed the staff of the Senate 
Energy and Natural Resources Committee. At the time you were advocating 
for the policy. Then the House of Representatives and the Senate 
attached language to the FY 2011 Interior Appropriations bill and again 
in the FY 2012 bill that prohibits spending any funds to implement the 
Wildlands Policy.

          a. Will you commit to me that you will not attempt to 
        implement any administrative land set-asides or designations 
        that in any way would restrict access or uses on BLM lands in 
        ways similar to a Wilderness restriction, if you are confirmed?

    Answer. Secretarial Order 3310 was issued in December of 2010 to 
provide national guidance for protecting lands with wilderness 
characteristics as Wild Lands. Congress has prohibited the use of 
appropriated funds to implement, administer, or enforce Secretarial 
Order 3310. The BLM is in full compliance with that Congressional 
direction, and has not and will not designate any Wild Lands. If 
confirmed, I commit that the BLM will continue to comply with all 
applicable laws.
    Question 7. Is there any reason that an economic pipeline corridor 
to bring Arctic oil and gas production to the Trans-Alaska pipeline 
corridor will be difficult to permit across the 23 million-acre 
National Petroleum Reserve? Is it in the national interest to plan for 
such a pipeline corridor and to keep the Trans-Alaska Pipeline at 
operational throughput?
    Answer. There are a number of issues that need to be analyzed when 
planning and permitting a pipeline corridor in the Arctic environment; 
however, I am unaware of any particular issue that would currently 
preclude a pipeline corridor across the NPR-A. The BLM's current 
planning for NPR-A takes into account the possibility of future 
pipelines and acknowledges the importance of the Trans-Alaska Pipeline 
System as strategic infrastructure for the continued production of oil 
out of the Arctic. A future pipeline proposal across the NPR-A would 
require further specific NEPA compliance. The BLM also recognizes the 
importance of maintaining operational throughput to the State of 
Alaska.
    Question 8. In your view, what is the primary purpose of the 
undesignated public lands in America, meaning the 264 million acres 
that BLM controls, and not the lands under the control of the National 
Park Service or the US Fish and Wildlife Service? Is it for those lands 
to fuel the nation's economy and produce jobs, or is it for those lands 
to be preserved in their natural states? What would you see as your 
primary responsibility?
    Answer. Congress has not assigned a single primary purpose to the 
management of America's public lands, whereas the management missions 
given to the National Park Service and the U.S. Fish and Wildlife 
Service are more narrowly focused. The more than 245 million acres of 
public lands administered by the BLM encompass the vast array of the 
American landscape, from the Alaskan tundra, to the dense forests of 
the Pacific Northwest, the red rock deserts of the American Southwest, 
and the sagebrush steppes of the Great Basin. Through the Federal Land 
Policy and Management Act (FLPMA), Congress charged the BLM with the 
mission of managing these diverse public lands for multiple use. Under 
this mandate, the BLM manages public land resources for a variety of 
uses including energy development, livestock grazing, recreation, and 
timber harvesting, while protecting a wide array of natural, cultural, 
and historical resources. Not every acre managed by the BLM is 
appropriate for oil and gas leasing, just as it is true that not every 
acre is suitable for wilderness designations. If confirmed, a priority 
of mine would be upholding FLPMA; my responsibility as Assistant 
Secretary for Land and Minerals Management would be to help ensure that 
the BLM make land use decisions that are informed by an open, 
transparent, and public process.
    Question 9. You recently lectured the University of North Dakota's 
law school regarding the decrease in lawsuits as relates to federal 
onshore oil and gas leasing.

          a. Some of this is due to very detailed and process intensive 
        work in regional management plans and lease schedules, but is 
        simply less activity, or less available acreage in new areas, 
        also a reason for less litigation?

    Answer. While additional factors may have contributed to a decline 
in leasing-related litigation, the oil and gas leasing reforms 
announced in 2010 are a factor in that decrease. These reforms are 
helping to reduce potential conflicts that lead to costly and time-
consuming protests and litigation. The BLM's current interdisciplinary 
approach prior to making leasing commitments is making oil and gas 
leasing more predictable, increasing certainty for stakeholders--
including industry--and restoring balance to the resource development 
process.
    Question 9b. Have approved APDs increased or decreased since 2008?
    Answer. Oil and gas drilling and development are market-driven 
activities, and demand is a function of market conditions and national 
energy consumption. The number of APDs submitted by industry is an 
indication of industry interest and intent to drill for oil and gas. 
The table below presents the APD statistics for 2001-2011. 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Industry may elect not to drill even after the BLM has approved its 
APDs. As of September 30, 2011, the BLM had approved 7,226 applications 
for permits to drill on Federal and Indian lands that had not been 
drilled.
    Question 10. Two weeks ago in our Appropriations budget hearing 
with Secretary Salazar, Sen. Hoeven noted that there should be a cost-
benefit analysis before DOI formally proposes its new hydraulic 
fracturing rules.

          a. Would you agree that there should be cost-benefit 
        analysis?

    Answer. The hydraulic fracturing rulemaking process includes an 
estimate of economic benefits and costs, which considers a number of 
factors, including employment impacts, discounted present value, 
uncertainty, and a number of rule alternatives.
    Question 10b. Has there been a formal cost-benefit analysis on this 
proposal?
    Answer. The hydraulic fracturing rulemaking process includes an 
estimate of economic benefits and costs, which considers a number of 
factors, including employment impacts, discounted present value, 
uncertainty, and a number of rule alternatives.
    Question 11. What is your position on whether royalty rates should 
be raised on producers of federal oil and gas resources?
    Answer. I believe that it is important for the taxpayer to receive 
a fair return on the resources extracted from the public lands. As part 
of that commitment, the Department and the BLM are studying royalty 
rates. If confirmed, I would work to ensure that any decisions 
regarding royalty rates are fair to both producers and the taxpayer.
    Question 11a. Do you disagree with the study that DOI recently 
commissioned, which concluded that the GAO report had failed to take 
major revenues into account, and that all three federal regimes were 
taking more revenue than competing regimes?
    Answer. Studies thus far have not provided specific conclusions 
regarding potential new royalty rates. If confirmed, I will continue to 
look at all available information in order to address any potential 
revision of the royalty rates.
    Question 11b. If raising royalty rates were to result in increased 
revenues but decreased production, would that be an acceptable outcome?
    Answer. Royalty rates are only one of many factors that affect oil 
and gas production levels. Oil and gas prices are the primary driving 
forces. The Department would not expect royalty rate changes of the 
magnitude considered to cause a significant decrease in production, as 
many oil producing states have higher royalty rates than those 
currently assessed for onshore production on Federal land. Recent 
changes to offshore royalty rates do not appear to have had any 
significant impact on industry interest in leasing on the Outer 
Continental Shelf. If confirmed, there are many factors, including 
production impacts, that I would consider as part of any royalty rate 
evaluation so as to ensure a fair return for the American taxpayer.
    Question 12. Is U.S. oil production a factor in the price of oil?
    Answer. The price of oil is determined by the international market. 
Producing more oil and natural gas domestically is not a solution to 
high prices, but it will help reduce our reliance on foreign oil and 
our vulnerability to the ups and downs of the international market.
    Question 13. On January 27, 2011, E&E Daily reported that you told 
a town hall meeting that you had met with 40 Congressional staff to 
discuss DOI's Wildlands policy and had left most of the meetings 
confident that the agency made the right decision.

          a. Given the Congressional Appropriations language that 
        defunded the Wildlands Policy proposal, could you give me your 
        assessment of the statements you made to that town hall as 
        reported by E&E daily?

    Answer. Secretarial Order 3310 was issued in December of 2010 to 
provide national guidance for protecting some lands with wilderness 
characteristics as Wild Lands. Congress has prohibited the use of 
appropriated funds to implement, administer, or enforce Secretarial 
Order 3310. The BLM is in full compliance with Congressional direction 
and will not designate Wild Lands.
    Question 14. On March 15, 2010, E&E Daily reported on your 
testimony at a House of Representatives hearing at which you were 
reported to have said, ``Opening new land to Sealaska would set a 
precedent that would encourage other native Alaskan corporations to 
seek new areas as well, hurting the administration's goal of quickly 
resolving the outstanding conveyances.'' At the same time BLM was 
beginning to construct its FY 2012 budget request that proposed to 
almost zero out the Alaska Conveyance Program budget line item.

          a. Let me begin by asking you to explain your agency's goal 
        to ``quickly resolv[e] the outstanding conveyances'' given 
        BLM's budget requests for the Alaska Land Conveyance line item, 
        which was cut in half in the FY 2012 and FY 2013 budget 
        requests. Can you help me reconcile your testimony as reported 
        in E&E Daily on March 15, 2010, with the two budget requests 
        BLM made in FY 2012 and FY 2013?

    Answer. The Department of the Interior and the BLM are committed to 
the conveyances of lands, not only to individuals and to corporations 
formed under the Alaska Natives Claim Settlement Act, but also to the 
State of Alaska under the Alaska Statehood Act. The 2004 Alaska Land 
Transfer Acceleration Act has allowed the BLM to streamline the 
conveyance program and reduce program costs. The BLM is exploring 
opportunities to further streamline the program so that available 
resources are focused on completing the goal of transferring title to 
the remaining portion of the 150 million acres the agency is required 
to convey. In FY 2011, the BLM began testing a new type of survey or 
business process which, if adopted, would expedite the issuance of 
final patents in Alaska. The BLM is committed to identifying and taking 
advantage of opportunities to further accelerate patents to remaining 
entitlements.
    Question 14b. Do you understand the revenues generated by the sale 
of timber from Sealaska lands is shared with the other Native 
Corporations in Alaska, and if Sealaska has to shut down its timber 
operations all the other Native Corporations will also suffer?
    Answer. Yes, we understand the importance of these revenues for 
Native Corporations in Alaska. The BLM is working closely with Sealaska 
and the U.S. Forest Service to complete Sealaska's conveyance, 
specifically the Frank's Lake parcel, so that Sealaska can continue its 
timber operations.
    Question 14c. If confirmed, will you commit to me that BLM will 
propose budgets that will fund sufficient staff to complete all Alaska 
conveyances within the next five years?
    Answer. The Department of the Interior and the BLM are committed to 
the conveyances of lands, not only to individuals and to corporations 
formed under the Alaska Natives Claim Settlement Act, but also to the 
State of Alaska under the Alaska Statehood Act. The BLM will continue 
to utilize best practices and efficiencies to ensure that the funding 
appropriated by Congress for the Alaska Land Conveyance program is used 
in the best manner possible.
    Question 15. Over the past several years the Administration has 
testified in favor of legislative proposals that include provisions 
requiring a public interest finding by either the Secretary of the 
Interior or the Secretary of Agriculture.

          a. Do you personally believe that Congress has the right and 
        responsibility to direct land exchanges?
          b. Do you believe that Congress has the right to exempt land 
        exchanges from NEPA and/or public interest findings or other 
        laws?
          c. If confirmed and you receive a law on a land exchange that 
        exempts the exchange from NEPA, other laws, and/or a public 
        interest finding, will you commit to me that you will 
        faithfully execute that law in the timelines prescribed in that 
        land exchange law?

    Answer. Congress passes the laws that the Executive Branch 
implements and administers on behalf of all Americans. The National 
Environmental Policy Act is the backbone of our nation's suite of 
environmental laws, and was created to ensure Federal agencies consider 
the environmental impacts of their actions and decisions. If confirmed 
as the Assistant Secretary for Land and Minerals Management, I will 
faithfully implement all applicable laws that pertain to programs 
overseen by that office.
    Question 16. On January 12, 2011, the Desert Sun Newspaper from 
Palm Springs, California reported that at a tribal summit on renewable 
energy, you addressed tribal leaders who traveled to Palm Springs and 
said the BLM is analyzing 50 projects this year and rating the impact 
the projects might have on tribal, cultural, spiritual and natural 
resources. You are reported to have said: ``We want to be smart from 
the start.''
    Given the number of the renewable energy projects that have been 
legally challenged, or have fallen on financial difficulty (sometimes 
partially as a result of federal government actions or inactions), 
could you give the BLM and the Department a grade on whether or not 
they have been ``smart from the start''?
    Answer. The Department of the Interior has been ``smart from the 
start'' with our renewable energy program. The BLM has permitted more 
than 6,500 MWs of renewable energy projects since 2010 and is 
processing applications that, if approved, would support almost 6,800 
MWs of renewable energy this year.
    The Department of the Interior and the BLM have been proactive in 
evaluating and streamlining their siting and approval processes to 
ensure that our decisions continue to be smart from the start. In 
February 2011, the Department hosted a Renewable Energy Forum with a 
variety of stakeholders to further discuss and evaluate lessons learned 
from the first round of renewable energy projects. The BLM issued 
policy guidance in February 2011 that memorialized best practices for 
early coordination and careful review of proposed renewable energy 
projects with Federal, state, tribal and local government agencies. The 
policy has assisted the BLM in identifying and prioritizing 
applications with the fewest resource conflicts and the greatest 
likelihood of success in the permitting process. This smart from the 
start approach is consistent with the Secretary's goal to facilitate 
environmentally responsible development of renewable energy projects on 
the public lands. The renewable energy projects that the BLM reviewed 
and approved in 2011 and the current 2012 priority projects have 
involved rigorous coordination and review, consistent with the 
principles of smart from the start.
    Question 17. In a University of Cincinnati Law Review article 
titled ``Much Ado About Nothing: Kelo v. City of New London, Babbitt v. 
Sweet Home, and Other Tales from the Supreme Court'' that you authored, 
you wrote:

          Because the current rhetoric about the use of eminent domain 
        in this country may be inaccurate at best, such rhetoric must 
        be challenged vigorously. For if we allow the inaccuracies to 
        remain unchallenged long enough, we may find ourselves 
        operating under the delusion that they are truths, unduly 
        hampering government's authority and obligation to regulate on 
        the behalf of the public's health, safety, welfare, and 
        morals.''

    Do you believe that same standard should be imposed on BLM or DOI 
scientists, for example, who have been found to have used false 
information or data to advocate for the listing of a specific species 
under the Endangered Species Act? If not, why not?
    Answer. I support the Department of the Interior's policy on the 
integrity of scientific and scholarly activities, which addresses this 
issue. The Department's policy is contained in Chapter 3, Part 305, of 
the Departmental Manual, available online: http://elips.doi.gov/elips/
    Question 18. In a Notre Dame Law Review article titled ``The 
Emperor's New Clothes: Exposing the Failures of Regulating Land Use 
through the Ballot Box'' that you authored, you appeared to be arguing 
that local or state ballot measures may not be a legitimate tool for 
regulating land use.

          a. If you believe that, what are your views on imposing other 
        environmental regulations through ballot measures?
          b. Question: If a local ballot measure on land use 
        regulations is perhaps illegitimate for the reasons expressed 
        in your Notre Dame Law Review article, shouldn't we also be 
        suspect of the environmental regulatory ballot measures as 
        well?
          c. Question: Given your views and beliefs, who in your mind 
        has the most legitimate authority and responsibility to 
        regulate land use: the Congress; an Administrative agency such 
        as the BLM; a state government; a local government; or citizens 
        through a ballot measure? Please explain why.

    Answer. The bureaus for which the Assistant Secretary for Land and 
Minerals Management has oversight responsibility promulgate regulations 
in accordance with governing statutes, including the Federal Land 
Policy and Management Act, the Outer Continental Shelf Lands Act, the 
Surface Mining Control and Reclamation Act, the National Environmental 
Policy Act, and the Administrative Procedure Act. The bureaus do not 
use ballot measures as a tool for management of Federal public lands or 
the Outer Continental Shelf. Should I be confirmed, I will continue to 
help ensure that management is conducted in accordance with all 
applicable Federal laws and regulations.
    Question 19. The BLM is struggling with wild horse overpopulation 
on the lands it manages in the Intermountain West.

          a. Do you believe that invasive species should be given 
        protection under the Endangered Species Act?

    Answer. The Endangered Species Act (ESA) was enacted to conserve 
plants and animals that are or are likely to be threatened with 
extinction in their native range or country. To my knowledge, no non-
native invasive species has ever been listed under the ESA. Moreover, 
invasive species are generally increasing in number and distribution 
and, therefore, are unlikely to face extinction or warrant protection 
under the ESA.
    Question 19b. In relative terms do you think euthanizing wild 
horses that have overpopulated an area is less or more humane than 
leaving the herds on the land to die of starvation when forage becomes 
scarce?
    Answer. If confirmed, I will support the Department of the 
Interior's position that euthanasia of healthy wild horses is not a 
viable or acceptable management option, even though this legal 
authority is provided under the Wild Free-Roaming Horses and Burros Act 
of 1971, as amended. The BLM's goal is to ensure healthy horse and 
burro populations can thrive in balance with other resources and uses 
on healthy public rangelands. I support the goal of putting the Wild 
Horse and Burro Program on a sustainable course that benefits the 
animals, the land, and the American people. Since passage of the 1971 
law, the BLM has found good homes through its adoption program for more 
than 225,000 wild horses and burros. Also, we are continuing to 
aggressively pursue methods to control herd population growth by, among 
other things, applying fertility control to mares before returning them 
to the range. In instances where drought and other severe conditions on 
the range result in inadequate forage and water for wild horses, the 
BLM must seriously consider emergency gathers, to ensure the health of 
the horses and the range.
    Question 19c. Do you believe wild horse health and welfare should 
take priority over other native ungulates like deer, elk, and antelope?
    Answer. The 1971 Wild Free-Roaming Horses and Burros Act authorizes 
the BLM to manage, protect, and control wild horses and burros. This 
law also directs the BLM to remove excess wild horses and burros from 
the range to sustain the health and productivity of the public lands. 
If confirmed, I would work to ensure the best balance of uses and 
resource protections for the public lands consistent with both the 
Federal Land Policy and Management Act and the Wild Free-Roaming Horses 
and Burros Act. If confirmed, I would support the BLM's commitment to 
using the best science available in making resource allocation 
decisions, including those affecting wildlife and wild horses. The BLM 
has commissioned a study by the National Academy of Sciences to help it 
move forward in addressing wild horse and burro management challenges.
    Question 20. Efficiency was a stated rationale for the proposed 
BLM-OSM merger, and I understood that meant DOI expected it would save 
taxpayer dollars. However, we have yet to see any calculations showing 
what the merger would cost--or, potentially, what it would save. What 
studies, or other internal analysis, have you completed to demonstrate 
that merging BLM and OSM will increase their relative efficiency? 
Please provide all relevant documents to the Committee.
    Answer. At the Direction of the Secretary, the BLM and OSM analyzed 
a number of similar functions currently being carried out by both 
agencies and the DOI Office of Natural Resources Revenue. The OSM 
devotes a significant portion of its budget to maintaining its own 
administrative support functions, rather than sharing administrative 
services as other Departmental bureaus and offices have done. The 
consolidation of certain administrative functions could make available 
a larger percentage of OSM's budget for mission-critical activities to 
thereby enable OSM to more effectively deliver services to the American 
people. (Attached is the final Report for the Secretary on the Proposed 
BLM/OSM Consolidation that includes an analysis of the various 
consolidation options considered.)
    Question 21. Since you first proposed merging OSM and BLM, we have 
had conversations about its legality, particularly with respect to 
SMCRA. The Committee staff has requested a legal opinion from your 
counsel on how such a merger is legal under SMCRA. Is it your legal 
opinion that transferring staff or agency functions from BLM to OSM 
does not violate SMCRA?
    Answer. The recommendations contained in the report to the 
Secretary of the Interior, dated February 15, 2012, on the proposed 
BLM/OSM consolidation were thoroughly reviewed by the Department of the 
Interior's Office of the Solicitor and found to be in compliance with 
SMCRA.
    Question 22. Whose input have you sought in the three months since 
Secretarial Order 3315 was first issued for the BLM-OSM merger? Will 
you publish the comments you have received from the public?
    Answer. In analyzing the proposed consolidation, the BLM and OSM 
sought input from a number of stakeholders, including agency employees, 
industry, tribes, the public, and Members of Congress. Together, the 
agencies held four employee meetings, ten stakeholder meetings, and two 
tribal consultations. DOI leadership held conference calls and met five 
times with Congressional staff and Members of Congress. In addition, 
Deputy Secretary David J. Hayes testified before the Senate Energy and 
Natural Resources Committee to discuss the proposed consolidation. The 
BLM, OSM, and the Department also solicited input via their websites 
and received 220 external comments and 68 internal comments. The 
Department does not plan to publish the comments it received.
    Question 23. According to your biography, you previously ``served 
as visiting assistant professor of law at the Rutgers School of Law in 
Camden, N.J., and subsequently, at Seattle University School of Law for 
its `Summer in Alaska' program.'' According to the website for that 
program, students enrolled in it ``learn from experts in Anchorage, 
Alaska, about important environmental, legal, and social issues that 
impact Alaska Native rights and natural resource management in the 
Arctic National Wildlife Refuge and wildlife preservation.''

          a. When did you participate in the `Summer in Alaska' 
        program?
          b. Please describe your involvement in this program. Please 
        provide a list of all courses you taught, as well as syllabi 
        and reading materials that were assigned for those courses.
          c. Please summarize your views--as expressed by you during 
        your participation in the `Summer in Alaska' program--on the 
        ``important environmental, legal, and social issues that impact 
        Alaska Native rights and natural resource management in the 
        Arctic National Wildlife Refuge and wildlife preservation.''
          d. Do you believe that oil exploration and production could 
        be carried out safely and responsibly in the non-wilderness 
        portion of ANWR?

    Answer. I taught the second half of an eight-week course during the 
summers of 2006 and 2007, as a part of Seattle University School of 
Law's ``Summer in Alaska'' program. The first half of the course, 
taught by another professor, focused on laws specific to Native 
Alaskans. The portion of the course that I taught focused on 
environmental and natural resources laws. My portion of the course was 
designed to introduce some of the statutes relevant to the management 
of primarily Federal lands and waters in Alaska and to provide a 
sampling of the many complex resource management issues. Enclosed are 
the syllabi and the reading materials that I assigned. The course began 
with an introduction to environmental law and the role of science in 
environmental law. Then it focused on select statutes and issues such 
as the Endangered Species Act, the Marine Mammal Protection Act, 
salmon, mining, the U.S. Forest Service's Roadless Area Conservation 
rule, and the Arctic National Wildlife Refuge. Also enclosed are the 
PowerPoint slides that I used to present the materials in class. With 
respect to possible oil and gas development in the Arctic National 
Wildlife Refuge, the President and Secretary Salazar have been clear 
that there are some places where such development is appropriate and 
some places where it is not. The Arctic National Wildlife Refuge, 
because of its unique conservation values and importance as wildlife 
habitat, is a place where development is not appropriate.
   Responses of Marcilynn A. Burke to Questions From Senator Barrasso
    Question 1. Please provide a list of all the legal actions and 
threats of legal action made by the Defenders of Wildlife in 2005 and 
2006 with which you disagreed or took an opposing view. b. Please 
provide a short explanation of what, if any, action you took as a 
member of the Defenders of Wildlife Litigation Committee to articulate 
your disagreement with the legal actions and threats of legal action 
made by the Defenders of Wildlife.
    Answer. I was a member of the Defenders of Wildlife's litigation 
committee for approximately one year. During that year, I reviewed 
legal memoranda and recommendations from the legal staff of the 
Defenders of Wildlife concerning whether the organization should 
initiate litigation or participate in existing litigation. According to 
my records and to the best of my recollection, I voted to approve the 
Defenders of Wildlife legal staff recommendations in two cases. One 
involved their recommendation to file an amicus brief with the United 
States Supreme Court in the consolidated cases United States v. Rapanos 
and United States v. Carabell. The second recommendation I voted to 
approve was to initiate litigation in Defenders of Wildlife v. National 
Park Service.
    Question 2. Did you receive any payments from the Defenders of 
Wildlife for your work on the Defenders of Wildlife Litigation 
Committee in 2005 and 2006? If so, please provide a detailed accounting 
of all the payments you received.
    Answer. As a member of the Litigation Committee I was reimbursed 
for travel expenses to attend one meeting in 2005. I received no 
payments for my work.
    Question 3. Please provide all documents, including but not limited 
to calendars, notes, and electronic correspondence, related to your 
work for the Defenders of Wildlife.
    Answer. I attended one meeting as a member of the litigation 
committee, on Friday, September 23, 2005. According to my records and 
to my recollection, as a member of the litigation committee I voted to 
approve the Defenders of Wildlife legal staff recommendations in two 
cases. One involved their recommendation to file an amicus brief with 
the United States Supreme Court in the consolidated cases United States 
v. Rapanos and United States v. Carabell. The second recommendation I 
voted to approve was to initiate litigation in Defenders of Wildlife v. 
National Park Service. I have contacted the Defenders of Wildlife, and 
the organization has declined to waive any attorney-client privilege 
with respect to litigation related materials.
    Question 4. Please provide any existing transcripts or recordings 
of all speeches and presentations you have made, including but not 
limited to statements made as a participant of a panel, roundtable, 
debate, conference, or symposium, since 2002.
    Answer. Enclosed please find a list of the events in which I made a 
speech or a presentation since 2002. Enclosed is the one transcript of 
which I am aware. The following is a list of recordings of speeches and 
presentations I have made that are available on the internet. The list 
includes the web address where the recordings may be accessed. 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 5. In your written testimony, you state that you have a 
``sincere belief in the value of collaboration, consensus building, and 
transparency in the development and implementation of policies 
governing the management of the public lands and waters.'' However, it 
is my understanding that the Department spent approximately one year 
developing and implementing the Wild Lands policy prior to announcing 
the policy to the public on December 23, 2010. a. Why did the 
Department fail to consult Congress on the Wild Lands policy? b. How 
does the Department's failure to consult Congress reflect the values of 
collaboration, consensus building, and transparency?
    Answer. Under the Secretarial Order no. 3310, no Federal land was 
to be designated as `Wild Lands' until and unless there was ample 
opportunity for comment from Congress, from state and local government 
officials, and from interested citizens. The Secretarial Order restored 
the traditional multi-use approach to managing Federal lands as 
provided in Federal law.
    The manuals developed by BLM to implement Secretarial Order 3310 
described a process that would have included full public involvement in 
the land use planning process before a Wild Land could be designated in 
any plan decision.
    Collaboration, consensus building, and transparency would have been 
important tools in implementing the Wild Lands Policy, and I continue 
to believe they are of great value in land use management decisions. It 
is my commitment to continue putting these tools to good use if I am 
confirmed.
    Question 6. Did the Department consult any individuals or entities 
outside the Federal government when developing and implementing the 
Wild Lands policy? If so, please list all the individuals and entities 
the Department consulted. Please include as part of the record all 
documents, including but not limited to calendars, notes, and 
electronic correspondence, related to the Department's consultations 
with these individuals and entities.
    Answer. The Wild Lands policy was developed as a result of internal 
conversations within the Department of the Interior and the Bureau of 
Land Management. Because the development and issuance of Secretarial 
Order 3310 were internal policy decisions, there was neither a formal 
process for soliciting input outside the Department nor any formal 
consultations with outside groups. Views on how the Department should 
manage its lands, whether for wilderness characteristics, energy 
development, or some other use, are regularly received by the 
Department from constituents and stakeholders.
    Question 7. Did the Department consult any individuals or entities 
outside the Federal government when developing and implementing the so-
called onshore oil and gas leasing reforms? If so, please list all the 
individuals and entities that the Department consulted. Please include 
as part of the record all documents, including but not limited to 
calendars, notes, and electronic correspondence, related to the 
Department's consultations with these individuals and entities.
    Answer. The onshore leasing reforms were developed as the result of 
internal conversations within the Department of the Interior and the 
BLM. There was neither a formal process for soliciting input outside 
the Department nor any formal consultations with outside groups. Views 
on how the Department should manage its lands are regularly received by 
the Department from constituents and stakeholders.
    Question 8. You have written extensively on the U.S. Supreme 
Court's decision in Kelo v. City of New London. In that case, the Court 
upheld New London's use of eminent domain to condemn the home of Ms. 
Kelo for the purposes of giving her land to a much larger and richer 
private party. You have written that there were ``colossal 
overreactions in the media and legislatures across the country'' to the 
Court's decision, and that ``there is primarily only anecdotal evidence 
of abuses of the power of eminent domain.'' a. Do you still believe 
there is only anecdotal evidence of abuses of the power of eminent 
domain? If so, why and if not, why not? b. You have a very narrow view 
on the rights of home owners. What are your views on the rights of 
leaseholders and permitees who use our public lands?
    Answer. Other than as described in my article, I am unaware of any 
studies or analyses regarding the use of the power of eminent domain. 
The rights of leaseholders and permittees who use our public lands are 
prescribed by laws, regulations, and the terms of the applicable 
instruments conveying those rights. Should I be confirmed, I will 
remain committed to recognizing those rights.
    Question 9. You have criticized ``conservative and libertarian 
members of Congress [for] propagating their ideology of limited 
government.''

          a. Do you believe limited government is an ``ideology'' or 
        one of our nation's bedrock principles?
          b. If you believe there are limits to the Federal 
        government's power, please explain in detail what those limits 
        are?

    Answer. The United States Constitution is the supreme law of the 
nation and establishes the framework for the powers of the Federal 
Government. Should I be confirmed, I will continue to uphold the 
Constitution and comply with the laws of the United States.
    Question 10. The Office of Surface Mining (OSM) is rewriting the 
2008 stream buffer rule. It is my understanding that OSM's 2008 rule 
took about five years to complete. I understand that this process 
involved two proposed rules, approximately 5,000 pages of environmental 
analysis, and took into account about 40,000 public comments.

          a. How much is the rewrite of the 2008 rule costing 
        taxpayers?

    Answer. Since 2009, OSM has spent approximately $7.7 million to 
develop this rulemaking. The majority of the expenditures ($5.2 
million) represent obligations for contract support to develop portions 
of an Environmental Impact Statement (EIS) and the regulatory impact 
analysis. The remaining $2.5 million spent thus far is for staff costs.
    Question 10b. How many coal mining jobs would be impacted if the 
new rule were implemented today?
    Answer. OSM is in the process of developing a proposed Stream 
Protection Rule and the related economic and environmental analyses. 
When OSM publishes a proposed rule, it also will make available the 
Draft EIS, and together those documents will contain a detailed 
economic analysis, including any anticipated impacts on jobs in the 
coal mining industry.
    Question 10c. What steps are you taking to ensure that OSM complies 
with the National Environmental Policy Act and the Administrative 
Procedure Act?
    Answer. OSM published an Advance Notice of Proposed Rulemaking 
(ANPR) and received over 32,000 public comments. OSM conducted nine 
scoping sessions pursuant to the National Environmental Policy Act 
(NEPA), and received over 20,000 comments. OSM will publish its 
Proposed Rule and make available its Draft EIS for public notice and 
comment in accordance with the Administrative Procedure Act (APA), 
NEPA, and other applicable Federal law. Prior to publishing a Final 
Rule and Final EIS, OSM will consider public comments it receives on 
its Proposed Rule and Draft EIS. Any Final Rule and Final EIS will be 
published in accordance with the APA, NEPA, and any other applicable 
Federal law.
    Question 10d. What steps are you taking to ensure that OSM provides 
cooperating state agencies and the public sufficient time to comment on 
the new rule and participate in the rulemaking process?
    Answer. Fourteen state agencies, which are acting as cooperating 
agencies on the OSM's Draft EIS, reviewed and provided extensive 
comments on early working versions of the Draft EIS. OSM has taken 
those comments into consideration as it develops both its Proposed Rule 
and Draft EIS. When OSM publishes its Proposed Rule and makes available 
its Draft EIS in the Federal Register, the states, along with the 
public, will have the opportunity to review and provide comments on 
those documents in accordance with the APA, NEPA, and other applicable 
Federal law.
    Question 11. It is my understanding that OSM is rewriting the 2008 
stream buffer rule to address an issue specific to the Appalachian 
region. However, the rule will affect every coal mine throughout the 
country.

          a. Has OSM provided any documentation or evidence that there 
        is a nationwide problem that requires a new rulemaking?

    Answer. OSM is still in the process of developing a proposed Stream 
Protection Rule. The Proposed Rule and Draft EIS, when published and 
made available for public notice and comment, will provide a full 
explanation of the scope of the Proposed Rule, including reasons for 
the geographic application of various provisions of the Proposed Rule.
    Question 11b. If so, when did OSM provide this documentation and 
will you include it as part of the record?
    Answer. OSM is still in the process of developing its Proposed Rule 
and Draft EIS. When complete, these documents will be published and 
made available to the public, and will detail the basis for provisions 
of the Proposed Rule.
     Responses of Marcilynn A. Burke to Questions From Senator Paul
    [Questions are in reference to the article, Much Ado About Nothing: 
Kelo v. City of New London, Sweet Home v. Babbitt, and Other Tales from 
the Supreme Court, 75 U. CIN. L. REV. 663 (2006) (lead article)]

    Question 1. Do you support the use of eminent domain in acquiring 
blighted property which is then handed over to a private party?
    Question 2. Do you support the use of eminent domain in acquiring 
non-blighted property which is then handed over to a private party?
    Question 3. Are there any cases where blighted property should be 
protected from eminent domain?
    Question 4. Are there any cases where non-blighted property should 
be protected from eminent domain?
    Question 5. Do you believe that state legislatures that re-
evaluated or strengthened their private property laws following the 
Kelo and Sweet Home decisions were acting in an outrageous or 
irrational manner?
    Question 6. Do you believe that transferring private property to 
private developers in order to increase tax revenues is a legitimate 
use of eminent domain?
    Answer. The BLM most commonly acquires property through voluntary 
transactions involving purchase, exchange, or donation. Should I be 
confirmed, I will continue to comply with all applicable laws and 
regulations regarding the acquisition of real property.
    Responses of Marcilynn A. Burke to Questions From Senator Heller
    Question 1. If confirmed, your portfolio would include management 
of much of our nation's oil and gas resources development on public 
lands. As I'm sure you are keenly aware, gas prices have doubled since 
the beginning of this Administration and are causing strain for all 
American families. I believe that alternative sources of energy are our 
future. While we work to develop the technologies, we need to secure 
our economy now by having an energy policy that respects the cause of 
the problem--supply and demand.
    Members of this Committee are well aware that domestic production 
has increased, however it has largely been on non-federal lands. Do you 
believe that we have a responsibility to develop our natural resources 
on public lands for the American public? And, do you believe that would 
help stabilize prices and secure the energy necessary to power our 
economy now while we develop the technologies of the future?
    Answer. I agree that alternative sources of energy are an important 
part of our energy future. If confirmed, my responsibility would be to 
balance the need for development and production of energy resources on 
the public lands with protecting other natural and cultural resources 
and the environment. Producing more oil and natural gas domestically is 
not a solution to high prices, but it will help reduce our reliance on 
foreign oil and our vulnerability to the ups and downs of the 
international market.
    Question 2. In your view, do you think there is anything DOI can do 
to bring down prices at the pump?
    Answer. As the President has stated, our country needs an all-out, 
all-of-the-above strategy that develops every available source of 
American energy--a strategy that's cleaner, cheaper, and fosters new 
jobs, while protecting the environment. He has also made clear that 
there are no quick fixes to fluctuating gas prices, which are subject 
to cyclical spikes due to forces largely outside our control, like 
international demand.
    The Department is working to expand opportunities to develop 
cleaner sources of energy, including renewables like wind, solar, and 
geothermal, as well as coal and natural gas on public lands. 
Facilitating the efficient, responsible development of our oil and gas 
resources is also a necessary component of energy security. Domestic 
oil and gas production remains critical to our nation's energy supply 
and is a part of a broad, ``all-of-the-above'' energy strategy that 
will help reduce our dependence on oil imports.
    Question 3. I mentioned to you when we met last week that there was 
a large energy company that told me they would never build a project on 
federal lands again because of the problems associated with permitting. 
And, as you know, this was distressing to me because 87% of Nevada is 
controlled by the federal government and we heavily rely on access to 
public lands for economic development.
    Job creators need a measure of certainty and there is a lot of 
uncertainty relating to permitting on public lands. What do you think 
DOI should do to incentivize development on public lands and provide 
more certainty to job creators?
    Answer. I recognize that the public lands are important to the 
livelihoods of many who live in the rural West and agree that it is 
important to bring certainty to the permitting process for activities 
on the public lands. One example where we have done this is through oil 
and gas leasing reforms. When Secretary Salazar took office in January 
2009, nearly half of the parcels offered by the BLM for oil and gas 
development were protested, resulting in delays, extra costs, and 
lengthy court battles. The BLM moved to develop and implement leasing 
reforms that have led to a significant reduction in the number of 
protests. These leasing reforms provide certainty for industry by 
reducing conflict, litigation, and protests. Our current 
interdisciplinary approach, which occurs prior to making leasing 
commitments, is bringing greater certainty to stakeholders--including 
industry--and helping ensure that jobs are available. If confirmed, I 
would continue to support making public lands available for energy 
development in a thoughtful and balanced manner.
    Question 4. You and I have discussed previously the difficulties 
associated with permitting mines on public lands. I introduced a bill 
in November to give DOI 45 days to complete the Washington Office 
review of certain NEPA documents with the idea that it will improve 
efficiency in the permitting process without impacting environmental 
analysis. You reported to me that NEPA documents are now making it out 
of the Washington office in 30 days or less. I am gratified that this 
simple action has been prioritized and would like you to please provide 
me with instances where this has occurred.
    Answer. I understand that delays in completing necessary 
environmental reviews may adversely affect mining projects that are 
important to the West's economy. The BLM has improved its processes for 
getting critical mining-related, environmental impact statement notices 
published in a timely manner in the Federal Register. Two success 
stories are the publication in the Federal Register of the notices of 
availability of the draft Environmental Impact Statement prepared for 
General Moly's proposed Mt. Hope molybdenum project in Eureka County 
and Newmont Mining Corporation's Phoenix Copper Leach expansion south 
of Battle Mountain. In the case of the Newmont project, a company 
official acknowledged that process that could have taken up to a year 
was completed in 42 days. Making the review process as timely and 
efficient as possible is not only a worthy goal in and of itself, but 
also directly connected to the economic health of industries that 
operate on BLM-managed lands. If confirmed, I intend to continue moving 
this effort forward--without compromising the environmental review 
process that is needed to protect America's public lands.
    Question 5.. While DOI is working to improve the permitting aspect, 
the President's Budget has proposed a gross royalty on hardrock mining 
on public lands again. This ill-conceived tax will have a devastating 
impact on our domestic mining industry. We discussed this briefly, but 
I want to follow-up with you on it because it is such an important 
issue to Nevada and I'm still not sure what your position is on the 
issue.
    Question 6. Why does the Administration insist on proposing this 
particular type of royalty? How do you think it will impact 
competitiveness for the domestic mining industry? Do you believe that 
domestic mineral development is in our national interest?
    Answer. Domestic mineral development continues to be in our 
national interest, and it is important to provide a fair return to the 
taxpayer from hardrock production on Federal lands. The legislative 
proposal would implement a leasing and royalty system on a discrete 
number of specifically identified minerals, including gold, silver, 
lead, zinc, copper, uranium, and molybdenum that are currently covered 
by the General Mining Law of 1872. This system would help ensure a fair 
return to the public on the development of their resources, with half 
of the receipts distributed to the states in which the leases are 
located and the remaining half deposited in the Treasury.
    Question 7. Because 87% of Nevada is in federal ownership, there 
are many long-standing issues that impact local communities. One that I 
hope you will commit to addressing is the issue of historic mining 
townsites, where Nevadans have bought their land and have been paying 
taxes in some cases for generations, but are considered to be in 
trespass by BLM. These citizens deserve to have this issue resolved. 
There are other outstanding issues that require action from the BLM in 
Nevada--but they cannot be settled without more active participation 
from your agency, and I would like your help. Can I count on your help? 
I am happy to provide you with information on the specific cases in 
Nevada that need attention.
    Answer. Nevada is a state in which the BLM manages a great deal of 
public land for the benefit of Nevadans and all Americans. If confirmed 
I will be happy to discuss these issues with you.
    Question 8. A listing of either the Bi-State or Greater Sage Grouse 
population would have a devastating impact on Nevada and the entire 
West. I'm not sure if you know this, but a lot of the best sage grouse 
habitat in Nevada is on private lands or public lands that are managed. 
This is important because it tells the story of the importance of 
managing for wildfire, grazing, mitigation efforts, and good 
stewardship.
    Any decisions about the sage grouse should be those that are truly 
the best for the species--not decisions driven by politics or threat of 
litigation. What is the BLM doing to account for the needs of 
communities and industries as decisions are made about the sage grouse? 
What more can be done to insure that decisions made about the sage 
grouse will not have a devastating impact on our already fragile 
economy?
    Answer. The BLM is implementing a rigorous and consistent Bureau-
wide sage-grouse strategy that accounts for the most recent science 
pertaining to impacts of various land uses and stressors on sage-grouse 
and their habitat. The aim of these science-based measures is to 
maintain and restore viable populations of greater sage-grouse and 
sagebrush habitat. The BLM is working to develop a strategy that 
protects the health of the public lands, while also facilitating 
multiple uses. By proactively addressing sage grouse conservation 
concerns on public lands, the BLM hopes to maintain the widest possible 
range of options for our neighboring landowners. The BLM is committed 
to working with its partners to protect sage-grouse habitat so as to 
avoid the impacts of listing on both public land managers and private 
landowners. If confirmed, I will strongly support the BLM's efforts to 
carry out its sage-grouse strategy.
                                 ______
                                 
       Responses of Anthony Clark to Questions From Senator Wyden
                              lng exports
    Question 1. Under the Natural Gas Act, DOE approves the exports of 
natural gas, but FERC approves the physical terminals that are needed 
to carry out the exports and any pipelines that are needed to connect 
them to gas supplies. Under the Natural Gas Act, FERC must make a 
finding of public need and necessity for infrastructure certificates. 
LNG export terminals will reduce U.S. supplies of natural gas and 
according to the Energy Information Administration, increase U.S. 
natural gas prices. How will you apply this public interest test to LNG 
export terminals?
    Answer. It is my understanding that the Secretary of Energy 
retained the authority under section 3 of the Natural Gas Act to 
approve or deny applications to import or export natural gas. The 
Secretary delegated to the Commission the authority to approve or deny 
applications for the construction and operation of facilities used for 
the import or export of natural gas. I would expect to examine all 
public interest issues that commenters raise relating to the siting of 
export facilities.
                            lng nepa review
    Question 2. FERC is currently in the process of approving the first 
export terminal conversion for Sabine Pass. FERC staff has concluded 
that it can recommend approval without completing a full environmental 
impact statement. Do you believe that it is appropriate to approve 
construction of multi-billion facilities that will allow the export of 
over 2 billion of cubic feet of natural gas a day, and consume roughly 
10% of that much per day for operations, without a full environmental 
impact statement? Some facilities expected to apply for authority to 
build export facilities, such as Jordan Cove LNG in Oregon, have not 
even begun physical construction while others such as Cove Point have 
been in operation for many years. Do you believe there is a different 
threshold for NEPA review for construction of export facilities at an 
existing facility versus an entirely new facility?
    Answer. The Sabine Pass proceeding is currently before the 
Commission, and Jordan Cove LNG may initiate a new proceeding for 
export facilities later this year. If confirmed, I might be expected to 
rule on those cases. For this reason, it would not be appropriate to me 
to comment on substantive issues that could arise in those cases, 
including the extent of environmental review required under NEPA. As a 
general matter, I understand that under NEPA an agency may prepare an 
environmental assessment on any action in order to assist agency 
planning and decisionmaking, and that it needs to prepare an 
environmental impact statement if it determines that the proposed 
action will have a significant impact on the human environment. In 
addition, I note that I did not have the opportunity to address export 
terminals for LNG in my role as a state regulator in North Dakota. I 
look forward to exploring this important issue, including 
implementation of any direction that Congress may choose to provide.
                               sec. 211a
    Question 3. FERC recently agreed with wind generators that it has 
authority to intervene in the Bonneville Power Administration's 
transmission system rates under Sec. 211A of the Federal Power Act. I 
am concerned about where FERC will draw the line on how it uses its 
authority under 211A of the Federal Power Act to regulate access to 
transmission systems owned by BPA, or the Tennessee Valley Authority, 
or any of the other Federal and consumer-owned utilities. Do you agree 
that this authority should be used on a case-by-case basis to provide 
transmission customers an avenue for relief or do believe that FERC can 
or should use this authority to regulate BPA and other ``non-
jurisdictional'' transmission systems on a day-to-day basis?
    Answer. Given that the Iberdrola Renewables, Inc. v. Bonneville 
Power Administration proceeding is currently before the Commission and, 
if confirmed, I might be expected to rule on the matter, it would not 
be appropriate for me to comment on substantive issues in that case. I 
do note, however, that the Commission's recent order stated its 
expectation that ``the need to use this statutory authority would be 
rare.'' I agree with this general principle.
               transmission cost--allocation and planning
    Question 4. Last year, FERC issued an order--Order 1000--putting in 
place new requirements for regional transmission planning and 
allocation of cost for building new transmission projects. FERC adopted 
a principle of allocated costs that are ``roughly commensurate'' with 
benefits. I am concerned that this could lead to utility customers 
paying for transmission constructions that are not directly tied to 
benefits. How do you interpret ``roughly commensurate'' standard? What 
assurance can you give me that utility customers are going to be 
protected?
    Answer. My experience as a state commissioner has convinced me that 
whatever cost methodology is adopted must be grounded in the sound 
principles of the user or beneficiary pays model. Simply put, those who 
do not use and do not benefit from infrastructure should not be 
expected to pay for it. I believe this standard can fit within a number 
of definitions, including ``roughly commensurate.'' In order to 
accomplish these goals, I believe an acceptable cost allocation 
methodology will need to be developed in a ground-up, not top-down 
manner, and it will need to be dependent on a record that specifically 
attempts to quantify, within reason, why a given methodology meets the 
just and reasonable standard.
                        hydroelectric licensing
    Question 5. There is enormous interest in expanding the use of 
small, low-impact hydroelectric projects in existing irrigation canals, 
city water systems, and other existing water systems. Many of these 
have very little environmental impact and can help pay for system 
upgrades and water saving measures like replacing open canals with 
pipelines. FERC, however, subjects these projects to licensing 
requirements that cost almost as much as the projects would save by 
producing energy. Would you support the creation of a separate process 
for approving low-impact hydro projects in existing water systems?
    Answer. If confirmed, I would be interested in exploring ways in 
which a streamlined process might be made to work in a way that reduces 
unnecessary bureaucracy while protecting statutory and procedural 
rights.
                           storage technology
    Question 6. FERC has recently come out with some very helpful 
rulings that require energy storage technologies to be compensated for 
the services they provide. What is your opinion on the benefit of 
energy storage applications on the interstate power system? Would you 
support including energy storage as an alternative to the construction 
of new transmission lines in regional transmission planning processes?
    Answer. I believe energy storage is not only a potential ``game 
changer'' in the long term, but also has the potential to be 
incrementally helpful as well. Energy storage technologies can be 
helpful in shaping load curves and in interacting with the wholesale 
market in innovative and helpful ways. I believe that energy storage 
can and should be considered as one tool in system planning, respecting 
that each region of the country will need to assess costs and benefits 
given its specific circumstance. It is my understanding that for 
purposes of identifying needed transmission facilities, Order No. 1000 
required that regional transmission planning processes consider 
proposals for non-transmission alternatives, which may include energy 
storage, on a basis comparable to proposals for new transmission 
development.
                             oil pipelines
    Question 7. FERC sets the rates for interstate pipelines that carry 
oil and petroleum products although it does not control the siting or 
location of these pipelines. It's clear to me from the Keystone XL 
pipeline debate that some of these pipelines are going to have 
significant impacts on oil prices in regional markets. TransCanada 
provided testimony that it's shippers were prepared to absorb billions 
of dollars in increased shipping costs on its pipeline in order to earn 
billions more by raising oil prices in the Midwest. To what extent 
should FERC consider the impact of regional price impacts in setting 
pipeline rates?
    Answer. FERC does not regulate the price of oil; it regulates only 
the price of the transportation of oil. Under the provisions of the 
Interstate Commerce Act, FERC ensures that the rates for movements of 
crude oil are just and reasonable and protect shippers by prohibiting 
the exercise of undue preference by pipelines. It is my understanding 
that the Interstate Commerce Act does not allow the Commission to 
consider regional oil price impacts in determining the just and 
reasonable rate for transportation of oil.
       Response of Anthony Clark to Question From Senator Shaheen
    Question 1. I was pleased to see that the National Association of 
Regulatory Utility Commissioners (NARUC), where you served as President 
from 2010-2011, recently filed comments on the FERC's regulatory 
incentives Notice of Inquiry. NARUC's comments indicated that state 
regulators had found that FERC's incentives policies have ``transferred 
hundreds of millions of dollars from consumers to transmission 
investors without any clear showing of need or benefit'' and that those 
policies ``are in dire need of reform.'' Do you agree with NARUC's 
comments? What specific changes, if any, to FERC's incentives policies 
would you advocate for if confirmed to the Commission?
    Answer. Given my position as a nominee for the FERC, I technically 
abstained from that particular NARUC vote, so as not to prejudge any 
future proceeding in which I may be asked to vote. I can report that I 
do believe this is a topic that is worthy of FERC consideration. FERC 
is in the position of needing to be responsive to Congressional intent 
via the Energy Policy Act of 2005, which directed FERC to establish a 
framework for incentive rates. At the same time FERC must ensure that 
the rates are structured so as to not be overly-generous. That is to 
say, incentive rates should not simply add unjust consumer-borne costs 
to lines that would be built in any event. A fact-based record is the 
best way to assess the matter.
     Responses of Anthony Clark to Questions From Senator Murkowski
    Question 1. In your opinion, what is the appropriate standard or 
principle that governs who should be assessed the costs for new 
transmission lines?
    Answer. Whatever cost methodology is adopted must be grounded in 
the sound principles of the user or beneficiary pays model. Simply put, 
those who do not use and do not benefit from infrastructure should not 
be expected to pay for it. In order to accomplish this goal, I believe 
an acceptable cost allocation methodology will need to be developed in 
a ground-up, not top-down manner, and it will need to be dependent on a 
record that specifically attempts to quantify, within reason, why a 
given methodology meets the just and reasonable standard.
    Question 2. As a general matter, do you believe that FERC's Order 
No. 1000 upholds the ``beneficiary pays'' principle that the 
beneficiaries of a transmission project should bear the costs of that 
project?
    Answer. I believe it is too early to tell. The compliance filings 
and how FERC reacts to them will be where that question is definitively 
answered.
    Question 3. How do you view the ``benefits'' portion of FERC's 
Order No. 1000? What kinds of broad social ``benefits'' need to be 
considered when looking at new transmission lines?
    Answer. I believe FERC must be careful to not so broadly define 
``benefits'' so as to eviscerate the principle of user or beneficiary 
pays. It will be important for FERC to respect and understand the 
differences between regions of the country, so that the Order 1000 
planning process is a ``ground-up'' and not ``top-down'' project for 
the purpose of defining benefits. Transmission plans that are developed 
and approved should be supportive of state and regional efforts, not 
determinative of them.
    Question 4. Do you believe it is ever appropriate to allocate the 
costs of transmission infrastructure over an entire interconnection 
area?
    Answer. Without prejudging any particular matter, an 
interconnection-wide allocation seems somewhat unlikely. This would be 
especially true across a very large interconnection, though ERCOT could 
be an example of an exception. I would like to note, however, that FERC 
has no jurisdiction over ERCOT for purposes of cost allocation under 
Order No. 1000. Nonetheless, the decision would be dependent upon a 
fact-based record that attempts to quantify cost causers and 
beneficiaries in a meaningful way.
    Question 5. In your opinion, has the Commission given appropriate 
incentives to promote investments in transmission?
    Answer. I believe this is a topic that is worthy of FERC 
consideration. FERC is in the position of needing to be responsive to 
Congressional intent via the Energy Policy Act of 2005, which directed 
FERC to establish a framework for incentive rates. At the same time 
FERC must ensure that the rates are structured so as to not be overly-
generous. That is to say, that they are not simply adding unjust 
consumer-borne costs to lines that would be built in any event. A fact-
based record is the best way to assess the matter.
    Question 6. Do you believe we are investing enough in transmission? 
Where exactly is new transmission needed and why? Is building long-
distance transmission to access remote renewable resources always a 
better deal for the customer or should states look at local resources 
first?
    Answer. I do not believe there is a one-size-fits-all answer to 
that question. This is why I believe that regional planning can be a 
helpful tool. In my experience in the Midwest, it is rarely the case 
that the answer is all distant generation, or all local generation. We 
have typically found that some mixture of both leads to a least-regrets 
plan that is both cost-effective and diverse. That is why it is so 
important for upfront analyses to be done, so regulators, industry, 
policymakers and other stakeholders have a common set of assumptions 
regarding the costs and benefits of various scenarios. More often than 
not, the answers will be highly regional in nature.
    Question 7. Pursuant to Section 215 of the Federal Power Act (FPA), 
FERC is responsible for assuring the electric grid is operated 
reliably.

          a. Given this responsibility, what can FERC do to educate EPA 
        and stakeholders interested in the Utility MACT implementation 
        process about how utilities, NERC, its regional entities and 
        its Planning Authorities actually plan to assure reliability?

    Answer. I believe FERC can play an important role by using its 
position at the nexus of utilities, NERC, regional entities and 
planning authorities to encourage and develop a fact-based record that 
can help inform the EPA and others with regard to logistical issues 
related to a widespread shutdown or retrofitting of the electric 
generation fleet.
    Question 7b. DOE has emergency authority under the Federal Power 
Act to order electric generation facilities to operate when needed to 
keep the lights on in true emergency situations. At least once in the 
past, a company had to run its plant longer than permitted by its 
environmental permit in order to comply with a DOE emergency order to 
maintain reliability. That company faced a dilemma as to which law to 
follow and which law to break. And it ultimately had to pay millions of 
dollars for violating its environmental permit limitations. As a 
regulator responsible for maintaining the reliability of the grid, 
would you support a clarification to the law that would keep companies 
from facing this ``Hobson's choice'' when the reliability of the grid 
is at stake?
    Answer. I would support such a clarification.
    Question 7c. In your experience, how much time does it take to 
build a transmission line that would be big enough to replace a power 
plant? Do you agree with EPA that this can take place in less than 3 or 
even 4 years?
    Answer. To some degree, the answer depends on where the line would 
be built. Some states and utilities have a speedier track record than 
others, but in my experience, less than four years is not the norm, 
especially for larger projects.
    Question 7d. Can you discuss where you see reliability in light of 
other topics identified as top initiatives on the FERC website (smart 
grid, demand response, integration of renewables and transmission 
planning)?
    Answer. As a state commissioner, reliability has been one of my 
very top concerns. I anticipate that would continue for me if I am 
confirmed for a position on the FERC. The reason I place such an 
emphasis on reliability is because the consequences of a large-scale 
reliability event are an immediate health and human safety concern, not 
simply an economic inconvenience. An extended energy shortage in the 
dead of winter on the northern plains, or at the height of summer in an 
urban area, is an immediate threat to safety, especially for our most 
vulnerable citizens.
                               hydropower
    Question 8a. Do you consider hydropower to be a renewable resource?
    Answer. I do.
    Question 8b. Please state your views on the hydropower resource and 
its contribution and value to the nation's energy mix.
    Answer. I believe hydropower is an important resource for the 
nation. It has traditionally been a reliable source of clean, 
affordable power for the American people.
    Question 8c. What are your thoughts on the issue of reliably 
integrating intermittent renewable resources onto the grid?
    Answer. This will be an area of ongoing work for the FERC and all 
stakeholder groups, especially states, which have a great deal to say 
about generation. Intermittent sources of power such as wind and solar 
can play a role in supplying electricity to the nation. In my home 
state of North Dakota, we have seen nearly 1,400 MW of wind power 
placed into the grid. Yet, without question, intermittency is an issue 
and a challenge that will continue to be dealt with by regulators at 
both the state and federal levels of government.
    Question 8d. What role can both conventional hydropower and pumped 
storage have to play in addressing these problems?
    Answer. I believe both conventional hydro and pumped storage have a 
role to play. I have seen first-hand, as a state commissioner, 
utilities that have successfully ``paired'' intermittent resources with 
dispatchable resources in a way that is reliable and affordable.
                           organized markets
    Question 9a. What is the appropriate path forward with respect to 
organized and bilateral wholesale markets? Can and should they co-exist 
or should all utilities ultimately be in organized markets?
    Answer. As a state commissioner, I have felt strongly that these 
are decisions that must be made from the ground-up, as ``coalitions of 
the willing'' develop. FERC should be supportive of the different 
regions of the country as they work to find solutions that work for 
their consumers, but should be careful to not impose one-size-fits all 
solutions.
    Question 9b. Is FERC's oversight of electricity markets sufficient 
to ensure that the wholesale electric rates meet the ``just and 
reasonable'' standard of the Federal Power Act?
    Answer. It is my understanding that FERC market oversight 
capability has grown greatly in the last several years. I would seek to 
continue to look for ways to ensure that FERC is effective in 
fulfilling its oversight responsibilities.
    Question 9c. Do you believe that the wholesale electricity markets 
operated by regional transmission organizations are achieving net 
benefits for consumers as compared to those regions without RTOs?
    Answer. I am most knowledgeable about the experiences of North 
Dakota's utilities and their customers within MISO, so I can speak from 
that perspective. While there have been some bumps along the way of 
belonging to a market, our general view in North Dakota has been that 
it has been a net positive experience, and the numbers would appear to 
justify that conclusion. How this plays in different regions and with 
different utilities is probably very region and utility specific. It is 
important for FERC, the states and stakeholders to be vigilant in 
ensuring that there continue to be a ``value proposition'' in belonging 
to an RTO.
    Question 9d. Do you think that there is a sufficient level of 
transparency in the pricing and other relevant data from the 
electricity markets, particularly those operated by RTOs?
    Answer. I understand the FERC has done a fair amount of work in 
recent years to increase market monitoring activities. Nonetheless, I 
am always open to considering ways to improve such efforts so as to 
ensure the FERC is appropriately handling its important duties under 
its relevant statutes.
    Question 9e. What is your assessment of the success of pricing 
incentives in the RTO markets, such as Locational Marginal Pricing, to 
spur infrastructure development and address transmission congestion?
    Answer. As a general rule, those regions that have moved to a 
market model have adopted somewhat similar features such as LMP and 
found them to be useful tools in promoting efficient outcomes. There 
have been some successes in promoting infrastructure investment where 
needed because of this. At the same time, there can be other 
intervening factors such as cost allocation uncertainty, siting 
challenges, slower demand growth and changing fuel costs, that have 
slowed transmission development.
    Question 9f. Do you believe RTO-run locational capacity markets are 
providing adequate revenue and certain for new generation while 
avoiding excess payments to existing generation?
    Answer. I believe this is a question that is ripe for further FERC 
analysis. Not all capacity market models are the same, and some have a 
longer track record than others. A fact-based record would help assess 
whether capacity markets have been sending appropriate price signals to 
provide adequate capacity, or whether certain models are flawed.
    Question 10. How does FERC consider priorities for industry and its 
costs in approving the various initiatives it reviews?
    Answer. Not being an incumbent FERC Commissioner, I am unsure how 
FERC internally assesses these priorities.
    Question 11. FERC has many offices and many responsibilities. As 
Commissioner, do you feel reviewing FERC's budget and looking for 
internal efficiencies, reducing duplication, should be a priority? If 
so, what areas would you target?
    Answer. It is my understanding that much of the administrative and 
budgetary duties flow through the Office of the Chairman from a 
structural standpoint. Nonetheless, I would intend to be an 
appropriately engaged Commissioner. Although the FERC is a ``charge-
back'' agency, it is still important that it set a good example of 
prudent fiscal management at all times, but especially during such 
trying financial times as we have now. My standards at a state level 
commission have been to only ask for such resources as are necessary to 
meet the agency's duties effectively and efficiently.
      Responses of Anthony Clark to Questions From Senator Corker
    Question 1. As you may know, last year I introduced S. 400, a bill 
sponsored by 7 other Senators, including Senators Murkowski and Wyden 
of this Committee. Its premise is similar to language in an amendment 
this committee adopted with respect to the 2009 energy bill. Simply 
put, the bill amends the Federal Power Act to state that electric 
consumers cannot be charged for the cost of new transmission facilities 
unless they are ``reasonably proportionate to measurable economic or 
reliability benefits.'' To me, that seems completely consistent with 
the Federal Power Act's existing requirement that electricity rates 
must be ``just and reasonable.'' Do you agree or disagree with the 
language of S. 400, and why?
    Answer. On its face, I generally would find it difficult to 
disagree with the goals of S. 400. I believe ``reasonably 
proportionate,'' not unlike ``roughly commensurate'' could work to 
facilitate sound beneficiary pays principles within the broad just and 
reasonable standard. One word of caution, that I would recommend the 
Senate weigh, is related to what a change in legislative language might 
mean in the courts. I have learned from experience at the state level, 
that seemingly innocuous changes in statutory language can have an 
unintended effect in the courts. I believe it would be an unfortunate 
outcome if a reinterpretation by the courts due to slightly revised 
language were used to inject uncertainty into existing cost allocation 
methodologies that may be working perfectly well for certain regions of 
the country. Legislative changes always incur a litigation risk, one 
that may bring unwanted uncertainty into the marketplace.
    Question 2. Order 1000 has been criticized as going beyond existing 
law, by assuming that transmission ``benefits''--a term not defined 
under the Federal Power Act or in the Order itself--would be broadly 
enjoyed by nearly anyone who theoretically could use a new transmission 
line. Doesn't this vague use of the term ``benefits'' go far beyond 
FERC's existing authority? Shouldn't the agency be asking Congress to 
consider legislation which would provide such authority--as was 
considered in the 2009 energy bill when my amendment was adopted?
    Answer. The critical piece of Order 1000 will be the compliance 
filings and the FERC reaction to those filings. While costs and 
benefits are something regulators look at in nearly every case we 
review, in theory, there always exists a potential for the term 
``benefits''(or costs for that matter) to be construed so broadly by 
regulators as to undermine the intent of the Federal Power Act and/or 
sound regulatory practice. As of today, I am not certain that I would 
say that this potential causes me to conclude that FERC should have, 
necessarily, sought a specific statutory change however.
    Question 3. With many utilities and their customers facing 
increased costs from the need to retrofit power pollutants with costly 
pollution control equipment to comply with a myriad of new EPA 
regulations, do you think it is fair and appropriate to add yet another 
burden in the form of subsidies to build new transmission to import 
distant renewables?
    Answer. As a general matter, I am not supportive of uneconomic 
subsidies for any form of power. However, I think it would be too broad 
a statement to conclude that geographically diverse renewables are 
never a cost effective solution for any state or any region. I believe 
there will likely be somewhat different answers in different regions of 
the country. That is why it is so important that FERC respect those 
regional differences and not impose one-size-fits-all solutions on 
states and regions that are working towards solutions that work best 
for their consumers.
     Responses of Anthony Clark to Questions From Senator Cantwell
       ferc jurisdiction over the bonneville power administration
    Question 1. The Federal Energy Regulatory Commission recently 
issued an order under Section 211A of the 2005 Energy Bill asserting 
that actions by the Bonneville Power Administration (BPA) were 
discriminatory in its dealing with over-generation of wind during 
periods of light electric demand. I realize that this issue is still 
pending for rehearing and you are therefore limited in what you can 
say. I do want to emphasize, however, that the scope of FERC's decision 
is a potentially troubling issue. BPA has sought clarification on a 
number of critical issues, and I strongly encourage the Commission to 
carefully consider this matter.

          a. If confirmed, will you respect the authority and 
        jurisdiction that Congress granted and has historically been 
        provided to BPA under the Federal Power Act?
          b. Please provide specific examples of any role, authority, 
        or jurisdiction the FERC has or should have over the decision 
        making of the Bonneville Power Administration.

    Answer. Given that the Iberdrola Renewables, Inc. v. Bonneville 
Power Administration proceeding is currently before the Commission and, 
if confirmed, I might be expected to rule on the matter, it would not 
be appropriate for me to comment on substantive issues in that case. I 
do note, however, that the Commission's recent order stated its 
expectation that ``the need to use this statutory authority would be 
rare.'' I agree with this general principle.
                    section 5 of the natural gas act
    Question 2. Section 206 of the Federal Power Act has refund 
protection for complainants while Section 5 of the Natural Gas Act 
(NGA) does not. Every sitting FERC Commissioner (as well as recently 
departed Commissioner Spitzer) has indicated at various times that 
Section 5 should to be amended to provide natural gas consumers with 
the same refund protection as electric consumers.

          a. Do you agree that natural gas consumers should be afforded 
        retroactive refund protection in cases where a pipeline has 
        been shown to have charged unjust and unreasonable rates?

    Answer. Not having administered the NGA, I have not yet formed a 
definitive opinion on the question. However, in my experience as a 
state regulator, I do know that retroactive refund provisions within 
regulatory practice are a common and acceptable method for ensuring 
customers are not unduly harmed by ``regulatory lag.''
    Question 2b. Can you think of any credible policy justification to 
not undertaking this reform to Section 5 of the Natural Gas Act?
    Answer. I understand the pipeline industry has suggested there is 
something different about its industry with regard to the nature of its 
structure and revenue model. But I do not yet have enough information 
to verify whether this is a valid concern.
     Responses of Anthony Clark to Questions From Senator Landrieu
    Question 1. I was pleased to see that the National Association of 
Regulatory Utility Commissioners (NARUC), where you served as President 
in 2010-2011, recently filed strong comments on the incentives NOI, 
stating that state regulators had concluded that FERC's incentives 
policies have ``transferred hundreds of millions of dollars from 
consumers to transmission investors without any clear showing of need 
or benefit'' and that those policies ``are in dire need of reform.'' Do 
you personally agree with the NARUC comments? What specific changes to 
FERC's incentives policies would you advocate if confirmed for a 
Commission seat?
    Answer. Given my position as a nominee for the FERC, I technically 
abstained from that particular NARUC vote, so as not to prejudge any 
future proceeding in which I may be asked to vote. I can report that I 
do believe this is a topic that is worthy of FERC consideration. FERC 
is in the position of needing to be responsive to Congressional intent 
via the Energy Policy Act of 2005, which directed FERC to establish a 
framework for incentive rates. At the same time FERC must ensure that 
the rates are structured so as to not be overly-generous. That is to 
say, incentive rates should not simply add unjust consumer-borne costs 
to lines that would be built in any event. A fact-based record is the 
best way to assess the matter.
            transmission planning for load-serving entities
    Question 2. Section 217 (b) (4) of the Federal Power Act directs 
FERC to exercise its authority to facilitate the planning and expansion 
of the transmission grid to meet the reasonable needs of Load Serving 
Entities, so that utilities with an obligation to serve will be able to 
secure transmission rights needed to match their long term investments 
in power supply. What is FERC doing or planning to do to ensure that 
Congress' directive with regard to transmission planning is met?
    Answer. In 2007, FERC established requirements for open and 
transparent planning processes for electric transmission facilities. 
Last year, FERC issued Order 1000, which adopts additional reforms to 
improve transmission planning. FERC stated that those transmission 
planning reforms are consistent with section 217 of the Federal Power 
Act because they support the development of needed transmission 
facilities, which ultimately benefits load-serving entities. If 
confirmed as a FERC commissioner, I will work to ensure that Congress' 
directive with regard to transmission planning is met.
                                 ______
                                 
      Responses of John R. Norris to Questions From Senator Wyden
                              lng exports
    Question 1. Under the Natural Gas Act, DOE approves the exports of 
natural gas, but FERC approves the physical terminals that are needed 
to carry out the exports and any pipelines that are needed to connect 
them to gas supplies. Under the Natural Gas Act, FERC must make a 
finding of public need and necessity for infrastructure certificates. 
LNG export terminals will reduce U.S. supplies of natural gas and 
according to the Energy Information Administration, increase U.S. 
natural gas prices. How will you apply this public interest test to LNG 
export terminals?
    Answer. As your question notes, DOE and FERC share responsibility 
under section 3 of the Natural Gas Act to consider proposals to import 
or export natural gas, and proposed facilities for such import or 
export. The Natural Gas Act deems that LNG exports to free trade 
agreement countries are in the public interest. With regard to LNG 
exports to non-free trade agreement countries, the Natural Gas Act 
requires a determination that the export will not be consistent with 
the public interest in order to reject such a proposal. As I testified 
at hearing, if confirmed, I would expect to consider all public 
interest issues brought before me in light of this statutory structure 
and the particular facts and circumstances of an individual LNG export 
terminal application.
                            lng nepa review
    Question 2. FERC is currently in the process of approving the first 
export terminal conversion for Sabine Pass. FERC staff has concluded 
that it can recommend approval without completing a full environmental 
impact statement. Do you believe that it is appropriate to approve 
construction of multi-billion facilities that will allow the export of 
over 2 billion of cubic feet of natural gas a day, and consume roughly 
10% of that much per day for operations, without a full environmental 
impact statement? Some facilities expected to apply for authority to 
build export facilities, such as Jordan Cove LNG in Oregon, have not 
even begun physical construction while others such as Cove Point have 
been in operation for many years. Do you believe there is a different 
threshold for NEPA review for construction of export facilities at an 
existing facility versus an entirely new facility?
    Answer. Given that the Sabine Pass matter is currently before the 
Commission, and Jordan Cove LNG may start a proceeding on this point 
soon, I cannot prejudge how I might decide these cases. Generally, an 
agency must do an environmental impact statement if a proposed action 
will have a significant impact on the human environment. If confirmed, 
I will fairly consider all relevant views and comments submitted in 
these cases, recognizing the possible concerns of local citizens, and 
other issues within the scope of the responsibility defined by 
Congress.
                               sec. 211a
    Question 3. FERC recently agreed with wind generators that it has 
authority to intervene in the Bonneville Power Administration's 
transmission system rates under Sec. 211A of the Federal Power Act. I 
am concerned about where FERC will draw the line on how it uses its 
authority under 211A of the Federal Power Act to regulate access to 
transmission systems owned by BPA, or the Tennessee Valley Authority, 
or any of the other Federal and consumer-owned utilities. Do you agree 
that this authority should be used on a case-by-case basis to provide 
transmission customers an avenue for relief or do believe that FERC can 
or should use this authority to regulate BPA and other ``non-
jurisdictional'' transmission systems on a day-to-day basis?
    Answer. Federal Power Act section 211A is a tool that Congress gave 
FERC to protect open access to transmission service. However, I believe 
it is a tool that should be utilized only in rare instances. As a 
result, I agree that this authority should be used on a case-by-case 
basis when specific issues arise regarding open access to transmission, 
and should not be used to regulate non-public utilities on a day-to-day 
basis.
               transmission cost-allocation and planning
    Question 4. Last year, FERC issued an order--Order 1000--putting in 
place new requirements for regional transmission planning and 
allocation of cost for building new transmission projects. FERC adopted 
a principle of allocated costs that are ``roughly commensurate'' with 
benefits. I am concerned that this could lead to utility customers 
paying for transmission constructions that are not directly tied to 
benefits. How do you interpret ``roughly commensurate'' standard? What 
assurance can you give me that utility customers are going to be 
protected?
    Answer. Order No. 1000 states clearly that those who do not benefit 
from transmission facilities are not required to pay for them. The 
order also includes the related principle that the cost of new 
transmission facilities meeting certain criteria must be allocated to 
those within a transmission planning region that benefit from those 
facilities in a manner that is at least ``roughly commensurate'' with 
estimated benefits. This principle draws on language used by the U.S. 
Court of Appeals for the Seventh Circuit in addressing FERC orders on 
cost allocation for transmission facilities. It is important to also 
note that Order No. 1000 requires open, transparent planning processes 
where all stakeholders are given a chance to participate, so that 
stakeholders can decide how best to meet their transmission needs and 
how best to pay for them.
                        hydroelectric licensing
    Question 5. There is enormous interest in expanding the use of 
small, low-impact hydroelectric projects in existing irrigation canals, 
city water systems, and other existing water systems. Many of these 
have very little environmental impact and can help pay for system 
upgrades and water saving measures like replacing open canals with 
pipelines. FERC, however, subjects these projects to licensing 
requirements that cost almost as much as the projects would save by 
producing energy. Would you support the creation of a separate process 
for approving low-impact hydro projects in existing water systems?
    Answer. I am in favor of anything that can be done to promote the 
speedy approval of low-impact hydro projects, consistent with statutory 
mandates. For example, over the past two years, Commission staff worked 
with Colorado regulators to obtain state ``pre-approval'' of projects, 
so that the Commission could act on applications within a month or two. 
I note that many of the requirements imposed on licensees are 
statutory, and often under the control of other agencies, so that the 
Commission cannot control them.
                           storage technology
    Question 6. FERC has recently come out with some very helpful 
rulings that require energy storage technologies to be compensated for 
the services they provide. What is your opinion on the benefit of 
energy storage applications on the interstate power system? Would you 
support including energy storage as an alternative to the construction 
of new transmission lines in regional transmission planning processes?
    Answer. I strongly believe that storage technologies hold great 
promise to help our nation reliably and cost-effectively address many 
of the challenges facing our interstate power system. Given the 
enormous potential benefits of storage technologies, the Commission 
should strive to ensure that our regulatory policies foster, rather 
than inhibit, their growth. I have supported, and will continue to 
support, policies that ensure that alternatives like storage are 
equally considered in regional transmission planning processes.
                             oil pipelines
    Question 7. FERC sets the rates for interstate pipelines that carry 
oil and petroleum products although it does not control the siting or 
location of these pipelines. It's clear to me from the Keystone XL 
pipeline debate that some of these pipelines are going to have 
significant impacts on oil prices in regional markets. TransCanada 
provided testimony that it's shippers were prepared to absorb billions 
of dollars in increased shipping costs on its pipeline in order to earn 
billions more by raising oil prices in the Midwest. To what extent 
should FERC consider the impact of regional price impacts in setting 
pipeline rates?
    Answer. The Interstate Commerce Act does not provide the Commission 
with jurisdiction over the price of oil itself. The Commission is only 
authorized to ensure just and reasonable rates for the transportation 
of oil. The Commission does this by prohibiting the exercise of undue 
preference by oil pipelines. In performing this analysis, the 
Commission does not consider how pipeline rates may affect the cost of 
oil as a commodity because we do not have the legal authority to do so.
      Response of John R. Norris to Question From Senator Shaheen
    Question 1. I have concerns about FERC's implementation of Order 
679, which guides the Commission's decision making process on deciding 
whether to grant regulatory incentives for the construction of 
electricity transmission infrastructure. While I believe that 
appropriate investment in these facilities plays a vital role in our 
nation's energy future, I think that the current bonus rate incentives 
policy has resulted in consumers, especially those in New Hampshire, 
paying more than what is necessary to get transmission built.
    That is why I led a letter to (FERC) Chairman Jon Wellinghoff, 
signed by 10 of my Senate colleagues, in response to the Commission's 
Notice of Inquiry (NOI) seeking comments on Rule 679, urging FERC to 
consider a more objective approach to awarding transmission rate 
incentives. For example, FERC should make a specific finding of the 
necessary risk that must be undertaken before a project receives an 
incentive.
    Where is FERC in terms of reviewing the comments it received and 
what can we expect to see from the Commission in terms of possible 
changes to its incentives policy?
    Answer. The Commission has received more than 1500 pages of 
comprehensive and helpful comments with respect to our Notice of 
Inquiry on incentives. We are currently reviewing those comments and I 
am hopeful that we will move to the next step in this process soon. I 
believe that it is crucial that the Commission enumerate a clear policy 
that appropriately balances the Congressional mandate to provide 
incentive rate treatments for the construction of needed transmission 
projects with the interests of consumers who will pay for those 
projects.
    Responses of John R. Norris to Questions From Senator Murkowski
    Question 1. Basis for your opinion regarding the potential impact 
of EPA's rules on electric reliability: At the Commission's Technical 
Conference held on November 30, 2011, you said you were ``sufficiently 
satisfied'' that ``the reliability of the electric grid can be 
adequately maintained as compliance with EPA regulations is achieved.'' 
At the Committee's hearing on March 20, 2012, you reaffirmed that you 
continue to maintain that opinion in the light of evidence received 
since then which includes, for example, testimony at the technical 
conference, filings made in response to the Commission's notice of that 
conference, assessments done by NERC and planning authorities, and the 
scope and scale of announcements of generation retirements to date.

          a. Please state all of the facts that form the basis for your 
        opinion.
          b. For purposes of your statement quoted above, do you define 
        ``EPA regulations'' to include the Mercury and Air Toxics 
        (``MATS'') Rule, and the other regulations outlined in Senator 
        Murkowski's letter to you of May 17, 2011?
          c. If not, what rules would you add to or omit from ``EPA 
        regulations'' in this context? How did you define the term 
        ``EPA Regulations'' in the context of your answer at the 
        hearing on March 20, 2012?
          d. For purposes of your statement quoted above and your 
        opinion as stated, how do you define ``the reliability of the 
        electric grid''?
          e. For purposes of the same statement, how do you define 
        ``adequately maintained''?

    Answer. I believe a reliable electric grid is extremely important 
to our economy and to the health and safety of our citizens, and I take 
very seriously my responsibility to oversee and protect the reliability 
of our electric grid. Industry also takes reliability extremely 
seriously, and has a remarkable track record of maintaining high levels 
of reliability while responding to new environmental regulations.
    My statements that I am ``sufficiently satisfied'' that ``the 
reliability of the electric grid can be adequately maintained as 
compliance with EPA regulations is achieved'' should be understood in 
the broader context of the competing variables that can impact 
reliability. As I noted in my testimony to the House Energy and 
Commerce Committee last year, in reliability, like many other elements 
of our electric power system, there is an intersection of physics, 
economics, policy, law, and other factors. These factors are constantly 
changing and evolving, and for that reason, I do not believe that 
lawmakers, regulators or industry can ever claim 100 percent 
satisfaction that the reliability of the electric grid will never be 
impacted as those factors change and evolve. I strive to balance all of 
these factors, as they are understood at the time, when I make 
decisions on reliability matters before me. But we cannot guarantee 
future outcomes, so the key is having the appropriate tools available 
so we are prepared to deal with the myriad of situations that might 
occur.
    My views in this area are shaped by my review of the numerous 
studies and reports that have been produced analyzing the potential 
impact of EPA rules on generation retirements, the testimony produced 
at our November 30, 2011 Technical Conference, and numerous 
discussions, conferences and meetings that I have attended with a wide 
variety of stakeholders. In response to your question 2, I have 
provided a number of studies, reports, and other documents that I found 
especially valuable as I have considered these issues. These materials 
present a large amount of data and a multitude of factors that go into 
analyzing the impact to reliability of environmental regulations, and 
it would be impractical to identify a comprehensive set of facts 
supporting my views. Rather, I have formed my views based on a review 
of the totality of the evidence and factors presented to me, as applied 
to the broader context of reliability that I describe above.
    However, I would note a few key factors that I find particularly 
relevant to my views:

   Multiple entities have prepared analytical studies on the 
        impact of EPA rules throughout the rulemaking process, and 
        these studies have used a wide range of assumptions and 
        produced a wide range of outcomes.
   A number of the early studies used assumptions of what would 
        be in proposed or final EPA rules that later proved inaccurate, 
        resulting in an overstatement of the level of projected plant 
        retirements. One example of this is the assumptions that were 
        used as to what EPA would include in its proposed Clean Water 
        Act Section 316(b) Rule; EPA's actual proposal includes 
        implementation options that differ substantially from those 
        assumed in the 2010 NERC EPA Assessment.
   Moreover, many of the studies and reports use static 
        assumptions that fail to take into account the response to the 
        EPA regulations that we can expect from competitive wholesale 
        markets. FERC oversees these markets to ensure that they are 
        designed to respond to factors like new environmental 
        regulations and provide appropriate price signals for 
        investment in new resources when needed.
   A significant cross-section of over 30 utility companies 
        have made statements in the last six months indicating 
        confidence that those companies would meet the EPA regulations 
        within the proposed compliance timeline.
   From 2000 to 2003, electric companies added over 200 GW of 
        new capacity. This large-scale addition of capacity in four 
        years is more than any of the analytical studies suggest may be 
        needed in the 2011 to 2017 time period to replace capacity that 
        could retire as a result of EPA rules.
   By 2018, NERC projects energy efficiency programs will 
        reduce summer peak demands by nearly 20,000 MW. Moreover, 
        demand response programs have expanded significantly at the 
        retail and wholesale levels; FERC staff recently reported that 
        demand response participation in RTO/ISO markets alone 
        increased more than 16 percent between 2009 and 2010. Demand 
        response and energy efficiency resources can be targeted to 
        address specific localized reliability issues if needed. In 
        regions where demand response is not widely utilized, one would 
        expect that such resources will have significant value in 
        responding to new environmental regulations.
   PJM states in its August 2011 report that ``resource 
        adequacy does not currently appear at risk in spite of 
        projected retirements.'' This statement is indicative of the 
        opinions in many of the analytical studies that I have 
        reviewed.
   The EPA has included a process of addressing unit specific 
        reliability concerns through the use of CAA section 113(a) 
        administrative orders.
   There remains the Presidential authority to grant further 
        extensions where a threat to reliability continues to exist 
        after all other actions and precautions are exhausted.

    I define ``EPA regulations'' as including the Mercury and Air 
Toxics Rule (MATS), the Cross-State Air Pollution Rule (CSAPR), the 
Coal Combustion Residuals Rule, and the Clean Water Act Section 316(b) 
Rule. These are the rules that, to date, most analysts have focused on 
as having the potential to have the most impact on the electric sector, 
and are the rules included in the analytical studies that have been 
conducted for purposes of reviewing the reliability impact of pending 
EPA Rules. I would add that, because there is more certainty with 
respect to the MATS and CASPR Rules, I have focused more of my 
attention with respect to those rules when reviewing reports and 
analysis. However, as new EPA rules are proposed, I intend to monitor 
the impact they may have as well.
    I would note that NERC and the industry are currently working to 
better define terms such as ``adequate level of reliability'' through 
their stakeholder processes. Without prejudging those efforts, which I 
hope will arrive at more certain definitions, I define ``the 
reliability of the electric grid'' to mean that the availability of 
electricity on demand is maintained at a level that a reasonable person 
would expect. I define ``adequately maintained'' to mean that the 
availability of electricity is maintained consistent with historical 
performance, and/or at a level that meets a reasonable person's 
expectations.
    Question 2. Evidence related to potential impacts of EPA's rules on 
electric reliability: Please list all documents that you read at any 
time prior to the Committee's hearing on March 20, 2012 that contain 
evidence of the potential impact of the EPA's pending or recently-
issued regulations affecting power plants or upon which relied for the 
purpose of forming your opinion concerning the potential impact of EPA 
regulations on reliability. (For purposes of this and following 
questions, please include among such regulations, the MATS Rule and the 
other regulations listed in Senator Murkowski's letter to you of May 
17, 2011.)

          a. Please list especially studies or reports prepared by the 
        North American Electric Reliability Corporation (NERC), 
        regional reliability entities, planning authorities or regional 
        transmission organizations that you read on or before March 20, 
        2012.
          b. Please provide and highlight any such document, and 
        especially any report or analysis prepared by any entity 
        referenced above, and any specific portion of any such document 
        that serves as a basis for your opinion that ``the reliability 
        of the electric grid can be adequately maintained as compliance 
        with EPA regulations is achieved.''

    Answer. As I note in response to your question 1, numerous studies, 
reports, and other documents have been prepared assessing the potential 
impact of EPA regulations on the electric sector and grid reliability. 
Below, I list a number that I have found valuable and probative as to 
the reliability issues raised in your questions, and that have helped 
form the basis of my views in this area. As you requested, I have 
provided some highlights to many of these documents, but I must stress 
that the documents need to be viewed in their totality. Given the 
extensive nature of the materials available, however, this list is not 
exhaustive.

   NERC 2010 Special Reliability Scenario Assessment: Resource 
        Adequacy Impacts of Potential US Environmental Regulations, 
        October 2010
   NERC 2011 Long-Term Reliability Assessment, November 2011
   Potential Retirement of Coal Fired Generation and its Effect 
        on System Reliability (Preliminary Results), FERC OER Division 
        of Bulk Power System Analysis. October 2010. Graphs Pg. 24-25
   November 2011 Update: Ensuring a Clean, Modern Electric 
        Generating Fleet while Maintaining Electric System Reliability, 
        M.J. Bradley & Associates LLC, November 2011. Appendix A
   Overview of U.S. Environmental Protection Agency Rules for 
        the Electric Power Sector, Environmental Protection Agency, 
        February 2011
   Coal Capacity at Risk for Retirement in PJM: Potential 
        Impacts of the Finalized EPA Cross State Air Pollution Rule and 
        Propose National Emissions Standards for Hazardous Air 
        Pollutants, PJM, August 26, 2011. Executive Summary, pg. 33
   EPA Impact Analysis: Impacts from the EPA Regulations on 
        MISO, MISO, August 2011. Pg. 3, Pg. 6
   Correspondence between Luminant, EPA, & Southwest Power Pool

    --Luminant Announces Facility Closures, Job Reductions in Response 
            to EPA Rule, Luminant Media, September 12, 2011
          Letter from Bob Perciasepe, EPA Deputy Administrator, to 
        David Campbell, CEO, Luminant, September 11, 2011
    --Letter from Southwest Power Pool CEO & Trustees to Administrator 
            Lisa Jackson, EPA, September 28, 2011

   Testimony of H.B. Doggett, Electric Reliability Council of 
        Texas, Inc. before the House Committee on Energy and Commerce, 
        Subcommittee on Energy and Power, United States House of 
        Representatives, September 14, 2011
   The Clean Air Act's ``Exemption Authority'' is the 
        Appropriate Tool for Allowing More Than Four Years for Utility 
        MACT Compliance, EEI Briefing Paper, October 20, 2011
   Letter & Testimony from Gerry Cauley, President and CEO of 
        North American Electric Reliability Corporation, to Chairman 
        Fred Upton and Chairman Ed Whitfield, September 13, 2011. 
        Testimony pg. 8
   Review of the Potential Impacts of Proposed Environmental 
        Regulations on the ERCOT System, ERCOT, June 21, 2011. Pages 9-
        11
   Impacts of the Cross-State Air Pollution Rule on ERCOT Grid 
        Operations, ERCOT Presentation, September 14, 2011
   Petition of Public Service Commission of South Carolina, 
        September 1, 2011
   Reliability Impacts of Climate Change Initiatives: 
        Technology Assessment and Scenario Development, North American 
        Electric Reliability Corporation, July 27, 2010
   Letter from Thomas R. Kuhn, President of Edison Electric 
        Institute, to Assistant Administrator Regina McCarthy, August 
        3, 2011. Pg. 5, 66-Conclusion
   PJM's Comments to EPA Proposed Hazardous Air Pollutant Rule, 
        Craig Glazer, Vice President-Federal Government Policy, PJM, 
        August 4, 2011. Pg. 9
   EPA Ascendant as Congress Stalls Out--Busy Year Ahead, 
        Baird, September 1, 2010. Pg. 13, Pg. 14
   Assessment of Technology Options Available to Achieve 
        Reductions of Hazardous Air Pollutants, URS Corporation, April 
        5, 2011. Executive Summary, Introduction, Conclusion
   US Utilities: Can Texas Comply with the Cross-State Air 
        Pollution Rule? Yes, If Existing Scrubbers are Turned On, 
        Bernstein Research, July 20, 2011. Pg. 2, Pg. 8
   Opening Statement of Regina McCarthy, Assistant 
        Administrator for Air and Radiation U.S. Environmental 
        Protection Agency, Legislative Hearing On H.R. 2250, the EPA 
        Regulatory Relief Act of 2011, and H.R. 2681, the Cement Sector 
        Regulatory Relief Act of 2011, September 8, 2011
   EPA's Enforcement Response Policy for Use of Clean Air Act 
        Section 113(a) Administrative Orders in Relation to Electric 
        Reliability and the Mercury and Air Toxics Standard, EPA 
        Memorandum, December 16, 2011. Pg. 5-7; Section A-D
   Electric Reliability under New EPA Power Plant Regulations: 
        A Field Guide, Susan Tierney, Ph.D. for World Resources 
        Institute, January 18, 2011. Pg. 6, Pg. 8
   Ensuring a Clean, Modern Electric Generating Fleet while 
        Maintaining Electric System Reliability, M.J. Bradley 
        &Associates LLC, August 2010. Pg. 5, Table 2, Pg.7 Fig.3, Pg. 
        8, Table 3
   Ensuring a Clean, Modern Electric Generating Fleet while 
        Maintaining Electric System Reliability, 2011 Summer Update, 
        M.J. Bradley & Associates LLC, June 2011. Pg. 17, Chart
   Testimony of Susan F. Tierney, Ph.D. Hearing on the Impacts 
        of EPA Regulations on Electric System Reliability, September 
        14, 2011. Pg. 19, Table; Pg. 21, Table; Pg. 23
   Environmental Regulations and Electric System Reliability, 
        Bipartisan Policy Center, June 13, 2011. Sec. III; Sec. V
   EPA's Regulation of Coal-Fired Power: Is a ``Train Wreck'' 
        Coming?, James E. McCarthy and Claudia Copeland, Congressional 
        Research Service, August 8, 2011. Summary; Pg.14-17; Pg.28-35; 
        Pg. 39-40
   Testimony from Panel III, FERC Reliability Technical 
        Conference, November 30, 2011.

    --Written Remarks from Mark Lauby, Vice President and Director of 
            Reliability Assessment & Performance Analysis
    --Testimony of Michael J. Kormos, Senior Vice President PJM 
            Interconnection, LLC
    --Statement & Testimony of Carl A. Monroe, Executive Vice President 
            and COO Southwest Power Pool, Inc.
    --Statement by Thomas F. Farrell, II, Chairman and CEO, Dominion. 
            Pg. 1-8
    --Testimony of Kathleen L. Barron, Vice President, Federal 
            Regulatory Affairs and Policy, Exelon Corporation. Pg. 6
    --Statement of Anthony Topazi, Chief Operating Officer, Southern 
            Company

   Testimony from Panel IV, FERC Reliability Technical 
        Conference, November 30, 2011

    --Written Remarks from Gerry Cauley, President and CEO, NERC
    --Testimony of Nicholas K. Akins, President and CEO, American 
            Electric Power
    --Comments of the Midwest Independent Transmission System Operator, 
            Inc.
    --Comments submitted on behalf of the PUCO
    --Statement of Eric D. Baker, President and CEO of Wolverine Power 
            Supply Cooperative. Pg. 3, Sec. I

   Reliability Technical Conference, Docket No. Ad12-1-000, 
        Debra Raggio, Vice President Government and Regulatory Affairs, 
        and Assistant General Counsel, GenOn Energy, Inc. November 29, 
        2011
   Letter from Chairman Donna Nelson, Public Utility Commission 
        of Texas, to EPA Docket Center, August 4, 2011
   Proposed Language to Effectuate RTO's Proposed Reliability 
        Safety Valve for MACT Rule, Email from Craig Glazer, October 
        14, 2011
   Comments of the Electric Reliability Council of Texas, The 
        Midwest Independent Transmission System Operator, The New York 
        Independent System Operator, PJM Interconnection, LLC, and the 
        Southwest Power Pool, August 4, 2011
   Corrected Comments of PJM Interconnection, LLC, Craig 
        Glazer, August 4, 2011
   Testimony of John Hanger before the US House of 
        Representatives Energy and Commerce Committee Subcommittee on 
        Energy and Power, September 14, 2011
   Reliability-Only Dispatch: Protecting Lives & Human Health 
        While Ensuring System Reliability, John Hanger, Clean Air Task 
        Force, Exelon Corporation and Constellation Energy, September 
        29, 2011. Pg. 17
   Revisions to Federal Implementation Plans to Reduce 
        Interstate Transport of Fine Particulate Matter and Ozone, EPA 
        Proposed Rule, October 6, 2011 (Finalized February 21, 2012)
   Commissioner-led Reliability Technical Conference, FERC 
        Transcript, November 30, 2011. Pg.268-270
   Court remands Kemper County approval; On road with CEO, Bank 
        of America Merrill Lynch, March 15, 2012. Pg. 1
   Why Coal Plants Retire: Power Market Fundamentals as of 
        2012, Susan F. Tierney, Ph.D., February 16, 2012. Pg.1-13

    Question 3. Do you believe that the cumulative impact of the EPA 
Regulations on electric reliability has the potential to be quite 
serious? Please provide the facts that support your answer.
    Answer. believe that on any given day our electric grid is 
vulnerable to a serious outage, given the number of variables that go 
into ensuring reliability on a day-to-day and moment-to-moment basis. 
The grid is a machine with many moving parts, some of them decades old. 
Moreover, there are hundreds if not thousands of trained professionals 
making split-second, critical decisions on system operations at any 
given time. Our electric grid is vulnerable to extreme weather, cyber 
attack, physical attack, human error, and mechanical failure, to name 
just a few variables. A failure in any of these factors could lead to a 
serious problem if not appropriately managed. For this reason, 
maintaining reliability is in large part an exercise in planning to 
ensure that failures or unexpected contingencies can be managed with 
minimal impact on the end user.
    If the EPA regulations were to be implemented overnight without 
time to plan system adjustments for them, and without any tools to 
address the impacts of those regulations, the result could be quite 
serious. However, that is not the case. Generally, the EPA regulations 
are to be phased in over time, with the possibility to obtain 
extensions if warranted. There are plans to be developed, 
infrastructure projects to be built, and tools available to make 
adjustments to deal with reliability vulnerabilities that surface. I 
believe the cumulative impact of the EPA regulations can be managed 
collaboratively by industry and policymakers to avoid serious 
reliability risk. I expect adjustments or changes will have to be made 
as more information and further analysis is available. That is why I 
have been supportive of the development of additional tools, like the 
safety value proposal from the RTOs (EPA responded to this request with 
the Administrative Order process issued with the MATS Rule), should 
they be needed. To the extent additional tools within FERC's 
jurisdiction prove to be necessary, I will advocate that we provide 
them. In addition, should Congress wish to develop additional tools, 
such as the safety valve legislation proposal you have described, if 
confirmed, I would be happy to assist by providing my feedback.
    In short, I believe there could be serious reliability concerns if 
the EPA regulations were not being taken seriously. However, I believe 
that these regulations are being taken seriously by all involved. I 
have heard EPA Assistant Administrator McCarthy say on multiple 
occasions that she and the EPA take reliability very seriously. I know 
you take it seriously. I also know that FERC, NERC, states, industry, 
and the many other entities involved in maintaining reliability take it 
seriously. For that reason, I believe the EPA regulations can be 
successfully implemented over the next several years without 
jeopardizing reliability.
    Question 4. Do you believe that NERC's analysis of the potential 
impact of EPA's rules is flawed or its concerns are overstated?

          a. If so, why?
          b. In your view, are or were any of the NERC or RTO 
        assessments that you have reviewed among the ``doomsday 
        predictions'' that you referenced during the March 20 hearing? 
        (See Archived Webcast at 91:30 -94:45)
          c. Do you accord a study or studies by the Bipartisan Policy 
        Center of the impact of EPA regulations on electric reliability 
        more, less or the same weight as the NERC 2010 and 2011 
        Reliability Assessments as each relates to the pending EPA 
        regulations?
          d. Should such a study or studies by the Bipartisan Policy 
        Center be given more, less or the same weight as such an 
        assessment by the Midwest Independent Transmission System 
        Operator (Midwest ISO), the Southwest Power Pool or any other 
        FERC-approved Regional Transmission Organization?
          e. What weight should be accorded to the Bipartisan Policy 
        Center's assessment of the impact of EPA rules on electric 
        reliability?
          f. What weight should be accorded to reviews by the 
        Congressional Research Service (CRS) of studies related to the 
        potential impact of EPA regulations on electric reliability?
          g. Should more, less or the same weight be given to the work 
        of the Congressional Research Service with respect to the 
        potential impact of EPA regulations on the reliability of 
        electric service than to the referenced NERC or RTO 
        assessments?
          h. Mr. Mark Lauby, NERC's Vice President and Director of 
        Reliability Assessment, testified at the Commission's technical 
        conference on November 30 that ``Reserve Margins are not the 
        complete landscape. . . . Policy that changes normal operations 
        must be understood to appreciate overall reliability effects. 
        More importantly, based on input from NERC's regional entities, 
        NERC is concerned about the risk to reliability from 
        retrofitting by 2015, environmental controls in over 500 units, 
        representing over 250 gigawatts of capacity driven by the 
        utility air toxics rule.'' (Transcript at 173).

                  i. What facts enable you to maintain your opinion in 
                the face of Mr. Lauby's testimony?
                  ii. What ``sufficient tools are in place'' to address 
                the risk to reliability identified by Mr. Lauby?
                  iii. And which of those tools, specifically, would 
                reduce the risk of ``retrofitting by 2015 environmental 
                controls in 500 units representing 250 gigawatts of 
                capacity?'' or of unit retirements of the magnitude 
                that appear to be emerging.
                  iv. As to each such tool, how would that tool reduce 
                the risk?

          i. You appeared to observe at the hearing on March 20 that 
        EPA underestimated the retirements of electric generating units 
        attributable to just one of its rules, the MATS rule. (See 
        Archived Webcast 91:30-94:45.)

                  i. In light of announcements of unit retirements 
                attributed to the MATS rule, what role going forward--
                with respect to that rule or any currently pending or 
                future EPA rule--do you see for the Commission and 
                entities subject to its regulation and oversight for 
                influencing EPA's regulations or improving EPA's 
                analysis of potential impacts of its regulation?
                  ii. What are you doing or will you do to see that EPA 
                takes into account the Commission's views or the 
                expertise of those entities subject to its regulation 
                or oversight, e.g., the ERO, regional reliability 
                organizations, planning authorities or RTOs?

    Answer. As a general matter, analyses of the impact of the EPA 
regulations on electric reliability require numerous assumptions, and 
as those assumptions change so do the results. For this reason, I do 
not view any NERC or RTO assessment as flawed, overstated, or a 
``doomsday prediction,'' nor do I give any particular study or report 
greater or lesser weight. While I have paid particular attention to the 
NERC and RTO assessments given the important roles these entities have 
in reliability planning, each of the reports and studies that have been 
released provide important data points to consider as we continue to 
monitor and assess the impact of the EPA regulations on the grid.
    Mr. Lauby's testimony at the November 30, 2011 Technical Conference 
highlighted the important issue of coordinating maintenance outages for 
generating units that choose to install new environmental controls to 
comply with EPA regulations. In further discussion on this issue at the 
technical conference, I questioned panelists representing RTOs on the 
current process for coordinating maintenance outages, and whether that 
process is sufficient. They each represented that they currently have 
the tools they need to sequence outages, provided that they have 
adequate information from generator owners and operators and additional 
time to address any particular units for which maintenance cannot be 
scheduled within the compliance timeframe. With regard to the possible 
need for additional time for particular units to schedule outages for 
retrofit, panelists pointed to a ``safety valve'' as an appropriate 
mechanism to provide that extra time. (See Transcript at 268-270) As I 
note in response to your question 3, EPA has provided a form of the RTO 
safety valve proposal through the Administrative Order process included 
with the MATS Rule. However, as I state in response to your question 
22, an additional statutory safety valve tool such as the one you 
describe could be valuable, and I would be happy to work with you and 
your staff as you develop legislation.
    Going forward, I believe the Commission can be a resource to EPA 
and other stakeholders by providing our reliability expertise to their 
ongoing efforts to assess the reliability impacts of new environmental 
regulations. If confirmed, I would expect to closely monitor these 
efforts and the Commission's interactions with EPA, and to advocate for 
enhanced dialogue and communication. In addition, the Commission should 
continually assess whether the tools for achieving compliance with 
these regulations that are under our jurisdiction--such as the 
transmission planning processes and the competitive wholesale markets--
are sufficiently robust and flexible. To the extent changes or reforms 
are needed to ensure that these tools are adequate, the Commission can 
and should respond quickly.
    Question 5. During the hearing on March 20, you acknowledged that 
EPA regulations will have an impact on reliability and that there will 
be a ``localized concern'' (See Archived Webcast at 91:30--94:30).

          a. Do you see these impacts as potentially serious?
          b. To your knowledge, is there a formal definition of such a 
        ``localized effect''?
          c. And, if not, how do you define such an effect?
          d. Would a ``localized effect'' include the loss of service 
        to the downtown area of a major city?
          e. Have you seen instances where a ``localized effect'' on 
        the electric grid spreads rapidly to a broader area?
          f. In your judgment, how would the ``tools in place'' reduce 
        the risk of a localized effect? Please be specific.
          g. As you see it, would additional risks to electric 
        reliability, such as loss of units necessary for grid support 
        services such as ``black start'' or ``voltage support'' be 
        acceptable if the loss of those units were a consequence of 
        timely compliance with EPA rules?

    Answer. With respect to whether localized impacts of EPA 
regulations could be potentially serious, please reference my response 
to question 3. Without time to undertake reliability planning and tools 
to address potential impacts, the result could be serious. However, as 
I state in response to question 3, there is time for planning and 
infrastructure development, tools are available, and additional tools 
can be developed if necessary, to ensure that reliability is maintained 
and that serious impacts can be avoided.
    I am not aware of a ``formal definition'' of the term ``localized 
effect'' as I used it in the March 20th hearing. My use of that term 
was a general reference to a point made in multiple reports and 
comments from entities like NERC (``Local reliability issues resulting 
from individual unit retirements'') and the RTOs (``local reliability 
impacts''). I believe the various usages of ``local'' is a general 
reference to a more limited geographic area where one or a limited 
number of plant retirements may cause a concern that is more specific 
than a regional or interconnection-wide resource adequacy concern. That 
would certainly include the loss of service to the downtown area of a 
major city.
    Certainly, there have been instances where a local reliability 
issue spread to a broader area. The best example is the 2003 blackout, 
where a vegetation touch on a transmission line in Ohio is considered 
to be the major precipitating cause. However, as with many broader 
reliability events, other variables and factors compounded to cause 
this local issue to spread beyond a more limited geographic area.
    The impact on local reliability of EPA rules will be assessed by 
the relevant transmission planning authorities after generation owners 
make a business decision on whether to retire or upgrade a plant to 
meet EPA regulations. Once that decision is made, planners will be able 
to determine what reliability concerns may result, and what options are 
available to address those concerns. Those options could include 
constructing new generation or transmission, developing additional 
demand side resources, or making other resource additions to address 
reliability needs. If the identified reliability needs cannot be met 
within the EPA implementation timeline, there are extension tools 
available to meet specific circumstances. For example, in conjunction 
with the MATS rule, EPA issued a Policy Memorandum on the use of CAA 
Section 113(a) administrative orders (AOs) with respect to sources that 
must operate in noncompliance with the MATS rule for up to a year to 
address a specific and documented reliability concern. The issuance of 
such an AO would add an additional fifth year for compliance.
    I share your interest in an adequate safety valve as you stated at 
the March 20 hearing. The Commission is currently considering 
approaches and processes for providing advice to the EPA regarding the 
December 16, 2011, Policy Memorandum and on its use of AOs for critical 
units. I believe this is an effort by the EPA to address the need for a 
safety valve in instances where a specific unit must operate to ensure 
reliability. If confirmed, I will continue to monitor how the EPA 
intends to process AO requests so it adequately addresses local 
reliability concerns. I would also welcome the opportunity to assist 
you with any additional safety valve proposals you are considering.
    I do not believe that additional risks to reliability from the loss 
of units necessary for grid support services, without adequate planning 
to replace the services provided by those units, would be acceptable. 
However, I believe the work of planning regions to address reliability 
concerns and the multi-year process for compliance will enable these 
and other reliability concerns to be addressed.
    Question 6. Recognizing that the Chairman and not individual 
Commissioners direct the work of the Commission's staff, how would you, 
if you were Chairman, administer the Commission with respect to the 
reliability impacts of EPA rules?

          a. Are you satisfied that at all times during your tenure as 
        a Commissioner you have had access to the information you have 
        needed when you have needed it fully and fairly to perform your 
        duties as a Commissioner?
          b. What, if anything, would you have done differently in the 
        Commission's handling of the issue of the impact of EPA 
        regulations on electric reliability since September 2010 when 
        Commissioner Moeller raised the issue at the Commission's 
        monthly open meeting had you been Chairman during that time?
          c. Why did the Commission wait more than a year after the 
        September 2010 Commission meeting to convene a Technical 
        Conference addressing the potential reliability impacts of the 
        EPA Regulations? Should it have waited that long?
          d. If you were Chairman, how would you expect the Commission 
        to interact with EPA, NERC and the planning authorities on the 
        question of the potential impact of EPA Regulations on electric 
        reliability?
          e. What is your view of the NARUC-FERC process underway to 
        consider these reliability/environmental issues going forward? 
        Will you support full participation by the Commission and its 
        staff in that process?
          f. Please provide, to the fullest extent that you have formed 
        them, your views on the Staff White Paper on the Commission's 
        Role Regarding Environmental Protection Agency's Mercury and 
        Air Toxics Standards. What do you see as FERC's role on the 
        matters outlined in the Staff White Paper? Should the 
        Commission defer to the recommendations of planning authorities 
        and NERC?
          g. May I have your commitment that as long as you are serving 
        on the Commission you will provide prompt, thorough and 
        complete answers to questions that may be posed to you by 
        members of this committee in correspondence or otherwise? Will 
        you do everything in your power to assure that the Commission 
        provides such answers to the Committee?

    Answer. I believe it is essential for FERC to work with industry, 
NERC, states, other federal agencies, and all stakeholders on this and 
a number of issues that fall within the scope of our Congressional 
mandate. Clearly, more can always be done to better coordinate with the 
many stakeholders involved in an issue as important as the reliability 
of the electric grid. I also think it is essential that I, as a FERC 
commissioner, stay as up-to-date as possible on the issues surrounding 
EPA regulations and potential impacts on reliability. Staff has been 
made available to me to discuss their analysis of EPA regulations. 
Additionally, I have set up monthly briefings with FERC staff to keep 
me apprised of any developments related to these issues. With regard to 
the issue of the scheduling of a technical conference on EPA 
regulations, I note that the Chairman sets the calendar for technical 
conferences.
    As a general matter, I believe that additional interaction with all 
of our fellow agencies in the federal and state governments would help 
us to better achieve the public good. With this in mind, I consider the 
NARUC-FERC process to be a valuable forum to discuss reliability/
environmental issues. I think it is essential for federal regulators to 
work with our state colleagues on these issues and I support full 
participation by the Commission and its staff in that process.
    I supported the issuance of the staff white paper. We are partners 
in this effort with NERC, Regional Entities, planning authorities and 
the states, and it is appropriate to consult with them with regard to 
EPA regulations and potential reliability concerns. We have received a 
number of comments regarding the approach outlined in staff's white 
paper. I am reviewing those comments and expect that they will better 
inform my views on the appropriate path forward on this issue. In my 
early review of this record, I note that many commenters make an 
excellent point that determinations regarding the reliability impacts 
of the shut down of a particular plant are best made by the relevant 
local planning authority, which has the best ``on the ground'' 
knowledge of local system needs.
    If confirmed, I commit to providing prompt, thorough, and complete 
answers to questions posed to me by members of this committee or 
otherwise. If confirmed, I commit to do what is in my power to assure 
that the Commission provides such answers to the Committee.
    Question 7. In correspondence to me during 2011 you provided 
answers to a series of questions. Please review your answers to those 
questions and supplement your answers to the extent that you have new 
information or are aware of new information that would affect your 
prior answer in any material way. To the extent that you have no new 
information or have no need or desire to supplement any of your 
answers, please so indicate.
    Answer. I have not received any information since my last letter of 
correspondence to you on October 7, 2011 that would affect my prior 
answers in any material way.
    I would note that at the Commission's Technical Conference held on 
November 30, 2011, the topic of the unfair dilemma an electric 
generator can face if it is ordered by DOE to operate to maintain 
reliability, and doing so results in a violation of its environmental 
permit, was discussed. I committed at that Technical Conference, as I 
do in my answer to your question number 17, to fully support a change 
in the law to address that situation.
    Similarly, I noted in my response to you in the October 7, 2011 
letter that I believe the RTO/ISO proposal for compliance flexibility 
``has great merit.'' I reaffirm my belief in a ``safety valve'' 
provision in my response to your questions number 3 and 22.
    Question 8. On December 1, 2011, the Department of Energy released 
a report entitled ``Resource Adequacy Implications of Forthcoming EPA 
Air Quality Regulations.'' The report represents an assessment by DOE 
of the adequacy of U.S. electric generation resources under air 
pollution regulations being finalized by the U.S. Environmental 
Protection Agency.

          a. Were you or your staff consulted at any time before, 
        during or after the preparation of the report about its 
        contents or direction? If so, by whom were you contacted and 
        what was the substance of the consultation?

    Answer. Neither I nor my staff was consulted with respect to the 
contents or direction of the Department of Energy report.
    Question 9. Can you please provide a list of those hydropower 
projects for which FERC collects a federal land use fee under Section 
24 of the Federal Power Act even where the underlying land has been 
transferred out of federal ownership but for a power site 
classification?
    Answer. It is my understanding that the Commission does not collect 
this information. While the Commission does keep track of projects as 
to which the Commission charges licensees federal land use fees, and 
how much federal acreage is included in each project, I am told that 
the Commission does not keep track of the basis for the land charges. 
In other words, the Commission does not track whether federal land use 
charges are based on federal fee ownership, leases, rights-of-way, 
easements, section 24 reservations, or other interests.
    Question 10. In Docket No. RM 11-6-000, the Commission proposes to 
revise its methodology to assess annual charges on hydropower licenses 
for use of government lands. I'm concerned that some Alaskan projects 
will face increase tremendous increases. Sitka's Green Lake Project, 
for example, could see fees increase by a stunning 142 percent.

          a. Do you believe such increases can be considered 
        ``reasonable'' as required by the Federal Power Act?
          b. In revising its methodology to assess federal land use 
        fees, do you think it is appropriate for the Commission to 
        adopt a single per-acre rate for land use fees for all federal 
        lands in Alaska? Do you believe a phase-in implementation 
        period is warranted? Do you support providing the licensee with 
        the ability to challenge the application of whatever formula 
        for land use fees the Commission decides upon?
          c. In preparing comments for Docket No. RM 11-6-000, I was 
        surprised to learn that, under section 24 of the Federal Power 
        Act, FERC is able to collect federal land use fees for 
        hydropower projects even when the ``federal'' land in question 
        has been transferred out of federal ownership if that land 
        retains a power site classification. If the fees being 
        collected are to recompense the government for the ``use, 
        occupancy and enjoyment'' of federal lands is it fair to be 
        collecting such fees when the land subject to those fees is no 
        longer owned by the federal government? Would you support 
        legislation addressing this discrepancy?

    Answer. I share your concerns over significant rate increases for 
the use of federal lands. The Commission is carefully considering 
provisions for calculating a new per-acre rental fee promulgated by the 
Bureau of Land Management for linear rights of way. I will be guided by 
the principles in section 10(e) that require the Commission to fix 
reasonable annual charges for, among other things, the use, occupancy, 
and enjoyment of federal lands. I am willing to consider a variety of 
methods for implementing any new rule regarding federal land use fees, 
and I have not formulated any final opinions on these matters.
    With respect to collecting federal land use fees where the lands in 
question have been transferred out of federal ownership, I too was 
unaware of the circumstances you describe. I am still learning about 
this issue, and have not formed any opinions on it, but if confirmed, I 
would be happy to discuss legislative proposals with you and your 
staff.
    Question 11. The Cooper Lake Hydroelectric Project in Alaska, 
operated by the Chugach Electric Association, recently went through 
FERC's hydropower relicensing process to secure a new 50 year term 
license. As part of the settlement process, the resource agencies 
directed Chugach to improve the habitat for certain fish in the lower 
reaches of Cooper Creek by raising the water temperature. At the time, 
in 2005, the estimated cost of the Stetson Creek diversion project was 
$12 million. However, with the engineering changes sought by FERC, the 
current estimated costs of this license condition for this small 20 
megawatt project have doubled to an astounding $24 million.

          a. Does this seem like a fair result to you?
          b. Do you believe that both resource agencies and the 
        Commission need to keep licensing costs just and reasonable for 
        the end consumer?
          c. Given that we have a number of Alaskan hydro projects up 
        for relicensing in the next few years, what can be done to 
        avoid such a result in the future?
          d. Can cost containment be accomplished administratively or 
        are legislative changes to the Federal Power Act necessary?

    Answer. This matter was resolved by Commission staff in an 
uncontested proceeding. I am aware that environmental and engineering 
requirements can significantly increase project costs. To the extent 
that these are matters within the Commission's control, licensees may 
timely seek Commission review of any actions to which they object.
    I believe that the Commission has done the best that it can to 
establish collaborative licensing processes, in which issues are 
developed by stakeholders as early as possible, and information needs 
and study results are shared. I also believe that the Commission does a 
good job of balancing competing resource needs in issuing licenses.
    I believe that both resources agencies and the Commission should do 
everything they can, consistent with governing statutes, to ensure that 
licensing costs are just and reasonable. Under the current regulatory 
structure, however, the Commission has only a limited ability to 
contain certain licensing costs. Certain statutory provisions, 
including sections 4(e) and 18 of the Federal Power Act, section 401 of 
the Clean Water Act, and sections 7 and 10 of the Endangered Species 
Act, give agencies other than the Commission the ability to impose 
mandatory license conditions that the Commission may not alter in its 
final license. Thus, the Commission in many instances lacks the ability 
to control licensing costs.
    Question 12. FERC has opened a Notice of Inquiry into its incentive 
rates policy for new transmission investments. Why did you learn from 
this NOI and has FERC decided on any next steps?
    Answer. The Commission has received more than 1,500 pages of 
comprehensive and helpful comments with respect to our Notice of 
Inquiry on incentives. We are currently reviewing those comments and I 
am hopeful that we will move to the next step in this process soon. I 
believe that it is crucial that the Commission enumerate a clear policy 
that appropriately balances the Congressional mandate to provide 
incentive rate treatments for the construction of needed transmission 
projects with the interests of consumers who will pay for those 
projects.
    Question 13. Last July, several New York City generators filed a 
complaint with FERC (Docket No. EL11-50-000) asking for expedited/
emergency review of a NYISO determination in applying Buyer-Side Market 
Power Rules. Leaving aside the merits of that complaint, I understand 
that while nearly 9 months have passed since the filing, the Commission 
has still not issued a ruling on the complaint. According to 
stakeholders, the absence of a Commission decision has created so much 
uncertainty in the market that New York City may be facing reliability 
issues this summer. What is causing the delay? When can we expect FERC 
to make a decision on this emergency filing?
    Answer. The complaint filed on July 11, 2011, alleged that the 
NYISO improperly applied its buyer-side market power mitigation rules 
with respect to two generating facilities. After reviewing the 
complaint and NYISO's August 3, 2011 answer, the Commission found that 
it did not have sufficient information to address the complaint and 
thus, on August 31, 2011, issued an order seeking additional 
information. (Order Directing Submission of Supplemental Information 
and Issuing Protective Order, Astoria Generating Company, L.P. and TC 
Ravenswood, LLC v. New York Independent System Operator, Inc., 136 FERC 
Sec.  61,155 (2011)). It was not until after the additional 
confidential information was submitted that the Complainants and other 
interested parties were able to address the issues raised in the 
Complaint in detail in an extended series of subsequently-filed 
comments, answers, and other pleadings. The last set of pleadings in 
response to this Commission order was received by the Commission in 
December 2011.
    The Commission is currently reviewing the large record in this 
case, and its decision will be based on the full record thus 
established, including the subsequently-filed information and 
pleadings. Since this proceeding in Docket No. EL11-50-000 is pending 
before the Commission, I cannot further comment on the merits of the 
case or the timing of the Commission's action. That being said, I 
intend to consider carefully this matter, including the potential 
reliability issues with regard to New York City.
    Question 14. In furtherance of the Energy Policy Act of 2005, FERC 
designated NERC as the Electric Reliability Organization (ERO). In 
recent remarks, FERC Chairman Wellinghoff has questioned whether NERC 
is still the proper entity to be the ERO. In fact, I understand that 
NERC is now being audited by FERC. What is the purpose of this audit? 
In your opinion, how has NERC performed as the ERO?
    Answer. I am very satisfied with NERC's performance as the Electric 
Reliability Organization. Audits can provide valuable information to 
both the Commission and the entity under review about areas where they 
can achieve better compliance with Commission policies, and where 
efficiencies can be gained in performance and operation. I think with 
any new entity, let alone a unique entity like NERC, there is value to 
be gained from an audit and from identifying opportunities to create 
efficiencies. I see our audit of NERC as an opportunity to work with 
NERC and its stakeholders to achieve greater efficiencies.
    Question 15. Just last week, the Department of Homeland Security 
briefed members on a ``grid-attack scenario'' to highlight the problem 
of cybersecurity. As the primary regulator of the nation's grid, why 
didn't the Commission participate in this cyber attack scenario? How 
does FERC interact with DHS, and the rest of the federal government, on 
cyber issues today? Does DHS have the necessary level of expertise to 
regulate the grid?
    Answer. With respect to the ``grid-attack scenario,'' it is my 
understanding that FERC received informal advance notice of the 
exercise, but was not invited to participate.
    FERC, DHS, DOE, DOD, NRC, FBI, NSA, and CIA share information about 
vulnerabilities to the electric grid. This interaction includes ad hoc 
meetings on specific cybersecurity topics and participation in 
established forums. These forums include the Government Coordinating 
Council for the Energy Sector (FERC supports DOE as the sector-specific 
agency), the Industrial Control Systems Joint Working Group (organized 
by DHS), and the Roadmap to Secure Control Systems in the Energy Sector 
(sponsored by DHS and DOE). FERC also receives daily reports on threats 
and vulnerabilities from DHS, the U.S. Cyber Emergency Response Team 
(CERT), the Industrial Control Systems CERT, and the SCADA Test Bed. It 
is my understanding that the federal governmental relationships are 
working well.
    With respect to DHS's current expertise to regulate the grid, I do 
not have sufficient information to address this question.
    Question 16. How important is information sharing in the debate on 
cybersecurity?
    Answer. Information sharing is an important aspect to protecting 
the cyber security of the grid. However, while it is a necessary 
component, information sharing alone may not be sufficient to ensure 
cyber security.
    Question 17. Pursuant to Section 215 of the Federal Power Act 
(FPA), FERC is responsible for assuring the electric grid is operated 
reliably.

          a. Given this responsibility, what can FERC do to educate EPA 
        and stakeholders interested in the Utility MACT implementation 
        process about how utilities, NERC, its regional entities and 
        its Planning Authorities actually plan to assure reliability?
          b. DOE has emergency authority under the Federal Power Act to 
        order electric generation facilities to operate when needed to 
        keep the lights on in true emergency situations. At least once 
        in the past, a company had to run its plant longer than 
        permitted by its environmental permit in order to comply with a 
        DOE emergency order to maintain reliability. That company faced 
        a dilemma as to which law to follow and which law to break. And 
        it ultimately had to pay millions of dollars for violating its 
        environmental permit limitations. As a regulator responsible 
        for maintaining the reliability of the grid, would you support 
        a clarification to the law that would keep companies from 
        facing this ``Hobson's choice'' when the reliability of the 
        grid is at stake?
          c. In your experience, how much time does it take to build a 
        transmission line that would be big enough to replace a power 
        plant? Do you agree with EPA that this can take place in less 
        than 3 or even 4 years?
          d. Can you discuss where you see reliability in light of 
        other topics identified as top initiatives on the FERC website 
        (smart grid, demand response, integration of renewables and 
        transmission planning)?

    Answer. The Commission has important statutory roles and 
responsibilities with respect to bulk power system reliability, and I 
take these responsibilities very seriously. To fulfill these roles and 
responsibilities, the Commission has developed significant staff 
expertise that I believe can be a valuable resource to help educate 
EPA, other federal agencies, and stakeholders with respect to 
reliability planning processes. Providing information and education on 
the roles of NERC, regional entities, planning authorities, and the 
states in reliability planning can help ensure that EPA and others 
involved in implementing the Utility MACT rule know which of these 
entities are the best source of advice and analysis regarding the 
potential reliability impacts of shutting down a particular power plant 
or set of plants.
    I understand and appreciate the unfair dilemma that an electric 
generator can face if it is ordered by DOE to operate to maintain 
reliability, and doing so results in a violation of its environmental 
permit. As I stated at the Commission's November 30 Technical 
Conference, I fully support a clarification to the law to address this 
situation.
    The time it can take to construct a transmission line to replace a 
power plant, assuming that the relevant reliability planning process 
chooses a transmission line as the best replacement solution, depends 
greatly on the specific circumstances. In some cases, such as a shorter 
line or an upgrade of a line in an existing right-of-way, a 
transmission solution could be built in a relatively short amount of 
time. In other cases, however, we have seen transmission facilities 
take far too long to be sited and constructed. Reliability planning 
processes should, and to the best of my knowledge do, take these timing 
considerations into account when choosing the best solution to a 
reliability concern prompted by the retirement of a power plant.
    I view the reliability of the electric grid as a very high 
priority. Fulfilling our roles and responsibilities under section 215 
of the Federal Power Act has been a focus of my work at the Commission. 
More broadly, however, I believe power system reliability is a factor 
in nearly every decision the Commission makes, because when it comes to 
our energy infrastructure, at the end of the day it all has to work 
reliably and efficiently.
    Question 18. Hydropower

          a. Do you consider hydropower to be a renewable resource?
          b. Please state your views on the hydropower resource and its 
        contribution and value to the nation's energy mix.
          c. What are your thoughts on the issue of reliably 
        integrating intermittent renewable resources onto the grid?
          d. What role can both conventional hydropower and pumped 
        storage have to play in addressing these problems?

    Answer. I consider hydropower to be a renewable resource that makes 
a very valuable contribution to the nation's energy mix, although I 
believe that limiting its use in meeting a federal renewable energy 
requirement is a decision for Congress to make. In fact, it is the 
largest renewable resource in the U.S., providing about 10 percent of 
the nation's electric capacity. Analysts say that capacity can double 
in 30 years. FERC is reviewing more than 30,000 MWs worth of new 
projects, equal to a third of all existing hydropower capacity and 
enough to power the New York metropolitan area.
    I believe that intermittent renewable resources will also play a 
key role in our nation's energy future. This intermittency can raise 
potential reliability concerns that can and are being addressed in 
numerous regions around the country. Many states and regions are 
already integrating intermittent renewables in large numbers. These 
regions are learning important lessons that can be shared with other 
entities that are similarly working on renewables integration. 
Conventional hydropower and pumped storage have characteristics that 
can accommodate the variable characteristics associated with renewable 
resources. They are more flexible than most conventional generation in 
their ability to start quickly to accommodate rapid increases or 
decreases in the differences between demand and resources for any 
reason.
    Question 19. Organized Markets

          a. What is the appropriate path forward with respect to 
        organized and bilateral wholesale markets? Can and should they 
        co-exist or should all utilities ultimately be in organized 
        markets?
          b. Is FERC's oversight of electricity markets sufficient to 
        ensure that the wholesale electric rates meet the ``just and 
        reasonable'' standard of the Federal Power Act?
          c. Do you believe that the wholesale electricity markets 
        operated by regional transmission organizations are achieving 
        net benefits for consumers as compared to those regions without 
        RTOs?
          d. Do you think that there is a sufficient level of 
        transparency in the pricing and other relevant data from the 
        electricity markets, particularly those operated by RTOs?
          e. What is your assessment of the success of pricing 
        incentives in the RTO markets, such as Locational Marginal 
        Pricing, to spur infrastructure development and address 
        transmission congestion?
          f. Do you believe RTO-run locational capacity markets are 
        providing adequate revenue and certain for new generation while 
        avoiding excess payments to existing generation?

    Answer. I believe that organized and bilateral markets can and 
should co-exist. As long as FERC continues to work to improve 
competition in both organized and bilateral markets, through such 
efforts as open access transmission tariff reform, market based rate 
reform, and Order No. 1000, FERC should not attempt to impose a single 
market structure on all regions. Both organized and bilateral market 
structures are capable of supporting competitive markets. With respect 
to the path forward, as both the organized and bilateral wholesale 
markets continue to evolve, I expect that the Commission will receive 
filings that seek to modify and improve these markets to assist 
consumers in obtaining reliable, efficient, and sustainable energy 
services at a reasonable cost. In response to such filings or on its 
own motion, the Commission will take action as appropriate to support 
this goal.
    I believe that FERC's oversight of electricity markets is 
sufficient to ensure just and reasonable wholesale electric rates. In 
addition to strengthening competition in electric power markets, FERC 
closely monitors these markets for anomalous market behavior. The 
Commission's Office of Enforcement protects consumers through (1) 
oversight and surveillance of wholesale electric energy markets, (2) 
assuring compliance with tariffs, rules, regulations, and orders, (3) 
investigating potential violations and manipulation, and (4) crafting 
appropriate remedies, including civil penalties and other measures.
    I support the voluntary nature of RTOs and ISOs. I believe that 
there are net benefits that can be achieved in regions with organized 
wholesale markets. The wholesale electricity markets operated by ISOs 
and RTOs are designed to enhance competition and maximize utilization 
of least-cost resources. Wholesale markets provide important price 
signals for needed investment in transmission infrastructure, as well 
as demand response and energy efficiency. RTOs and ISOs also help 
ensure continued reliability of the regional transmission system 
through long-term transmission planning. Having said that, however, I 
also believe that those who question the benefits of organized 
wholesale markets are entitled to reasonable answers. I support 
continued and enhanced efforts to assess these markets.
    FERC has made efforts to increase the transparency of electricity 
markets including RTO markets. Currently, prices for all power sales 
within the Commission's jurisdiction are reported quarterly to the 
Commission and made available to the public, and all RTOs post 
location-specific prices for the public on an hourly basis. If 
confirmed, I will continue to closely follow issues related to the 
transparency and competitiveness of organized markets.
    The organized energy markets in most RTOs rely on Locational 
Marginal Pricing (LMP), which is a system that allows prices to vary at 
different locations and at different times to reflect the market 
conditions and costs of meeting demand in those areas. The LMP system 
sends price signals to market participants regarding where generation 
resources are most needed, where reductions in demand are most 
valuable, and where transmission constraints are the most severe. The 
transmission planning processes employed by the RTOs consider the 
congestion price signals in developing transmission expansion plans. Of 
course, the ability to pursue upgrades identified in those transmission 
expansion plans would require a number of regulatory approvals in the 
states that they traverse. So, while the price signals sent by the 
RTOs' markets are an important factor in encouraging efficient resource 
developments where they are needed, they alone are not sufficient to 
develop infrastructure; other factors also are important.
    With respect to capacity markets, there are several contested 
proceedings before FERC addressing capacity market issues that I do not 
wish to prejudge. Generally, however, capacity markets should be 
designed to fairly compensate existing generation for the capacity they 
provide to the grid, and should efficiently acquire new generation when 
it is the least cost resource to meet reliability. Demand response 
resources, energy efficiency, and existing generation, however, may 
provide a more efficient alternative, and when this is the case, 
capacity markets should acquire such lower cost alternatives. Capacity 
market rules should also ensure competitive procurement of capacity 
resources and protect against the exercise of market power, to avoid 
market outcomes that provide either insufficient or excess revenues.
    Question 20. How does FERC consider priorities for industry and its 
costs in approving the various initiatives it reviews?
    Answer. FERC has an open and deliberative process that provides 
opportunity for industry and consumers to comment and participate. In 
reviewing Commission initiatives, ensuring that we do not impose 
unnecessary burdens on industry, and ultimately on consumers and our 
overall economy, is vitally important to me.
    Question 21. FERC has many offices and many responsibilities. As 
Commissioner, do you feel reviewing FERC's budget and looking for 
internal efficiencies, reducing duplication, should be a priority? If 
so, what areas would you target?
    Answer. Under the direction of the Chairman, FERC conducts a review 
of our budget annually. I am not aware of any specific concerns that 
have been raised with respect to inefficiencies or duplication of 
efforts. In contrast, I have heard compliments regarding FERC's 
efficient processes, especially with respect to energy projects. With 
that said, internal efficiency and avoiding government waste are 
significant issues that I take seriously and, if confirmed, I commit to 
remain vigilant with respect to these issues.
    Question 22. I am developing legislation to ensure that the Federal 
Power Act contains a ``safety valve'' to protect electric reliability 
in situations such as those presented since 2010 with respect to EPA 
Regulations. Please provide your views, in concept, about amending the 
FPA to provide authority for the Commission or entities subject to its 
regulation or oversight with respect to reliability assurance to have a 
formal role to ensure that EPA Regulations do not threaten electric 
reliability unduly.
    Answer. Protecting electric reliability as compliance with EPA 
regulations is achieved requires us to utilize all the tools we can. I 
believe having an additional statutory tool such as the one you 
describe could be valuable, and I would be happy to work with you and 
your staff as you develop legislation.
     Responses of John R. Norris to Questions From Senator Barrasso
    Question 1. Did you have any exchange, in person or otherwise, at 
any time before March 20, 2012 with anyone in the Administration about 
EPA's Mercury and Air Toxics Standards Rule and its impact on electric 
reliability? If so, please provide the names and titles of these 
individuals, the agencies that the individuals represented, and the 
dates the exchanges took place.
    Answer. I met with EPA Assistant Administrator for Air and 
Radiation Gina McCarthy, on November 29, 2010. Commissioner Cheryl 
LaFleur, members of our staffs, and members of Ms. McCarthy's staff 
were also present. I also participated in a panel discussion that 
included Ms. McCarthy at the National Association of Regulatory Utility 
Commissioners (NARUC) Winter Meeting on February 14, 2011. Ms. McCarthy 
and I also participated in a panel discussion at an Energy Bar 
Association conference on May 4, 2011.
    Question 2. What, if anything, in the exchanges you described in 
question 1 serves as the basis for your statement at the Technical 
Conference on November 30, 2011, that you are ``sufficiently satisfied 
that the reliability of the electric grid can be adequately maintained 
as compliance with EPA regulations is achieved''?
    Answer. My statement that I am sufficiently satisfied that we can 
protect reliability while achieving compliance with EPA regulations was 
based primarily on my review of reports prepared on the subject, 
comments and written testimony filed prior to the technical conference, 
and discussions with industry participants. However, in my exchanges 
with Ms. McCarthy, I have emphasized the need for EPA to consider 
reliability impacts not just with respect to the air regulations under 
her responsibility, but also with respect to new water quality 
regulations. In our exchanges, Ms. McCarthy has assured me that EPA 
understands the critical importance of electric reliability to the 
economy and to the health and welfare of the public, and that EPA will 
take reliability into account as it crafts regulations impacting the 
power sector.
    Question 3. On March 20, 2012, EPA's Assistant Administrator for 
Air and Radiation, Gina McCarthy, testified before the Senate 
Subcommittee on Clean Air and Nuclear Safety that EPA had not conducted 
an assessment of the cumulative impact of all of EPA's regulations, 
including proposed regulations that have not yet been made final. a. 
Given that EPA has not conducted an assessment of the cumulative impact 
of its regulations, please explain the basis for your conclusion that 
you are satisfied that the cumulative impact of these regulations will 
not affect electric reliability? b. Given that EPA has not performed an 
assessment of the cumulative impact, will you advocate that the FERC 
provide such an assessment? c. Do you believe that EPA should issue any 
additional final rules affecting the power sector, including the 
pending coal ash and water intake structure regulations and proposals 
for greenhouse gas new source performance standards, before a an 
analysis of the cumulative impact on electric reliability is completed?
    Answer. Based on the available information that I have reviewed to 
date on EPA's proposed and final regulations, I am sufficiently 
satisfied that the overall reliability of the electric grid can be 
adequately maintained as compliance with EPA's regulations is achieved. 
However, given the importance of a reliable electric grid to our 
economy and the safety of our citizens and the number of variable 
factors and competing choices that impact grid reliability, I do not 
believe that we can ever claim 100 percent satisfaction that any of the 
numerous factors impacting the public and private entities engaged in 
our electric system will not at some time impact reliability. With EPA 
having finalized some of its proposed rules, and as it finalizes other 
proposed rules or refines final rules, generation owners are making 
their own business decisions based on their own individual 
circumstances as to whether to continue to operate. As those business 
decisions are made, any potential local reliability concerns that 
result can be adequately studied and addressed using the tools 
available to industry and regulators. It is key that we remain vigilant 
in monitoring grid reliability as generation owners make their business 
decisions, and that we have appropriate tools available to address 
reliability concerns if and when they arise. As evidenced by 
assumptions in a number of prior studies that have proved to be 
inaccurate, it is difficult to do a cumulative impact study until EPA 
regulations are final. However, I have encouraged EPA to consider the 
cumulative impact of their regulations.
    I base these views first on the extensive analyses that have been 
performed to date by a wide variety of entities to attempt to assess 
the reliability impact of EPA's proposed and final regulations. While 
the results of these studies have varied greatly, given that they 
employed widely varying assumptions regarding the ultimate requirements 
EPA would adopt, the costs of compliance, and the relative economics of 
different types of generation, none of the studies are unreasonable. 
Each of them provides key data points for consideration as we monitor 
the overall impact on grid reliability. These kinds of studies are 
continuing to be performed, and I will continue to monitor their 
results.
    Second, to the extent reliability concerns are identified as 
generation owners make their business decisions regarding continued 
operation, I believe there are numerous tools available to manage 
electric reliability as compliance with EPA's regulations is achieved. 
FERC, state public utility commissions, and EPA all have important 
tools that can be utilized. FERC's tools include its oversight of 
competitive wholesale power markets and the local and regional planning 
processes developed pursuant to Order Nos. 890 and 1000. State public 
utility commission tools include their primary oversight of generation, 
and of Integrated Resource Planning processes and other measures to 
ensure that their utilities are adequately planning to meet 
environmental requirements. EPA's tools include existing flexibility 
under the Clean Air Act and Clean Water Act to extend compliance 
timeframes where necessary. EPA has already utilized this flexibility 
in its final MATS Rule, which allows a fourth year for compliance, and 
also establishes an Administrative Order process to allow units needed 
for reliability to continue to operate for a fifth year. In that 
process, EPA will seek input on reliability issues from FERC, NERC, 
planning authorities and state commissions. We recently received public 
comments on a staff white paper addressing ways in which FERC can 
advise EPA in this process, and I am currently reviewing those comments 
and considering how we can best provide our expertise to EPA and other 
stakeholders as compliance with the MATS Rule moves forward.
    Question 4. I am concerned that the FERC under Chairman Wellinghoff 
has underestimated the cumulative impact of EPA's new and proposed 
regulations on electric reliability. If President Obama wins a second 
term and you are confirmed, it is not unreasonable to assume that you 
would have a strong chance to become the next Chairman of the FERC. As 
Chairman, what would you do differently to assess the impact of EPA's 
regulations on electric reliability?
    Answer. The Commission has significant expertise in electric 
reliability matters that I believe can be a valuable resource to 
entities across the federal government, including EPA. It is important 
to continually emphasize and strengthen dialogue and communication 
regarding reliability matters such as the impact of EPA regulations, so 
that our resources can be effectively utilized, and I would advocate 
for even more dialogue and communication between agencies on these 
issues.
    Question 5. On March 20, 2011, Cass Sunstein, Administrator of the 
Office of Information and Regulatory Affairs of the Office of 
Management and Budget, issued a ``Memorandum for the Heads of Executive 
Departments and Agencies.'' It states that ``[c]onsistent with 
Executive Order 13563, and to the extent permitted by law, agencies 
should take active steps to take account of the cumulative effects of 
new and existing rules.'' Should the FERC insist that EPA undertake an 
assessment of the cumulative impact of its existing and new power 
sector regulations in order to ensure that there is no impact to 
electric reliability?
    Answer. As I noted in response to question 4, the Commission has 
significant expertise in electric reliability matters that I believe 
can be a valuable resource to entities across the federal government, 
including EPA. I support strengthened communication and dialogue with 
EPA as it analyzes the impacts of its regulations on the power sector, 
and will assist in any way that I can. I have emphasized the importance 
of considering the impact of all rules to EPA in the past, and will 
continue to do so.
      Responses of John R. Norris to Questions From Senator Corker
    Question 1. As you may know, last year I introduced S. 400, a bill 
sponsored by 7 other Senators, including Senators Murkowski and Wyden 
of this Committee. Its premise is similar to language in an amendment 
this committee adopted with respect to the 2009 energy bill. Simply 
put, the bill amends the Federal Power Act to state that electric 
consumers cannot be charged for the cost of new transmission facilities 
unless they are ``reasonably proportionate to measurable economic or 
reliability benefits.'' To me, that seems completely consistent with 
the Federal Power Act's existing requirement that electricity rates 
must be ``just and reasonable.'' Do you agree or disagree with the 
language of S. 400, and why?
    Answer. As I stated at last week's hearing, uncertainty about cost 
allocation has been perhaps the largest barrier to the development of 
needed transmission facilities. I have two concerns about a requirement 
that costs of new transmission facilities be allocated only based on a 
demonstration that those costs are ``reasonably proportionate to 
measurable economic or reliability benefits.''
    First, a limitation to ``economic or reliability benefits'' may 
exclude important benefits associated with new transmission facilities. 
I believe that Order No. 1000 appropriately requires transmission 
planning regions to develop a cost allocation method that accounts for 
the benefits associated with new transmission facilities that are 
selected to address regional transmission needs in a cost-effective 
manner. Importantly, Order No. 1000 provides flexibility to each region 
in determining how to consider transmission needs and how to account 
for benefits associated with transmission facilities built to meet 
those needs. Order No. 1000 also states clearly that those who do not 
benefit from transmission facilities will not pay for them.
    Second, I am concerned that a requirement that benefits be 
``measurable'' may contribute to confusion and litigation that would 
impede needed transmission development. If ``measurable'' is read as 
requiring a degree of quantification, then the term arguably is 
redundant with the requirement that costs and benefits be ``reasonably 
proportionate.'' Moreover, ``measurable'' suggests the benefits can be 
measured with exacting precision, e.g., by meters or other devices, 
which may be difficult to apply to facilities that are not yet 
constructed, and may exclude certain benefits that regions, exercising 
the flexibility of Order No. 1000, may wish to recognize in their cost 
allocation methods.
    Question 2. Order 1000 has been criticized as going beyond existing 
law, by assuming that transmission ``benefits''--a term not defined 
under the Federal Power Act or in the Order itself--would be broadly 
enjoyed by nearly anyone who theoretically could use a new transmission 
line. Doesn't this vague use of the term ``benefits'' go far beyond 
FERC's existing authority? Shouldn't the agency be asking Congress to 
consider legislation which would provide such authority--as was 
considered in the 2009 energy bill when my amendment was adopted?
    Answer. I believe that the cost allocation requirements of Order 
No. 1000 are within FERC's existing statutory authority. Court 
precedent makes clear that consideration of benefits must be an 
important part of FERC's analysis of whether a proposed cost allocation 
method produces just and reasonable rates. Although FERC could have 
defined ``benefits'' more specifically in Order No. 1000, I believe 
that it was more appropriate to give transmission planning regions 
considerable flexibility in defining ``benefits'' in ways that reflect 
their respective needs and distinctive characteristics. I also believe 
that this approach is preferable to a one-size-fits-all mandate on this 
issue.
    Question 3. With many utilities and their customers facing 
increased costs from the need to retrofit power pollutants with costly 
pollution control equipment to comply with a myriad of new EPA 
regulations, do you think it is fair and appropriate to add yet another 
burden in the form of subsidies to build new transmission to import 
distant renewables?
    Answer. I do not support subsidies to build new transmission to 
import distant renewables. I share your concerns about increasing costs 
to consumers, and that is one reason why I support Order No. 1000. 
Specifically, Order No. 1000 provides utilities, customers, and other 
stakeholders, including state regulators, the opportunity to 
participate in a fair, open and transparent transmission planning 
process to make the decisions about how to cost-effectively satisfy 
that region's transmission needs. Order No. 1000 also requires that 
public utility transmission providers identify a cost allocation method 
that abides by several principles, one of which is that those that 
receive no benefit from transmission facilities, either at present or 
in a likely future scenario, must not be involuntarily allocated costs 
of those facilities. Order No. 1000 is technology and resource neutral 
and does not require the building of transmission facilities to serve 
specific generating resources.
     Responses of John R. Norris to Questions From Senator Cantwell
    Question 1. FERC Jurisdiction over the Bonneville Power 
Administration--The Federal Energy Regulatory Commission recently 
issued an order under Section 211A of the 2005 Energy Bill asserting 
that actions by the Bonneville Power Administration (BPA) were 
discriminatory in its dealing with over-generation of wind during 
periods of light electric demand. I realize that this issue is still 
pending for rehearing and you are therefore limited in what you can 
say. I do want to emphasize, however, that the scope of FERC's decision 
is a potentially troubling issue. BPA has sought clarification on a 
number of critical issues, and I strongly encourage the Commission to 
carefully consider this matter.

          a. If confirmed, will you respect the authority and 
        jurisdiction that Congress granted and has historically been 
        provided to BPA under the Federal Power Act?
          b. Please provide specific examples of any role, authority, 
        or jurisdiction the FERC has or should have over the decision 
        making of the Bonneville Power Administration.

    Answer. I respect the authority and jurisdiction that Congress has 
granted and carefully consider the merits of all matters that come 
before the Commission including the Iberdrola Resources, Inc. v. BPA 
matter. However, as you note in your question, that matter is currently 
pending before the Commission on rehearing, and it would be 
inappropriate for me to comment on the substance of this matter as I 
might be required to rule on it. Generally, I would note that Federal 
Power Act section 211A is a tool that Congress gave FERC to protect 
open access to transmission service. However, I believe it is a tool 
that should be utilized only in rare instances, and I do not believe 
that FERC should use that statute or any other authority to regulate 
non-public utilities like BPA on a day-to-day basis.
    Question 2. Section 5 of the Natural Gas Act--Section 206 of the 
Federal Power Act has refund protection for complainants while Section 
5 of the Natural Gas Act (NGA) does not. Every sitting FERC 
Commissioner (as well as recently departed Commissioner Spitzer) has 
indicated at various times that Section 5 should to be amended to 
provide natural gas consumers with the same refund protection as 
electric consumers.

          a. Do you agree that natural gas consumers should be afforded 
        retroactive refund protection in cases where a pipeline has 
        been shown to have charged unjust and unreasonable rates?
          b. Can you think of any credible policy justification to not 
        undertaking this reform to Section 5 of the Natural Gas Act?

    Answer. I support affording natural gas consumers retroactive 
refund protection under section 5 of the Natural Gas Act, similar to 
the protection provided to electricity consumers under section 206 of 
the Federal Power Act.
     Responses of John R. Norris to Questions From Senator Landrieu
                            joint ownership
    Question 1. The implementation of policies to broaden the ownership 
of the transmission grid to all load serving entities in certain areas 
through Joint Ownership appears to have had a positive impact on the 
development of a robust electric grid by promoting more comprehensive 
planning, reducing permitting disputes, engaging more advocates and 
facilitating more effective integrated resource planning. In Vermont, 
this has also lowered the cost to ratepayers of building new 
transmission.
    The Commission has, on several occasions, expressed strong support 
for Joint Ownership of transmission. Other than expressions of support 
and encouragement, has the Commission taken or ordered any action to 
actively promote Joint Ownership? If not, why not?
    Answer. I agree that Joint Ownership of transmission facilities can 
have a number of benefits, including those you noted. The Commission, 
in Order No. 1000, took action that may help promote Joint Ownership of 
transmission facilities. Order No. 1000 requires that public utility 
transmission providers have a regional transmission planning process 
that is open, transparent, aligns transmission planning and cost 
allocation, and produces a regional transmission plan. These measures 
may have the effect of promoting cooperation and participation among a 
range of investors and thus promoting Joint Ownership of transmission 
facilities. In addition, the Notice of Inquiry (NOI) on Promoting 
Transmission Investment Through Pricing Reform (RM11-26), raised the 
question of whether the Commission's approach to incentives has 
adequately reflected the benefits of Joint Ownership and whether there 
are other approaches to providing incentives that would encourage Joint 
Ownership of transmission facilities. Some commenters addressed this 
issue in their comments on the NOI, and the Commission is considering 
next steps in that docket.
                            cost allocation
    Question 2. Cost allocation is one of the most difficult issues 
facing the development of new transmission. One proposal contemplated 
in this committee is to require all costs be allocated based on 
``measurable benefits''. I understand the FERC has weighed in with 
concerns regarding this approach. What are the concerns that a 
``measurable'' standard might create in attempting to build new 
transmission?
    Answer. I am concerned that a requirement that costs of new 
transmission facilities be allocated based only on ``measurable'' 
benefits may contribute to confusion and litigation that would impede 
needed transmission infrastructure development. For example, in the 
context of such a requirement, if ``measurable'' is read as requiring a 
measurement by meters or other devices, it may exclude certain 
determinable benefits that regions might prefer to recognize. I would 
note that under Order No. 1000, each transmission planning region has 
significant flexibility to define the benefits of transmission 
facilities in ways that account for the region's needs and distinctive 
characteristics.
                 incentive rates (sent to sen. shaheen)
    Question 3. I am very concerned that FERC implementation of its 
incentive rates authority has resulted in consumers, including 
consumers in New Hampshire, paying more than necessary to get needed 
transmission built. I was encouraged by the May 2011 Notice of Inquiry 
that FERC initiated last year, and as you know, 11 of my Senate 
colleagues and I sent a letter commending FERC for this action and 
urging that the Commission consider changes to its incentive rates 
policies to make them more performance-based and better focused on 
determining whether incentives are needed to overcome specific risks.
    I also note that on March 5, 2012 a coalition of state utility 
commissions; attorneys general; national and regional consumer 
advocates, environmental groups and NGOs; and others filed joint 
comments on the NOI, asking FERC to modify its incentive policies in 
several specific ways.
    Where is FERC in terms of reviewing the comments it received and 
what can we expect to see from the Commission in terms of changes in 
its incentives policy?
    Answer. The Commission has received more than 1,500 pages of 
comprehensive and helpful comments with respect to our Notice of 
Inquiry on incentives. We are currently reviewing those comments, and I 
am hopeful that we will move to the next step in this process soon. I 
believe that it is crucial that the Commission enumerate a clear policy 
that appropriately balances the Congressional mandate to provide 
incentive rate treatments for the construction of needed transmission 
projects with the interests of consumers who will pay for those 
projects.

                                    

      
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