[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]






    AMERICAN ENERGY SECURITY AND INNOVATION: AN ASSESSMENT OF NORTH 
                               AMERICA'S
                            ENERGY RESOURCES

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 5, 2013

                               __________

                            Serial No. 113-1






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             ANTHONY D. WEINER, New York
ROBERT E. LATTA, Ohio                JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            JOHN BARROW, Georgia
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
PETE OLSON, Texas                    KATHY CASTOR, Florida
DAVID B. McKINLEY, West Virginia     JOHN P. SARBANES, Maryland
CORY GARDNER, Colorado               JERRY McNERNEY, California
MIKE POMPEO, Kansas                  BRUCE L. BRALEY, Iowa
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            PAUL TONKO, New York
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania        PAUL TONKO, New York
LEE TERRY, Nebraska                  EDWARD J. MARKEY, Massachusetts
MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
ROBERT E. LATTA, Ohio                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas                    JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin 
MIKE POMPEO, Kansas                      Islands
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California (ex 
FRED UPTON, Michigan (ex officio)        officio)












                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the State of 
  Kentucky, opening statement....................................     1
    Prepared statement...........................................     3
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     6
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. Eliot L. Engel, a Representative in Congress from the State 
  of New York, prepared statement................................   180

                               Witnesses

Adam Sieminski, Administrator, U.S. Energy Information 
  Administration.................................................     9
    Prepared statement...........................................    12
    Answers to submitted questions...............................   189
Daniel Yergin, Vice Chairman, IHS................................    34
    Prepared statement...........................................    37
Jennifer Morgan, Director, Climate and Energy Program, World 
  Resources Institute............................................    45
    Prepared statement...........................................    47
    Answers to submitted questions...............................   193
Mary J. Hutzler, Distinguished Senior Fellow, Institute for 
  Energy Research................................................    78
    Prepared statement...........................................    80
E. Harry Vidas, Vice President, ICF International................   115
    Prepared statement...........................................   117

                           Submitted Material

Map entitled, ``Lower 48 oil and gas shale plays and federal 
  lands,'' by EIA, submitted by Mr. Doyle........................   167
IHS The Energy Daily, Friday, January 25, 2013, submitted by Mr. 
  Pompeo.........................................................   181
Article entitled, ``Windmills Overload East Europe's Grid Risking 
  Blackout: Energy,'' Bloomberg, October 25, 2012, submitted by 
  Mr. Pompeo.....................................................   185
Statement of the National Petroleum Council, submitted by Mr. 
  Whitfield......................................................   187

 
    AMERICAN ENERGY SECURITY AND INNOVATION: AN ASSESSMENT OF NORTH 
                       AMERICA'S ENERGY RESOURCES

                              ----------                              


                       TUESDAY, FEBRUARY 5, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:08 a.m., in 
room 2322 of the Rayburn House Office Building, the Honorable 
Ed Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Scalise, 
Shimkus, Pitts, Terry, Burgess, Latta, Cassidy, Olson, 
McKinley, Gardner, Pompeo, Kinzinger, Griffith, Barton, Upton 
(ex officio), Rush, Tonko, Markey, Engel, Green, Capps, Doyle, 
Barrow, Matsui, Christensen, Castor, and Waxman (ex officio).
    Staff present: Nick Abraham, Legislative Clerk; Gary 
Andres, Staff Director; Charlotte Baker, Press Secretary; Mike 
Bloomquist, General Counsel; Sean Bonyun, Communications 
Director; Matt Bravo, Professional Staff Member; Allison 
Busbee, Policy Coordinator, Energy and Power; Patrick Currier, 
Counsel, Energy and Power; Tom Hassenboehler, Chief Counsel, 
Energy and Power; Heidi King, Chief Economist; Ben Lieberman, 
Counsel, Energy and Power; Jason Knox, Counsel, Energy and 
Power; David McCarthy, Chief Counsel, Environment/Economy; Gib 
Mullan, Chief Counsel, Commerce, Manufacturing, and Trade; Mary 
Neumayr, Senior Energy Counsel; Andrew Powaleny, Deputy Press 
Secretary; Krista Rosenthall, Counsel to Chairman Emeritus; 
Chris Sarley, Policy Coordinator, Environment and Economy; Phil 
Barnett, Democratic Staff Director; Alison Cassady, Democratic 
Senior Professional Staff Member; Greg Dotson, Democratic 
Energy and Environment Staff Director; Kristina Friedman, EPA 
Detailee; Caitlin Haberman, Democratic Policy Analyst; and 
Alexandra Teitz, Democrat Senior Counsel, Energy and 
Environment.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF KENTUCKY

    Mr. Whitfield. I would like to call this hearing to order 
this morning, and I certainly want to welcome our panel of 
witnesses and also I want to welcome all the members back on 
the subcommittee. I look forward to another 2 years with the 
ranking member, Mr. Rush. And also, we are really excited to 
have three new members on the Republican side joining our 
subcommittee for the first time, Mr. Latta of Ohio and Mr. 
Cassidy of Louisiana and also Mr. Kinzinger of Illinois. We are 
delighted that they are on this subcommittee and look forward 
to working with them on important issues facing our Nation in 
the energy sector as well as all the members of the 
subcommittee, Democrat and Republican.
    The title of today's hearing is ``American Energy Security 
and Innovation,'' and we are going to focus on an assessment of 
North America's energy resources. I think all of us agree that 
we have many problems facing our country today but one of the 
primary ones that we have is a sluggish economy and we want to 
be sure that we take every action possible to stimulate the 
economy and create more jobs. Certainly, we are very much aware 
in the last quarter our GDP decreased by .1 percent. Our 
unemployment has ticked up from 7.8 to 7.9 percent, and so we 
all face this challenge of adopting policies and taking actions 
that can help stimulate the economy.
    Certainly, one of the primary factors that affects the 
economy is energy policy, and certainly there are other factors 
as well but that plays a vital role. I was reminded as I read 
the testimony last night that it wasn't too many years ago when 
people throughout the country, experts and otherwise, were 
talking about the United States fossil fuels, for example, 
their resources were being depleted. We were running out of 
oil, we were running out of natural gas and we were going to 
have to be importing more. As a matter of fact, in January 
2007, a CEO of one of our largest utility companies made the 
comment that we were running out of natural gas, production was 
declining and demand growing so he expected that imports would 
go from 3 percent of our national needs to 24 percent in 2020. 
And then of course, we know what has happened. We have had all 
sorts of new discoveries--the Bakken field, the Eagle Ford, 
developments in Colorado--and most of these shale fields have 
been discovered on private lands, and even though the number of 
permits on public lands has gone down, the production on 
private lands has increased dramatically.
    So this is a real game changer, the possibility of a game 
changer in America. We have heard the term for many, many 
years, we have the opportunity to be energy independent, and 
that is actually the reality today, and I tell you what, people 
around the world are focused on it too because some of our 
witnesses today attended the World Economic Forum in Davos, and 
we know that many Europeans are expressing great concern about 
the abundance of energy that we have in America and their 
ability to compete in the global marketplace because their 
energy costs are going up in Europe and we have the opportunity 
to decrease our energy costs because of this abundance of 
fossil fuels that we have.
    Now, we all recognize that we have renewable that can play 
a role as well, but I am not going to be an alarmist about the 
increased use of fossil fuel because our carbon dioxide 
emissions today are lower than they have been in America in 20 
years, which shows that the marketplace can continue to play a 
vital role, our expertise in technology continues to improve 
and so in oil, in natural gas and in coal, we have abundant 
resources that can meet the needs of this country on the 
electricity side and the transportation side for years and 
years to come.
    So we have a unique opportunity and the policies that we 
adopt at the government level will determine whether or not we 
are going to be successful in America, and some of the 
policies, there is a lot of disagreement on this committee 
about aggressive EPA should be. I was reading some court 
decisions over the last couple of weeks. There were a total of 
eight of them in which the court language was very strong in 
chastising EPA for being overly aggressive and exceeding their 
legal authority, and yet they have had good policies as well 
and America does not have to take a back seat to anyone, to any 
country for our enforcement of environmental laws. But our 
objective is, we want a balanced approach. We don't want to be 
an alarmist on climate change, for example, but we want to 
protect our environment and we want to fully explore the 
natural resources that we have which can go a long way toward 
stimulating our economy and creating jobs for Americans.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    Today, we are going to kick off the subcommittee's 
activities, and we are going to do so with a hearing on what 
many of us consider to be the most significant energy story to 
emerge in a long time--the potential to truly be more energy 
secure as a nation. We have long known that we possess an 
abundance of coal, but the news on oil and natural gas has been 
a very pleasant surprise.
    We have seen increases in domestic oil production since 
2007 and natural gas production since 2006, according to the 
Energy Information Administration. And EIA predicts that these 
upward trends will continue for years to come.
    At the same time, Canadian oil production is growing so 
fast that we will need the Keystone XL pipeline expansion 
project to bring the additional output to American refineries 
in the Midwest and Gulf Coast.
    In fact, the news is so promising that some analysts are 
talking about the possibility of achieving North American 
energy independence by the end of the decade.
    Of course, experts may disagree as to just how much energy 
potential is out there, but none would have claimed just a few 
years ago that our nation would reverse course and have the 
potential to become a true global energy supplier and 
powerhouse. A quantitative assessment of the resource base is 
the topic of today's hearing and what we will hear today shows 
how the impacts are profound and only beginning to be 
understood.
    I might add that we are seeing a truly dramatic shift away 
from long-held beliefs about domestic oil and natural gas 
supplies. So much of our existing legislation is rooted in the 
assumption of domestic energy scarcity, not energy abundance. 
Needless to say, a wholesale rethinking of energy policy is in 
order, and today's hearing is the first step in that process.
    This domestic energy wealth brings with it many issues that 
will need to be addressed by this subcommittee in the months 
and years ahead. After all, an abundance of energy alone means 
little without the right policies in place. Just look at the 
nation's abundance of coal, which in my view is being 
squandered thanks to a long and growing list of anti-coal 
regulations from the EPA.
    As we will soon hear from one of our witnesses, Mary 
Hutzler of the Institute for Energy Research, America possesses 
nearly half of the entire world's coal reserves. This is enough 
coal to continue its use at current rates for 500 years. We 
should be making good use of this gift instead of strangling it 
in red tape.
    We want policies that enable our resources to be utilized 
for the benefit the American people. If we do this right, we 
can lower energy prices, create jobs, and strengthen national 
security.
    There will be issues related to access, issues related to 
infrastructure, and issues related to export, among other 
things that will need to be sorted out. But today, we will 
focus on the threshold question of how much potential is out 
there and how this knowledge can help shape the difficult, but 
remarkable choices we will have to make as a country on how 
best to use it all.
    This includes ensuring a diverse mix of our resources: 
coal, oil, gas, and renewables, continue to power America. But 
these and other policy considerations will be the subject of 
future hearings. We are pleased to welcome the EIA and all of 
our witnesses today.
    The good news is that a future of plentiful, affordable, 
and reliable supplies of North American energy is no longer 
just a dream. With today's effort to gain an accurate 
assessment of the resource base, we are taking the first step 
in what I hope will be a bipartisan initiative to help turn 
that dream into a reality.

                                #  #  #

    Mr. Whitfield. With that, at this time I would like to 
recognize the gentleman from Illinois, Mr. Rush, for 5 minutes.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I certainly want to thank you, Mr. Chairman, and 
Mr. Chairman, I also want to join you in welcoming all the new 
members of the subcommittee and those who are returning, and I 
want to especially welcome the new members on the Democratic 
side, Mr. McNerney, Mr. Tom Cole, and Mr. Barrow; Ms. Matsui 
and Ms. Christensen to this subcommittee.
    Mr. Chairman, I want to thank you for holding today's 
hearing assessing North America's energy resources. As we begin 
the subcommittee's work for the 113th Congress, I would submit 
that it is critical for us as policymakers to understand the 
changing landscape of our Nation's energy supplies, not only as 
we move away from policies guided by scarcity but also so that 
we can develop a comprehensive energy plan for moving this 
Nation forward.
    This subcommittee needs to get down to the serious business 
of enacting an energy blueprint that will move this country 
towards a truly all-of-the-above strategy that will follow four 
basic principles: one, to provide safe, reliable and affordable 
energy to all Americans; two, to provide additional jobs and 
economic opportunities to all segments of our population; 
three, a plan that will address the dire consequences of 
climate change that scientists have been warning us about for 
years now and which we have been seeing more and more firsthand 
evidence of across this Nation; and fourth, to set a path that 
would help us become self-sufficient and energy independent 
over the next few decades.
    Mr. Chairman, today we will hear from our expert witnesses 
that domestic crude oil production has increased significantly 
over the past few years with the EIA reporting that U.S. crude 
oil production has increased from 5.1 million barrels per day 
in 2007 to 6.4 million barrels per day in 2012, the highest 
level since 1997. The EIA reports that in 2005, the United 
States imported 60 percent of the petroleum it consumed, and by 
2012, that number had dropped to about 41 percent, the lowest 
level in decades. This decline can be attributed primarily to 
increased domestic oil production, the additional use of 
biofuels as well as the adoption of higher fuel efficiency 
standards for vehicles. The EIA also projects that the United 
States will reduce its reliance on imported oil to less than 30 
percent of consumption by 2035, and U.S. natural gas production 
will increase by 44 percent by 2040 due primarily to the 
projected growth in shale gas production.
    However, Mr. Chairman, in order to reach all the necessary 
objectives of providing reliable energy, creating new jobs, 
addressing climate change and also becoming energy independent, 
it is imperative for this subcommittee to also promote and to 
encourage renewable energy resources. The NREL estimates that 
we could supply 80 percent of total U.S. electricity generation 
from renewable energy generation through technologies that are 
commercially available by the year 2005.
    Mr. Chairman, I welcome today's hearing, and we move 
legislatively, I will urge this subcommittee to promote a truly 
all-of-the-above energy policy that includes renewables and 
clean energy sources as well as traditional carbon-intensive 
fossil fuels before the time is too late, Mr. Chairman, too 
late to act.
    I thank you, and I really look forward to hearing from 
today's witnesses and I yield back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Rush. We appreciate that 
opening statement.
    At this time I recognize the chairman of the full 
committee, the gentleman from Michigan, Mr. Upton, for 5 
minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    Certainly, this hearing is a welcome one to examine the 
positive developments resulting from advancements in innovation 
and technology, the game-changing potential for North American 
energy independence. What was once believed to be unthinkable 
is certainly now within our grasp.
    For 3 decades, 30 years, the American people have been told 
that we are a Nation of declining resources at the mercy of 
OPEC. The story was nearly as gloomy with natural gas with 
forecasts of dwindling domestic supplies, higher prices, and 
rising imports from the Middle East. In fact, in this 
committee, many may remember when we crafted a new title in the 
Energy Policy Act of 2005 to facilitate what we thought would 
be the new norm: pending reliance on imported gas from 
geopolitically unstable regions of the world, to add to our 
growing reliance on OPEC oil. What a bad thing.
    But thanks to American ingenuity and advanced technologies, 
the trends in domestic oil and natural gas production have in 
fact been turned upside down. In fact, the United States is now 
the world's leading producer of natural gas, and the IEA is 
predicting that by 2020, U.S. oil production will exceed Saudi 
Arabia. 2020, let me repeat that, we are going to exceed the 
production in Saudi Arabia.
    Our overall energy landscape has changed dramatically in 
just a short period of time, and it is not only rewriting the 
economic outlook that we have as a Nation, but also beginning 
to change the geopolitical nature of global energy economics.
    Today, this subcommittee is launching a series of hearings 
on energy security and innovation to hear from experts who are 
working with the current realities. It is up to us to ensure 
that our federal laws are not continuing to introduce roadblock 
after roadblock to enhanced energy security. We have got to 
remain steadfast in our support for efforts to improve the 
infrastructure necessary to maximize use of these resources, 
including the Keystone XL pipeline. These issues are too 
important for our Nation to be looked at in a vacuum, and if we 
don't take advantage of our energy abundance, other nations are 
eagerly waiting to step in and use North American energy to 
fuel their own growth.
    The benefits of our emerging energy abundance are many, 
boosting our economy and creating jobs across the nation, a 
bright spot in the economic downturn. We have got to build upon 
that progress. Once we have a more accurate sense of North 
America's energy potential, we can start the process of 
ensuring we have the proper vision for the future.
    I yield the balance of my time to--anybody? Mr. Barton.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Today's hearing is a welcome one to examine the positive 
developments resulting from advancements in innovation and 
technology--the game changing potential for North American 
energy independence. What was once believed to be unthinkable 
is now within our grasp.
    For over 3 decades, the American people have been told that 
we are a nation of declining resources at the mercy of OPEC. 
The story was nearly as gloomy with natural gas--with forecasts 
of dwindling domestic supplies, higher prices, and rising 
imports from the Middle East. In fact, in this committee, many 
may remember when we crafted a title in the Energy Policy Act 
of 2005 to facilitate what we thought would be the new norm: 
Pending reliance on imported gas from geopolitically unstable 
regions of the world, to add to our growing reliance on OPEC 
oil.
    But thanks to American ingenuity and advanced technologies, 
the trends in domestic oil and natural gas production have been 
turned upside down. In fact, the U.S. is now the world's 
leading producer of natural gas and the IEA is predicting that 
by 2020, U.S. oil production will exceed Saudi Arabia's. Let me 
repeat that--by 2020, U.S. oil production will exceed Saudi 
Arabia. A remarkable turn of events.
    Our overall energy landscape has changed dramatically in 
just a short period of time, and it is not only rewriting the 
economic outlook that we have as a nation, but also beginning 
to change the geopoliticalnature of global energy economics.
    Today, this subcommittee is launching a series of hearings 
on American Energy Security and Innovation to hear from experts 
who are working with the current realities of this energy 
transformation. It is up to us to ensure that our federal laws 
are not continuing to introduce roadblock after roadblock to 
enhanced energy security.
    We must remain steadfast in our support for efforts to 
improve the infrastructure necessary to maximize use of these 
resources, including the Keystone XL pipeline. These issues are 
too important for our nationto be looked at in a vacuum, and if 
we don't take advantage of our energy abundance, other nations 
are eagerly waiting to step in and use North American energy to 
fuel their own growth.
    The benefits of our emerging energy abundance are many, 
boosting our economy and creating jobs in Michigan and across 
the nation, a bright spot in the economic downturn. We must 
build upon our progress.
    Once we have a more accurate sense of North America's 
energy potential, we can start the process of ensuring we have 
the proper vision for the future. I welcome our esteemed panel 
of experts here today, including Dr. Daniel Yergin. The 
domestic energy boom is good news--but only if we are wise 
enough to let it happen.

                                #  #  #

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Well, thank you, Mr. Chairman.
    I want the record to show that I have my iPad and I am 
trying to do this electronically, so I am at least trying.
    I want to welcome our witnesses. I see former Congressman 
Martin Frost out in the audience. He knows a little bit about 
energy. We are glad to have you here, Martin.
    Today is an important hearing, Mr. Chairman. I represent a 
Congressional district in Texas that at one time had it been a 
nation would have been the fifth largest oil-producing nation 
in the world. The first oil field west of the Mississippi was 
discovered in my Congressional district at Corsicana in 1895. 
As we speak today, in the Barnett shale, which is not totally 
in my Congressional district, there are over 16,000 producing 
natural gas wells, and last year they produced in the 
neighborhood of 2 trillion cubic feet of natural gas in that 
one field.
    With the miracle of hydraulic fracturing, we have unleashed 
a drilling and production revolution in this country, not only 
in natural gas but now that technology is being used in oil, 
and the State of North Dakota, which less than 10 years ago had 
probably fewer than 200 or 300 oil wells, is on track in that 
one State to produce over a million barrels of oil in the very 
near future, possibly this year. We can be energy independent 
if we want to. It is not a question of can we. It is a question 
of, is it in our economic and political self-interest to do so.
    So today's hearing is an important hearing for the American 
people to see the energy abundance that our Lord blessed us 
with and the policymakers in this room and in this city can 
decide what we want to do with it.
    With that, Mr. Chairman, I yield back to you or any other 
person.
    Mr. Whitfield. Thank you, Mr. Chairman.
    At this time I would like to recognize the ranking member 
of the full committee, Mr. Waxman of California, for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman. I appreciate that we 
are holding this hearing on North America's energy resources. 
We are going to hear testimony about fossil and renewable 
energy supplies in the United States, Canada and Mexico.
    We are dramatically improving the efficiency of our use of 
oil, so we are using less of it. At the same time, we are 
producing more domestic oil, which means we are importing less 
oil from dangerous parts of the world.
    We are unlocking new reserves of natural gas, which is 
helping to limit the use of polluting coal, and to increase the 
competitiveness of our domestic industries. We have doubled our 
capacity to generate renewable electricity from wind and solar 
in just 4 years, which has cut our pollution and invigorated 
clean energy manufacturing.
    These are all positive developments. The question we must 
ask is whether we are on a sustainable course for the years to 
come.
    In his inaugural address, President Obama said that we must 
transition to a sustainable energy future. He said we must 
respond to climate change, because to do otherwise would 
``betray our children and future generations.''
    As we debate our energy future, this committee has a 
choice. It is an energy choice and a climate policy choice, and 
ultimately it is a moral choice.
    The biggest energy challenge we face as a country is carbon 
pollution. We can't have a conversation about America's energy 
policy without also having a conversation about climate change. 
We have a rapidly diminishing window of time to act to reduce 
our carbon pollution before the catastrophic impacts of climate 
change are irreversible.
    In November, the International Energy Agency published its 
World Energy Outlook. IEA concluded that our current global 
energy system is ``unsustainable.'' The International Energy 
Agency found that ``the climate goal of limiting warming to 2 
degrees Celsius is becoming more difficult and more costly with 
each year that passes.'' The International Energy Agency also 
concluded that if the world does not take action to reduce 
carbon pollution before 2017, then ``all the allowable 
CO2 emissions would be locked in by energy 
infrastructure existing at that time.
    That means that the energy policy decisions we make today 
will have a real and direct impact on whether we can limit 
climate change in the future. Every decision to build a new 
fossil fuel-fired power plant, or construct a pipeline to 
transport tar sands, or drill for more oil off our Nation's 
coasts has climate risks. We need to understand and weigh those 
risks before we lock in infrastructure that will produce carbon 
pollution for decades to come.
    There is an appeal to the energy resources we are 
discovering. We are stronger when we produce oil in the United 
States than when we import it from Saudi Arabia. We are better 
off when we produce our own natural gas than when we import 
LNG.
    But we also must recognize that the world has far more 
proven reserves of oil, gas and coal than we can ever safely 
use. The atmosphere has a rapidly shrinking capacity to safely 
absorb carbon. In fact, if we want to have a reasonable chance 
of limiting average global warming to 2 degrees Centigrade, or 
3.6 degrees Fahrenheit, there is an estimated five times more 
carbon in proven fossil fuel reserves than we can release into 
the atmosphere. If we burn all the known reserves of fossil 
fuel without new technologies to sequester the carbon, the 
damage to the planet would be immense.
    The future will belong to the country that leads the 
inevitable transition to the clean energy economy of tomorrow. 
It is our responsibility to figure out how we make sure our 
Nation is in the forefront of this change.
    Mr. Chairman, this is a new Congress. I want to begin it by 
offering to work with you as we grapple with these incredibly 
serious challenges. I look forward to this hearing and future 
hearings on this subject and to our cooperation to deal with 
these problems in a bipartisan and a balanced way.
    Thank you. I yield back the time.
    Mr. Whitfield. Thank you, Mr. Waxman. We appreciate your 
opening statement.
    I also want to welcome Joe Pitts of Pennsylvania, who is a 
new member of this subcommittee. As many of you know, he is the 
chairman of the Health Subcommittee, and we are delighted to 
have him on the Energy and Power Subcommittee as well. We do 
have a new vice chairman also, Steve Scalise, who was here but 
I think stepped out for just a moment.
    Right now I would like to get our witnesses. We are 
thrilled with the panel that we have today. Each one of them 
are real experts in various fields of energy and we genuinely 
appreciate your testimony that you have prepared and that you 
are about to give, and I know that everyone will have questions 
for you, and at this time I would like to introduce our panel 
of witnesses. First we have Adam Sieminski, who has been here a 
number of times. He is the Administrator for the United States 
Energy Information Administration, and we welcome you. Dr. 
Daniel Yergin is Vice Chairman of IHS, and many of you know Mr. 
Yergin also because he wrote a book called The Prize, which won 
the Pulitzer Prize, so we are delighted that he is here. We 
have Jennifer Morgan, who is the Director of the Climate and 
Energy Program at the World Resources Institute, and we look 
forward to your testimony, Ms. Morgan. We have Mary Hutzler, 
who is a Distinguished Senior Fellow at the Institute for 
Energy Research. I read her testimony as well, and she has some 
great things to tell us today. And then we have Mr. Harry 
Vidas, who is Vice President for ICF International, and we 
appreciate your thoughtful testimony as well, Mr. Vidas.
    So each one of you will be given 5 minutes for your opening 
statement, and there are a couple of little boxes with lights, 
and when it is green that means go, and when it is red, it 
means stop, but we will give you some leeway because we do 
respect your being here and appreciate your expertise.
    So Mr. Sieminski, I will recognize you for 5 minutes for 
your opening statement.

 STATEMENTS OF HON. ADAM SIEMINSKI, ADMINISTRATOR, U.S. ENERGY 
INFORMATION ADMINISTRATION; DANIEL YERGIN, VICE CHAIRMAN, IHS; 
 JENNIFER MORGAN, DIRECTOR, CLIMATE AND ENERGY PROGRAM, WORLD 
  RESOURCES INSTITUTE; MARY J. HUTZLER, DISTINGUISHED SENIOR 
FELLOW, INSTITUTE FOR ENERGY RESEARCH; AND E. HARRY VIDAS, VICE 
                  PRESIDENT, ICF INTERNATIONAL

                  STATEMENT OF ADAM SIEMINSKI

    Mr. Sieminski. Thank you, Mr. Chairman and members of the 
subcommittee. I appreciate the opportunity to appear before you 
today to discuss American energy security and innovation. EIA 
is the statistical and analytical agency within the U.S. 
Department of Energy. By law, its data, analyses and forecast 
are independent of approval by any officer or employee of the 
U.S. government.
    My statement today summarizes recent trends in production 
and draws on EIA's January short-term energy outlook, and also, 
I am going to talk about resource estimates for oil, gas, coal 
and renewables for the United States.
    As I discuss the different sectors, though, it is useful to 
keep in mind that the methodologies for developing reserve and 
resource estimates differ across the fuels. EIA estimates that 
U.S. total crude oil production averaged 6.4 million barrels a 
day in 2012, an increase of .8 million barrels a day. This is 
the largest annual increase since Colonel Drake drilled the 
first commercial crude oil well up in Titusville, Pennsylvania 
back in 1859. This growth is driven largely by tight oil 
production--that is in figure one of my written statement. 
Drilling in tight oil plays in North Dakota, Montana, and Texas 
are expected to account for the bulk of the forecast production 
growth over the next 2 years. U.S. crude oil production could 
reach 8 million barrels a day in 2014, and with some very 
strong assumptions about how drilling could proceed and other 
factors, could get as high as 10 million barrels a day but that 
is not currently in our reference case.
    U.S. dry natural gas production has increased consistently 
since 2005, mainly because of the production of shale gas 
resources. Total marketed production averaged about 69 billion 
cubic feet in 2012, and EIA expects production will remain 
close to that level this year and next year.
    Crude oil and natural gas proved reserve additions in 2010 
were the highest recorded since EIA began publishing those 
numbers in 1977. Crude oil proved reserves increased by 12.8 
percent, almost 3 billion barrels, during 2010 to end the year 
at over 25 billion barrels. U.S. proved reserves of wet natural 
gas increased by almost 12 percent, or 34 trillion cubic feet, 
during 2010, ending that year at well over 300 trillion cubic 
feet.
    Next, I want to speak to the issue of oil and natural gas 
resources. Estimates of technically recoverable resources, 
while inherently uncertain, are a common measure of the long-
term viability of U.S. domestic production. U.S. crude oil and 
lease condensate resources in non-prohibited areas are 
estimated at 223 billion barrels in the Annual Energy Outlook 
that we just published in December up from EIA's estimate of 
140 billion barrels back in the year 2000. That is despite 
cumulative production since the year 2000 of over 26 billion 
barrels of oil. U.S. total dry natural gas resources, 2,327 
trillion cubic feet in the AEO2013 are up from our 2000 
estimate of nearly 1,600, maybe I should say only 1,600 
trillion cubic feet, despite cumulative production between 
those years of 260 trillion cubic feet. The shale gas resource 
in the AEO2013 is about 13 percent higher than what we 
estimated in 2012.
    Moving on to coal, domestic production decreased by 12 
percent by over 1,000 million short tons between 2008 and 2012, 
half of this decline between 2011 and 2012, as electric 
utilities and the industrial sector cut back their purchases. 
EIA estimates that coal consumption in electric power in 2012 
will total 829 million short tons, the lowest since 1992, due 
largely to competition from low natural gas prices. Coal 
exports in 2012 partially offset that decline in consumption.
    The largest category of coal resources, the demonstrated 
reserve base, represents coal in the ground, this resource base 
was originally estimated back in 1974 by the Bureau of Mines as 
part of the last comprehensive assessment. On January 1, 2012, 
the resource base was estimated to contain 483 billion short 
tons. That is a huge amount. Limited resources at EIA have 
prevented us from doing a full national reassessment but we 
have updated some of the regions.
    Finally, I would like to highlight developments in 
renewable resources. EIA estimates that production of 
renewables, most renewables, grew significantly in 2012, 
especially wind and solar. Hydropower production fell because 
of the drought. Even so, the overall growth in renewable energy 
consumption from 2010 to 2012 was over 10 percent. Drought in 
the Midwest caused fuel ethanol production to fall by about 
80,000 barrels a day in the second half of 2012. We expect that 
production will pick back up again as the drought recedes and 
we will get back to pre-drought levels of about 870,000 barrels 
a day of ethanol production. Biodiesel production averaged a 
billion gallons in 2012 and it is expected to meet the RFS 
requirements of 1.28 billion gallons that have been set for 
2013.
    That concludes my testimony. Thank you again, Mr. Chairman, 
for the opportunity to be here.
    [The prepared statement of Mr. Sieminski follows:]


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    Mr. Whitfield. Well, thank you.
    And Dr. Yergin, you are recognized for 5 minutes.

                   STATEMENT OF DANIEL YERGIN

    Mr. Yergin. Chairman Whitfield, Ranking Member Rush, 
members of the committee, I am pleased to be here----
    Mr. Whitfield. Is your microphone on?
    Mr. Yergin. I don't think so. So I will start over with 5 
minutes. Thank you.
    Chairman Whitfield, Ranking Member Rush, members of the 
committee, it is really an honor to be here to have the chance 
to share some thinking that fits into the framework of the 
discussion that the members have already laid out.
    It is indeed very timely because the United States is in 
the midst of an unconventional revolution in oil and gas that 
fits that all-of-the-above strategy that Congressman Rush 
talked about and also becomes increasingly apparent, goes 
beyond energy itself, that is, it goes to the economy, and it 
has only become really apparent in the last year or two that 
this unconventional revolution is supporting currently about 
1.7 million jobs in the United States and it is not only in the 
oil- and gas-producing States. There are 44,000 jobs in New 
York, which doesn't produce, 39,000 jobs in the State of 
Illinois. We think that overall job number will rise to 3 
million by 2020.
    Last year, this unconventional revolution brought $62 
billion in revenues to federal and State government. By 2020, 
that number could be close to $115 billion. It is helping to 
stimulate a manufacturing renaissance in the United States. We 
have noted something like $95 billion of plans for investment 
in the chemical sector in the United States. I don't know if 
all of that will get done but that demonstrates it. It is 
certainly improving the competitive position of the United 
States in the world and beginning to affect global geopolitics.
    I think although great advances have been made in solar and 
wind--I talk about them in The Quest--the rebirth of 
renewables, those are really innovations from the last century. 
In terms of this century, what is happening in oil and gas is 
the biggest energy innovation so far of the 21st century. It 
has unfolded fast. Those of you who participated in hearings in 
2008 remember those dark, dire days when, I think as Chairman 
Whitfield reminded, the world was going to run out of oil and 
the United States was going to run out of oil even more 
quickly. How that has changed. Shale gas now has gone from 2 
percent of our supply to 37 percent of our supply, and what is 
really dramatic is what has happened on oil, which instead of 
continuing its long decline has increased dramatically by 
almost 39 percent since 2008. That increase is equivalent--
because you say what does that mean. It is equivalent to the 
entire output of Nigeria, the 7th largest oil-exporting country 
in OPEC. It is almost equivalent to Iran's total exports before 
sanctions went into place. Indeed, it is sobering to consider 
that without these technologies, and the oil output that has 
resulted from them, the sanctions on Iran might well have 
failed.
    The environmental aspects have been touched on. U.S. carbon 
dioxide emissions from energy consumption are down 13 percent 
since 2007. I think in discussion we might get to some of the 
conclusions that we came to as the Deutch committee, the 
subcommittee of the Secretary of Energy Advisory Board set up 
at the behest of President Obama, on managing the environmental 
issues around this. One thing that did come out of that hearing 
is a focus on the role of the States and in particular the 
activities of STRONGER, the collaborative organization of the 
States that seeks collaborative benchmarking and standard 
setting.
    Let me come finally to something that is always 
contentious, which is imports and exports of oil and energy, 
which has been a major issue for the United States for about 70 
years. Until the end of the last decade, it seemed that the 
question was only how fast would oil imports go up and how big 
would our imports of natural gas become, as the chairman 
referred to in his remarks. Well, this unconventional 
revolution has sure turned that around. Mr. Rush has cited the 
decline in our imports over the last 7 years or so, and this is 
the result both of surging production and greater efficiency. 
Moreover, the flow of imports has changed. Canada now supplies 
about 27 percent of our total.
    But what gets the most attention right now is the question 
of whether we are going to become an export of LNG, liquefied 
natural gas, and I think this needs to be looked at in terms of 
the overall U.S. supply and global competition. Our view, 
similar to others, is that the market in the United States is 
demand constrained, not supply constrained. Many LNG projects 
have been announced. We think only a handful will be built, 
these $10 billion projects. The reason is both cost and scale 
of global competition. Currently already, before any of these 
get going, already about a third, equivalent to a third of 
total existing capacity new projects are under construction or 
have been committed. So the United States capacity will be 
coming into a market in which there will be new supplies from 
Australia, new sources such as offshore East Africa and eastern 
Mediterranean and Canada. Just yesterday, Canada approved a 
major export project to Asia. Finally, the shale gas 
development that will occur elsewhere, so these will all be 
offsets.
    So let me just add one other thing. I think for decades, 
the United States has made the free flow of energy supplies 
really one of the corner principles of our foreign policy. It 
is the policy we have urged on many other nations. So to me, at 
least, it is puzzling how we can say to a close ally like Japan 
suffering energy shortages as a result of Fukushima that on the 
one hand we want you to import less oil from Iran, yet on the 
other hand we don't want to consider new natural gas exports to 
Japan. So those are some thoughts for consideration on it.
    I will just conclude by saying certainly expanded domestic 
supply will add resilience to shocks and add to our security 
cushion. Moreover, prudent expansion of U.S. energy exports 
will actually add an additional dimension to U.S. influence in 
the world. However, there remains only one world oil market, 
and a disruption anywhere will be a disruption everywhere.
    So all together this unconventional oil and gas revolution 
has already had a major impact in multiple dimensions. Its 
significance will continue to grow as it continues to unfold, 
and these opportunities certainly provide a timely opportunity 
for assessing the impact and significance in its many 
dimensions. Thank you.
    [The prepared statement of Mr. Yergin follows:]


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    Mr. Whitfield. Thank you, Dr. Yergin.
    Ms. Morgan, you are recognized for 5 minutes.

                  STATEMENT OF JENNIFER MORGAN

    Ms. Morgan. Thank you very much, Mr. Chairman, and thank 
you for the opportunity to testify here today. I work for the 
World Resources Institute, which is a nonprofit, nonpartisan 
think tank, and we focus on the intersection of environment and 
improving people's lives.
    I am very delighted to speak here today about America's 
abundant energy resources and the smart choices we need to make 
to deliver them, and I have two main points to share with you 
today. First is that an effective, durable and affordable 
energy strategy must consider the risks of climate change. Why? 
Well, our climate is changing. Each successive decade in the 
last 50 years has the warmest on record globally, and extreme 
weather events are on the rise with tens of billions of dollars 
in damages in the United States each year. A 2010 National 
Research Council report concluded that ``climate change is 
occurring, is caused largely by human activities and poses 
significant risks for, and in many cases is already affecting a 
broad range of human and natural systems.'' This is the message 
of numerous comprehensive science assessments including the 
draft National Climate Assessment that was released last month.
    Directly relevant to this subcommittee are electric 
infrastructure and reliability are already being affected and 
are increasingly vulnerable to droughts and other disruptions 
caused by climate change. Current impacts on energy production 
are just the beginning. Unless we change course, these impacts 
will become more extreme, placing our energy infrastructure and 
our country at great risk, which brings me to my second point, 
which I think is very important. To avoid the most serious 
climate change impacts, our energy policy must drive low-carbon 
technologies forward now and build them out at a much larger 
scale.
    The good news is that we don't have to choose between 
energy security and climate security. America is rich in 
renewable resources and has large opportunities to increase 
efficiency. According to the National Renewable Energy 
Laboratory, 80 percent of our electricity needs can be met in 
2050 through renewable generation and existing technology. We 
can also improve our efficiency across the economy. The 
National Academy of Sciences found that the United States could 
save 30 percent of the energy used, and reducing methane 
emissions from natural gas and capturing and storing 
CO2 can put us on the cutting edge of technology 
development, which I think is a true win-win.
    If the United States, however, and we decide not to move 
forward with a low-carbon future now, we risk not only the 
severe impacts of climate change but also stranded investments 
from short-term poorly informed planning. Many utilities are 
already factoring climate change into their investment 
decisions, and they are looking for regulatory and climate 
policy certainty. Investments in high-polluting resources, I 
think, will prove to be a poor bet over time and these 
investments will be at direct physical risk from increasing 
impacts.
    So without a rapid shift to a low-carbon economy, the 
United States is also going to miss out on the clean technology 
market around the world. The global market for low-carbon 
technology could double or triple by 2020.
    So in conclusion, Mr. Chairman, I think the United States 
has the opportunity to be both energy and climate secure in the 
future, and Congress can help and assist in that effort through 
policies that first ensure climate change risks are more 
directly incorporated into both public and private decision 
making; two, build out America's clean energy sector through an 
approach that is comprehensive, long term, targeted and 
inclusive; three, increase energy efficiency across the 
economy; and four, provide funding and incentives for low-
carbon and clean energy technologies. Ultimately, Congress will 
work together to build national energy policies that take these 
climate risks very seriously and take advantage of all the 
opportunities presented by our abundant clean energy resources.
    Thank you very much for the opportunity, sir.
    [The prepared statement of Ms. Morgan follows:]


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    Mr. Whitfield. Thank you, Ms. Morgan.
    Ms. Hutzler, you are recognized for 5 minutes.

                  STATEMENT OF MARY J. HUTZLER

    Mr. Hutzler. Chairman Whitfield, Ranking Member Rush and 
members of the subcommittee, thank you for the invitation to 
participate in today's hearing.
    The Institute for Energy Research is a nonprofit think tank 
that conducts research and analysis concerning global energy 
issues. In the last several years, IER has monitored closely 
the boom in energy production that is taking place in the 
United States, primarily on private and State lands. IER also 
tracks regulations and policies that limit the potential to 
reduce our dependence on overseas oil regimes, hinder our 
ability to generate much-needed revenues, and harm efforts to 
foster an energy-based economic recovery that creates jobs.
    Just this morning, we released a study on the economic 
effect of immediately opening federal lands onshore and 
offshore to energy production. According to our analysis, 
immediately opening federal lands that are currently 
unavailable because of statutory or administrative action would 
result in an additional $14.4 trillion to our GDP over the next 
37 years. In light of the recent Commerce Department report, 
the GDP shrank for the first time since 2009. Our economy needs 
the lasting stimulus that robust energy development on federal 
lands and waters would provide.
    But today's hearing is focused primarily on the resource 
availability and the potential under our feet and off our 
shores to achieve domestic energy goals, almost unthinkable 
just a few years ago. In fact, for decades Americans were 
asking the question, where we will get the energy we need to 
heat our homes, fuel our cars and meet the demands of a strong 
21st century economy. Due to hydraulic fracturing and 
horizontal drilling technologies, we no longer question whether 
we have the resources. Rather, we question whether we will be 
able to develop them and thus reap the nationwide economic 
benefits such development would foster.
    The myth of energy scarcity that has plagued our national 
conversation has been exposed. Just in the last year, the 
misleading refrain that the United States only possesses 2 
percent of the world's oil reserves has been replaced by the 
mounting evidence of our Nation's resource abundance. IER 
highlighted this in an inventory of North America's energy 
resources. Using government information, we cataloged the vast 
resources of the United States and our neighbors. The United 
States has enough resources to provide reliable and affordable 
energy for centuries to come. The question is whether the 
federal government will permit us to access these abundant 
resources and not whether sufficient resources exist. We can 
now unlock our shale resources using technology proven for more 
than 60 years in over 1 million wells without a single 
confirmed case of contamination.
    Furthermore, while our use of fossil energy has 
dramatically increased over the last 50 years, our air quality 
has improved. According to the EPA, emissions from the six 
criteria pollutants under the Clean Air Act have decreased 68 
percent since 1970, even though our energy consumption has 
increased by 45 percent. Therefore, however troubling trends in 
policy that threaten to restrict access to our vast energy 
resources, which could make American-made energy less 
available, affordable and reliable. Oil shale development has 
all but stopped because Administration policy withdrew research 
in much-needed leasing activity that could bring these 
resources to market.
    Increased oil sands imports from our neighbor Canada could 
free the United States from energy dependence on foreign 
countries where American workers face increasing threats of 
kidnapping by terrorists and even murder. But we need the 
transportation infrastructure to get it here and the energy 
security this infrastructure would provide. Onshore development 
on federal lands, which is roughly estimated at 700 million 
acres of subsurface mineral estate, is extremely limited and is 
increasingly so. In fiscal year 2009, for example, the current 
Administration leased fewer onshore acres for energy 
development than in any preceding year on record. Offshore 
development on 1.76 billion acres of mineral lands has suffered 
from the de facto Administration embargo with lease plans 
canceled, moratoria imposed and cumbersome regulatory activity 
that served to discourage exploration.
    Today, permitting delays by federal regulators have driven 
the wait to more than 300 days before drilling can begin on 
federal lands, about twice as long as it took in 2005. By 
contrast, States like North Dakota are now turning permits in 
10 days, in Ohio, 14 days, in Colorado, 27 days. Alaska's 
energy resources lie dormant even though its pipeline has 
enough unused capacity to take twice the daily production of 
North Dakota.
    Decisions made today about access to energy resources 
affect energy production for years and decades to come. The 
more areas accessible to energy production today increases the 
likelihood of domestic production tomorrow, and with it, 
increased jobs, government revenues and economic activity.
    Thank you for the opportunity to testify today, and I look 
forward to your questions.
    [The prepared statement of Ms. Hutzler follows:]


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    Mr. Whitfield. Thank you, Ms. Hutzler.
    Mr. Vidas, you are recognized for 5 minutes.

                  STATEMENT OF E. HARRY VIDAS

    Mr. Vidas. Chairman Whitfield, Ranking Member Rush and 
members of the subcommittee, I appreciate the opportunity to 
discuss my work in estimating the U.S. endowment of oil and 
natural gas resources.
    Due to technology advancements, the U.S. natural gas and 
oil resource base is now widely seen as large and diverse. 
Lower-48 production of shale gas, tight oil, and associated 
natural gas liquids has been an engine of economic growth in 
recent years. Our analysis of the remaining resource base 
indicates that this unconventional resource base is large and 
that this production activity is in the early stages of the 
resource development cycle. Therefore, we expect growing 
production and increased jobs many years into the future.
    In recent years, ICF has extensively evaluated shale gas 
and tight oil resources, both in terms of technical and 
economic recovery. This work has been sponsored by private 
companies, industry associations and government agencies. We 
have evaluated the geology, historic production and costs of 
all the major U.S. and Canadian geologic settings, or as we 
say, plays. This analysis shows that these resources are 
geographically widespread, and are economic to develop at 
moderate wellhead prices. The ICF analysis of these emerging 
natural gas and oil resources is done using a geographical 
information system, a process that evaluates the resource at a 
highly granular level, accounting for variations in geology, 
resource quality and economics within the plays.This ICF 
analysis reflects recent upstream technology including advances 
in horizontal drilling and steering, multistage hydraulic 
fracturing, improvements in fracturing fluids and methods, and 
improvements in seismic and geophysical analysis that helps 
identify the best locations for the wells. And finally, I would 
point out advances that reduce the environmental impacts of 
drilling. These are such things as using multi-well drilling 
pads, conservation of water and recycling of water resources, 
reformulation of chemical additives, and reduced emission 
completions that capture gases in the flow-back.
    These upstream technology advances have enlarged the U.S. 
economic resource base by expanding areas where drilling can 
take place, increasing recovery factors and reducing capital 
and operating costs per unit of production. ICF estimates that 
the remaining technically recoverable U.S. natural gas resource 
base is 3,850 trillion cubic feet, which represents 155 years 
of current consumption. The U.S. shale gas resource is almost 
2,000 tcf, and that makes up 52 percent of the total. One 
should look at these assessments as conservative in the sense 
that they are developed assuming current technology and no 
major new plays are discovered.
    In terms of U.S. oil production, as already been mentioned, 
U.S. production started increasing in the year 2009 for the 
first time since 1984 and there is the potential for the United 
States to become a much larger oil producer in coming decades 
due, as we have heard, from expanded production of tight oil. 
Our current assessment of the U.S. oil resources in terms of 
technically recoverable resources is 264 billion barrels. This 
represents 110 years of production at current production rates.
    The U.S. tight oil potential is excellent due to the wide 
range of potential producing plays in diverse geologic settings 
at numerous basins. The success in tight oil across a wide 
spectrum of geologic settings indicates that most historic oil-
producing areas will eventually see horizontal drilling, and in 
many cases, this tight oil development will dominate activity 
and production.
    So in summary, recent advances in drilling and completion 
technologies have dramatically increased estimates of 
technically recoverable natural gas and oil resources and have 
led to a much more optimistic outlook for future oil, gas and 
natural gas liquids production. Our forecast for natural gas is 
that it is going to be growing at about 2.2 percent per year up 
to about 32 tcf by 2025, and our forecast for the oil 
production is even faster 2.6 percent, up to 9 million barrels 
per day by 2025.
    The other point I want to make is that we expect upstream 
technologies to continue to improve and therefore we expect 
these resource base number to be going up in the future as well 
as the economics to improve as well. Thank you.
    [The prepared statement of Mr. Vidas follows:]


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    Mr. Whitfield. Thank you, Mr. Vidas.
    At this time we will go into the question-and-answer 
period, and I will recognize myself for 5 minutes for 
questions. Once again, I want to thank all of you for your 
testimony. It is quite encouraging that we find ourselves in 
America today with abundant natural resources--gas, oil, coal--
as well as renewables, and your testimony, as I had indicated 
in my opening statement, shows how just a short period of time 
how everyone was talking about we were depleting our natural 
resources. So it is really exciting that we find ourselves in 
America in this situation and particularly at a time when we 
really are in a global marketplace and we find ourselves 
competing with other countries for jobs and for job creation. 
How many of you attended the World Economic Forum in Davos? Dr. 
Yergin? OK.
    Now, I had read some comments that there was a lot of 
discussion in Davos about the focus on American energy 
independence, and the articles that I read indicated it was a 
major concern for the Europeans because fortunately in America, 
most of our production and discoveries have occurred on private 
lands which we have been able to develop even though permits on 
public lands are down, and I know that in Europe, a lot of 
these discoveries are on government-owned lands. But would you 
make a comment about your observation of the Europeans' views 
on what is happening in America in the energy sector?
    Mr. Yergin. Yes. I think it was summarized for me at the 
World Economic Forum, I asked a prominent journalist what he 
thought the number one theme was, and I expected him to say the 
euro, and he said shale, and it took me by surprise, but I 
think that, you know, it takes time for thinking to catch up 
with changes, and I think Europe is suffering from enormous 
unemployment problems. Spain has 26 percent unemployment. And 
they are looking at the United States and saying the United 
States, because of this low-cost, abundant energy is going to 
be a very formidable competitor and people kind of stopping 
investing Europe and wanting to transfer their investment to 
the United States, and I think companies that are European 
based saying that they are going to be at a disadvantage 
competing against the United States.
    I heard the same thing when I was in China for the 
publication of my book The Quest. I spent 2 weeks there and I 
heard the same intense discussion about shale in the sense that 
the United States was going to be changing the competitive 
playing field in the global economy because of this, so I think 
the rest of the world has really kind of become obsessed with 
this development in the United States because of how it changes 
the competition, as I say, in the global marketplace.
    Mr. Whitfield. Well, I agree and I think we are very 
fortunate to live here, and the policies that we adopt are 
going to go a long way in determining how far we can go down 
this road, and I said in the beginning, one of our primary 
focuses today is about economic growth and job creation, and we 
have what I will refer to as a magic key to really facilitate 
that in many ways.
    Let me just briefly talk about the export of liquefied 
natural gas. I know it is controversial and I know there are a 
lot of different sides to it. My understanding is that a permit 
has been issued and there is a facility being built in 
Louisiana for the purpose of doing that. I know the chemical 
industry, for example, is very much opposed to it, but would 
some of you just make a brief comment on what you think about 
it? I mean, do you think this is something we should be looking 
at? When you think about the impact it would have on our trade 
deficit too, that is good. But Dr. Yergin, I know you mentioned 
it briefly. Just give me your views on that.
    Mr. Yergin. Well, I think that some of us can remember a 
few years ago when we were going to have all these importing 
facilities for LNG, and you would look at a map and you would 
see 30 or 40 of them and it turned out it is sort of zero right 
now, so I think there is a kind of boom discussion about all 
these facilities, and our conclusion is that the number that 
will be built is perhaps, you know, you could count them on one 
hand because a lot of the discussion has left out, as I said, 
the competitive factor that there are a lot of other people. 
Canada might have three to five just in British Columbia and 
they cost a lot, and a lot of new projects. There is new gas 
off of East Africa. There is new gas off Israel. All that is 
going to be coming into the marketplace, so that will kind of 
put a balance upon it, and I think as many of us feel on this 
panel that the issue is that we are demand constrained. We have 
a lot of gas and so it would not have a dramatic impact on gas 
cost and it would unfold over a decade or more.
    Mr. Whitfield. Did you want to make a comment, Ms. Morgan?
    Ms. Morgan. We haven't worked extensively on LNG exports 
but I think the key point I think across the board is, if the 
United States is successful in integrating carbon capture and 
storage along with gas from shale and other resources, you 
actually, I think, would have even greater opportunities.
    Mr. Whitfield. I see my time is expired so at this time I 
will recognize the gentleman from Illinois for 5 minutes, Mr. 
Rush.
    Mr. Rush. I want to thank you, Mr. Chairman.
    Dr. Yergin, it is so good to see you again. I remember 
having breakfast with you at the Aspen Institute and I thought 
you did quite well and you are doing quite well now. In your 
testimony, you report that the unconventional energy revolution 
supports 1.7 million jobs currently and that that number will 
grow significantly over the next decade. Can you speak to these 
new jobs and what we can expect to see? How will the number 
grow, the types of jobs that will be created and where these 
jobs will be located nationally?
    Mr. Yergin. We undertook this research over about the last 
six or seven months, and we were surprised by a couple of 
things, one, the scale of the jobs. We use the same methodology 
that the Bureau of Economic Analysis and Commerce Department 
uses. And secondly, that it really spread across all the 
States. That is why I mentioned New York and Illinois as 
examples because of these long supply chains, and I think this 
too, if we talk about the surprise around unconventional 
resources, the first surprise was the scale of it and the speed 
and the second has been this wider economic impact. So the 
jobs, that 1.7 million that we talk about includes direct jobs, 
which would actually be working in the oil and gas fields. It 
would include the technology jobs, the service jobs that 
support it, and then it is the jobs that are created--this is 
called the induced jobs that are created by the rising incomes 
that people have to spend and it is the kind of services that 
would be provided. So it is kind of package of all of them, and 
you know, it is a demonstration of how tightly integrated our 
national economy is, that it goes across the entire country. So 
it could be everything from somebody working in manufacturing 
steel in Ohio to somebody working in information technology in 
California that feeds into this industry.
    Mr. Rush. Are we equipped now? Is the American workforce 
prepared to take these jobs? Are we prepared to deal with these 
jobs?
    Mr. Yergin. I think so up to a point, but it does require 
training. For instance, the State of Ohio is getting prepared 
for activity there, and Governor Kasich there has made a big 
emphasis on vocational training in the schools to train workers 
who would be working directly in the oil or gas field, in the 
Utica shale, as it is called. I think it is striking that this 
job creation or job support has really occurred during a period 
of high unemployment and it has been in a sense one of the 
bright spots during these 5 tough economic years that we have 
had.
    Mr. Rush. Thank you.
    Ms. Morgan, in your testimony you state that the United 
States has been a world leader in clean energy research and 
development but it has had less success relative to other 
countries in actually developing a domestic clean energy 
manufacturing industry. In your opinion, what has prevented the 
United States from developing a robust clean energy 
manufacturing sector?
    Ms. Morgan. Thank you. We recently did an assessment across 
five countries of the wind and solar value chain to look at who 
is winning the clean energy race, and what we found across the 
board is that the countries that are ahead, which include 
Germany and China, have a long-term policy signal that provides 
certainty for investors in manufacturing. So you need to have 
something that goes beyond 3 years. So now with our short-term 
benefits, you may see some wind turbines come up but you may be 
creating the perverse piece where you are not creating the 
manufacturing capacity domestically because there is no long-
term policy signal around renewable energy and therefore you 
may see the import of those parts because investors don't know 
what is going to happen in 2 years or 3 years, so it is mostly 
that lack of national renewable energy policy that is lacking 
here.
    Mr. Rush. Along the same lines, what does the United States 
need to do to become a net exporter of clean energy technology?
    Ms. Morgan. I think there are a number of pieces across the 
value chain that would be essential. The first is that national 
policy that provides that long-term certainty, so that could be 
anything from a renewable portfolio standard to a feed-in 
tariff to whatever policy of choice provides that long-term 
certainty. The second really is putting in place the innovation 
centers that bring together public and private actors to be 
able to develop those new technologies rapidly. The third is to 
increase our research and development. We are doing pretty 
there, but our problem really is that although we are leading 
the world in R&D, we are not doing it fast enough vis-`-vis 
other players. Thank you.
    Mr. Rush. Thank you very much, Mr. Chairman. You have been 
very kind.
    Mr. Whitfield. Thank you. At this time I recognize the 
gentleman from Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    I would like to ask Mr. Yergin if he is familiar with the 
emerging technology on hydraulic fracturing that greatly 
minimizes the amount of water that is used. Have you studied 
that in any detail?
    Mr. Yergin. I am certainly aware of companies who are 
working to perhaps reduce the water requirements by as much as 
75 percent, and I think, you know, one of the things when we 
did this study for the Secretary of Energy Advisory Board, we 
said that the needs here, as your question suggests, are going 
to really promote a lot of innovation and there sure is a lot 
of innovation going into the water issues right now, and we do 
see the water usage as a major part of it.
    Mr. Barton. There is a company in my district and then 
there are a number of companies around the country that they 
haven't commercialized it to a great degree yet but they have 
certainly shown that it works on a prototype basis, and some of 
them can take as much as 99 percent of the water that is 
currently used to frack a well. It is no longer necessary. And 
I think that if we can solve that issue satisfactorily, the sky 
is the limit. I think that seems to be the larger environmental 
issue.
    Mr. Yergin. Congressman Barton, if I can say, it is 
striking that this is all--you know, this is only in the last 4 
or 5 years and already to see this innovative response, which 
is part of our hearing, it kind of shows the creativity of our 
industries to respond to immediate needs.
    Mr. Barton. When I was chairman of the full committee, we 
passed a bill called the Energy Policy Act of 2005, and we put 
in language that gave the Federal Energy Regulatory Commission 
ultimate say on siting LNG facilities for import. We thought we 
were going to be importing liquefied natural gas. That 
authority is now being used by the FERC to license facilities 
to export, in some cases the same facility. They are just 
turning it around. Do you see LNG for export radically changing 
the price structure for natural gas, which right now is a 
little under $3 1,000 cubic feet?
    Mr. Yergin. No, we don't see LNG exports as having a major 
impact on price. I mean, what we see is a continuing growth of 
supply and there is actually a need for additional market, 
whether it is LNG, whether it is vehicles, it is electric 
power, and we don't think that these projects will have much 
impact.
    Mr. Barton. So you don't see any national security issues 
if we were to license LNG facilities?
    Mr. Yergin. I think we see a gain to national security from 
the United States being an energy exporter and the influence 
that will come from that that is a net positive for our 
national security.
    Mr. Barton. I happen to agree with that.
    And finally, I have got about another minute and a half, 
Dr. Yergin, how do you see the combination of hydraulic 
fracturing and horizontal drilling in terms of oil production? 
A lot of companies down in Texas 5 or 6 years ago when I talked 
to them about using this technology for oil production, they 
kind of laughed. They said it is just not the same, it doesn't 
work. And a company in Houston, EOG, and also a privately owned 
company, Hunt Energy up in Dallas, they decided to try it, and 
I will be darned, all you have to do is look at the Bakken up 
in North Dakota, and I think almost all of that production is 
horizontally drilled with hydraulic fracturing. Do you see that 
becoming the norm or do you still see the conventional drilling 
for oil dominating?
    Mr. Yergin. I think it is really spreading. I mean, as you 
say, it was only around--this is only really is 2009, 2010 that 
it took off for oil, and I think the numbers keep--I don't know 
what Administrator Sieminski would say but the numbers keeping 
exceeding the projections that are happening so fast and we see 
it being applied in traditional areas like the Permian Basin, 
which has been pronounced dead several times and of course is 
going through another----
    Mr. Barton. They had an all-time year last year.
    Mr. Yergin. Yes, so I think it is going to be applied, and 
I think that we will see probably impact of this faster 
globally than we will see it in terms of natural gas.
    Mr. Barton. My final question is to Mr. Sieminski. Do you 
see the United States being self-sufficient in oil production 
in the next 10 years?
    Mr. Sieminski. In oil production?
    Mr. Barton. Yes.
    Mr. Sieminski. In our reference case for the Annual Energy 
Outlook, which we just published, we have oil self-sufficiency 
getting down to the low 30s, low 30 percent, so 30 percent of 
our consumption would still be imported. In the side cases, 
which we will publish in March for the Annual Energy Outlook, 
we have looked at what it would take to get to self-sufficiency 
in oil. It involves closer well spacing, greater estimates of 
what the resource base is and a number of other factors that 
would drive oil production higher. We also looked at the demand 
side; that is, could fuel efficiency standards for automobiles, 
for example, be improved, and other steps that could be taken 
to reduce demand. In that set of circumstances, which requires 
further policy changes on both supply and demand, we could get 
to a crossover where the United States would be self-
sufficient.
    Mr. Barton. You are not saying it is probable but it is 
possible?
    Mr. Sieminski. It is possible.
    Mr. Whitfield. The gentleman's time is expired.
    Mr. Barton. Thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the gentleman from 
Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. I am proud to follow my 
colleague in Texas, on the success we have had on directional 
drilling in both natural gas and oil. You might remember, you 
were chair of the committee, Congressman Barton, in 2005 when 
we did a bipartisan energy bill that we put in a little 
provision for the DOE to do a study on directional drilling 
because they had a great lab in Wyoming to do it, and we had a 
Houston or a Texas company who was drilling at that time out to 
35,000 feet and they thought they could get to 50,000 and on, 
and we are seeing some of the success of that both for natural 
gas but also for the tight oil, as we call it.
    I have always believed a balanced energy policy must 
support all domestic sources of energy including oil, natural 
gas and renewables, and again, the last question was, we are 
also using our energy smarter now because each time I buy a new 
car, I am getting 5 to 10 miles more per gallon than I did on 
the previous one, so we are using our energy smarter. Limiting 
this production would only serve to jeopardize our small-
business jobs and increase our reliance on foreign sources of 
energy. It may also have an impact on our ability to address 
climate change because if we fail to provide the natural gas 
needed to meet our short-term carbon reduction targets while 
providing affordable and reliable sources to American 
consumers.
    Administrator Sieminski, the EIA expects natural gas 
production to remain close to its 2012 level in both 2013 and 
2014. Is that correct?
    Mr. Sieminski. Yes.
    Mr. Green. I know currently there are a lot of wells 
comprised of just gas, or just dry gas, that are not being 
produced due to the low price of natural gas. This is one of 
the reasons I support the export of LNG so that there is 
additional incentive to produce these gas wells. Has EIA looked 
at what these export opportunities might mean for our future 
natural gas production levels?
    Mr. Sieminski. We have done that. Coming back to the major 
driver behind why we have natural gas holding even this year 
and next year, it is mainly because we are assuming natural gas 
prices are going to recover to $4 by the end of next year. That 
begins to allow coal to compete more effectively for electric 
utility generation markets and holds natural gas back. So one 
of the interesting factors here that comes into play is that 
because of continuing strong supplies, natural gas prices 
remain low. That would actually lead to more demand in the 
electric utility sector.
    As far as LNG is concerned, and in response to the question 
that Chairman Whitfield asked at the beginning of the hearing, 
Mr. Green, the United States is already exporting natural gas. 
We export by pipeline to Mexico and Canada. Of course, we get 
more gas from Canada. In the reference case that we examined 
for the Annual Energy Outlook, EIA has LNG exports from the 
lower 48 States and Alaska rising towards about 5 percent of 
domestic output over the period out to 2040.
    Mr. Green. Well, I actually have two issues, I guess, on 
that. One, I represent an area that is heavy in the chemical 
industry who is concerned about the rise in natural gas prices 
but I also know that when I drive through south Texas and I see 
so much flaring of the dry gas because we don't have the 
capacity or the infrastructure or the customers for it, it is 
just such a waste of our utilization of natural gas, and so if 
we could sell it to someone for $15 an mcf, I wouldn't mind 
doing that.
    But has the EIA incorporated the increased use of enhanced 
oil recovery in its oil projections? In Texas, for example, the 
use of EOR has changed our predicted production levels, and you 
mentioned the Permian Basin area as a good example of that.
    Mr. Sieminski. We have built in some assumptions along 
those lines, and in separate cases, we look at other factors 
that could help drive oil production. One of the main questions 
raised at this hearing is, what is the extent of the resource 
base, and if we were to see the same improvements that have 
taken place in the last 5 years in natural gas occurring in the 
oil shale area, what we would end up saying is that rather than 
our roughly 6.4 million barrels of oil production we had last 
year getting up to about 8 before it begins to taper off, then 
it could get up closer to 10 million barrels a day and then 
hold pretty steady at that level, and one of those things 
includes better technology and recovery.
    Mr. Green. Well, and 10 million barrels a day sounds like a 
lot, but I actually have five refineries in East Houston and 
Harris County that use over a million barrels a day right now 
to make refined product, so we still are going to have to 
import or produce the needs for our own country.
    Mr. Whitfield. The gentleman's time is expired.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the vice chair, Mr. 
Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having this hearing on America's energy security, and 
specifically to look at an assessment of our resources because, 
you know, I think the chairman had mentioned, the first natural 
gas facility, the first LNG export facility is in south 
Louisiana. I have actually toured that facility, Cheniere 
Energy, in south Louisiana, and that was originally built to be 
an import facility because we didn't think we had the reserves 
that we needed for natural gas, and then eventually because of 
the technology, the advancements that brought all these shale 
plays online, now the actual opposite has happened where we 
have so much that in many cases they are not even drilling in 
areas where they have leases because all of a sudden we found 
these resources that we didn't really know we could access just 
a few years ago and so they spent billions of dollars to 
retrofit and shift that from an import facility to an export 
facility, allowing us to create more American jobs and to 
continue to advance that new technology, which has really 
helped start a revolution, as I think a number of you talked 
about in your testimony.
    I want to ask you, Ms. Hutzler, because you specifically 
mentioned production on federal lands versus non-federal lands, 
and it is one of the misnomers that we hear about up here in 
Washington, you know, and the President will go around saying 
that production has never been higher, and yet you actually 
look at some of his policies that have shut production off on 
federal lands in the areas where the federal government doesn't 
currently have the ability to go and have an impact in those 
States where they are seeing a real revolution, it is on non-
federal lands. So if you can touch a little bit on that, about 
maybe some of the factors behind such an increase on non-
federal lands where you actually have some problems and in some 
cases reductions on federal lands on production.
    Ms. Hutzler. Production, for instance, production of oil on 
private and state lands over the past 5 years has increased, is 
essentially 96 percent of the total production that we have 
gotten, and the reason generally is that there is a lot of red 
tape when you try to deal with production on federal lands, and 
I think I mentioned in my opening remarks and in my testimony 
that it takes over 300 days to now get a permit to drill on 
federal lands where in the States it is less than 30 days. So 
all of this is taking much longer for a company to invest their 
money in terms of trying to deal with production on federal 
lands.
    Mr. Scalise. Yes, and we can see, especially if you look at 
the shale natural gas plays, they are actually regulated. You 
know, the EPA might try to give the impression that there are 
no federal regulations and they need to step in, and I think 
that concerns a lot of people because the EPA doesn't have a 
good track record of implementing good regulations where States 
have actually done a really good job at regulating natural gas 
shale plays, and frankly, the topography in Louisiana is a 
whole lot different than it is in Pennsylvania or North Dakota 
or Texas, and so the States have the ability to do that much 
better and have a great track record, by the way, of doing 
that, and so I think it is a good point to make because where 
we have seen real growth not only in energy but in jobs where 
in North Dakota, the lowest unemployment in the Nation they 
have up there because of all of this new economic growth coming 
from this technology, and so we surely don't want to see the 
federal government come in and try to slow that down in the 
name of good regulations when in fact you already have good 
regulations the way it is supposed to be done and that is where 
the States themselves do it.
    I want to ask you, Mr. Vidas, because you have looked at 
some of the data. We get data from the Energy Information 
Agency and they have even shown that there has been a decrease 
in production on federal lands but some of the information you 
have on resources, on the known resources, are dramatically 
higher, I think 50 percent in some cases higher than the 
numbers that come out of EIA. Can you explain what data you 
look at that shows the outlook for this country is even better 
than what we get from the EIA's numbers?
    Mr. Vidas. Well, in any type of resource assessment, there 
is going to be uncertainty because what we are talking about is 
some activity that has yet to happen, so we are predicting then 
the productivity of potentially hundreds of thousands of wells 
that will be drilled in the future, and the way we do it is to 
first start with the geology and to develop maps of each of the 
plays, and we try to deal with and get data on the key 
parameters like what is called the structure maps, which is the 
drilling depth you need to go down to, the thickness of the 
shale, some of the parameters of the shale in terms of their 
carbon content, the porosity, the pressures and temperatures, 
and from that we can develop what is called a gas-in-place 
estimate, which is an estimate of how much gas there is in the 
ground in the formations that will be targeted. And then we 
have information on wells that have already been drilled and we 
can look at their production profiles and estimate over their 
lives how much gas they are going to produce. So, for example, 
if we looked at Pennsylvania and we looked at the Marcellus 
shale, we would see that the horizontal wells there that have 
been drilled have been improving in terms of their productivity 
and now are producing about 4-1/2 billion cubic feet per well. 
But that is in the better parts of the play because producers 
have gone to look for the best gas first, the most economic 
gas, but then we can look at the other areas of the play in 
terms of either being thinner or less pressure or lower 
porosity and we can correct for the productivity using basic 
engineering principles and thereby forecast that into the 
future, the future productivity of the wells, which we think on 
average will be about half of that, maybe 2 bcf per well.
    Mr. Scalise. I am seeing I am out of time. I apologize, but 
I thank you for your testimony and your answers, and Mr. 
Chairman, I yield back.
    Mr. Whitfield. At this time I will recognize the gentlelady 
from California, Ms. Capps, for 5 minutes.
    Mrs. Capps. Thank you, Mr. Chairman, very much, and thank 
you, each of you, for your testimony.
    You know, assessing our current energy resources is 
obviously important, especially in light of the numerous 
advancements in research and technology in recent years and 
that is why I appreciate today's hearing, but I am concerned 
that we are not getting the full picture. Today's testimony and 
the questions coming from the majority have focused 
overwhelmingly on fossil fuels. Oil, natural gas and coal 
obviously dominate our energy supply but they are certainly not 
the only resources available. The EIA Energy Outlooks makes 
this clear, pointing out that renewable energy sources such as 
solar, wind and biofuels make up a sizable portion of our 
energy use.
    So my first question is to you, Administrator Sieminski. 
EIA projects that use of renewables will continue to grow, in 
some cases by double digits. Is that right?
    Mr. Sieminski. Yes, that is correct. We actually have 
renewables growing the fastest in percentage terms of all of 
the fuel sources over the period out to 2040. I would also like 
to point out that the share of generation of electricity from 
renewables grows from 13 percent in 2011 to about 16 percent in 
2040. Electricity generation from solar and to a lesser extent 
wind energy sources grows as recent cost declines make them 
more economical. The 2013 projection is a little bit less 
optimistic about advanced biofuels because of the difficulty 
that companies have had in gearing up their manufacturing 
process but in general renewables are growing pretty strongly 
and help the fact that overall carbon dioxide emissions from 
energy in our forecast actually remain below the peak of 6 
billion metric tons that we hit in 2005.
    Mrs. Capps. Thank you. And in addition to what you just 
said, Ms. Morgan, you established a direct link between burning 
fossil fuels and climate change, and that has already been well 
established from a variety of sources, and we have begun to see 
these impacts if we just even look at extreme weather events 
like Hurricane Sandy, all the droughts and the wildfires as 
well, and I represent a coastal State and a costal district. I 
am particularly mindful of climate change impacts on higher sea 
levels and increasing erosion.
    Ms. Morgan, in your testimony you discuss some of these 
impacts. Could you elaborate, particularly on sea-level rise 
and increased erosion for those of us who do represent coastal 
communities?
    Ms. Morgan. Certainly, yes. Sea-level rise is one of the 
major threats to the United States and is already occurring 
along the Eastern seaboard and certainly also on the West 
Coast. I am familiar, we have done some work looking in Florida 
particularly where you see that Miami Beach is already having 
to spend more than $200 million to overhaul its storm damage 
system. You are seeing that Hallandale Beach has to spend $10 
million a year on new wells because of saltwater intrusion. 
Florida is built on limestone, which means sea walls don't help 
much. So that is a major piece of worry. Also, certainly, the 
energy infrastructure that is located along the coast is also 
at risk.
    Mrs. Capps. I just want to add an example to that. I 
represent the central coast of California, and the city of 
Pismo Beach is installing sea walls itself to protect two 
sewage lift stations that are threatened by erosion, and in 
Santa Barbara, our central creek that comes right down through 
the heart of the city has been widened to increase its flood 
capacity. These projects come at a high cost, and I know these 
communities have struggled to find necessary resources.
    One final one, in the last few seconds, is this something 
other communities are also struggling with and finding that the 
cost is really prohibitive?
    Ms. Morgan. Absolutely, and I know in Florida there are 
four counties that have joined together and are facing 
tremendous cost. If you look here in Lewes, Delaware, not far 
away from communities that are struggling with it, go up to 
Maine. So it is a real issue that we need to face on our 
infrastructure investments but also the cost to local 
communities. It puts an imperative on emission reductions as 
well.
    Mrs. Capps. Thank you very much. I will yield back.
    Mr. Whitfield. At this time I recognize the gentleman from 
Nebraska, Mr. Terry, for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman.
    This fall I hosted a natural gas forum in Omaha where we 
had representatives from just about every facet of the natural 
gas world from users, producers and potential future users. One 
theme came from that, and that is that we have a great supply 
of natural gas, we can argue 100 years or 150 years, that there 
is enough supply that we could expand the uses of natural gas 
into transportation, and this begs of question, we have been 
talking about exporting surplus but we could also have 
discussions of additional uses of natural gas.
    But one thing always came back, and that is the uncertainty 
of regulations and the regulations when you drilled further 
down were defined as uncertainty about whether the federal 
government was going to start regulating fracking, if and how, 
and that that in itself is the worry for the users. I am one of 
those that feels that expanding natural gas into vehicles will 
help our country not only because we are using a domestic 
product but the fact that diversity in auto fuels, whether we 
start with trucks, heavy trucks or whatever, enhances our 
national security status.
    So starting with Mr. Sieminski, honorable, and then going 
down, this is the question I would like to have your respective 
opinions, and that is, is it fair to say that moving more of 
our transportation to natural gas will impact our national 
security?
    Mr. Sieminski. Thank you, Mr. Congressman, for calling me 
honorable. I guess I get that because the Senate confirmed me 
in my appointment. I tell people that a lot of folks in my new 
place of employment call me sir, and that is very different 
than when I was in the private sector, but I have to fly 
economy when I travel.
    Mr. Terry. I understand that. With a 9 percent approval 
rating here, we get called a lot of things, but honorable is 
not one of them.
    Mr. Sieminski. I think that you are on to a really 
interesting question here. We actually took at look at how 
quickly natural gas could grow in transportation, and it is a 
very small number, a rounding error in terms of percentages. We 
do use 3 percent of our natural gas to move natural gas in the 
pipelines, but when most people think about transportation, 
they are thinking about trucks or cars and so on. We believe 
that LNG in freight trucks and then eventually natural gas 
being turned into liquids like a high-quality diesel fuel--
there is a plant under consideration down in Louisiana to do 
just that--could actually almost double the amount of total 
natural gas in transportation so that we could get up from 3 
percent now to easily 6 percent and possibly as high as 8 or 9 
percent. A lot of that is because natural gas, from a pricing 
standpoint, looks really, really attractive compared to global 
oil prices. So there is a lot of effort underway there.
    Mr. Yergin. I think we have pretty much the same view as 
EIA, that, you know, it does now appear that natural gas will 
become an important fuel for large trucks, for railroads and so 
forth. At this point we don't see it becoming a major fuel for 
private automobiles because of the nature of the infrastructure 
and so forth that would be needed.
    Mr. Terry. I would like to hear your opinion.
    Ms. Morgan. I would be happy to.
    Mr. Terry. You are the contrarian.
    Ms. Morgan. We haven't done extensive research on this area 
but the one piece that I can add to the discussion perhaps is 
that it is clear that gas a lower global warming potential than 
oil, so from that perspective, it is more beneficial, and I 
think as I was saying earlier, if we can also tackle the carbon 
capture and storage piece of that, you will see even greater 
benefit.
    Mr. Terry. Thank you.
    Ms. Hutzler. From our standpoint, we essentially agree with 
Dr. Yergin in the sense that there is certainly a market in the 
heavy-truck area, and it is easier to deal with the 
infrastructure problems there of supplying the natural gas but 
in the private sector for residential vehicles, it is more 
difficult.
    Mr. Vidas. The analysis that we have done is very similar, 
that although we expect natural gas and liquefied natural gas 
vehicles to triple their use over the next 20 or 25 years, it 
still represents a relatively small part of the overall sector. 
The more likely way that natural gas could be used to displace 
oil would be through gas-to-liquids technologies or even using 
natural gas to generate electricity and then using electricity 
in battery cars.
    Mr. Whitfield. The gentleman's time is expired.
    Mr. Terry. Thank you.
    Mr. Whitfield. At this time I recognize the gentlelady from 
California, Ms. Matsui, for 5 minutes.
    Ms. Matsui. Thank you, Mr. Chairman. I would like to also 
thank the witnesses for being with us today. I am pleased to be 
back on the Energy and Power Subcommittee this Congress, and I 
look forward to working with my colleagues to comprehensively 
address our Nation's energy needs, and that also includes 
dealing with climate change.
    Right now there are thousands of clean technology companies 
manufacturing innovative products that will help fundamentally 
shift our country away from carbon-intensive energy sources. 
Many of these are small-business owners and entrepreneurs. My 
district of Sacramento has over 220 such companies. I have seen 
firsthand the progress they have made in solar, wind, hydrogen 
fuel cells and waste-to-energy conversion techniques. These 
companies are working on the technology to ensure that America 
remains a leader in green energy global market. We are rapidly 
losing ground in this sector to countries like China and 
Germany who are heavily investing in the renewable energy 
markets, and the United States must level the playing field to 
allow our clean technology companies to better compete. Low-
carbon energy sources must have a seat at this table. Energy 
efficiency must have a seat at this table, and clean energy 
technology must have a seat at this time. Anything less is 
shortsighted and detrimental to our economy, our environment 
and our energy goals.
    I want to follow up to Ranking Member Rush's questions 
regarding the clean energy manufacturing sector. Last month, 
Chairman Emeritus John Dingell and I introduced H.R. 400, which 
is a bill to promote American clean energy exports and increase 
clean energy manufacturing. This bill passed the House with 
bipartisan support during the 111th Congress and it is my hope 
that this committee will consider it soon.
    Ms. Morgan, can you expand on the economic benefits we 
would receive by boosting our clean energy manufacturing 
sector?
    Ms. Morgan. Certainly. I think one key piece, if we are 
able and hopefully will build out our manufacturing sector 
would be in the area of jobs. Currently, according to the 
Energy and Environment Study Institute, you have more jobs 
created in clean energy than you do in oil, fossil and coal 
combined, and a recent study by the University of California 
actually looked at the fact that you can--over time if you were 
to really go for 30 percent renewables and push your energy 
efficiency in the economy, you could have 4 million jobs by 
2030. So the job benefits are certainly significant, that is 
for sure.
    Ms. Matsui. OK. And in your testimony, one of your 
recommendations is that we must build out America's renewable 
energy sector. Now, what are some criteria that policymakers 
should consider for driving clean energy growth and 
competitiveness?
    Ms. Morgan. I think the main criteria right now, if I look 
at where the United States stands on clean energy, is the 
clear, long-term, long, loud and legal signal that investors 
are looking for to see that this is a growing area, so that 
means that national renewable energy policy, I think it can 
take many different forms but optimally one that goes beyond 3 
years. I think certainly having grid access for that renewable 
energy is another key criteria that I would look for, and I 
would add in training. I think the other piece that is very 
important, Colorado is doing some work on this, and that is 
happening in Germany, is a really specific training program, 
big job opportunities.
    Ms. Matsui. OK. And do you think we need to consider 
creative financing options for smaller clean energy companies 
to succeed?
    Ms. Morgan. Definitely. I mean, I think that if you look 
at--there is a number of different innovative ways that you can 
bundle the demand for renewable energy and create new financing 
mechanisms to do that. We have had some experience with that in 
the United States and we are now seeing that happening in India 
as well.
    Ms. Matsui. Thank you. And I also believe too as we look 
forward, we are not--because of my focus on clean energy, clean 
energy technology, it does not at all mean that we cannot look 
at the transitional aspects of things like natural gas as long 
as I believe we look at some of the areas of carbon capture and 
storage which I think needs to be looked at alongside the 
wonderful aspects of how much gas we have. So anyway, I really 
appreciate your testimony and I hope that we can continue the 
conversation and looking at somewhat all of the above as we 
move forward.
    Thank you very much. I yield back my time.
    Mr. Whitfield. Thank you. At this time I recognize the 
gentleman from Illinois, Mr. Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman, and I thank the panel 
for coming to Mr. Sieminski and Dr. Yergin and actually 
Hutzler, and I can't see the name and we don't have paper 
anymore, so--Vidas. I had to go flip back on the side pad to 
find the testimony a couple times.
    Because in your presentations, a lot of you have the maps 
and the various plays, whether it be the shale, tight oil, 
coalbed, others in your testimony. What I would like to know 
is, how far behind are we from the pipeline infrastructure to 
move this product? I mean, the pipeline issue, we are dealing 
with Keystone and Keystone XL, part of the North Dakota play, 
the problem is, we don't have access to a pipeline so a lot of 
this North Dakota oil is being inefficiently trucked down 
versus through pipelines. So can you all just briefly talk 
about pipeline infrastructure?
    Mr. Sieminski. Thank you, Mr. Shimkus. So just to start, 
the infrastructure issues take time. I mean, you can often get 
some production going and you get a lot of wells being drilled. 
Whether or not companies can then afford to build the pipeline 
infrastructure to move those products, oil and gas, around 
depends on their own view about how long the production 
activity will last.
    Mr. Shimkus. Yes, and if you would just a little brief, 
because most of the pipeline infrastructure now is based upon 
traditional oil and gas and refineries and the like, so all 
these new plays are in areas where there may not be access to.
    Mr. Sieminski. Exactly.
    Mr. Shimkus. I guess the point is, is that something we 
ought to consider in public policy debates? Dr. Yergin?
    Mr. Yergin. Yes, I absolutely think so. I mean, it is like 
I said, our thinking needs to catch up with reality. Our 
logistics need to catch up with new production. Everything has 
been turned upside down. Instead of going south-north, it is 
going north-south. A big question, you know, we just managed to 
survive, save those refineries on the East Coast, but they have 
to be hooked into North Dakota. We see, as you say, trucking, 
we see railroad cars. Ultimately, the most efficient way to 
move these supplies is by pipeline. Canada's output of oil 
sands is equivalent to Libya's before the revolution there. 
That supply--you know, we talk about U.S. energy independence. 
It is really a North American integration. So we have got to 
get, you know, a pipeline system that catches up with the fact 
that technology has changed.
    Mr. Shimkus. There is also some oil being barged down on 
the Mississippi, and there was a recent one that ran into the 
bridge down in the southern part of the Lower Miss, so, I mean, 
there is also issues with that type of transportation.
    Ms. Hutzler?
    Ms. Hutzler. Yes, I agree with Dr. Yergin. We do have oil 
that is landlocked in North Dakota. We have built up in our 
storage facilities in Cushing and it is more efficient to move 
by pipeline. We are moving by rail now, I think I saw a number 
of 800,000 barrels a day, which is pretty substantial, and it 
is also safer to move it by rail--I mean by pipeline than rail.
    Mr. Shimkus. Mr. Vidas?
    Mr. Vidas. I agree with the other speakers, that oil and 
natural gas infrastructure that is going to be needed to move 
this oil and gas to market is very important and it involves a 
substantial investment each year and thousands of miles of 
pipe. The other point that I would emphasize as well is that 
pipelines in general tend to be the least expensive and usually 
the safest way to transport both gas and oil.
    Mr. Shimkus. Thank you. And I will finish with Dr. Yergin. 
This whole debate on slowing down or not exporting natural gas 
I find pretty problematic as natural gas is just a basic 
commodity product just like corn or beans or pork or anything 
else, and that it has to be priced on the world market and we 
have to get it. You mentioned in your comment that there is a 
need for additional markets. Why did you say that and what do 
you mean by that?
    Mr. Yergin. Well, because we have seen as been described my 
colleagues on this panel this growth, this technology has 
opened up a huge amount of new supply and right now, you know, 
there is a lot of supply that can't get to market and you see 
activity going down.
    Mr. Shimkus. So if there is no price signal, then all these 
jobs for location discovery and recovery would be gone because 
there is no price signal to continue the----
    Mr. Yergin. Yes. What has happened is of course a lot of it 
has flipped into looking for either oil or for gas that is rich 
with liquids but nevertheless I think the general view is that 
at this low level that this is not a sustaining price to 
maintain the growth in supply that we need for electric power, 
that we need for our industry and might need for transportation 
and to meet global markets.
    Mr. Shimkus. Great. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. Whitfield. At this time I will recognize the gentlelady 
from the Virgin Islands, Ms. Christensen, for 5 minutes.
    Mrs. Christensen. Thank you, Mr. Chairman, and I want to 
thank you and the ranking member for this hearing as well.
    Mr. Sieminski, I represent our U.S. territory, the U.S. 
Virgin Islands, and they are plagued with the highest rates of 
electricity in the United States. In my district of the U.S. 
Virgin Islands, current electricity rates are five times the 
national average. An average family pays, if they can, 50.8 
cents per kilowatt compared to the 9.83 U.S. average. A visit 
to your Web site shows a very clear breakdown of State 
electricity profiles with the U.S. average retail price 
reported but in order to find information about the 
territories, you have to really search and it is quite 
confusing. The majority of information is on a beta site that 
says, for public testing and comment only and there is a 
country analysis brief on the Virgin Islands, but this is 
really unacceptable. So why is it that the territories' 
electricity cost information is not included there even if it 
is as an outlier and what can we do to have that information 
included?
    Mr. Sieminski. Thank you, Congresswoman Christensen. I said 
at my confirmation hearings that EIA needed to get its data 
better, faster and cheaper, and we are working on that. We need 
to receive complete and timely data from everybody. This has 
been a problem with some of the territories but I will look 
into that question and I will see what we can do.
    Mrs. Christensen. And we can work to try to make sure that 
you have the information. It is important for that information 
to be out there. Thank you.
    We have spent a lot of time talking today about oil and gas 
resources but the United States has been said by Ms. Morgan and 
others that we are blessed with ample renewable energy 
resources as well. The question is whether we and the rest of 
the world are doing enough quickly to develop those clean 
energy resources and make our economies more energy efficient. 
Last November, the IEA released their World Energy Outlook for 
2012 and found that our current energy system is unsustainable 
and they projected that in a little more than 20 years we could 
see average global temperatures increase up to 6.5 degrees 
Fahrenheit as approximately 80 percent of future global 
emissions are already locked in by existing infrastructure.
    Ms. Morgan, how much would we have to reduce fossil fuel 
use in order to prevent more than, I think that would be 2 
degrees Centigrade rise in temperature and what does it mean 
that we would be locked into these emissions?
    Ms. Morgan. Thank you. Well, on the longer term what the 
scientific estimates state is that we need to be reducing our 
emissions by 80 to 95 percent by 2050, which means that we have 
to really have the longer term in mind. The estimates for 2020 
time period for developed countries tends to be around a 25 to 
40 percent reduction. The United States has made a commitment 
to 17 percent. I think the thing to recognize is that there are 
points of no return where we hit tipping points where you are 
no longer able to restore coral reefs, where the arctic ice 
melts completely. Those are the types of irreversible impacts 
and the lock-in of our infrastructure that, you know, comes 
from the current pathway on high carbon is very much 
responsible for that.
    Mrs. Christensen. And, you know, they also say that it is 
possible to prevent that 2-degree Centigrade increase if we 
were to act to reduce CO2 emissions prior to 2017. 
So I don't know if you wanted to comment or Mr. Sieminski 
wanted to comment on what is it that--you know, the window we 
have is rapidly closing. It hasn't closed yet. But the IEA has 
said that it is ambitious but still possible. So what is it 
that we would have to do? What kind of technology should be 
included in this rapid development in climate policy if we 
could reduce that increase, in order to reduce that increase by 
2017?
    Ms. Morgan. I will answer quickly. I think the key points 
are, we have to have a revolution in the renewable energy space 
and energy efficiency. We have these technologies now. We need 
to put in place the policy frameworks and the R&D to get those 
going. We need to price carbon. Most other major economies 
around the world price carbon. It drives efficiency. And we 
need very much to drive R&D much more quickly.
    Mrs. Christensen. It is only 5 years.
    Mr. Sieminski. I won't make any policy recommendations but 
I would like to point out that this is a global issue so to 
deal with the 2-degree Centigrade we need cooperation around 
the world. EIA's forecasts show that almost all of the growth 
in carbon dioxide emissions from energy will be taking place in 
the non-OECD countries so outside of the developed world what 
we really need is to help countries like China and India move 
towards lower-carbon fuels.
    Mr. Yergin. I think one of the things just to add is, our 
CO2 emissions from energy consumption are down 13 
percent since 2007, so this is already actually happening. And 
the other thing that we can do that has a huge impact is simply 
become more energy efficient. We are twice as energy efficient 
as a Nation than we were a few decades ago. We have 
technologies and tools to do that today and that is a big 
thing. But as Adam Sieminski says, the growth is in the 
emerging markets and those numbers tend to overwhelm what we 
are doing.
    Mrs. Christensen. Thank you.
    Mr. Whitfield. Time is up. At this time I recognize the 
gentleman from Texas, Dr. Burgess, for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman, and I thank you for 
convening this panel. It really has been a fascinating morning.
    I am going to start off this new session of Congress by 
agreeing with the ranking member of our committee. In his 
opening statement, he said we must not betray our children and 
our future generations. I agree with him. Now, while he was 
referencing carbon capture and storage, I would reference the 
economic conditions that have prevailed for the past 4 or 5 
years. The last Congresses, I was also on the Joint Economic 
Commission. It was our duty the first Friday of every month to 
receive from the Bureau of Labor Statistics the employment 
numbers from the previous month, and you saw a pattern emerging 
through all of that bad news, and there was a lot of bad news 
during the years, but mining and manufacturing always led that 
list of new job creation.
    Now, we see this morning Forbes magazine is reporting that 
four out of the top 10 best places to live in the world are in 
Texas. I knew that. They didn't need to tell me. But Austin 
leads the list followed by Houston second, Dallas third, San 
Antonio ninth. In fact, the State of Texas has added almost a 
half million people over the past years from last summer to--
the summer of 2011 to the summer of 2012, and the reason for 
that of course is the availability of energy and the cost of 
energy, and while energy in and of itself cannot be its own 
end, it does help drive our economy. So when we talk about not 
wanting to betray our children and future generations, I think 
we have a responsibility to the economy, and part of that 
responsibility is the energy supply that is available to our 
economy.
    Dr. Christensen talked about tipping points. I will just 
ask an open-ended question. I know you guys don't like to 
speculate, but what kind of tipping point would we have seen 
with the economy in the last 4 or 5 years in the absence of 
shale? What might have happened to our economy without the 
ability to produce this energy and produce these jobs? And 
either Dr. Yergin or the Honorable Sieminski, I would like to 
hear your thoughts on that.
    Mr. Yergin. Well, if we had remained on the track that we 
had been on prior to when we were going to build all of those 
LNG receiving stations, we would probably be spending $100 
billion a year now to import LNG into the country, so that 
would have been a big burden. Secondly, had we not seen this 
increase, this substantial increase in oil production, as I 
said, this equivalent to Iran's total exports before sanctions, 
we would be paying a lot higher prices for oil, and it would be 
a much, much tighter and more vulnerable market and we would 
not have had what we have seen is that these supply chains are 
so long in our economy, these are dollars that stay here. They 
are going to jobs here rather than going into a sovereign 
wealth fund somewhere else in the world. So in that other 
universe, it would have been a much more difficult picture and 
more congruent with what seemed to be the picture in front of 
people in 2008.
    Mr. Sieminski. Virtually every economic study that I have 
seen suggests that higher domestic production of fuels leads to 
greater GDP, and when you get to the import issue you obviously 
have lower trade deficits. All of that helps the economy, leads 
to greater job creation, as Dr. Yergin said. I think one of the 
things to keep in mind is that the availability of relatively 
low-cost natural gas has actually, I believe, helped to sustain 
some of the growth in wind and solar on the renewable side 
because those are intermittent sources. They need a backup 
supply and it is often natural gas that provides the backup for 
these rapidly growing renewables that are going to become a 
fairly significant part of U.S. energy production and 
consumption.
    Mr. Burgess. Sure. We have peaking demands in north Texas 
where in the summertime when the air conditioners are all 
cranked down low, even if you had a substantial wind component, 
you would never be able to keep up with that peak demand.
    I just have to tell you, this is such a different hearing 
than we had in this very room in 2008 and, I mean, it is good 
news. It is good news for the American people, it is good news 
for the American economy. Regardless of political party or 
political persuasion, this is a good-news hearing.
    The other part of the good news, and Mr. Vidas, I won't 
leave you out down on the end, yesterday flying up here reading 
in the Star Telegram and the concept of having an 
environmentally friendly fracking fluid that is being developed 
now by Halliburton in Texas. I understand other companies are 
doing that as well. But the technology is changing and it is 
changing in a way that is environmentally responsible, and you 
referenced some of that in your testimony but do you have 
additional thoughts on that?
    Mr. Vidas. Yes. What I said was there are several ways in 
which the industry has tried to adapt their technologies to 
reduce the footprint of drilling these wells. One is the 
surface footprint and trying to reduce the amount of space that 
it takes by combining multiple wells on a single path, and that 
can reduce the amount of space used by a factor of eight. The 
other point that I made is the drilling fluids themselves, 
which in the old days had been formulated with diesel oil. That 
has almost totally been eliminated now, and some of the toxic 
substances in the frack fluids are being replaced by more 
environmentally benign fluids.
    And then the other point that has been raised is the use of 
water itself. Typically, a well will take about 3 million 
gallons in terms of the fracking process, and one of the ways 
the industry is reducing that is by recycling the water and 
being able to use it over and over again, and the other thing 
that they have been doing is trying to reduce the total amount 
of water used by various different techniques including 
substituting other fluids such as CO2, nitrogen and 
in some cases propane instead of water.
    Mr. Whitfield. The gentleman's time is expired.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the ranking member, 
Mr. Waxman from California, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman. I appreciate that we 
have made great advances and it is a reason for celebration. We 
ought to be very pleased with the advantages that have come to 
us with the production of more oil and gas resources, and we 
now have advances in technology that have allowed us to drill 
in many new areas.
    But as we congratulate ourselves for these new discoveries, 
we also, I think, need to discuss how energy choices we are 
making today will have long-term impacts for our climate. We 
have a rapidly diminishing window to act to reduce our carbon 
pollution before the catastrophic impacts of climate change are 
irreversible.
    Ms. Morgan, in your testimony you say the United States 
cannot and should not make energy decisions without factoring 
in the risks associated with climate change. This committee is 
charged with developing energy policy for the United States. 
Ms. Morgan, how should this committee factor in climate when 
making energy policy?
    Ms. Morgan. Well, I think that if you look longer term, it 
is quite important. First of all, you need to take into account 
the intensity, the greenhouse gas intensity of the fuels you 
are looking at and you need to put a price on those fuels in 
order to drive innovation and energy efficiency. That is point 
one. The second point I think is that although emissions of 
CO2 have reduced extensively, which is very good 
news, they are plateauing out and emissions of methane and 
other gases are increasing, so that means that we need to put 
in place mandatory and voluntary approaches to reduce methane 
emissions as well, and we need a very solid renewable energy 
approach. The countries that are moving forward, you see those 
kind of three pieces in there. Carbon pricing, renewable energy 
policy, energy efficiency standards are all quite important, 
and then support mechanisms around those to make them work.
    Mr. Waxman. I have been on this committee for a number of 
decades, and I remember the period of time when we decided that 
we will continue to subsidize the fossil fuels through not 
requiring them to pay their external costs and in some cases 
directly through the tax code, and we undermined the 
alternatives that could have made us less dependent on these 
fossil fuels, which made us, of course, more dependent on Saudi 
Arabia and Iran and other countries, the OPEC countries that 
held us hostage. We made a mistake not diversifying our energy 
sources at that time. We should develop our energy policy under 
this new circumstance that doesn't make the same mistakes and 
put us all in the same situation where we will look back and 
regret that we didn't recognize that our energy policy had to 
be more thought through.
    What are the potential economic repercussions if we fail to 
integrate climate risk with our energy policymaking?
    Ms. Morgan. I think that there are three main risks. I 
think the first really is around stranded investments because I 
think companies today that are investing in high-carbon 
infrastructure without putting in place the mechanism to deal 
with CO2 are being shortsighted and that as climate 
change unfortunately gets worse and policies get put in place, 
those will be stranded investments, and if we wait to act, 
those likely will be more expensive as we go forward.
    The second really is missing out on new and existing 
markets around the world which are growing exponentially. You 
are looking at up to $7 trillion in new capital and renewables 
by 2030 and there is national policies in every other major 
economy in the world on renewables. They are serious about 
this. They are moving forward for a range of reasons. And the 
third are the impacts actually on our infrastructure itself and 
on the country, which as you know, as the EIA said, if we keep 
going the way we are going, you are looking at a 10.8-degree 
Fahrenheit rise in temperature, which is unprecedented in our 
time.
    Mr. Waxman. Dr. Yergin, aside from the investment we ought 
to be making and looking at alternative energy sources, 
renewables, efficiency, some of that research is threatened by 
the budget cuts that members want to make. Do you think we 
ought to develop a policy that looks at the environmental 
consequences of where we are going in energy development?
    Mr. Yergin. I think so. In the 1990s, I headed a taskforce 
on energy R&D for the Department of Energy, and I think one of 
the things, you know, we found very distressing was this 
volatility in spending on R&D, and whether you are talking 
about, you know, MIT where more people work on solar than 
anything else or advances in drilling or whatever it is, I 
think that a sustained commitment to R&D----
    Mr. Waxman. But aside from that----
    Mr. Yergin. --is the most important investment.
    Mr. Waxman. I absolutely agree with you, but aside from 
that, do you think we ought to make policies in the energy area 
that look at not just the research but the consequences to the 
future in reducing carbon emissions?
    Mr. Yergin. I mean, I think so. I think the environmental 
considerations obviously should be part of how you make energy 
policy.
    Mr. Waxman. Thank you. Thank you, Mr. Chairman.
    Mr. Scalise [presiding]. The gentleman's time is expired. 
The gentleman from Louisiana, Mr. Cassidy.
    Mr. Cassidy. Mr. Yergin, there are those that say that we 
shouldn't export liquefied natural gas because in some way by 
doing so we will promote the production of more natural gas and 
therefore contribute to global warming, but what you are saying 
is that is absurd because if we don't do it, Australia or 
Canada or some other country will export liquefied natural gas. 
Is that a fair statement?
    Mr. Yergin. Yes, I think people will fill the market and 
fill the need, and in fact are racing ahead to do that.
    Mr. Cassidy. Now, as they race ahead, it is fair to say 
that if is a $5 billion or $10 billion project to create one of 
these export terminals, those are a heck of a lot of jobs that 
will be sacrificed because of an absurd premise? Again, is that 
a fair statement?
    Mr. Yergin. The absurd premise is that----
    Mr. Cassidy. Being that if we don't export liquefied 
natural gas, then natural gas will not be mined.
    Mr. Yergin. Well, I think in fact if you take a country 
like China, which as Adam Sieminski pointed out, it is very 
heavily oriented towards coal and wants to reduce its use of 
coal and use more natural gas to produce electricity to reduce 
pollution, they will look in one direction or another, and if 
we are sending natural gas we would be contributing to their 
reducing their pollution.
    Mr. Cassidy. So if we can create those jobs, we will 
simultaneously improve our economy, but too, improve, decrease 
carbon release worldwide potentially?
    Mr. Yergin. Yes. I think what is happening now is----
    Mr. Cassidy. I am going to let you hold that.
    Mr. Yergin. OK.
    Mr. Cassidy. Mr. Sieminski, in 2007 you published a report 
at the request of Congress demonstrating subsidies for 
different sources of fuel, and at that time biofuels got $5.72-
per-million-BTU subsidy from the government, solar got $2.82, 
coal got 4 cents per million BTU and natural gas got 3 cents 
per million BTU. Your updated report did not have this chart, 
but when we speak about subsidies for various forms of energy, 
there is an order of magnitude difference there. Is that still 
the ballpark of the federal subsidies?
    Mr. Sieminski. I would have to look at the numbers, 
Congressman, but the number of assumptions and factors that you 
have to take into consideration to do those calculations are 
numerous and complex, but I think it is fair to say that in 
addition to fossil fuel subsidies that there are also obviously 
subsidies on renewable fuels and many of the other things that 
we do.
    Mr. Cassidy. Yes, like 100 fold, 100 fold going to 
renewables.
    Mr. Yergin, back to you. When you were at the World 
Economic Summit, you are right, if we don't send energy to 
Japan, their economy will tank. That is on my mind when I go 
around to the exporters in Louisiana. I say what do you need to 
create more American jobs. They say more robust markets to 
export to. Right now Japan and Europe are in the doldrums. We 
need those economies to do better so we can create more 
American jobs.
    So is it fair to say, let me ask, at the World Economic 
Summit, what is the prognosis for the Japanese economy as an 
example if they cannot replace their nuclear capability with 
some reasonable----
    Mr. Yergin. Well, they have turned--I mean, the new 
government in Japan is going to reconsider, and I think in July 
is going to come out with its policy about whether it is going 
to keep some of the plants operating or not. With that said, 
the Japanese are kind of in a panic about energy supplies right 
now, very focused on LNG as their kind of major increment, and 
I think the point you say, a Japanese economy that is a weak 
economy as part of a global economy contributes to global 
weakness. So we are pretty interdependent with them. That is 
why I said, you know, they are a close ally and if they do 
well, we do better.
    Mr. Cassidy. It is in our self-interest to make sure that 
they have adequate energy supply.
    Mr. Yergin. That is right, and it is in our political 
interest and it is in our economic interest.
    Mr. Cassidy. OK. Sounds great.
    Ms. Morgan, you spoke about methane emissions. I think it 
is important to make sure the record is straight. A lot of 
times folks who are critical of natural gas state that the--
quote that Cornell study, Mr. Howarth's study, and which finds 
very high levels of methane released with natural gas 
production. But just to set the record straight, that is kind 
of an outlier study, isn't it? I mean, both the Department of 
Energy as well as MIT peer-reviewed study have found a tenth of 
the emissions as the Howarth study. Is that a fair statement?
    Ms. Morgan. We are actually in the process of putting out a 
study on this. We think that that study is on the upper end.
    Mr. Cassidy. The Howarth study is on the upper end?
    Ms. Morgan. Yes, but that there are also real measures that 
can be put in place to control methane even on the lower level 
that are important.
    Mr. Cassidy. Mr. Yergin?
    Mr. Yergin. Just to add, I know my colleagues in the 
Howarth study used data that supposedly came from us, and my 
colleagues had written a letter to the journal which was 
published saying the data had been quite distorted, and there 
is now a cooperative program with the Environmental Defense 
Fund and a number of companies to actually measure methane and 
come out with some hard data on it.
    Mr. Cassidy. I just say that because Ms. Morgan, your 
testimony suggested that the lifecycle carbon release of 
natural gas is not as favorable as we would presume, but that 
really seems to assume the Howarth study is valid, and frankly, 
there seems to be a general agreement that it is not.
    Ms. Morgan. I think even on the lower levels, it is 
important to put in place measures to deal with----
    Mr. Cassidy. Well, I am not arguing that. I am just saying 
the lifecycle release has been overstated.
    Ms. Morgan. The lifecycle as a whole, that study does 
overstate it.
    Mr. Cassidy. I yield back. Thank you.
    Mr. Scalise. The gentleman's time is expired. The 
gentlelady from Florida, Ms. Castor.
    Ms. Castor. Good morning, and thank you very much for your 
insightful testimony.
    The outlook from the Energy Information Agency is very 
positive for the economy and I think beyond the current outlook 
there is great potential for additional economic growth tied to 
domestic supplies if we have the appropriate environmental 
safeguards, and I think here in America we can do more for 
consumers and for electric reliability or reliability from all 
energy sources. But in order to build that more sustainable 
energy system, we need to bring greater balance between fossil 
fuels and renewable sources, and I don't think it is all about 
generating energy from cleaner sources. We also need to make 
our economy more efficient so that we use less energy overall, 
and I think that it may be time to look at the business models 
for utilities and the incentives and modernizing those business 
models.
    According to the IEA, energy efficiency is an enormous 
unrealized opportunity for the world to reduce energy use and 
thereby carbon pollution. The IEA projects two-thirds of 
potential efficiency gains will remain untapped through 2035 
under current policy. That is a real hit on the pocketbooks of 
American families and businesses.
    Ms. Morgan, in your testimony you say the United States has 
immense remaining potential for improving efficiency in its 
industrial, transportation and building sectors. Which energy 
efficiency measures have the most potential to reduce energy 
consumption from the U.S. industrial sector?
    Ms. Morgan. I think there are a number of different 
measures, and they can come in on either the State level or on 
a national level. There is tremendous potential of combined 
heat and power on the State level for industrial facilities. In 
the building sector, certainly also you look at both the 
opportunity for new business models but also for jobs in 
retrofitting buildings. There is great potential there. And 
certainly, you know, the evidence base is quite strong if you 
look at the benefits that have come from the new car standards 
that have been put in place.
    Ms. Castor. Can you give me some more specific examples or 
the most innovative energy measures in use today? Are there 
energy efficiency measures being implemented at the State level 
or abroad that we should expand or employ on a national level?
    Ms. Morgan. There is a program actually in Germany that is 
very focused on the retrofitting of buildings and you need to 
look at the ownership structure obviously but they are looking 
at how you can get at the point that the owner and the renter 
don't always share the benefits and looking at new models of 
how they can put in place measures to retrofit those buildings 
extensively across the country. They are funding that actually 
with revenue from their emissions trading system so it is not 
additional funding coming in. I think that is a very strong 
example. You actually have a very strong program in China 
around their enterprises as well where they are putting in 
place measures to share practices and set targets for companies 
to increase their efficiency.
    Ms. Castor. And in your written testimony, you state that 
the federal government can play an important role in improving 
energy efficiency across the economy. You said the first step 
is to support programs that ensure consumers can make informed 
choices. What were you talking about? What else can the 
Congress do to encourage consumers to make energy-efficient 
choices in the marketplace?
    Ms. Morgan. I think there are things like smart metering, 
information provided in all products that is much clearer about 
energy saved, money saved, CO2 saved. There is ways 
when you start looking at our grid on the smart metering side 
of things. I think if consumers first of all have more 
information but then also, you know, can be able to buy the top 
products as affordably as possible.
    Ms. Castor. Wouldn't it help if then the electric utilities 
really had an incentive to promote conservation and greater 
efficiency? They would help empower consumers to do that. It 
would be a win for families. They would have more money to 
spend at home, and the utilities, their business would change a 
little bit. For example, in my neck of the woods, we have this 
terrible debacle with a broken nuclear power plant, and it is 
enormously expensive, and we like the diversity in power 
supply, it is very important, but it seems now that we would 
get more bang for the buck if we helped save energy and the 
utility had some incentive. Where is that happening? Are those 
discussions happening?
    Ms. Morgan. Yes, they are happening somewhat on the State 
level, I think, in certain States where you have these kind of 
demand-side management models that are put together where both 
utilities and consumers benefit. I think they need to be much 
more broadened out so that they occur across the country more 
systematically.
    Ms. Castor. Do any of you have information on those kind of 
incentives of changing the business model?
    Mr. Sieminski. I could just add very quickly that the 
lighting standards that have been put in place starting this 
year, changes in appliance efficiency, the improvements in auto 
fuel efficiency, lower vehicle miles traveled, all of that is 
leading to lower energy use per capita, which is good. You are 
getting more value for less consumption.
    And quickly, the difference between the new auto fuel 
efficiency standards that got adopted last year so between 2012 
and 2013 in our forecast by the year 2035 that is worth 
something like 1\1/2\ million barrels a day of oil imports.
    Ms. Castor. Thank you very much.
    Mr. Scalise. The gentlelady's time is expired. The 
gentleman from Texas, Mr. Olson.
    Mr. Olson. I thank the Chair, and welcome to the witnesses. 
I thank you for your time and expertise as we lay the 
groundwork for a broader discussion about federal energy policy 
and the importance of robust domestic energy industry. I want 
to dig a little deeper into the geopolitical challenges we are 
facing in the new energy era. As we move forward as a Nation, 
we need to better understand how our newly realized energy 
resources can advance our foreign-policy goals.
    One historic example of how U.S. production or a lack 
thereof impacts the geopolitical landscape, the Persian Gulf. 
At the end of World War II, our geopolitical focus was on 
containing communism. When I joined the Navy in 1989, we had 
four numbered fleets: the 2nd Fleet in the Atlantic, the 6th 
Fleet in the Mediterranean Sea, the 3rd Fleet in the eastern 
Pacific and the 7th Fleet in the western Pacific in Japan. 
Communism fell in 1991, and as a result, our global military 
forces changed dramatically. We added the 5th Fleet in the 
Persian Gulf. We disestablished the 2nd Fleet in the western 
Pacific in September of 2011, and the 7th Fleet has now become 
the largest fleet in our Navy, and it is ramping up very 
quickly with China's aggression in the South China Sea. 
American innovation and our abundant energy resources can and 
should be leveraged to protect our allies around the world from 
unreliable and unfriendly regimes and promote our interests.
    Another example of how U.S. energy supply can strengthen 
our relationships with important countries is India. They have 
the world's largest democracy and they are in a pretty 
unreliable neighborhood. They have Pakistan to the west, China 
to the north, Bangladesh to the east. I had lunch with the 
Indian counsel general in Houston a couple weeks ago. We spoke 
for 20 minutes about India getting U.S. LNG, export natural gas 
to India. Right now they have got a big problem: they have no 
pipelines. Because of their neighbors, they can't have overland 
pipelines so all their energy supply has to come in the form or 
oil or gas, has to come either via train or via boat, mostly 
boat. They want to be our partner.
    And so my question for you, Dr. Yergin, in your view, how 
can our energy resource base reshape our foreign-policy 
objectives? What countries should we develop or strengthen our 
ties with and how can we pressure rogue states without relying 
on military intervention?
    Mr. Yergin. Well, that is a big question. I think that 
first we are seeing, as we have been describing, a rebalancing 
of global oil that is occurring and that we will see the 
Western hemisphere largely self-sufficient in years to come and 
more of the oil from the Middle East going to the Far East, so 
I think that is kind of one of the fundamental changes. I think 
what you referred to with India, I found when I was in Asia 
recently in Singapore and other countries also that interest in 
seeing the United States at least a player as an energy 
exporter, if not a massive one, because for them it is 
diversification and they would like to actually be more reliant 
and diversified more to depend upon the United States. I think 
as these technologies develop and we see it develop elsewhere, 
a key country actually is what Mexico does in terms of opening 
itself up to these new technologies. It is something that I 
think is right on the foreground.
    In terms of new relationships, Brazil is on course to be a 
global energy powerhouse and I think the U.S.-Brazilian 
relationship is one that grows in significance for us. So those 
would be some of the changes.
    Mr. Olson. How about Eastern Europe, who buys their natural 
gas largely from Russia?
    Mr. Yergin. Well, Poland is very interested in--it is 
interesting, you have different mixes in Europe on policy. 
Poland certainly wants to develop its shale gas to reduce its 
dependence on Russian gas, and Ukraine, of course, there is 
constant friction between Russia and Ukraine over the price of 
natural gas, and Ukraine, I think just last week or the week 
before, started signing some large agreements to develop shale 
gas in Ukraine, and for them, it is not only economic but it is 
also a geopolitical development.
    Mr. Olson. I get emails back home every week from people 
along the Silk Road, you know, where Turkey starts and heads 
east toward all those countries right there, the former Soviet 
states up there on the Caspian Sea, they want our natural gas. 
So again, I think it is a great opportunity for our country to 
actually have an influence on these people, make some friends, 
create American jobs, and again----
    Mr. Yergin. And I think they wanted to be integrated in the 
global markets as a way to sustain their nationhood.
    Mr. Olson. Yes, sir. It looks like I am out of time. I 
yield back the balance of my time. Thank you.
    Mr. Whitfield. At this time I recognize the gentleman from 
Pennsylvania, Mr. Doyle, for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman, and thank you to our 
witnesses today.
    This morning we are discussing a new landscape for North 
America's energy resources and how we develop an effective 
energy policy in the absence of resource scarcity. In my home 
State of Pennsylvania, especially in western Pennsylvania where 
I represent, we are experiencing a surge in energy development 
that each of you have discussed in your testimony. In my neck 
of the woods, we have natural gas, coal, nuclear. We have got 
steelworkers making wind turbines. We have got universities 
producing energy startups that are harnessing renewables. 
Marcellus shale alone in my State has provided thousands of new 
jobs and we are burning a cleaner fuel for our transportation 
and electric industries. So it is important to me that 
policymakers fully understand energy reserves that we have and 
the best ways to develop them. But something that is equally 
important to me is how we manage the effects of carbon 
emissions that come from burning these resources. I have worked 
many years on this committee--this is my 13th year on the 
committee and the 19th year in Congress--to do this in a 
comprehensive way, and I think most of the members of this 
committee know that I want to get our fossil fuel resources out 
of the ground. I don't think it has to be an either-or 
proposition. But what I am interested in is how we find that 
sweet spot where we can develop North American energy resources 
and effectively manage our carbon emissions simultaneously.
    So I have some questions about that, but before I ask those 
questions, I just want to provide some clarity to something 
that we heard at this hearing, and we hear a lot. My good 
friend, Mr. Scalise--and he is my good friend--had asked Ms. 
Hutzler why we weren't seeing more development on federal 
lands, and her reply was that the permitting process takes up 
to 300 days. I want to put a map up on the screen that I think 
we have that I think should provide a little bit of clarity. As 
you look at the United States, that dark area, the gray shaded 
area, that is the federal lands, and the light red, the pinkish 
area, is where our oil and gas shale plays are, and then the 
dark red that you see is where there is an overlap of federal 
lands and oil and gas shale plays, and Mr. Sieminski, I think 
back in August you testified to this committee that because 
basically the shale resource basins are largely outside of the 
federal lands, so too is the shale production, I think your 
quote was in this case the geology is working in favor of non-
federal landowners.
    [The information follows:]


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    So we hear this a lot that there is all this development 
that could be taking place on federal lands but the permitting 
process is so bad, and I think the map pretty graphically 
illustrates that there is just not much federal lands where the 
oil and gas shale plays are in the United States. I just wanted 
to provide that for clarification.
    I want to ask Dr. Yergin and Ms. Hutzler too, you both 
briefly addressed climate change and greenhouse gases in your 
written testimonies, and I just wonder, as we start to reassess 
these vast new energy resources, and it is not that they are 
new, you know, technology has given us a way to make them 
economically feasible to go and recover them now, right? And 
everything we do is a technology question, whether it is how we 
dispose of nuclear waste, what do we do with carbon emissions, 
just all of this, the answer is in technologies, and we are 
discovering new ways to do things in a more environmentally 
sound way. We hear about new types of fracking fluids because 
there is this tremendous potential to get this out of the 
ground, and I guess my question is, I am interested to hear, do 
you believe that we should also factor in climate change in 
these environmental concerns? Because it seems to me that once 
industries, you know, have to address these carbon issues too, 
we are going to see technology innovations there also that are 
going to be very valuable to U.S. companies to help these 
economies like in China and India and others. They are not 
going to be the leaders in figuring out to deal with carbon 
emissions. That is going to hopefully come here and then we are 
going to sell that technology all over the world. So I guess 
what I want to ask you is, do you think we should factor this 
in as we are looking at a new energy policy and these new 
fuels, factoring in environmental concerns and climate change 
as we develop policy?
    Mr. Yergin. I think we are certainly factoring them in. As 
I said, I had spent some time on that Secretary of Energy 
Advisory Board committee that I think provided a framework for 
looking at the environmental questions and saying how do you 
address them, and there is climate change but there is also the 
water questions, what do you do about wastewater, questions 
that you know very well from your district that need to be 
addressed. I think that as we have just discussed, 
understanding the methane emissions from natural gas drilling 
is a very important contribution to it. There are different 
views as to what the results will be.
    And I would say that the other thing is that you have to 
see this in an entirety. It is not that we are going to more 
oil because we are producing oil but it means our cars, as Adam 
says, are going to get a lot more efficient as we do it but the 
question is, is that oil going to be produced in the United 
States or are we going to import it. So we have to see it in 
the framework.
    Ms. Hutzler. I want to address your map again, and maybe 
that is the case for the shale formations, but on the other 
hand, the federal government has a lot of non-shale-based areas 
that----
    Mr. Doyle. But all the growth is in the--I mean, the boom 
we are seeing right now is happening because we figured out how 
to get this oil and gas out of shale.
    Ms. Hutzler. Well, let us take the offshore area in terms 
of oil drilling. We were drilling a lot, and as a matter of 
fact, the oil numbers offshore in fiscal year 2010 were very 
high but then it dropped by 17 percent. So you can still get a 
lot of oil offshore if you allow the permitting to go on.
    Mr. Doyle. The point is, we are seeing this huge boom in 
oil and gas shale and it basically exists on non-federal land, 
so I just think it is somewhat of a red herring.
    Mr. Chairman, I see my time is up.
    Mr. Whitfield. The gentleman's time is expired. At this 
time I recognize the gentleman from Colorado, Mr. Gardner, for 
5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman, and thank you to the 
witnesses today, and if I could have that last slide put up on 
the screen again, that would be fantastic.
    If you look at the State of Colorado as it appears on the 
map that is right there, you can see the state of Colorado. 
That red spot is in my district in northern Colorado. But there 
is tremendous opportunity for development in the gray spots, 
and a lot of that gray spot that you see in Colorado with the 
Rocky Mountain areas, it is BLM land, it is U.S. Forest Service 
land. They are unable to get permits through the BLM because of 
various bureaucracies. In fact, according to the Western Energy 
Alliance, over 100,000 jobs could be created in the western 
United States, primarily on those gray lands, if the permitting 
delays were simply lifted. Over 100,000 jobs could be created 
in the western United States. That is not because all the 
development is taking place in the red areas or the pink areas. 
That is because Bureau of Land Management and other agencies 
have been so slow in their permitting that we can't get those 
permits through to create those kinds of jobs. So I think you 
would see a lot more red areas if we could actually get a 
government that was willing to allow us access to those 
resources in a responsible manner, and so I for one would like 
to see over 100,000 jobs being created in the western United 
States.
    But I would also like to ask a couple of other questions, 
pointing out that in that red area you see in northern Colorado 
right there, because that development is taking place in that 
play. There was an article in Greeley Tribune on January 17 
that said--the Greeley Tribune is the newspaper in northern 
Colorado--that said Weld County rose 20 spots in a year to rank 
number 42 in the Nation in job and wage growth. There was an 
article in that same newspaper January 8, 2013, that said Weld 
County wage growth hits number five in the Nation because of in 
great party the energy development that is taking place in 
Colorado. So we can see the opportunities, and I believe it was 
Ms. Hutzler that talked about the amount of economic impact 
that we have seen. I think your statement--what was it again 
you said about the trillion dollars over 30 years? What was the 
amount of money you said as a result of development?
    Ms. Hutzler. If we opened up new areas onshore and offshore 
to development, that we would get over the next 37 years $14.4 
trillion to the economy.
    Mr. Gardner. And I believe the President's budget said that 
if we had--and I am going to get this number in the ballpark--
if we had 1 percent GDP growth over the next 10 years, we would 
generate around $2 billion or so in new revenues for the 
federal government, so you can see the kind of activity, the 
GDP growth we would see, the kind of GDP growth we would see as 
a result of energy development across the country.
    Ms. Hutzler, you mentioned the permitting delays on federal 
land. What do we need to do in order to alleviate those delays?
    Ms. Hutzler. We need to make the process more streamlined. 
We need to get rid of all the red tape and the delays and look 
at the States to see how they are doing it to remove those 
delays or in fact allow the States to actually do the 
permitting because they certainly know the geologic areas and 
what is best for the State.
    Mr. Gardner. Ms. Morgan, you had said something in your 
statement regarding 2050 carbon emissions. Is that reducing 
carbon emissions by 80 percent by 2050? Twenty percent of 
today's carbon emissions would be, what, about a billion tons 
of CO2? Is that roughly what it would be?
    Ms. Morgan. Roughly, yes.
    Mr. Gardner. Can you give me an emissions inventory for 
2050 of specific sources that would add up to 1 billion tons in 
CO2?
    Ms. Morgan. In 2050?
    Mr. Gardner. Yes, a specific inventory of emissions.
    Ms. Morgan. Well, I can certainly--I mean----
    Mr. Gardner. Does the technology exist today to do that?
    Ms. Morgan. Yes, it does exist today. The National 
Renewable Energy Laboratory actually said you can get to the 80 
percent renewables by 2050 with existing technologies. What the 
inventory would be then would be much less CO2. 
There would probably be a bit left over in some of the non-
CO2 gases. But the point is that I think if we were 
to build out and put in place the policies, you can find that 
sweet spot of extracting or clean energy resources while also 
producing the gas in a more climate-friendly fashion.
    Mr. Gardner. And I think that is something that I have long 
been supportive of is an effort to find a sweet spot when it 
comes to bulk renewable alternative energy sources as well as 
traditional energy sources, but unfortunately, what I see in 
Colorado and what I see out of this Administration are attempts 
to actually make it more difficult to develop that traditional 
resource. In fact, I was reading a letter from one of the EPA 
regions, I believe it was region 3 of the EPA, concerning an 
LNG export facility that they were asking how many new wells 
would have to be drilled across the country as a result of that 
one single LNG facility, and I think when we start asking those 
kinds of questions, what happens to this LNG to wells being 
drilled in Colorado, that seems to me to be a very adverse tone 
for energy production in this Nation.
    I see my time is expired and I will yield back.
    Mr. Whitfield. At this time I will recognize the gentleman 
from New York, Mr. Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair, and thank you to the 
witnesses for presenting at this hearing.
    There has been a lot of discussion about the oil and gas 
production and the estimates of oil and gas reserves. I believe 
there is most likely this gap between proven and technically 
recoverable reserves. To what degree, if any, have the 
environmental costs of exploiting oil and gas been considered 
in estimating the technically recoverable reserves? Anyone?
    Mr. Vidas. I can try to address that issue. In the work 
that we have done, we have defined technically recoverable to 
be based on current technology and current activity, so we 
apply a factor of so many bcf or so many barrels per well based 
on what is going on right now. So it does not take into account 
future changes to regulations that might change the cost.
    However, when we look at the economically recoverable 
resource base, which is a subset of the technically 
recoverable, we have to make certain assumptions about the 
costs. So depending on what kind of scenario we are looking at, 
we may use today's costs, which are based on today's 
environmental rules, or we may hypothesize new regulations that 
might be imposed in the future. And typically when we look at 
that, we would look at a series of different rules about water 
use, different types of materials that can be used and so on, 
and generally when we have looked at that, we would say that 
the future regulations might add something like 7 percent to 
the cost of a well, so that would produce then a resource cost 
that would be about 7 percent higher than today's cost, but of 
course, that depends on what regulations are implemented in the 
future.
    Mr. Tonko. Anyone else? Many of you did not respond, so I 
am assuming there was no environment cost. Ms. Morgan?
    Ms. Morgan. Yes, sir. I believe that environmental costs 
are actually not factored in, and we would be happy to provide 
data from a recent National Academy of Sciences report on the 
climate and non-climate impacts that has a United States focus.
    Mr. Yergin. If the environmental costs, if you mean, for 
instance, regulations that require how you manage water, how 
you manage land, how you manage air quality, those are all 
environmental costs that are then internalized because they are 
part of the regulatory process.
    Mr. Tonko. Well, Dr. Yergin, you discussed the implications 
of the expansion in gas production for our domestic markets and 
for the global market. The demand in the United States has 
leveled out recently but global oil consumption continues to 
expand and fossil fuel use continues to expand. How do the 
rates of increase in our reserves compare to the rate of 
increase in oil and gas consumption globally?
    Mr. Yergin. Globally, the world is now divided into two. 
There is the OECD, the United States, western Europe, Japan 
where we really started in about 2005, 2007 to have peak demand 
in terms of oil and our oil consumption is going to go down, 
not up, because of more efficient cars, because of demographic 
changes in our population, because people reach a limit to how 
many hours they want to spend sitting in a car, so I think that 
is happening, but the great boom is of course in the emerging 
markets and they roughly now consume about the same amount of 
oil as the advanced markets but that is where all the growth is 
going to be. China in 2000 sold 2 million new cars, we sold 17 
million new cars. By 2010, we were selling 12 new cars and they 
were selling 17 million. So that tells you where the growth is 
going to be.
    Mr. Tonko. And we are experiencing this period of relative 
abundance but we have been there before in our recent past 
history, so oil and gas markets are volatile and have led us to 
a false sense of energy security in the past. So how do we 
develop a national energy policy that is less shortsighted and 
more strategic? Basically, how can we best use these reserves 
to maximize----
    Mr. Yergin. Well, what you said is quite right, that what 
we have seen overall, this is just development in the last 3 or 
4 years and we are focusing this discussion and our resource 
base, but look at the Middle East. I mean, people used to talk 
about the arc of instability going from Syria to Iran. Now they 
talk about it going from the Sahel in Africa to central Asia. 
So you look at the map and there are many parts of the world 
which have abundant energy supplies, where there is a lot of 
very evident political risk, and I think your point that we 
shouldn't--there is no reason here for complacency.
    Mr. Tonko. Ms. Morgan?
    Ms. Morgan. I just wanted to say that I think that if you 
look at the--we really can pull out all of our resources, that 
we don't need to be thinking of an either-or, and that 
renewable energy resources, energy efficiency and CCS are all 
part of that and you need to take that longer-term view or else 
we will be making shortsighted decisions and not building the 
CCS in now to our gas and oil decisions.
    Mr. Tonko. Thank you very much. With that, I yield back.
    Mr. Whitfield. Thank you very much. At this time I 
recognize the gentleman from Virginia, Mr. Griffith, for 5 
minutes.
    Mr. Griffith. Thank you, Mr. Chairman. I have to say I 
think we have to use all of our energy resources to develop a 
plan long term.
    That being said, in regard to natural gas, Administrator 
Sieminski, you would expect at some point in the next few years 
for gas to return to $4? Is that correct?
    Mr. Sieminski. We have natural gas prices getting back to 
$4 a million BTUs by the end of next year.
    Mr. Griffith. OK. And in fact, they have been going up. 
They hit a low in April of $1.95 and in December they were 
$3.34. Is that correct?
    Mr. Sieminski. I believe so, sir.
    Mr. Griffith. And if I understood your testimony earlier, 
when it gets to $4, coal becomes very competitive again?
    Mr. Sieminski. It is a sliding scale but as natural gas 
prices go higher, coal becomes more attractive.
    Mr. Griffith. I appreciate that very much coming from a 
coal district, and I will turn to you, Ms. Hutzler.
    A lot of what we have been doing has been ignoring coal and 
its potential as a major resource in this country. It has 
always been that way. And I would point out that I think in 
your testimony you said that we relied on three major sources. 
Of course, we have got our renewables but our three major 
sources are nuclear, coal and natural gas. Is that correct?
    Ms. Hutzler. Yes.
    Mr. Griffith. And I think you also reported that just the 
mercury utility MACT rules would cost about $21 billion a year 
and 183,000 jobs a year. Is that correct?
    Ms. Hutzler. Yes.
    Mr. Griffith. And that retirement of coal power plants by 
2016, we are going to be retiring 27 gigawatts. Is that also 
accurate?
    Ms. Hutzler. I think that is through 2015 and that is an 
EIA number that has been reported to them by electric utility 
companies.
    Mr. Griffith. All right. And that is much higher than the 
EPA's estimates when they first came out with this new 
regulation. Isn't that correct?
    Ms. Hutzler. Yes.
    Mr. Griffith. And in fact, not only is it going to affect 
jobs in the coal fields and at coal-fired power plants, but it 
also will cause our electric rates to go up by 10 to 20 percent 
in most of the country. Isn't that correct?
    Ms. Hutzler. Yes.
    Mr. Griffith. And in fact, in some parts in the Midwest, I 
don't represent them but in some parts it could be right up 
there at the 20 percent.
    Ms. Hutzler. Yes, in States that are highly dependent on 
coal-fired generation.
    Mr. Griffith. Now, you acknowledge in your written 
testimony that the EPA claims that they are not going to do 
this but you do raise some concern and worry that the EPA may 
decide that the modifications in regard to greenhouse gases 
could impact existing coal-fired power plants because that 
would force them to, if they interpreted that complying with 
Utility MACT created them into a new source that that would 
then put a tremendous amount of pressure on the existing coal-
fired power plants and cause even more closures. Is that 
correct?
    Ms. Hutzler. Yes, because under the Utility MACT rule, if 
there are substantial changes, they might be able to look at 
that particular unit as a new unit and therefore treat it as a 
new unit where they don't want the amount of greenhouse gas 
emissions to be any more than from a natural gas plant 
essentially.
    Mr. Griffith. And you cited a report from the United Mine 
Workers of America that would indicate that if that were to 
happen, that job losses could amount to more than 50,000 direct 
jobs if you could coal, utilities and the railroad industry, 
and as much as 250,000 jobs indirect. Is that a correct 
assessment of what the UMWA said?
    Ms. Hutzler. Yes.
    Mr. Griffith. So this is of great concern in my area 
because we have railroads, coal and utility companies.
    I would point out also that it is kind of interested that 
your written testimony indicates that the Chinese are using 
about four times as much coal as we are and that while they are 
building cleaner plants, they are not putting their older, less 
clean plants out of existence in the meantime, are they?
    Ms. Hutzler. No, they are not. With their GDP growth, they 
need all the power they can get, and in fact, according to the 
National Energy Technology Laboratory, they are building 60 to 
80 gigawatts of coal-fired plants a year, and they think that 
will happen easily through 2016 and maybe further.
    Mr. Griffith. And so they are relying on coal including 
maybe some of our coal to generate their energy and the growth 
in their economy. Isn't that true?
    Ms. Hutzler. Yes. They have to import coal now. They can't 
produce enough themselves to satisfy their demand and we are 
exporting coal to them.
    Mr. Griffith. And so when I tell my constituents that not 
only are we damaging coal but we are also damaging jobs in the 
United States, we are allowing the Chinese to grow their 
economy while retarding our economy by not using our clean coal 
technology. Isn't that correct?
    Ms. Hutzler. Yes.
    Mr. Griffith. And in fact, in my district there is a plant 
that just opened this year that is extremely clean, and because 
of the carbon rules, the greenhouse gas rules, it wouldn't be 
allowed to be built if it hadn't already been in construction 
and opened this year. Isn't that correct?
    Ms. Hutzler. Yes.
    Mr. Griffith. And so for all intents and purposes, at least 
at this point in history, there is not the technology available 
for the United States to build any more clean coal plants, 
coal-fired electric generation plants, and we are really 
handicapping ourselves in relationship to our competitiveness 
with the Chinese. Isn't that also true?
    Ms. Hutzler. Yes. We don't--currently, CCS technology is 
not available, commercially available for these plants.
    Mr. Griffith. I thank you, and I yield back, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the honorable 
gentleman from Massachusetts, Mr. Markey, for 5 minutes.
    Mr. Markey. I thank the gentleman very much.
    Just a point. In 2009 in this committee and on the House 
Floor, Mr. Waxman and I built in $60 billion for clean coal 
technology, carbon capture and sequestration. We voted it out 
of this committee with no Republican support. Over the last 5 
years, unfortunately, coal has dropped from 51 percent down to 
35 percent of all electrical generation in the country, and 
what has gone up? Natural gas. It is less expensive and it is 
cleaner. So coal is being attacked but it is by the natural gas 
industry, so let us just get that clear, and we put the $60 
billion in and the coal industry opposed the Waxman-Markey 
bill. They opposed now, and now they suffer from not having the 
investment in technology to make it cleaner. So don't blame us, 
blame the coal industry for not wanting the funding and blame 
the natural gas industry for their technological breakthroughs 
that have allowed for the production of more and cheaper and 
cleaner sources of energy.
    Mr. Sieminski, recently the Department of Energy released a 
study of the economic impacts associated with exporting large 
quantities of natural gas that was performed by NERA 
Consulting. The study used outdated 2010 EIA projection data 
and concluded that while exports would lead to higher domestic 
energy prices and adverse impacts to American manufacturing, 
the overall economic impact would be positive. Mr. Sieminski, 
isn't it true that EIA's 2010 data predicted that domestic 
natural gas use in the power sector would decline between 2010 
and 2020, though its use in the power sector has actually ended 
up growing by 27 percent just since 2010?
    Mr. Sieminski. I have been in the forecasting business a 
long time----
    Mr. Markey. No, I am just asking, is that true or not? I am 
not asking for your personal history.
    Mr. Sieminski. Yes.
    Mr. Markey. OK. That is all I needed to know. So way off. 
EIA was way off. Natural gas and the utility sectors not only 
did not go down, it has now gone up 27 percent since that 
report. Isn't it true that EIA's current projections of natural 
gas use in the transportation sector are seven times as high as 
the 2010 data used in the NERA study?
    Mr. Sieminski. And our supply estimates are also higher.
    Mr. Markey. I am only--I am not asking you--I am asking you 
to just go back to this study that is being relied upon. Is it 
not seven times higher in the transportation sector than NERA 
projected in just 2010?
    Mr. Sieminski. Yes, sir.
    Mr. Markey. OK. Thank you. So this data was released in 
2010, and since then 100 major manufacturing projects totaling 
$95 billion in investment have been announced. These are 
manufacturing facilities that would produce chemicals, 
fertilizer, steel, aluminum, gas, tires, plastics and other 
goods, all of which rely on cheap natural gas. That is what is 
driving this manufacturing. These announced projects alone 
would push U.S. industrial demand for natural gas 30 percent 
beyond the estimates used in the NERA study. Just yesterday, 
the Wall Street Journal described decisions made by German and 
Canadian companies to locate new facilities in the United 
States because of low natural gas prices. The Germans, the 
Canadians are coming to the United States with their 
manufacturing facilities.
    Do you believe that we should be making decisions about 
what to do with domestic natural gas in 2013 and beyond using 
data that reflected what was going on in that sector 3 years 
ago that vastly underestimated what is happening today?
    Mr. Sieminski. I think it is always better to have recent 
and accurate date in making forecasts but----
    Mr. Markey. Especially since the data we are talking about 
is like a Frankie Avalon record except it only took 3 years to 
turn it into completely outdated information that was totally 
wrong about where we would be 3 years later----
    Mr. Sieminski. Congressman Markey, as I was trying to say 
earlier----
    Mr. Markey. Let me just continue. Last year your agency 
found that exporting 12 billion cubic feet per day of natural 
gas could lead to a 54 percent increase in domestic prices but 
today companies are applying to export nearly three times that 
amount. It seems to me that before we permit more natural gas 
exports to occur, we should have an understanding of the 
potential economic impacts on consumers, on the manufacturing 
sector and on the transportation sector in the United States in 
terms of our own internal domestic growth in those sectors of 
our economy and have it based upon real data, not old data that 
bears no resemblance to what is happening in the natural gas 
sector today.
    Now, let me just ask this question. This panel led by the 
Republicans voted in 2012 to repeal the ability of EPA to 
increase fuel economy standards for the vehicles which we 
drive. Let me just go down the line here and just ask each of 
you, do you support the repeal of the ability of the EPA to 
increase fuel economy standards or do you oppose repealing the 
authority? Can we just go down and we will just get your views 
on that way in which we deal with oil consumption in the United 
States? Mr. Sieminski?
    Mr. Sieminski. It is not a question for me, Congressman.
    Mr. Markey. It is not?
    Mr. Sieminski. No, it is not. It is a policy issue.
    Mr. Markey. OK. Good.
    Mr. Yergin?
    Mr. Yergin. I think fuel efficiency standards are an 
important contribution to energy efficiency and our overall 
energy mix.
    Mr. Markey. Thank you.
    Ms. Morgan. I agree, it is a great example of how you can 
meet energy and climate security goals at the same time.
    Mr. Markey. Thank you.
    Ms. Hutzler. Well, they are important and certainly make a 
difference. You have to take a look at----
    Mr. Markey. No, just that one issue. One issue, please.
    Ms. Hutzler. Well, there are safety issues with vehicles 
and other issues that have to be taken into account.
    Mr. Markey. So you would consider repealing EPA authority?
    Ms. Hutzler. I would think that it needs to be studied and 
you have to look at the entire situation.
    Mr. Markey. Yes, sir?
    Mr. Vidas. I don't want to state any policy opinions like 
that, but as a personal consumer of cars, I certainly like to 
have more efficient cars.
    Mr. Whitfield. The gentleman's time is expired.
    Mr. Markey. Thank you.
    Mr. Whitfield. At this time I recognize the gentleman from 
Illinois, Mr. Kinzinger.
    Mr. Kinzinger. Thank you, Mr. Chairman, and thank you all 
for coming in. Just a couple of questions, and this may not 
take all my 5 minutes.
    Mr. Yergin, last week's Wall Street Journal, there was an 
article titled ``Can Gas Undo Nuclear Power?'' which discusses 
how low natural gas prices are problematic for our baseload 
energy production, and I would like to know your thoughts on 
low gas prices as it impacts fuel diversity into the future and 
existing domestic resources like nuclear.
    Mr. Yergin. I think what has happened with natural gas 
prices, remember, when people went out to start developing 
shale gas, it was--the incentive was very great for these 
independents. It was like $12 and now we know we are talking 
around $3, and that is really changing the marketplace, the 
electric power marketplace for everything, certainly including 
nuclear.
    Mr. Kinzinger. So does that give you concerns for maybe the 
viability of nuclear in the future if this continues? And also, 
what do you think is going to happen? Do you think in 10 years 
if you can magically look forward that we will have a diverse 
energy supply or do you think we will have too many eggs in one 
basket?
    Mr. Yergin. Well, I think it is the--we have four reactors 
that are under construction, two projects now. I think that in 
this cost environment it is very hard to see anybody committing 
to a current generation of new power plants. The Secretary of 
Energy Advisory Board, the last session was partly devoted to 
small modular nuclear reactors, in other words, where there is 
technological innovation. And I think the other question about 
our nuclear fleet is, it is about 20 percent of our 
electricity. Lives have been extended. What happens after 
another 20 year and does that shrink away then.
    Mr. Kinzinger. And then another question. You mentioned my 
home State of Illinois as a State that already employs 39,000 
people in oil and gas.
    Mr. Yergin. Well, who are benefiting from the 
unconventional oil and gas revolution.
    Mr. Kinzinger. Right.
    Mr. Yergin. Although Illinois hasn't yet passed the 
regulations.
    Mr. Kinzinger. No, it is about time we get there.
    What would the economic impact be on Illinois if they 
allowed oil and gas production, in your mind, as far as new----
    Mr. Yergin. It would be--it would lead to considerable 
generation of income in the State, as we have seen in other 
States. Mr. Doyle mentioned it in his State. And when I was out 
in Illinois, that day the front page of USA Today was about how 
income is shifting, new income is being created in areas, rural 
areas, areas that had been depopulated and so forth because of 
this activity and kind of in the center of the State, and the--
--
    Mr. Kinzinger. They are the areas that are frankly 
suffering sometimes the hardest under this recession, or this 
economic difficulty, we will call it, to avoid argument on it.
    Mr. Yergin. The new Albany shale could be very important 
for the economy of your State.
    Mr. Kinzinger. And what price do you think natural gas 
would need to be in order for production to occur in Illinois?
    Mr. Yergin. Well, I think it is really--I mean, I think 
people are ready to go ahead. It depends on happens in 
Springfield, I think, as to whether it goes ahead or not and at 
what----
    Mr. Kinzinger. I will say Springfield makes Washington, 
D.C., look highly functional.
    Well, thank you, and I appreciate everybody's testimony. I 
appreciate your answering my questions. The big concern here 
into the future is, I have always been a believer in saying you 
can't have too few energy supplies, and when it comes 
specifically to nuclear, I think it is important we ensure 
nuclear maintains a major part of our energy portfolio because 
in the future you never know how things change.
    With that, I want to say thank you. Thank you, Mr. 
Chairman. I yield back.
    Mr. Whitfield. At this time I recognize Mr. Pompeo from 
Kansas for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman, and I thank the 
witnesses. It has been a long morning. I think I am hitting 
cleanup today.
    A couple thoughts. It has been great to listen to. I have 
heard words like renaissance and revolution thrown around and 
all the good things that are happening. I think it is worth 
noting for everyone here, almost all of that happened with 
almost zero role of the federal government. Most of the things 
that the federal government's resources have gone to in this 
intervening period between the hearing in 2008 and the one in 
2013 continue to provide a very, very negligible set of outputs 
important to the American economy. So I think that suggests the 
direction of travel for us as well as we think about new 
policies.
    Mr. Yergin, I have got a question for you about pipelines. 
Mr. Shimkus talked about it a little bit. You know, there is an 
article in Energy Daily talking about how long it is taking for 
permitting. I would like to introduce that article into the 
record if I might, Mr. Chairman.
    Mr. Whitfield. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Pompeo. The study found that nearly 20 percent of 
natural gas pipelines have delays of over 6 months or more, 
enormous capital at risk when you think about building a new 
pipeline, and it is important not only for existing fields to 
get those pipelines--the Mississippi shale in my district is a 
good example. We have got production but relatively little 
demand in towns like Anthony and Coldwater, Kansas. We have got 
to this product to the right places.
    I think there is also a circular effect, that is, if you 
know that you can efficiently build a pipeline, folks will go 
look for in other places as well. Can you talk about the 
interplay between challenges in building pipelines and people's 
willingness to take risks in finding these fields in North 
America?
    Mr. Yergin. Well, Ms. Hutzler spoke about that before too. 
I think that getting--the word she used, streamlining 
permitting for pipelines. I mean, pipelines are literally a 
pretty straightforward thing and that we ought to--that you 
need them to keep up with where we are and otherwise you either 
are using flaring for gas or you are shipping oil by truck and 
so forth and that is not a very efficient way to do it.
    Mr. Pompeo. I appreciate that. I am actually--I am working 
on some legislation to give FERC a little more authority in 
trying to streamline this process. I think it will be 
bipartisan. I think we can do this in a way that provides all 
the protection for the environment, all the things we need to 
do, but getting us to a finish line where we actually make 
decisions about these. Whether the pipeline is a go or a no go, 
we do it in a much more timely and reliable fashion.
    We talked about energy exports. I was surprised Mr. 
Griffith didn't talk about coal exports. We have been talking 
about LNG mostly but it is a broad set of energies that we 
ought to be exporting from America. Today with respect to LNG 
exports, we have a delineation about DOE's authority, whether 
we are going to transport this to a free trade agreement 
country or a non-free trade agreement country. I guess this is 
for anyone on the panel. Is there any reason for that 
demarcation to continue to exist?
    Mr. Yergin. I think it is an artifact.
    Mr. Pompeo. Yes, that is my sense as well.
    Mr. Yergin. I mean, Japan, the example I gave, is not a 
free trade country and yet it is an incredibly important 
country to us.
    Mr. Pompeo. It seems to me too that there is a history. I 
read a little history of how it came to be and it seems 
something that we as a policy matter could get rid of. We could 
direct those two places for shipment to be treated identically. 
I have a few of what DOE's authority ought to be. I don't think 
the--I think the national interest finding is by definition 
free trade, it creates wealth in America. I think it is by 
definition but I am sure others would have a slightly different 
view on that but at least we could get rid of that demarcation.
    Ms. Hutzler, I was reading an article about renewable 
energy, and in Eastern Europe they subsidized it even longer 
than we have and even more than we have, and they have had some 
power blackouts. There is an article in Bloomberg on October 25 
that I would also like to submit for the record that talks 
about these energy blackouts.
    Mr. Whitfield. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Pompeo. You know, our grid could suffer the same kinds 
of things, in my view, if we have non-storable, non-reliable 
energy source. Do you have a view of the risk of us subsidizing 
this at such a rate that we get to a place where we have got 
less reliable electricity in America?
    Ms. Hutzler. Yes. Germany is a good example because they 
are phasing out their nuclear units and turning to renewable 
energy in its place, but obviously it has to be backed up, and 
it has caused instability to their grid. Neighboring countries 
are not allowing them to export their renewable energy, their 
wind energy, to them such as Poland, and in fact, industrial 
users are seeing some disruptions in their service that is 
causing them hundreds of thousands of dollars in equipment and 
they have already told the German government that either you 
fix this problem or we are going to leave.
    Mr. Pompeo. I have got just 20 seconds. Mr. Sieminski, you 
talked about renewables growing at a huge rate. It is easy to 
grow at a huge rate off a small base. I remember, I ran a small 
company at one point too. It is still not a hugely important 
part of our energy resource base. When you made these 
assumptions about its economic growth, what did you assume for 
federal policy? Did you believe that we would continue our 
current--somebody on the other side of the aisle called it 
creative financing. I will call it getting in the pockets of 
taxpayers. But what assumptions did you make about state RPSs 
and these kinds of non-economic policies remaining in effect 
supporting----
    Mr. Sieminski. EIA's forecasts always use existing law and 
regulation. We don't try to forecast regulation or law. We do 
have the California renewable and other laws built into our 
forecasts. Renewables go from about 13 percent over the last 
few years to 16 percent of total electricity generation, so 
there is a lot of growth but it is still a small portion.
    Mr. Pompeo. Great. Thank you. Thank you, panelists, all for 
being here today.
    Mr. Sieminski. Congressman, I just want to add one other 
quick thing if I might, Mr. Chairman.
    Mr. Pompeo. It is OK with me. My time is up.
    Mr. Sieminski. Your background in the oil service industry, 
a number of questions have come up here this morning about the 
impact of hydraulic fracturing and need for water. In 
Pennsylvania, I know that most of the flow-back water is now 
being recycled and used again, and changes in technology like 
the multistage fracturing could lead to much less water use 
simply because the identification of where to frack along a 
horizontal well could cut the number of feet that you have to 
frack in half, and all these things, these changes in 
technology are taking place at such a rapid pace. It is one of 
the reasons why EIA's forecasts have fallen short, as Mr. 
Markey suggested.
    Mr. Pompeo. Great. Thank you.
    Mr. Whitfield. OK. All time is expired, and I want to thank 
the panel of witnesses. So thank you all very much. We will 
keep the record open for 10 days, and I am asking unanimous 
consent to submit into the record a copy of a statement from 
National Petroleum Council and also the executive summary of 
the IER study on opening federal lands to oil and gas leasing.
    [The information appears at the conclusion of the hearing.]
    Mr. Whitfield. So with that, we will conclude today's 
hearing, and once again, I appreciate the participation of 
everyone.
    [Whereupon, at 1:05 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

               Prepared statement of Hon. Eliot L. Engel

    Thank you Mr. Chairman.
    As we start a new legislative year, I am pleased to see a 
strong focus on North American energy resources. I have been a 
strong proponent of doing everything we can to make the United 
States energy independent. One of the reasons I formed the 
Energy and National Security Caucus was to draw attention to 
the fact that our dependence on imported oil affects our 
national security.
    I believe in an ``all of the above approach'' to energy 
independence, but we must include renewable energy as part of 
the mix, even as we tap new fossil fuels. Our country, the 
climate, and the world cannot afford for us to rest on our 
laurels. Climate change is a serious threat to our country and 
to the entire planet. We must tackle this threat by seriously 
by focusing on renewable energy resources which do not 
contribute to global climate change.
    New York, New Jersey and Connecticut were recently 
devastated by Superstorm Sandy; western states are still 
suffering through record droughts, and many areas were 
devastated by wild fires. Climate change is contributing to 
these weather patterns. We can no longer afford to ignore 
climate change and I am hopeful that this Committee will 
seriously deal with the issue.
    One method for helping to grow renewable energy resources 
is make sure it is on an even playing field with fossil fuels. 
I will soon be reintroducing my ``Open Fuel Standard Act'', 
that would require 95% of new vehicles to be able to operate on 
another fuel in addition to or instead of gasoline.


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