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



 
U.S. ENERGY ABUNDANCE: EXPORTS AND THE CHANGING GLOBAL ENERGY LANDSCAPE 

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 7, 2013

                               __________

                           Serial No. 113-38


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov

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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             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
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
RALPH M. HALL, Texas                 JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania        EDWARD J. MARKEY, Massachusetts
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
ROBERT E. LATTA, Ohio                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 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     2
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, 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.......................................     7
    Prepared statement...........................................     8
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     8

                               Witnesses

J. Bennett Johnston, Chairman, Johnston & Associates.............    10
    Prepared statement...........................................    13
Byron Dorgan, Co-chair, Bipartisan Policy Center.................    17
    Prepared statement...........................................    19
James Bradbury, Senior Associate, Climate and Energy Program, 
  World Resources Institute......................................    26
    Prepared statement...........................................    28
    Answers to submitted questions...............................   128
Michael Breen, Executive Director, Truman National Security 
  Project........................................................    54
    Prepared statement...........................................    56
Mike Halleck, President, Columbiana County Board of Commissioners    61
    Prepared statement...........................................    63
Amy Jaffe, Executive Director, Energy & Sustainability, UC Davis 
  Graduate School of Management..................................    66
    Prepared statement...........................................    68
    Answers to submitted questions...............................   130

                           Submitted Material

Statement of U.S. Representative Michael R. Turner...............   117
Letter of May 3, 2013, from Charles P. Sammarone, Mayor of 
  Youngstown, Ohio, to the Subcommittee..........................   120
Letter of May 6, 2013, from Scott Lincicome of the Cato 
  Institute, to the Subcommittee.................................   121


U.S. ENERGY ABUNDANCE: EXPORTS AND THE CHANGING GLOBAL ENERGY LANDSCAPE

                              ----------                              


                          TUESDAY, MAY 7, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Present: Representatives Whitfield, Scalise, Hall, Shimkus, 
Pitts, Terry, Burgess, Latta, Cassidy, Olson, McKinley, 
Gardner, Pompeo, Kinzinger, Griffith, Barton, Johnson, Upton 
(ex officio), Rush, McNerney, Tonko, Engel, Green, Capps, 
Doyle, Barrow, Matsui, Castor, and Waxman (ex officio).
    Staff Present: Nick Abraham, Legislative Clerk; Charlotte 
Baker, Press Secretary; Matt Bravo, Professional Staff Member; 
Allison Busbee, Policy Coordinator, Energy & Power; Tom 
Hassenboehler, Chief Counsel, Energy & Power; Jason Knox, 
Counsel, Energy & Power; Ben Lieberman, Counsel, Energy & 
Power; Nick Magallanes, Policy Coordinator, CMT; Brandon 
Mooney, Professional Staff Member; Mary Neumayr, Senior Energy 
Counsel; Chris Sarley, Policy Coordinator, Environment & 
Economy; Jeff Baran, Minority Senior Counsel; Alison Cassady, 
Minority Senior Professional Staff Member; and Caitlin 
Haberman, Minority Policy Analyst.

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

    Mr. Whitfield. I would like to call this hearing to order 
this morning. Today we are going to have a hearing on the U.S. 
energy abundance, exports and changing global energy landscape. 
And at this time I would like to recognize myself for 5 minutes 
for an opening statement. And I will be introducing members of 
the panel, but I will probably yield a few seconds to my friend 
from Ohio, Mr. Johnson, to introduce one member of the panel 
from his district.
    But this is an exciting day, a very important hearing. And 
we do thank the witnesses for being here with us today. We look 
forward to your testimony. All of you have had unique 
experiences in this area, and we know that your testimony will 
be quite valuable.
    America's growing energy production is a game changer, and 
today's hearing, entitled ``U.S. Energy Abundance: Exports and 
Changing Energy Landscape,'' explores the geopolitical benefits 
of the U.S. becoming a world leader in energy production and 
exports.
    As we have discussed in previous hearings, America's energy 
abundance is creating employment opportunities and growth at a 
time when little else in the economy is going as well, and that 
alone is enough reason to support domestic energy production. 
But while this energy abundance is a source of jobs at home, it 
can also be a force for good and competition around the world, 
and it is this potential that we hope to address today.
    Until a few years ago most of us assumed that the U.S. was 
well past its peak in terms of domestic energy production and 
that we would become increasingly dependent on imports, 
particularly oil imports from OPEC nations. Many feared the 
same thing was happening with natural gas, and some even 
worried about an emerging OPEC-like natural gas cartel 
dominated by Russia and Iran. This committee held many hearings 
discussing the grave geopolitical consequences of global energy 
markets dominated by nations that do not necessarily share our 
values and who are not shy about using energy exports to exert 
leverage over other countries.
    But now the tables are turning, thanks to American 
innovations in hydraulic fracking and directional drilling that 
is expanding the supply of domestic oil and natural gas. 
Instead of being beholden to energy exporting nations, we are 
fast becoming one ourselves.
    Perhaps nowhere is the reversal more stark than with 
natural gas. Debates about natural gas used to center around 
whether to permit facilities to import supplies of liquid 
natural gas from abroad to help make up for dwindling domestic 
production. But now these would be import terminals are being 
reproposed as export terminals. The reason for this reversal is 
that domestic natural gas production is now rising so fast that 
there is more than enough to meet domestic demand affordably 
and export the surplus to nations that need it, such as Japan 
and Great Britain. By taking advantage of these expert 
opportunities we can help our own economy and at the same time 
strengthen our ties with key allies.
    I might add that the benefits of energy exports also apply 
to coal, and I would like to draw your attention to a May 1st 
Wall Street Journal article that chronicles how U.S. coal 
exports to Eastern Europe are helping to displace Russian 
natural gas and neutralize Russian influence. And even Bulgaria 
was able to get a 20 percent reduction in price for natural gas 
its buying from Russia because of additional coal that they are 
using.
    Not only should we be focused of course on natural gas and 
oil and coal, but we need also to focus on pipelines, port 
facilities, and other infrastructure investments necessary to 
make full use of our energy abundance.
    So this is a vitally important hearing, and as I said, we 
are going to look forward to your testimony because we are at a 
threshold of a great opportunity in this Nation to be energy 
independent.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    America's growing energy production is a real game changer, 
and today's hearing, entitled ``U.S. Energy Abundance: Exports 
and the Changing Energy Landscape,'' explores the geopolitical 
benefits of the U.S. becoming a world leader in energy 
production and exports.
    As we have discussed in previous hearings, America's energy 
abundance is creating employment opportunities and growth at a 
time when little else in the economy is going as well--and that 
alone is enough reason to support domestic energy production. 
But while this energy abundance is a source of jobs at home, it 
can also be a force for good around the world--and it is this 
potential that we will address today.
    Until a few years ago, most of us assumed that the U.S. was 
well past its peak in terms of domestic energy production and 
that we would become increasingly dependent on imports, 
particularly oil imports from OPEC nations. Many feared the 
same thing was happening with natural gas, and some even 
worried about an emerging OPEC-like natural gas cartel 
dominated by Russia and Iran. This committee held many hearings 
discussing the grave geopolitical consequences of global energy 
markets dominated by nations that do not share our values and 
who are not shy about using energy exports to exert leverage 
over others.
    But now the tables are turning, thanks to American 
innovations in hydraulic fracturing and directional drilling 
that is expanding the supply of domestic oil and natural gas. 
Instead of being beholden to energy exporting nations, we are 
fast becoming one ourselves. Perhaps nowhere is the reversal 
more stark than with natural gas. Debates about natural gas 
used to center around whether to permit facilities to import 
supplies of liquefied natural gas from abroad to help make up 
for dwindling domestic production. But now, those would-be 
import terminals are being reproposed as export terminals. The 
reason for this reversal is that domestic natural gas 
production is now rising so fast there is more than enough to 
meet domestic demand affordably and export the surplus to 
nations that need it such as Japan and Great Britain. By taking 
advantage of these export opportunities, we can help our own 
economy and at the same time strengthen our ties with key 
allies.
    I might add that the benefits of energy exports also apply 
to coal, and I would like to draw your attention to a May 1st 
Wall Street Journal article that chronicles how U.S. coal 
exports to Eastern Europe are helping to displace Russian 
natural gas and neutralize Russian influence. Countries like 
Bulgaria and Poland that used to be under Russia's thumb are 
now gaining a measure of autonomy thanks in part to American 
coal. This kind of BTU diplomacy can be repeated throughout the 
globe, allowing us to strengthen our working relationship with 
many countries while reducing the influence of troublesome 
regimes.
    Of course, none of this can happen if we shut the door on 
domestic energy production. For this reason, we need to address 
the fact that the Obama administration continues to keep most 
federal lands off-limits to energy leasing and that regulatory 
efforts may be underway to crack down on hydraulic fracturing. 
The president likes to say he is for all-of-the-above, but 
Congress needs to hold him to that.
    In addition, we need to allow the pipelines, port 
facilities, and other infrastructure investments necessary to 
make full use of our energy abundance. The Obama 
administration's four-year delay in making a decision on the 
Keystone XL pipeline project is a warning sign that the 
infrastructure approval process is badly broken and needs to be 
fixed.
    The benefits of being an energy-exporting nation could also 
be derailed if we place unnecessary restrictions on these 
exports. For example, some argue that exports of natural gas 
will create domestic shortages and serious price spikes in the 
U.S. But, with resource assessments continuing to be revised 
upward and studies from the Department of Energy and the Small 
Business & Entrepreneurship Council touting the net economic 
benefits that are strongly positive, these fears are becoming 
more and more unfounded. The real risk is if the U.S. does not 
take advantage of energy export opportunities. Failure to do so 
would be a lost opportunity, both economically and 
geopolitically.
    Increased production and trade in American energy benefits 
both our economy at home and our standing around the world. I 
look forward to our discussion on how to move forward.

                                #  #  #

    Mr. Whitfield. At this time, I recognize the gentleman from 
Ohio, Mr. Johnson, for the purpose of an introduction.
    Mr. Johnson. Thank you, Mr. Chairman. I do consider it a 
distinct honor. You talk about energy abundance and job 
creation through domestic energy production, nowhere in the 
Nation is that happening any more prevalently than in eastern 
and southeastern Ohio. We sit on top of the Marcellus and the 
Utica shale, and so many, many opportunities are coming our 
way.
    No one knows that better than one of our own county 
commissioners, Mr. Michael Halleck from Columbiana County. 
Commissioner Halleck is a stalwart believer in accountable, 
responsible government. He has got a track record that proves 
that. Every time that I go into Columbiana County to talk about 
energy production, to meet with oil and gas companies, to talk 
with business owners who are working hard to create jobs and 
make ends meet for the residents of our district, you can find 
Michael Halleck close by. He is engaged. I am very honored to 
have him with us today. I think you are going to enjoy his 
testimony.
    Mr. Chairman, I yield back. Thank you.
    Mr. Whitfield. My time has expired. Thank you very much.
    At this time, I recognize the gentleman from California for 
a 5-minute opening statement, Mr. Waxman.

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

    Mr. Waxman. Thank you, Mr. Chairman.
    Today's hearing is the subcommittee's first opportunity to 
focus on liquefied natural gas or LNG exports. I think it is an 
important topic and I am glad we are having this hearing.
    There is no question that a significant energy transition 
is underway here in the United States. State and Federal 
renewable energy policies are paying off. We have doubled our 
capacity to generate renewable electricity from wind and solar 
just in 4 years. Cheap natural gas is also helping to transform 
our electricity sector. This market reality is driving a shift 
away from the use of polluting coal to generate electricity.
    These changes are positive developments, and we will hear a 
lot today about the geopolitical implications of America's 
energy abundance. We will also talk about the impacts on 
America's economy, American jobs, and America's balance of 
trade.
    But I want to address a different issue: the relationship 
between U.S. energy markets and climate change. Climate change 
is the biggest energy challenge we face as a country. We can't 
have a conversation about the global consequences of America's 
energy policy without also having a conversation about climate 
change.
    In November, the International Energy Agency concluded that 
if the world does not take action to reduce carbon pollution 
before 2017, then it will be impossible to prevent the worst 
effects of climate change because of the carbon dioxide 
emissions that would be locked in by energy infrastructure 
existing at that time. That means that the energy policy 
decisions that we make today will have a real and direct impact 
on whether we can prevent the worst impacts of global climate 
change in the future.
    It is through this lens that we need to examine whether we 
should export LNG to other countries. LNG export terminals are 
huge multibillion-dollar infrastructure investments that will 
last for decades. We should understand the climate impacts 
before these facilities are built, not after.
    I have an open mind about LNG exports. There is a case to 
be made that exports of LNG may allow other nations to move 
from coal to natural gas. That could lead to reduced carbon 
emissions. In addition, a number of studies predict that LNG 
exports would have generally positive economic effects. There 
is also a case to be made that free trade in natural gas may 
help our allies in Europe and Asia who are currently dependent 
on higher-priced natural gas imports from Russia and the Middle 
East.
    But we also need to consider the impact LNG exports could 
have on domestic greenhouse gas emissions. Liquefying and 
transporting natural gas is an energy-intensive process that 
would generate significant carbon pollution. LNG exports would 
increase the domestic price of natural gas, which could 
increase U.S. carbon emissions as a result of a shift back to 
coal for electricity generation. And methane itself is a potent 
greenhouse gas. It is 25 times more potent than carbon dioxide 
in warming the planet. Exports would stimulate more domestic 
natural gas production, which can emit substantial amounts of 
methane if not controlled.
    As the Department of Energy considers the pending 
applications to export LNG, I hope they will develop concrete 
answers so that we can understand the climate impacts of moving 
in this direction.
    I thank the witnesses for being here, and I look forward to 
there testimony. And I would be pleased to yield a minute that 
I have left to any member on the Democratic side who wishes to 
use it.
    Mr. Green, I yield back the balance of my time.
    Mr. Green. I thank my ranking member, and I want to welcome 
our panel. I appreciate particularly our two former Senators 
working with you as a House Member years ago.
    I come from a district in Houston that actually is a large 
petrochemical complex, so we are concerned about exporting 
because we have seen expansion of our chemical industry 
substantially over the last 2 or 3 years. But I still think 
there is a possibility we can share with the world some of not 
only our expertise in drilling, but also our natural gas. In 
fact, we were on a committee trip, or at least a trip a few 
weeks ago, and some members on the Republican side were there. 
The German Chancellor asked if we would be able to export 
natural gas to Germany, and I know one of my Pennsylvania 
colleagues said they would like to send Pennsylvania and Ohio 
gas. I told her we would be glad to send Texas gas, too, but it 
needs to be done in a reasonable manner.
    And, my ranking member, thank you again for yielding to me.
    Mr. Whitfield. The gentlemen's time has expired. At this 
time I recognize the chairman of the full committee, Mr. Upton 
of Michigan, 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.
    Today's hearing continues the subcommittee's look into what 
is becoming a welcome theme: how American energy abundance is 
rewriting the playbooks for all levels of energy policy. This 
new strategy is a reality, resulting from advancements in 
innovation and technology, has game-changing potential for 
America's energy future with more jobs, lower prices, and, yes, 
less volatility, as we will hear today, has far-reaching 
implications abroad as well.
    As we learned at our February hearing, U.S. energy 
resources are vastly abundant and growing, with technology 
continuing to evolve and new areas of the country becoming 
centers for exploration and production. It is not just Texas, 
Alaska, and Louisiana anymore, but places like Illinois, Ohio, 
Michigan, even California who are in the process of developing 
or considering developing new oil and gas resources from 
domestic shale.
    This diverse geographic abundance is helping to ease the 
volatility of the recent past, where prices were becoming 
increasingly vulnerable to hurricanes and geopolitical turmoil, 
to create a new North American gas market that is becoming the 
envy of the world.
    America's natural gas movement is creating competitive 
opportunities domestically for manufacturing and technology, as 
well as international opportunities to help our allies reduce 
their reliance on geopolitically unstable regions of the world. 
And I believe that our abundance means that we can have both 
new jobs from a renaissance in the energy and manufacturing 
sectors, along with new diplomatic strength from using these 
resources to reinforce our ties to important allies and trading 
partners. Our changing energy landscape will in fact produce 
both economic growth and real gains.
    To think that America in just a short period of time would 
be at such a strategic advantage to use our natural resources 
to not only help our country domestically with new jobs in 
energy and security, but to also influence Russia's ability to 
wield an energy weapon over its European customers, is truly 
remarkable. Yet as today's witnesses will tell us, that is 
exactly what is beginning to happen.
    This hearing should also remind us that we must remain 
steadfast in our support for efforts to maximize use of our 
energy resources. As American shale production expands from 
natural gas to oil, we have to embrace our newfound capability 
to lift and shift the power structure with Venezuela, Russia, 
and the Middle East back to our favor and strive to avoid 
needless litigation or bureaucratic delays that threaten this 
realignment.
    We are in the midst of a budding success story about 
American prosperity, jobs, and national power. We are 
continuing to produce valuable energy resources safely and 
responsibly around the country. But the benefits do not stop 
there, as emissions also continue to decline.
    I look forward to the testimony today, including Senators 
Johnson and Dorgan. You have been good friends and we respect 
your valuable expertise, and I look forward to that, and would 
yield to our Republicans on our side.
    Mr. Barton.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Today's hearing continues this subcommittee's look into 
what is becoming a welcome theme: how American energy abundance 
is rewriting the playbooks for all levels of energy policy. 
This new energy reality, resulting from advancements in 
innovation and technology, has gamechanging potential for 
America's energy future with more jobs, lower prices, and less 
volatility--and as we will hear today--has far-reaching 
implications abroad as well.
    As we learned at our February 5th hearing, U.S. energy 
resources are vastly abundant and growing, with technology 
continuing to evolve and new areas of the country becoming 
centers for exploration and production. It's not just Texas, 
Alaska, and Louisiana anymore--but places like Illinois, Ohio, 
Michigan, and even California--who are in the process of 
developing or considering developing new oil and gas resources 
from domestic shale. This diverse geographic abundance is 
helping to erase the volatility of the recent past where prices 
were becoming increasingly vulnerable to hurricanes and 
geopolitical turmoil to create a new North American gas market 
that is becoming the envy of the world. America's natural gas 
boom is creating competitive opportunities domestically for 
manufacturing and technology as well as international 
opportunities to help our allies reduce their reliance on 
geopolitically unstable regions of the world.
    And I believe our abundance means we can have both: new 
jobs from a renaissance in the energy and manufacturing 
sectors, along with new diplomatic strength from using these 
resources to reinforce our ties to important allies and trading 
partners. Our changing energy landscape will produce both 
economic growth and geopolitical gains.
    To think that America, in just a short period of time, 
would be at such a strategic advantage to use our resources to 
not only help our country domestically with new jobs and energy 
security, but to also influence Russia's ability to wield an 
energy weapon over its European customers is truly remarkable. 
Yet, as today's witnesses will tell us, that is exactly what is 
beginning to happen.
    This hearing should also remind us that we must remain 
steadfast in our support for efforts to maximize use of our 
energy resources. As American shale production expands from 
natural gas to oil, we must embrace our newfound capability to 
shift the power structure with Venezuela, Russia, and the 
Middle East back to our favor and strive to avoid needless 
litigation or bureaucratic delays that threaten this 
realignment. We are in the midst of a budding success story 
about American prosperity, jobs, and national power. We are 
continuing to produce valuable energy resources, safely and 
responsibly around the country, but the benefits don't stop 
there as emissions also continue to decline.
    I welcome our entire esteemed panel to this hearing, 
including Senators Johnston and Dorgan. Your extensive 
backgrounds and contributions to this discussion are incredibly 
valuable. Increased production and trade in American energy 
benefits both our economy at home and our standing around the 
world. The energy landscape is changing, and we will all be 
better for it. I look forward to our discussion on how to move 
forward.

                                #  #  #

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

    Mr. Barton. Thank you, Mr. Chairman. And thanks to Chairman 
Whitfield for holding this hearing. It is good to see Senator 
Johnson and Senator Dorgan. I worked with them in the past, and 
it is good to see you here at the witness table.
    This is an important hearing. I don't think it is a secret 
that I am a supporter of free markets and a robust American 
energy policy. Currently our oil and gas sector is creating 
about 9 million jobs a year and sending in taxes more than $30 
billion to the Federal Treasury every year.
    We have the blessing of the Lord on our side in the United 
States that the latest estimates, although it is difficult to 
estimate, we think over 2,000 trillion feet of natural gas 
resides beneath our lands in the United States, 2,000 trillion 
feet. Because of past laws, we give the Department of Energy 
the right to make a decision on exports and natural gas, if it 
is not to a country where we already have a free trade 
agreement. There are currently 19 of those applications 
pending, one has been approved. It would be my hope that 
several more are approved in the near future.
    If you believe in free markets this is a win-win. You only 
make an agreement if it benefits the seller and it benefits the 
buyer. In this case the seller is the American economy and the 
jobs that are created in America. And the winner overseas is 
the increased economic prosperity because they get natural gas 
from the United States that is orders of magnitude less 
expensive than it is from any other supplier.
    So, Mr. Chairman, this is a good hearing, and I look 
forward to the witnesses and then asking them questions. And 
with that I would yield back to the chairman.
    [The prepared statement of Mr. Barton follows:]

                 Prepared statement of Hon. Joe Barton

    Thank you, Chairman Whitfield, for holding this hearing to 
examine the national security and foreign policy implications 
of our abundant energy resources. America's energy revolution--
the massive increase in oil and gas production from shale 
formations--has shifted the geopolitical framework governing 
foreign diplomacy. The positive effects are being felt both in 
the U.S. and abroad, and this is just the beginning.
    The increase in oil and gas development is strengthening 
our economy here at home by supporting nearly 9 million jobs 
and sending more than 30 billion dollars to the Federal 
Treasury every year. It is the bright spot in an otherwise 
gloomy economy.
    The growth in domestic production also means we are 
importing less, freeing up supplies of natural gas and oil 
around the world, weakening the grip of state-owned energy 
companies like Russia's Gazprom, which once held sway over 
European natural gas markets.Allowing exports of American 
natural gas, and possibly even oil, would further enhance our 
power and influence--strengthening our relationships with 
allies and weakening the control of adversaries such as Iran.
    I support American energy exports because I support free 
markets and free trade. The fundamental principle of free 
markets is that both sides to transactions benefit. We keep 
jobs here at home--our businesses can continue to innovate and 
grow. Our allies around the world benefit because they can 
diversify their supply and decrease their reliance on OPEC 
nations. Together, we benefit knowing the safety and security 
of our energy supply will not be subject to the whims of 
adversaries seeking to use energy as a political weapon.
    I want to thank the witnesses for appearing before us today 
to allow us to better understand what may be possible in this 
new era of energy.
    Thank you, I yield back.

    Mr. Whitfield. The gentleman's time has expired. At this 
time I recognize the gentleman from Illinois, Mr. Rush, for a 
5-minute opening statement.

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

    Mr. Rush. I want to thank you, Mr. Chairman, and I want to 
join with my colleagues in welcoming our expert witnesses, 
particularly our former Senators, Senator Johnston and Senator 
Dorgan.
    Mr. Chairman, with the technological advances in the area 
of energy production and the prevalence of shale oil and gas 
due to hydraulic fracturing, or fracking, today's hearing is 
both timely and very necessary. Not long ago experts predicted 
that the U.S. would be forced to rely on increased natural gas 
imports in order to meet our energy demands. However, today we 
are seeing a boom in domestic production of oil and natural gas 
due to fracking and horizontal drilling. And now we must 
consider whether the U.S. should become a net exporter of 
natural gas, and, if so, over what period of time.
    Between 1990 and 2012, Mr. Chairman, natural gas production 
in the U.S. increased by 34 percent, and the EIA projects that 
under existing policies natural gas production will rise by an 
additional 39 percent by the year 2040. In fact, in a National 
Journal article dated April 30th, 2013, entitled ``The U.S. Has 
Much, Much More Gas and Oil Than We Thought,'' it was noted 
that the U.S. has double the amount of oil and 3 times the 
amount of natural gas than previously thought stored deep under 
the States of North Dakota, South Dakota, and Montana. And this 
was according to new data that was released by the Obama 
administration.
    The article went on to note that in just the Bakken and 
Three Forks plays alone the U.S. Geological Survey estimated 
that there are 7.4 billion barrels of recoverable oil and 6.7 
trillion cubic feet of natural gas waiting to be tapped. While 
the EIA predicts that under existing policies U.S. Total 
natural gas consumption will increase from 24.4 trillion cubic 
feet in 2011 to 29.5 trillion cubic feet in 2040, the agency 
also notes that as domestic production outpaces consumption the 
U.S. could become a net exporter of natural gas by the year 
2020. In fact, Mr. Chairman, President Obama reiterated this 
fact personally this past weekend during the development forum 
in Costa Rica where he indicated that he may be close to making 
a decision on whether or not the U.S. should become a net 
exporter of natural gas.
    In an E&E article published yesterday, on May 6th, 
entitled, quote, ``Obama Says U.S. Likely to Be a Gas Exporter 
By 2020,'' end of quote, President Obama is quoted discussing 
this very same issue. He said, and I quote, ``Because of the 
extraordinary advances in technology that we have made in the 
U.S., we are likely to be a net natural gas exporter as soon as 
2020. I have got to make a decision,'' he says, ``an executive 
decision broadly about whether or not we export liquefied 
natural gas at all,'' end of quote.
    So, Mr. Chairman, as this discussion of potentially 
exporting LNG heats up, I join with my colleagues in commending 
you for convening today's hearing where we will both be able to 
learn more from our distinguished panel on both the benefits 
and potential negative impacts of this pertinent issue as it 
relates to the economy, to jobs, to manufacturing, and to the 
U.S. trade balance, as well as the impact on climate change. 
More importantly, Mr. Chairman, I look forward to hearing how 
LNG exports would impact the pocketbooks of ordinary consumers 
so that American families are not subjected to adverse 
consequences, those that are intended and those that are 
unintended. Mr. Chairman, I look forward to this hearing, and I 
yield back the balance of my time.
    Mr. Whitfield. Thank you very much Mr. Rush.
    And that concludes the opening statements today. So now we 
get to listen to the opening statements of our distinguished 
panel. And at this time I would like to introduce the panel 
members. First, on my left, Senator Bennett Johnston, who is 
from the great State of Louisiana and had a distinguished 
career in the U.S. Senate. And one of the many areas that he 
was certainly involved in was in energy. He is now the chairman 
of Johnston & Associates.
    And, Senator, we are glad to have you here with us today 
and we look forward to your testimony.
    We have Senator Byron Dorgan from the great State of North 
Dakota. He also had a distinguished career in the U.S. Senate 
and certainly is a well-versed public policy person on energy 
issues. And we look forward to his testimony as well. And he 
is, by the way, also the co-chair of the Bipartisan Policy 
Center, that recently came out with a document about the energy 
needs of America and directions that we should be moving.
    We have Mr. James Bradbury, who is a senior associate, 
Climate and Energy Program, at the World Resources Institute.
    And we appreciate your being with us.
    We have Mr. Michael Breen, who is the executive director 
for the Truman National Security Project. We have Mr. Mike 
Halleck, who has already been introduced by Bill Johnson, but 
Mr. Halleck's the President of the Columbiana County Board of 
Commissioners and certainly has worked a lot on energy issues. 
And we have Ms. Amy Jaffe, who is the executive director for 
energy and sustainability, UC Davis Graduate School of 
Management.
    So thank you very much for joining us today.
    And at this time I am going to recognize each one of you 
for 5 minutes, and there is a little box on the table and the 
red light will come on when your time is up. So you can just be 
aware of that. And at this time I recognize Senator Johnston 
for 5 minutes for his opening statement.

STATEMENTS OF HONORABLE J. BENNETT JOHNSTON, CHAIRMAN, JOHNSTON 
  & ASSOCIATES; HONORABLE BYRON DORGAN, CO-CHAIR, BIPARTISAN 
 POLICY CENTER; JAMES BRADBURY, SENIOR ASSOCIATE, CLIMATE AND 
   ENERGY PROGRAM, WORLD RESOURCES INSTITUTE; MICHAEL BREEN, 
  EXECUTIVE DIRECTOR, TRUMAN NATIONAL SECURITY PROJECT; MIKE 
 HALLECK, PRESIDENT, COLUMBIANA COUNTY BOARD OF COMMISSIONERS; 
AND AMY JAFFE, EXECUTIVE DIRECTOR, ENERGY & SUSTAINABILITY, UC 
              DAVIS GRADUATE SCHOOL OF MANAGEMENT

                STATEMENT OF J. BENNETT JOHNSTON

    Mr. Johnston. Thank you, Mr. Chairman, Ranking Member Rush, 
ladies and gentlemen of the committee. The Department of Energy 
says we have 100 years of natural gas. They say that by 2020 
supply will go up by 40 percent, while demand will go up only 
20 percent. The amount of natural gas seems to be growing every 
week. Just last week The Washington Post reported that 
Williston Basin has 3 times as much natural gas as they 
thought. They also said, by the way, that China has 50 percent 
more natural gas than the United States has.
    Now, DOE commissioned to study by the Cambridge Energy 
Research Associates, a definitive study, which indicates that 
we can safely export natural gas without any untoward effect on 
the price--no price spikes, no difficulty in terms of supply.
    Now, that question is traversed, is argued against by some 
of the chemical companies, principally Dow Chemical, who says, 
if you have unfettered exports, then that is going to lead to 
supply disruptions, price spikes, and other difficulties. So 
the issue I would like to speak about today is the question of 
how to allocate this huge beneficence of natural gas in the 
United States. Is it by regulation or is it by the free market?
    Now, people in the market will point out that it takes 5 to 
7 years and $10 billion to $20 billion to have an export 
terminal, with the trains and the ships and the D gas 
facilities on the other end. And don't ever think that all of 
those who put up a few hundred dollars to apply for their 
permit are going to be able to make it to the finish line.
    In my judgment, and my experience has been that the market 
is the best way to do that allocation. Let me give you my 
experience with markets because it is pretty extensive. My 
first subcommittee was Production and Stabilization of the 
Banking Committee. We had jurisdiction of President Nixon's 
wage and price controls. We had hearings that indicated that it 
was a disaster--shortages, dislocations, supply disruptions--
and I think our hearings had a lot to do with making the case 
to suspend those wage and price controls.
    Then the Federal Power Commission--some of you remember the 
Federal Power Commission--was regulating the price of natural 
gas in order to protect consumers. The problem was they set the 
price so low that they dried up the supply. In the cold winter 
of 1976-1977 hundreds of thousands of employees in the Midwest 
were out of work because there was no natural gas, the 
regulators didn't know how to regulate. So in that cold winter 
we passed in 5 days the emergency natural gas bill--5 days we 
passed that bill.
    And we came along the next year with the Natural Gas Policy 
Act. I think one or two of you were here in this room for that 
year-and-a-half conference committee. What we did is deregulate 
the price of natural gas by degrees between 1978 and January 
the 1st, 1985. It was the most controversial bill you can 
imagine. All three networks-- we only had three networks at 
that time--they were here, and, oh, my gosh, you know, the 
regulator said it is going to ruin things, the price is going 
to shoot through the roof, the supply is going to dry up. Guess 
what? Come January the 1st, 1985, the supply was adequate, the 
price actually went down, and we proved, absolutely proved that 
the free market works in commodities and particularly in 
natural gas.
    Then we had the Fuel Use Act of 1978 where they prevented 
natural gas from being burned under boilers, and that turned 
out to be a disaster, the Congress didn't know how to allocate 
the highest and best use of natural gas. And just in case you 
think that since I left the Senate that the regulators are 
doing any better job, just look at electric cars. The President 
says we are going to have a million electric cars in a couple 
of years. We have got less than 100,000 now.
    And how about ethanol? We are supposed to have 36 billion 
gallons of ethanol, over half of that cellulosic ethanol. Right 
now, according to their estimates, we should be having 500 
million gallons of cellulosic ethanol. You know how many we 
have got? Less than a million gallons, less than 1/500, and the 
prospects are not any better.
    So the question is, does anyone really believe that the 
Department of Energy years in advance, 5 to 7 years in advance, 
can really accurately predict supply and demand and predict who 
is going to be able to come up with billions of dollars and 
make decades-long supply and demand offtake agreements? They 
can't do it.
    You know, markets are dynamic. There are many factors which 
are working which change by the month, some change daily, labor 
rates, interest rates, diesel cost, steel, pipeline capacity, 
NIMBY risk, regulatory risk, capital availability, technology 
changes. All of those things are working rapidly. And the way 
to allocate those, that great beneficence of natural gas, is to 
let the market do it because it can react faster than the 
regulators can react.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Thank you, Senator Johnston.
    [The prepared statement of Mr. Johnston follows:]

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    Mr. Whitfield. And, Senator Dorgan, you are recognized for 
5 minutes.

                   STATEMENT OF BYRON DORGAN

    Mr. Dorgan. Mr. Chairman, thank you very much.
    I am here on behalf of the Bipartisan Policy Center. 
Senator Trent Lott and I co-chaired, along with two others, a 
major study on energy and have produced this document. This is 
the executive summary. I would encourage all of you to get it. 
It is an unbelievably important source book. And we are hoping 
that the House and the Senate will hold a hearing on this 
because we have tried to create what we think could represent 
bipartisan opportunities for policy changes in the area of 
energy.
    I left the House, by the way, in 1992, went to the Senate, 
spent my next 18 years there. The last time I was in this room 
in 2007 as an energy conferee, and at that point FERC had said 
we were running out of natural gas, 2007. So times changes a 
bit. That is only 6 years ago, 5 \1/2\ years ago. We were 
running out of natural gas. An old Indian chief once said that 
the success of a rain dance depends a lot on timing. Well, 
timing is everything, and timing here with respect to where we 
were in 2007 versus now is unbelievably interesting. So let me 
talk about four major ways that the energy circumstances have 
changed on the planet.
    First of all, U.S. supply. We are producing more, a lot 
more oil and gas, but also producing more renewable energy. And 
the oil and gas that comes from innovation in combining 
horizontal drilling with hydraulic fracturing. So that is all 
good news. We are producing more, that is good news for our 
country, and not just more fossil, we are producing more 
renewable, which is good news for our country.
    Efficiency, which is the fifth fuel. A lot of people don't 
understand how much efficiency has contributed to where we are 
as a country. And so that is very important, and there are 
major U.S. benefits as a result of this.
    Second significant issue, we add 200,000 people to the 
planet every single day. We added Dallas, Texas, net to the 
planet every week. We are headed towards 9 billion people. They 
are going to want to have refrigerators, washing machines, and 
air conditioners. They are going to want to drive cars as well 
that are going to need to stop at a fuel station once or twice 
a week--or let's hope once every 2 weeks. My point is the 
growing demand as a result of increased population will 
continue.
    So number one, we are producing more, that is good for our 
country. Number two, there is going to be substantial growth in 
demand on the planet.
    Number three, you can't come to the intersection of 
discussing energy without understanding that you have to be 
concerned about the climate and climate change issues. It is 
clear to me that the wide consensus will be, is and will be in 
the future that we need a lower carbon future. That is going to 
play a role. Deny, as some will, energy policy is linked to 
environmental issues.
    And number four, you can't discuss all this without 
understanding there remains an oil cartel on this planet that 
sets international pricing. We need to understand that because 
that plays a role in our lives as well.
    Now, let me talk about the Bipartisan Policy Center's 
report. The major issues there are diverse sources. We say, 
yes, this is great news on oil and gas, it is transformative 
for our country in lots of ways, good for us. We believe we 
should continue producing. I offered the amendment in the 2009 
bill that didn't get to the floor of the Senate to open up the 
eastern Gulf. I mean, we should continue producing. But diverse 
sources means also continue to push renewables as well.
    And we also talk about improving productivity. That means 
transmission, CAFE, transportation fuels, all of those areas. 
We talk about innovation. Innovation is critically important 
for our country. We must innovate to succeed.
    And then finally governance. We have 20 Federal agencies 
that have some part of the energy policy. I mean, how do you 
have an orchestra without a band director? And yet we have 20 
different agencies that play a role in energy policy.
    So we have put together a set of 50 recommendations. And, 
again, I hope very much both the House and the Senate will hold 
hearings on these sets of recommendations on energy policy. It 
describes how on a bipartisan basis we can make progress in a 
Congress that seems unbelievably gridlocked. We had an advisor 
group of 20 people, CEOs from every part of the political 
spectrum, public policy groups and corporations and so on, as 
we created this document.
    Now let me talk at the end of this with respect to the 
issue of exports. The export of natural gas, it seems to me, 
will be continuing to play a significant role. What we decided 
is we believe the market should make the decision about the 
exports of natural gas. And I know some are worried, well, if 
we export natural gas we are going to see increases in domestic 
prices. Look, we have already doubled our exports of natural 
gas to both Canada and Mexico. A lot of people don't know that. 
We are piping natural gas to both of our neighbors and have 
doubled that since 2007.
    I think it is far more likely that domestic prices will 
affect exports than it is that exports will affect domestic 
prices. And so we decided in this report that the market should 
make the judgment about the exports of natural gas.
    So, Mr. Chairman, again, I am going to ask the Bipartisan 
Policy Center if we might provide--I think I just gave the last 
copy I had to Bennett Johnston, this is the full copy--but I 
would love to have all of you have a copy of this. It is an 
unbelievably good source book for virtually all areas of energy 
with 50 recommendations that I think could advance the 
bipartisan interest of this country and this Congress.
    Mr. Whitfield. Thank you Senator Dorgan.
    I know many of us have copies of it but we would be happy 
for you all to supply it to the committee so we can make sure 
everyone has it.
    [The prepared statement of Mr. Dorgan follows:]

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    Mr. Whitfield. Mr. Bradbury, you are recognized for 5 
minutes.

                  STATEMENT OF JAMES BRADBURY

    Mr. Bradbury. Thank you and good morning. Thank you for the 
opportunity to contribute to the deliberations of this 
subcommittee. My name is James Bradbury. I am a senior 
associate in the Climate and Energy Program at the World 
Resources Institute. WRI is a nonprofit, nonpartisan think tank 
that focuses on the intersection of the environment and socio-
economic development.
    I am pleased to be here today to offer WRI's perspective on 
the climate implications of U.S. Liquefied natural gas exports. 
I encourage this committee to consider not just the economic 
and geopolitical opportunities of LNG, but also the 
environmental, and particularly climate-related implications. 
In my testimony today I want to emphasize a number of points 
that are often overlooked in this discussion, in particular 
fugitive methane emissions and the cost-effective solutions 
available for reducing them today.
    LNG exports will lead to an increase in domestic production 
of shale gas, which will have important environmental 
implications, including an increase in U.S. greenhouse gas 
emissions. One major emission source is leaks from natural gas 
infrastructure. Methane is the primary component of natural gas 
and a potent greenhouse gas, with a warming effect that is at 
least 25 times greater than carbon dioxide. These fugitive 
emissions represent lost product and reduced revenue for 
companies and governments, with negative consequences for air 
quality, local environment, and the climate.
    In 2011 methane leaks from domestic natural gas 
infrastructure resulted in more greenhouse gas emissions than 
all of the direct and indirect emissions from U.S. iron and 
steel, cement and aluminum manufacturing combined. These 
upstream emissions, along with emissions associated with the 
liquefaction, transport, and regasification of LNG, 
significantly reduce the relevant advantage that exported 
natural gas would have over coal or oil from a climate 
perspective. The bottom line is that the projected expansion of 
domestic oil and gas production increases the risk of higher 
greenhouse gas emissions if proper protections are not in 
place.
    The impact of LNG exports on global carbon dioxide 
emissions is expected to be fairly minor. The International 
Energy Agency estimates that an expanded global market for 
natural gas would reduce global carbon dioxide emissions by a 
mere 0.5 of 1 percent by 2035. But these scenarios do not 
consider associated upstream methane emissions. The U.S. EPA 
estimated that the scale of leaked methane from global natural 
gas and oil systems is projected to be 10 times greater than 
IEA's estimated CO2 reductions resulting from a 
future with more abundant natural gas.
    Ultimately U.S. policies are needed to reduce these 
fugitive methane emissions if natural gas and LNG are to be 
part of the solution to climate change. WRI research has found 
that such policies are among the most important steps that the 
U.S. can take today to help meet our greenhouse gas emissions 
reduction goals.
    The good news is that most strategies for cutting leakage 
are highly cost effective and the EPA's recently finalized 
rules are already having emissions benefit. But there is more 
work to be done. By stepping up to address these emissions the 
United States has an important opportunity to improve our 
economic and geopolitical standing by showing leadership in 
addressing global climate change. We can do this through 
commonsense policies that promote the development, deployment, 
and export of low-emissions technologies and practices that 
will allow for the cleaner production and more efficient end 
use of natural gas here in the U.S. and internationally.
    While there are some benefits to increased natural gas 
production, there are also risks and associated costs. Further 
expanding our reliance on fossil energy resources exposes us 
and our allies to the destabilizing effects of climate change. 
In its 2010 Quadrennial Defense Review the Department of 
Defense found that climate change could have significant 
geopolitical impacts around the world, including weakening 
fragile governments, food scarcity, spread of disease, and mass 
migration.
    For energy markets to serve the public interest the price 
of energy must reflect its true cost. Society pays when our 
health care premiums rise due to the harmful health effects 
caused by high ozone levels and other air pollution. Taxpayers 
pick up the tab for climate change when more frequent extreme 
weather events cause increasing damage to our communities and 
critical infrastructure.
    Yet every day that we take no policy action on climate 
change we make the policy choice to let climate change run its 
course. The present course ignores the overwhelming consensus 
of climate scientists who have been warning for decades that 
rising greenhouse gas emissions will cause the planet to warm, 
sea levels to rise, and the weather to become more extreme. It 
is indisputable that these climate changes are already 
happening today, in many cases much more quickly than expected. 
Urgent action is needed.
    I would be glad to take questions. Thank you.
    Mr. Whitfield. Thank you, Mr. Bradbury.
    [The prepared statement of Mr. Bradbury follows:]

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    Mr. Whitfield. Mr. Breen, you are recognized for 5 minutes.

                  STATEMENT OF MICHAEL BREEN 

    Mr. Breen. Thank you, Mr. Chairman, Ranking Member Rush, 
members of the Committee. Thank you for inviting me here today 
to appear before the committee to discuss the geopolitical and 
strategic implications of rising U.S. energy production, oil in 
particular. I serve as the executive director of the Truman 
National Security Project and Center for National Policy, two 
organizations dedicated to forging strong, smart, and 
principled national security policy for America.
    As a former Army captain and an Iraq and Afghanistan combat 
veteran, I am also proud to be one of the leaders of Operation 
Free. That is a nonpartisan nationwide coalition of more than 
5,000 veterans who belive that our dependence on oil poses a 
clear national security threat to the United States.
    To be clear, oil is immensely important to our economy and 
will remain so for the foreseeable future. Its value goes far 
beyond its utility as a liquid fuel. Petroleum is a key input 
in advanced manufacturing, pharmaceuticals, agricultural 
products, and a host of other applications. Unfortunately, 
however, a near total dependence on oil as a fuel has eclipsed 
petroleum's other contributions, which threatens our prosperity 
and our security.
    Our dependence on oil as a single source of transportation 
fuel poses a clear national security threat. As things now 
stand, our modern military cannot operate without vast access 
to vast quantities of it. Our economy is equally dependent. 
More than 93 percent of our transportation sector is reliant on 
oil.
    Today oil is a vital strategic commodity, a substance 
without which our national security and prosperity cannot be 
sustained. Until and unless we develop alternatives, the United 
States has no choice but to do whatever it takes in order to 
obtain a sufficient supply of oil. Oil is a fungible product, 
traded globally, with prices set on a world market. In other 
words, global supply and global demand set the market and drive 
the price, not American supply and American demand alone. When 
it comes to the price at the pump there is no such thing as 
foreign oil.
    Recent technological advancements, such as horizontal 
drilling and advanced hydraulic fracturing, are promising. They 
offer the chance to increase domestic production, allowing us 
to reach supplies of oil that were until recently too expensive 
or impossible to obtain. These advances have led some to claim 
that the United States is suddenly capable of producing enough 
oil domestically to meet our needs. They believe that this will 
solve our oil-related economic and national security problems.
    Yet, even if U.S. oil imports dropped dramatically, 
geostrategic problems would persist. And though we do not 
always share the same oil sources as our international 
partners, our security is put at risk by their volatility. For 
instance, in December 2011, Iran threatened to close the Strait 
of Hormuz, a waterway that ships one-fifth of the world's 
supply of oil. This resulted in global oil prices jumping 2 
percent, exceeding $100 a barrel. Words alone were able to 
drive up the cost of oil in markets from the Gulf to Asia.
    Meanwhile, global demand for oil is rising at a 
breathtaking pace, with no sign of slowing down in the 
foreseeable future. While American demand has been very high 
but relatively static for some time, demand in China, India, 
and the developing world is skyrocketing. According to the 
Energy Information Administration, America's oil consumption is 
expected to grow by 11 percent over the next 2 decades. 
Meanwhile, in that same timespan, China's oil consumption is 
expected to grow by 80 percent and India's by 96 percent. And 
by the end of the decade, China alone is expected to sell more 
than 30 million cars a year. To put that in perspective, last 
year about 76 million cars were sold worldwide.
    It is unrealistic at best to imagine that increasing 
production can somehow keep up with such dramatically rising 
demand. Further, because the price of oil is set on a global 
market, it is subject to events outside of our control or 
influence. All of us agree, I am sure, that the United States 
should not be subjected to the whim of hostile or unstable 
regimes with nationalized oil assets.
    The U.S. Currently controls and secures the world's most 
critical shipping routes. Some contend that, producing more at 
home, we could relinquish many of those responsibilities. 
Indeed, a recent RAND study estimated that if the military were 
to stop defending oil supplies and sea routes from the Persian 
Gulf to the United States, it would save between 12 and 15 
percent of the entire defense budget, more than $90 billion 
annually.
    But imagine if we did disengage from this duty. A number of 
our adversaries would recognize this is an opportunity and our 
allies would be faced with serious challenges. Look, for 
instance, at the Asia-Pacific market. Eighty-five percent of 
the oil shipped through the Straits of Hormuz today, which 
supplies one-fifth of all oil traded worldwide, goes toward 
Asia, not the United States. The oil then transits the Indian 
Ocean and enters the North Pacific through the Straits of 
Malacca, a razor-thin chokepoint constantly under threat. 
According to EIA, if the strait was blocked, nearly half of the 
world's shipping fleet would be required to reroute. Hostile 
actors have taken notice. According to documents seized during 
the raid that killed Osama Bin Laden, Al Qaeda was planning to 
hijack and destroy oil tankers in the straits.
    But more than the security of oil flows is at stake. We 
have to consider the effect that would occur if the United 
States pulled out of the Pacific and pulled out of the Indian 
Ocean and who might step in. China would certainly be willing; 
few others would be capable of doing so.
    So it should be no surprise that our military is leading 
the world in developing next generation energy technologies. 
Our single-source dependence on oil threatens our national 
security. Even dramatic increases in domestic oil production 
will not free us from the global dynamics of the market or 
relieve us of our global responsibilities.
    Fortunately, more advanced energy technologies are 
available and increasingly viable. We must support their 
development and continue to lead the world through innovation. 
Thank you.
    Mr. Whitfield. Thank you.
    [The prepared statement of Mr. Breen follows:]

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    Mr. Whitfield. Mr. Halleck, you are recognized for 5 
minutes.

                   STATEMENT OF MIKE HALLECK

    Mr. Halleck. Mr. Chairman, Ranking Member Rush, 
distinguished members of this committee, thank you for the 
privilege of appearing before you today. Congressman Johnson, 
thank you go for your kind introduction. My name is Mike 
Halleck. I am president of the Columbiana County Board of 
Commissioners. Columbiana County is located in eastern Ohio, 
bordering Pennsylvania and West Virginia. We are part of the 
Appalachian region. Our county is comprised of 540 square 
miles, with a population of about 110,000.
    In the past 2 years our county in particular and 
surrounding counties in general has transcended into an energy-
based economy from a manufacturing one. A little more than 2 
years ago our county had an unemployment rate of about 16 
percent; today it is about half that. Permit me to address our 
manufacturing base for a moment. Ohio, and especially northeast 
Ohio, has been a manufacturing power since the industrial 
revolution. While in recent decades automobiles and steel were 
major employers, the advancement of technology and to some 
extent imports have challenged their future.
    However the good news is that eastern Ohio is quickly 
becoming an energy economy, which has enhanced our 
manufacturing base even more. A few examples would be V&M 
Steel, a French company that invested $750 million in our 
region to manufacture pipe for the oil fields and their 
pipelines. Another would be a billion-dollar cryogenics plant 
that separates the different gases for shipments. Just in the 
past week another announcement was made regarding a $300 
million pipeline and gas processing plant by NiSource, a 
division of Columbia Gas.
    To put all of this in perspective I will share with you a 
few of the more compelling statistics associated with this. In 
a few short years there have been over $7 billion invested in 
our area. That is about 2.5 times the total value of the real 
estate as if valued in our county. Over 39,000 jobs created, 
with projections of 143,000 by 2020; 266,000 by 2035. During 
2012 the average wage for manufacturing in Ohio was $55,000, 
while the wages for the oil and gas industry average was 
$81,000. The oil and gas industry accounted for $1.5 billion in 
new tax revenue to the State of Ohio.
    To bring a single well online takes about 410 people across 
150 different professions. The average well should generate 
about $1 billion in revenue. A recent study by Penn State that 
this Marcellus Utica, quote, ``play,'' unquote, was protected 
to be the largest natural gas find on Earth, second only to the 
border region of Qatar and Iran, not necessarily a place that 
we would want to stake our energy future.
    Finally, yes, there are billions and soon to be trillions 
of cubic feet being harvested as we speak, and, yes, there 
could and already has been a suppression of gas prices. What do 
we do next? While lower prices are welcome domestically, we 
should not in my view make the prices so cheap through too much 
supply that we force the producers to lower production. Better 
yet, why not pursue exportation to countries that we have open 
trade with? It would seem to me that not only would this 
stabilize price, but give the United States a different 
standing in the world and make a statement of energy 
independence.
    A recent report by Secretary Chu and the Energy Department 
seemed to suggest something along this same line of thinking. 
Several Members of Congress seemed to share the same school of 
thought in a recent letter to Secretary Chu. And it was 
refreshing to see the nonpartisan signatures on this letter. 
After all, energy independence is not and should not be a 
partisan issue.
    While I am certainly not an expert in this field, much less 
an economist, common sense would tell me that if we are 
exporting more product abroad there will be a need for more 
production. Thus more workers would be needed for this 
production.
    Again I thank you for this privilege, and in particular 
Congressman Johnson for inviting me here today. I would be 
happy to answer any questions. Thank you.
    Mr. Whitfield. Thank you, Mr. Halleck.
    [The prepared statement of Mr. Halleck follows:]

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    Mr. Whitfield. Ms. Jaffe, you are recognized for 5 minutes.

                     STATEMENT OF AMY JAFFE

    Ms. Jaffe. I want to thank you for this opportunity, and 
also thank the committee for bringing to the fore the subject 
of the international implications and U.S. foreign policy 
implications of U.S. energy exports. I would submit that our 
discussion on energy exports, in particular on LNG exports, has 
been too focused, 100 percent on the domestic market 
consequences, whether that is a job consequence or a price 
consequence. And I believe that we need to not take these 
decisions in a vacuum, that the context of U.S. foreign policy 
needs to be taken into account in the discussion of our export 
policy for both natural gas and other products.
    The context is that for the last 3 decades the United 
States has had an active foreign policy to promote free trade, 
open trade, and energy exports in investment. That is important 
not only to the United States, but to the global economy. Why 
do we want free trade in energy? As has been mentioned by many 
of your committee members and by my fellow panelists, we have 
operating in the global market an effective oil cartel that 
keeps the price of oil much higher than it would be without 
those artificial restrictions. And those restrictions are 
developed through energy trade, so countries like the Middle 
East and so forth organize to restrict exports of oil or 
natural gas in a manner to raise the price internationally and 
they also restrict open investment in oil and gas exploration.
    We send our diplomats to countries like Russia, China, and 
the Middle East to discuss with them having better and more 
open-access rules for the investment in oil and gas. It is this 
lack of investment in oil and gas abroad in recent years that 
has caused us to have the kinds of financial crises that have 
revolved around sharp increases in energy prices that we saw 
not only in the 1970s, but also in 1990 when Iraq invaded 
Kuwait, also more recently in 2007 and 2008 when we saw energy 
prices for all businesses in our country hurt American 
consumers, hurt average Americans.
    So it is important to have the United States have an open 
and assertive policy in trade policy globally, that we do not 
favor, that we promote free trade, that we do not--that we 
object to restrictions in investments and trade in oil and gas. 
Because that is our standing foreign policy and an important 
foreign policy because we don't want other countries that 
produce a lot of oil in the Middle East and other places to 
hold and restrict their exports, we cannot ourselves then have 
a policy where we choose to restrict our exports, because 
therefore we would move into a world where energy becomes 
possibly a political weapon or an economic weapon, and that is 
not in the vital interests of the United States.
    The best way to prevent the kind of global imbalances in 
energy supply that affects our jobs and hurts every American is 
to have a policy, a foreign policy that promotes trade and open 
markets. If the United States doesn't have an open-market 
policy then we cannot advocate it for other countries.
    When we consider LNG exports we need to put that export 
debate in the context of our own free trade agreements. Our 
free trade agreements have to be meaningful because otherwise 
why would anybody want to have economic agreements with the 
United States and important trade relations. We export natural 
gas to Mexico. Last year we exported 1.69 bcfd of natural gas 
to Mexico under the NAFTA agreement. That is an advantage of 
trade.
    We hold a free trade agreement with South Korea. South 
Korea would desire to buy liquid natural gas from the United 
States from the new proposed export terminal. We cannot supply 
natural gas under a free trade agreement with Mexico and turn 
to South Korea and tell them that we are not going to honor our 
agreement with them. Once we honor our agreement with South 
Korea, how are we going to turn to Japan, a country that would 
like to buy our LNG exports, and tell them even though they 
have been a staunch ally of the United States for decades, we 
are going to export our LNG to South Korea under a free trade 
agreement but we are not going to provide these resources to 
Japan.
    So the best way to protect consumers from the kinds of 
seasonal problems that could erupt from having exports is to 
have a mandate for minimum inventories in the United States as 
they have in Europe and Japan.
    Thank you.
    Mr. Whitfield. Thank you, Ms. Jaffe.
    [The prepared statement of Ms. Jaffe follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Whitfield. And thank all of you for your testimony and 
for taking time to be with us today.
    Now we will have a question period and answer, and I will 
recognize myself for 5 minutes for the first set of questions.
    First of all, I am happy to hear that many of you support a 
free-trade, open-market system on the export and in the entire 
energy sector. I read your testimony, Senator Johnston, and I 
was thinking back about all these Federal policies that you 
referred to, like the Fuel Use Act, the wage and price controls 
and others, and the unintended consequences that came about as 
a result of those government policies. And so I was--and Mr. 
Dorgan talked about--in the publication that they were involved 
in, he specifically said restricting international trade in 
fossil fuels is not an effective policy to reduce global 
greenhouse gas emissions, and I agree with that as well.
    Mr. Breen, one question I did want to ask you, you talked a 
lot about oil policy today, and do you have a position on the 
export of energy from America, liquid natural gas as an 
example?
    Mr. Breen. Sure. My position is that there may be some 
advantages to that. I am 100 percent in favor of the idea of a 
free market, a global free market in energy. My concern focuses 
around oil, primarily because the United States is single-
source-dependent on oil for transportation.
    So the good news on electrical energy production and 
industrial energy productions is it is diversified. Natural gas 
is part of it. There are other renewables.
    In the case of transportation, 93 percent plus is totally 
dependent on oil, and so that is why I focused on it. It is----
    Mr. Whitfield. But on the natural gas, did you say you do 
or you don't have a position on that?
    Mr. Breen. My position is that it is probably not a bad 
thing. I think natural gas is a great bridge fuel----
    Mr. Whitfield. OK.
    Mr. Breen [continuing]. From a climate perspective.
    Mr. Whitfield. OK.
    Mr. Breen. And certainly Russia's use of it geopolitically 
is----
    Mr. Whitfield. Thank you.
    Senator Johnston, you talked about, as I had said earlier, 
about the adverse policies of the government trying to dictate 
what will and will not be done. I was just curious, can you 
imagine any sensible way that we can actually try to restrict 
exports of natural gas that would be an effective government 
policy?
    Mr. Johnston. Mr. Chairman, I have thought a lot about 
that, and if you made me come up with a policy, I don't know 
what it would be. I mean, if you did it chronologically as to 
who first files for the permit, I think there are some 16 
permits now pending, that would not make any sense, because, 
you know, it just costs a couple of hundred dollars, I think, 
to file one of these things, and it doesn't tell you who has 
the best application, or who will be able to--you know, you 
have got to have a decades-long supply agreement, and a 
decades-long off-take agreement, and many billions of dollars, 
and that first application just doesn't tell you who is going 
to be able to do that.
    So I don't think there is a way to do it. I think it would 
be just as disastrous as the Federal Power Commission trying to 
set the price of natural gas.
    Mr. Whitfield. Do you have an opinion on that, Senator 
Dorgan?
    Mr. Dorgan. Yes. I generally agree with that. You know, we 
currently have in law a restriction with respect to the export 
of oil, as you know.
    Mr. Whitfield. Right.
    Mr. Dorgan. That has been there since the 1970s.
    And let me make a point in response to what Mr. Breen said 
as well. It is the case that the additional production, for 
example, of oil and natural gas is really good news for our 
country, really good news, but it is also the case that 70 
percent of the use of oil in this country is used in 
transportation, and 90 percent of transportation fuels are oil-
based. And so is that worrisome? Should we be trying to 
diversify? The answer to that is yes, of course we should.
    Mr. Whitfield. All right. Thank you.
    You know, Mr. Bradbury, you talked about the climate change 
issue, which certainly is important, but I think here in 
America we do need to take credit for the steps that we have 
made to improve our environment. Our CO2 emissions 
are down lower than they have been in 20 years. And when you 
think about the immediate impact, for example, when the 
Russians stopped the supply of gas into the Ukraine, when they 
stopped the supply of gas into Bulgaria, and they were without 
gas for 4 or 5 days, when you think about the immediate impact 
on the lives of people because they can't get adequate energy 
sources, and then you compare that to the long-term climate 
change issue that is out there, trying to balance immediate 
needs versus long-term needs is something that we all, I think, 
struggle with.
    But you don't even have to comment on that. My time is 
actually expired, so I will recognize Mr. Rush for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    We have had some interesting testimony and testimony that 
has touched on LNG exports from a myriad of perspectives. And 
all these perspectives are quite important, but I would like to 
hear a little bit more about how exporting LNG impacts the U.S. 
consumer.
    Unlike oil, which is set on--whose prices are set on the 
global market, natural gas prices are set under a regional 
scale or a North American and Europe and also in Asia. And 
today we are paying reasonably low prices for natural gas, less 
than $4 for a gallon, but when you compare to Europe, they are 
paying $10 per gallon, and in East Asia it is $12 to $16 per 
gallon, and experts expect these prices to increase over the 
coming years. As a matter of fact, the EIA estimates that Henry 
Hub's spot prices for natural gas will increase by 2.4 percent 
as producers begin drilling more oil, and especially in more 
difficult terrain.
    So the question that I have is how will this exporting LNG 
impact the cost of natural gas for America's families and 
consumers and the manufacturers? Will this impact be 
significant, and will it be widespread in the various and 
different sectors of our economy? Will there be an overall gain 
or loss in manufacturing jobs and other types of employment if 
we started exporting LNG? And so the impact on the American 
consumer is where I center my question. And anyone on the 
panel. Maybe, Senator Johnston, if you would be so kind to 
start it out.
    Mr. Johnston. Thank you, Mr. Rush.
    That is a very key question, and it was the subject of the 
Cambridge Energy Research Associates' study: What was going to 
be the effect on consumers? And they examined the question from 
many different aspects and determined that it would not have an 
adverse effect on American consumers. The reason is that demand 
begets supply. The more demand you have, the more supply you 
have.
    Now, in my home State of Louisiana, now, we have got what 
we call the Haynesville shale, some of the most prolific of the 
dry shale plays in America, but it is, for the most part, not 
being developed now because the price is a little bit too low. 
Now, you don't need a huge price to develop a Haynesville or 
some of the Texas shales, but you need more than you have got 
right now.
    So what Cambridge said, and what other studies have shown, 
is that demand will produce more supply, and that the price 
effects will not be bad, that they will be good for the 
country.
    Mr. Dorgan. There is a Brookings study on that point. There 
is a Council of Foreign Relations study on that point. And, you 
know, it is interesting. As we are talking here, one of the 
most significant oil plays on the face of the planet is in the 
Bakken in North Dakota. There is a substantial amount of 
natural gas. Most of it is being flared. I mean, if you fly 
over that place at night, it looks like another giant American 
city, because the price of gas at this point is not high enough 
to suggest to them they want to build the pipelines to gather 
it. The price of sweet light crude is where they are going to 
make profit up there, not collecting low-price natural gas. So 
we are burning a lot of natural gas at this point.
    But my point was that there are studies that have been 
done, three of which I have looked at, that suggest export of 
natural gas would have rather minimal impact on the U.S. 
consumer.
    Now, on the positive side, of course, it will reduce our 
trade deficit. There are a series of positive things that will 
come as a result of it.
    Mr. Rush. Ms. Jaffe.
    Ms. Jaffe. So my organizations have studied that issue as 
well. I would say that over time the natural gas market--we are 
currently studying that market together with Harvard--the 
natural gas market is going to look more like the oil market. 
In other words, the United States will probably not be that 
isolated a market.
    And if we do not export LNG from the United States, what 
will happen is gas from Canada will be exported through 
different projects that would be proposed of Canada. So you are 
going to have natural gas exports from North America one way or 
the other, and that will affect sort of a global effect on the 
price where in the end the price in Asia that you cited will 
come down over time as natural grass projects in Australia and 
other places come online.
    We have a global surplus of natural gas. It will assert 
itself more and more over time, and I do believe that that 
would give protection to U.S. consumers.
    You know, the oil industry is a cyclical industry, and, as 
many members of the panel have mentioned, sometimes when the 
price gets too low, companies stop drilling because they don't 
have profitability in a particular field, and that causes some 
volatility for consumers. But overall there is so much natural 
gas supply that it is hard to foresee we would go back to a 
condition that we saw several years ago where the price of 
natural gas in the United States was $10. It would take 
something very extreme to produce that kind of result.
    Mr. Whitfield. The gentleman's time has expired.
    At this time I recognize the gentlemen from Louisiana Mr. 
Scalise for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having this hearing.
    We have had a number of hearings in this committee about 
the new technologies, what technology has done to increase the 
supply. You know, years ago people thought there were short 
limits on how much oil we had left, of natural gas, and, of 
course, with the advancements in technology and then the 
Deepwater in Louisiana, Senator Johnston knows we have 
experienced even larger finds of large reserves of fossil fuels 
with the shale plays, as you mentioned in the Haynesville play. 
And I have been up there myself and seen just the job creation 
that it has created, but also the energy independence. And I 
have toured the Cheniere facility in southwest Louisiana, the 
first of those 20 facilities that are either looking to export 
LNG or, as Cheniere is, in the process of doing.
    You know, there are so many opportunities for us to become 
energy independent within 10 years. It is a very realistic 
possibility if we get the policy right here in Washington. And 
unfortunately, as our hearings in the past have shown us, the 
policies have not always matched the goal of having energy 
independence. You know, for those of us who want an all-of-the-
above strategy, which includes wind and solar, but being 
realistic about their limitations, and understanding the 
demands of a manufacturing economy, we are going to need to 
continue advancing the technologies that we have for fossil 
fuels as well.
    I want to start with you, Senator Johnston, and then first 
thank you for your 24 years of service to the great State of 
Louisiana and to our country----
    Mr. Johnston. Thank you.
    Mr. Scalise [continuing]. For serving in the Senate, and 
especially for your leadership on the Senate energy committee. 
You know very well the challenges that we face.
    In your testimony you talk about some of the times where 
the Federal Government gets it wrong. And probably all the 
times where the Federal Government tries to go and predict, 
whether it is with renewable fuel standards, and, you know, you 
cite the 2007 Congress projections that are now so far off that 
are our refineries are telling us they are hitting the blend 
wall. You know, you talk about the President's own predictions 
of I think it was, what, a million electric cars on the road by 
2015, and today we have 87,000 electric and hybrids.
    So the government hasn't really been good at picking 
winners and losers. In fact, you know, we had the hearings here 
in this committee about Solyndra and that scandal, and where 
the government literally came and tried to pick winners and 
losers, and just ends up picking losers, and the taxpayers foot 
the bill.
    If you can just expand on some of the things you talked 
about in your testimony about what would be a good strategy, as 
you cite Adam Smith and Wealth of Nations; and, you know, is 
government regulation versus a free market approach the right 
way to go. And, of course, history has a lot of indicators for 
which way is the better path.
    Mr. Johnston. Well, thank you very much, Mr. Scalise.
    There are huge opportunities for natural gas and for other 
fossil fuels around the world. Qatar is a huge producer, 
Indonesia, Australia. Chevron has a facility in Australia they 
are spending $81 billion on, and they will be exporting all 
over.
    In addition to that, you know, if the price did get too 
high, and I mentioned this to Mr. Whitfield, you can use coal 
to make chemicals. My son and I are involved in a plant in Lake 
Charles now which will make chemical precursors out of pet 
coke, which is essentially the same thing as coal. So there are 
huge opportunities for energy, and the market will sort those 
out. It is----
    Mr. Scalise. Do you----
    Mr. Johnston. You know----
    Mr. Scalise. Do you think it is an achievable goal. When 
those of us who talk about energy independence within 10 
years--again, if we get smart policy, if we get the policy 
right out of Washington, do you think it is achievable that we 
can be an energy-independent Nation----
    Mr. Johnston. Absolutely.
    Mr. Scalise [continuing]. To secure that future for our 
country?
    Mr. Johnston. Absolutely. You know, they are drilling down 
in the Gulf of Mexico now below 30,000 feet, and they think 
there are huge, huge--a huge new undiscovered basin down there.
    There are just tremendous opportunities if we just get the 
regulators out of the way. And, you know, we need regulation 
for a lot of things, for safety, et cetera, but when you are 
regulating the supply and demand of commodities, government 
just can't do that very well. You know----
    Mr. Scalise. Unfortunately the history has shown----
    Mr. Johnston [continuing]. On ethanol, they still haven't 
gotten it right. You know, we have known for years that they 
weren't producing any cellulosic ethanol, but they are still 
requiring it, and you would think the regulators would learn at 
some point.
    Mr. Scalise. We are going to keep pushing them to get 
there. So I appreciate all of your testimony, but, again, 
Senator Johnston for your leadership to our State.
    And I would be happy to yield back the balance of my time, 
Mr. Chairman.
    Mr. Whitfield. Thank you.
    At this time I recognize the gentleman from California Mr. 
McNerney for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman. Thank you for 
holding this hearing. I have enjoyed all of your testimony, so 
it is a great choice of panelists this morning.
    I don't think there is really that simple of answers on 
these questions. We are producing more oil and gas, and that 
has some real benefits in terms of national security, which was 
brought out clearly; in terms of prices, which encourages 
manufacturing in this country, which we need to do. It 
encourages other benefits, too, employment, and that was 
brought out by Mr. Halleck.
    But there are also some disadvantages: gas leakage into the 
environment, which is a global warming problem, perhaps more of 
a problem than the coal production that we are trying--that gas 
might displace. There is groundwater contamination. But it 
seems that the disadvantages could be mitigated with high 
standards for the wells and also with requirements for 
transparency for fracking and horizontal drilling.
    Mr. Bradbury, would you comment on that, please?
    Mr. Bradbury. Sure. Well, thank you, Mr. Congressman, for 
the question.
    Well, absolutely. I think--well, this is one of the good-
news stories of the past year with EPA finalizing their New 
Source Performance Standards for well completions, requiring 
green completions for all new natural gas wells. Those 
standards, it would be useful and I think a commonsense measure 
to have those applied also to natural gas liquids and oil wells 
with associated gas. To have----
    Mr. McNerney. Especially with regard to the leakage.
    Mr. Bradbury. This would address leakage at the well as you 
are starting the production. You are doing the well, finishing 
the development, the well completion of the well.
    Mr. McNerney. Thank you.
    Mr. Bradbury. And so that is a commonsense standard that 
could be expanded beyond what is there.
    Mr. McNerney. Thank you.
    Mr. Bradbury. But there are also a number of other 
technologies that could be used----
    Mr. McNerney. Thank you, Mr. Bradbury.
    Mr. Bradbury [continuing]. Not just for wells, but across 
the spectrum.
    Mr. McNerney. Senator Johnston, I appreciate your comments 
about regulation of supply and demand is not necessarily a good 
place for us to go, but do you agree that we could use higher 
standards with regard to wells to prevent leakage and to 
prevent contamination of groundwater? Do think that is a good 
place for us to go here as a part of our policymaking?
    Mr. Johnston. Yes, Mr. McNerney. I think no one cares more 
or has more to lose than the oil companies, oil and gas 
companies, about leakage and pollution, and so I think that 
they are working hard, I really do believe, to have the highest 
standards.
    One of the problems is that some of the smaller producers 
have yet to adopt the high standards. We need to adopt the 
highest standards, particularly for fracking, because public 
support of fracking is very, very important. I think it 
deserves public support, and I think that they will be able to 
do it safely. That was the conclusion of a study done by John 
Deutch, and Ernie Moniz was part of that study. They said we 
need to have the highest safety standards, but we need to 
produce through fracking.
    Mr. McNerney. I think you made an excellent point there, 
then. Public acceptance is absolutely critical. Based on past 
performance, there are problems. Communities are going to be 
reluctant to allow fracking in their areas without the right 
transparency and assurances that this is a safe process, and I 
don't feel we are quite there yet.
    But I am going to go on to, Mr. Breen, I appreciate what 
the Truman National Security Project is doing with regard to 
the implications of our national policies in terms of national 
security, our national energy policies. How much work has the 
Truman Project done with regard to the implications of global 
warming on our national security?
    Mr. Breen. Thank you for the question. It is good to see 
you.
    We have done quite a bit of it, as has, much more 
importantly, the Pentagon and the intelligence services. The 
consensus is that this poses a serious national security 
threat. The Natural Security Advisor Tom Donilon just gave a 
speech to that effect a couple of weeks back, saying that 
national security is threatened by climate.
    Recently the commander of our forces in the Pacific was 
asked what his top national security concern was, which I think 
is an interesting question, given that he is responsible for 
China, North Korea and a whole host of other issues in the 
Pacific, and his answer was climate.
    If you look at the accelerants of instability and the 
threats that come from this, with regard to terrorism, but also 
with regard to mass population migrations, terrorist 
recruiting, all kinds of issues, it is pretty clear that we are 
going to be dealing with this. And, as General Zinni likes to 
say, we can pay down now, and the cost will be in treasure, or 
we can pay down later, and the cost will be treasure and blood.
    Mr. McNerney. OK. I was going to ask, Ms. Jaffe, for your 
input on that, but I am running out of time, so I will have to 
yield back at this point. You were shaking your head, so I 
couldn't resist.
    Mr. Chairman, go ahead.
    Mr. Whitfield. Have you yielded back? OK.
    At this time I recognize the gentleman from Texas Mr. 
Barton for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    I have got a photo on--several photos on my wall down in my 
office, and one of them has myself and Senator Johnston 
standing behind the first President Bush at the White House 
when he signed a bill that repealed the Natural Gas Policy Act.
    Mr. Johnston. I have got the same picture on my wall.
    Mr. Barton. Yes. And I was chairman of the conference 
committee in 2005 that Senator Dorgan was a part of, and we did 
meet in this room. Both of those bills were bipartisan bills. 
Both of those bills--the Energy Policy Act in 2005, over half 
the Senate Democrats voted for it, and a third of the House 
Democrats voted for it. So for these young folks on the second 
row here in front of me, there is hope. We might actually burst 
out in bipartisanship on LNG exports.
    I would ask Mr. Bradbury, I listened to your comments, and 
if I interpret them correctly, my understanding is if we handle 
this fugitive methane emissions issue, at least your 
environmental group would support an LNG export bill; is that 
correct?
    Mr. Bradbury. Well, the World Resources Institute doesn't 
take a particular position on this specific issue, but 
certainly by reducing these upstream methane emissions, we 
could ensure that natural gas is lower-carbon-emitting--or 
lower-greenhouse-gas-emitting than coal or oil when oil and 
diesel fuel is used for transportation. If you get----
    Mr. Barton. You know, it wouldn't be the end of the world 
if the environmental community broke down and actually 
supported a positive energy-production bill. I mean, if we can 
meet the environmental standards, I know some of my friends on 
the Democratic side would be interested in being supportive. 
Former Chairman Waxman, if I heard him in his opening 
statement, said he has an open mind. And I know unless the 
minority leader Mrs. Pelosi has changed her mind, she has been 
a supporter of natural gas as a fuel. So we really do have some 
hope here.
    I would ask Senator Johnston, on these pending permits what 
would be wrong with setting some standards, some guidelines for 
the Department of Energy in terms of environmental protection 
and perhaps capital reserves, and then approve them all if they 
meet those standards, and then let the market determine which 
of them actually gets the contracts to do the exporting? What 
would be wrong with that approach?
    Mr. Johnston. Well, as you know, for onshore facilities, 
FERC approves those, and they must meet those standards. That 
does not give them an export permit, but they must get a FERC 
permit or a NOAA permit for offshore facilities. So that takes 
care of the safety, and they must have the high standards 
there.
    Now, the law provides that--it is an old law, it hasn't 
been updated and doesn't have a lot of standards, but it does 
say that DOE shall approve unless the national interest is 
against it. In other words, the preference is for approving, 
and I think that is proper. In other words, I think that the 
permit should be granted unless the case can be made against 
it.
    Mr. Barton. See, I don't think we are going to build 19 LNG 
export facilities. I don't think there is a world market. You 
are probably going to have one or two on the west coast, and 
one or two on the east coast, and one or two in the Caribbean, 
but if you let the market work, the market will sort, in my 
opinion, those types of things out.
    The gentleman that talked so much about oil as a strategic, 
do you oppose natural gas being used for a transportation fuel, 
Mr. Breen?
    Mr. Breen. Absolutely not. No. I think in cases where 
natural gas is viable as a transportation fuel, particular 
medium and heavy trucking or garbage trucks, things like that, 
municipal fleets, we should be embracing any opportunity to 
lower the single-source dependence of our transportation sector 
on oil. I think that is good.
    I think--I am also in favor of other technological 
approaches as well. I think the more diversity there is in that 
sector, the better off we are.
    Mr. Barton. OK. And finally, Mr. Halleck, as the person who 
is living in the real world in Ohio, what is the long-term 
expectation to the local economy in your area because of the 
Marcellus drilling activity? Is it positive, negative, short 
term, or is the expectation that it is going to create a stable 
employment base for decades to come?
    Mr. Halleck. Well, Congressman, we have been told that it 
is certainly 20 to 25 years. There have been some that has told 
us it is as much as 50, but I think conservatively 20 to 25 
years. And it has certainly been a game changer in our area. 
And for the first time in--I was a commissioner back in the 
1990s as well--we are not struggling like we used to to balance 
our budget.
    Mr. Barton. We have the Barnett shale down in my part of 
Texas, and we think another 50 years. And it is not nearly as 
big a reserve base as the Marcellus is.
    Mr. Halleck. Yes.
    Mr. Barton. With that, Mr. Chairman, I yield back. Thank 
you.
    Mr. Whitfield. At this time I recognize the gentleman from 
New York Mr. Tonko for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair. And welcome to our 
panelists.
    Virtually all of you have addressed the question of whether 
we should or should not export LNG, and most have testified in 
favor of the government allowing exports of LNG. Senator 
Johnston noted that an LNG facility takes some 5 to 7 years to 
build at an investment cost of some $10 to $40 billion. A 
facility has to secure those long-term contracts for supplies, 
obviously, of the gas to export and from customers to sell it 
to.
    I observed that there are markets at all scales, and the 
interest in exports appears to be driven primarily by a desire 
to maintain or expand production here in the United States, to 
ignore or override the signal our national market is providing 
to the gas-production industry, the low price indicating an 
excess of demand over supply and the market signal to reduce 
production.
    The other benefits we may achieve nationally by exporting 
LNG would not drive this debate alone, so I expect we will 
export LNG. I am wondering whether you have opinions about what 
the right level of exports might be? How much exporting should 
we allow and from which areas?
    Mr. Johnston. My point really is that the market should 
determine that. And, you know, there are all of these market 
signals that are changing day to day. I mentioned some of 
those: the price of labor, the price of interest rates, diesel, 
steel, technology, capital availability, regulatory delay, et 
cetera. All of these are market signals which are changing 
month to month, day by day, and those are going to restrict the 
amount of LNG that you can export. And there are also these 
worldwide competitors: Australia, Indonesia, Qatar. All of 
these are going to be working simultaneously. And I don't think 
that any regulators, not this committee, not myself, not 
anybody, can determine a proper level.
    I think the better way to do it is to let the market do it. 
The market is not perfect, but I think it is better than 
regulators would be.
    Mr. Tonko. Any other one? Any other panelists have an 
opinion?
    Yes, Ms. Jaffe.
    Ms. Jaffe. I think that what you are going to find is that, 
first of all, it takes a long time, as the Congressman said, to 
build these facilities. And there are some regions that the 
cost of producing gas is going to be higher or lower than 
others. So, for example, in northwest Canada, the natural gas 
there is stranded.
    So if we were to choose not to build, not to allow LNG 
exports from the U.S. Gulf of Mexico, those facilities, the 
economics would be that that gas would go out in that 
direction, that would raise the overall prices of North America 
to the small amount that would happen. So this idea that 
somehow if we were to block the Gulf Coast, that would help 
some manufacturer in my State of California and other places, 
that is not likely to happen, because there will be exports 
from North America when the market demands it.
    But as I mentioned, there is so much natural gas in other 
places that I really do think that it probably would be a very 
small amount of exports that will come from the United States.
    And if we had an export facility, one of the things that 
would happen is if I was a producer in another market, and I 
had a reason to seasonally store my LNG, because the United 
States has such giant saltstone storage for natural gas, we 
might find that producers would bring their natural gas here 
and store it and then have the opportunity to export it at a 
later date. So we might find that we provide what I call hub 
services, where the United States would be a focal point for 
export of natural gas globally in storage. And so we might 
actually benefit from having our facilities be used in a way 
that would help the international market, and we might have gas 
actually flowing here just as a storage facility.
    Mr. Tonko. Well, I believe DOE has applications for some 30 
facilities. How do they approach this? Do they--should they 
move forward?
    Ms. Jaffe. Let me speak to that. As you know, we have more 
than a dozen LNG import facilities that were built that are 
going to be empty for the foreseeable future, maybe for, you 
know, 20 to 30 years. And obviously if the industry could 
forecast correctly how many facilities we need for export or 
import, we wouldn't have all these bankrupt facilities now that 
are sitting empty for importation.
    So I think the fact that companies applied for a license is 
really pretty insignificant. What you really need to know is 
that there is one company, Cheniere, that has made a commitment 
to build a facility, and that facility will likely go.
    In the natural gas business, there is something we call the 
first mover advantage. The first facility that gets built will 
be the profitable facility, if any facility will be profitable. 
I might question whether or not even any facility will wind up 
being profitable over the long term, but the point is if I am 
first, I am much more likely to make a business out of it than 
if I am fifth or tenth.
    And so people put their licenses in. Thirty people might 
put their licenses in. Some of it is gaming: I want to get 
everybody else to be discouraged to do this, because there are 
so many of us. Right? And then maybe only the first one or two 
or three will ever get built. And if you think of how many 
facilities were built here in the United States to import, and 
how many of them got approved, and how many of them are going 
to remain empty, you can think about the fact that those 30 
applications are really meaningless.
    Mr. Tonko. Mr. Chair, I yield back.
    Mr. Whitfield. The gentleman's time has expired.
    At this time I recognize the gentleman from Texas Mr. Hall 
for 5 minutes.
    Mr. Hall. Thank you, Mr. Chairman.
    And I also thank the two Senators there that I worked with 
for many years, both great leaders. And I enjoyed, Senator 
Johnston, following you and Lloyd Bentsen. You were simply 
great. And thank you for coming here today. And to you others, 
I appreciate the time you put into it and the time you have 
given us here with your testimony.
    Joe, I was with you out there when we went West to sign the 
last good energy bill that this Congress has passed. And I well 
remember Bush giving some of us pins, but I well remember him, 
in good nature, turning to me and saying, Ralph Hall is with us 
because he likes the coffee on Air Force One. What he didn't 
know was I had six of his mugs in my briefcase at that time.
    But, you know, Senator Dorgan, you are exactly right on 
your fine energy past, and history and support, and you are 
right when you say we must understand climate change. And we 
get a lot of that from the other side, too, and, of course, we 
should.
    And we must understand, though, that we have also spent $34 
billion and had very little change, climate change, very little 
effect on it. I just think that it is obvious that we have an 
administration that is antienergy. And the environmentalists 
did say don't drill on little ANWR, it is just 19 million acres 
there.
    And I well remember we had, I think, 22 bills over to the 
Senate, and we had Senator Frist, I believe, Doctor, was the 
chairman then at that time. And he thought more like a 
businessman than he did about energy, in my opinion, because 
one of those bills got through, and Clinton vetoed it. And the 
Bushes had a shot at, I think, the other 20. And someone would 
get up to filibuster it, and the Senator would pull it down 
because I think he didn't want to waste the Senate's time. I 
really think he should have burned them down, let those who 
wanted to filibuster filibuster, and we would have some 
drilling on ANWR that we don't have now.
    They say don't drill on little ANWR, it is just 19 million 
acres. If we don't want to drill on, what, a couple of thousand 
acres or a thousand acres there for 60, maybe 50 years of 
energy, I think we ought to be doing that.
    I guess it is obvious that we do have an antienergy 
administration, and my question to you, I guess, Senator 
Johnston, is do you believe that our national energy policy is 
still mistakenly based on the belief that we are somehow in an 
age of energy scarcity?
    Mr. Johnston. You know, I don't really believe in energy 
scarcity. I think new supplies are pulled up all the time. They 
are based on technology like fracking. I well remember--you 
know, it wasn't very many years ago that we had almost not 
heard of shale gas. George Mitchell, down in your State, old 
friend of mine, you know, he went in with some DOE money and 
created that new technology, which has revolutionized America. 
Bakken oil and the Bakken shale has revolutionized certainly my 
colleague's home State.
    So I think there is not the scarcity that some talk about. 
I think we can be energy independent in this country, and I 
think it is a goal we should pursue.
    Mr. Hall. And we talk about free market versus regulation. 
Of course, that is an easy choice for me, but if I would come 
down on the side of regulation, I would have some concern about 
the EPA and their regulation, their lack of science that they 
take into consideration as they----
    Mr. Johnston. Well----
    Mr. Hall. They really damaged the energy thrust.
    Mr. Johnston. Well, I disagree with the EPA on some things, 
agree with them on others. Certainly we need the highest 
environmental standards, which I think we can, consistent with 
energy independence.
    One of the things that neither EPA nor any other agency can 
do is allocate resources, and that really is the heart of my 
point today, that government regulatory bodies just can't 
allocate resources. Let them make safety rules, but don't try 
to allocate resources.
    Mr. Hall. Thank you.
    And I will just close with the fact that jobs are hurting 
us, and they are hurting for 18-, 19-year-olds, and graduates 
who want jobs and are seeking jobs. There are fewer jobs, and 
unless we change some things up here, we are not going to have 
very many employers a year from now. The most important word in 
the dictionary today other than ``prayer'' for young people is 
the world ``energy.''
    And I thank you both, and I thank this panel for your 
input.
    I yield back.
    Mr. Whitfield. At this time I will recognize the gentleman 
from California Mr. Waxman for 5 minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    We have heard a lot lately about U.S. carbon dioxide 
emissions being at their lowest levels since 1994. The 
implication is that no further action to address climate change 
is necessary, and that is simply not the case.
    As a result of increased renewable energy generation, a 
shift from coal to natural gas generation, and the economic 
recession, U.S. emissions have dropped in recent years. But 
what matters most is whether U.S. emissions are on track to 
decline in the future by the amount needed to prevent dangerous 
climate change, and I am not aware of any reputable expert who 
believes this to be the case.
    Scientists tell us that our emissions need to decline by at 
least 80 percent below 1990 levels by 2050 to avoid a dangerous 
level of warming. The latest projections by the Energy 
Information Administration show that U.S. carbon dioxide 
emissions from fossil fuel combustion actually will be 13 
percent higher than 1990 levels in 2040, the last year in EIA's 
model. There is an enormous gulf between what these emissions 
will be without additional action and what they need to be to 
avert catastrophic warming.
    Senator Dorgan, you co-chaired a bipartisan panel that 
issued recommendations for our energy policy. Was there 
agreement that climate change is a serious issue and that 
additional policies will be necessary to reduce greenhouse gas 
emissions?
    Mr. Dorgan. Congressman Waxman, we did at the front end of 
this report indicate that we felt climate change was an issue 
that needed attention, it needed policy direction. We did not 
attempt in this report to create a policy framework for how we 
might address climate change, but we did indeed say that, well, 
we are going to cover a lot of energy issues, that climate 
issues were important and needed to be addressed.
    Mr. Waxman. Thank you.
    We need to think about LNG exports through the lens of 
climate change. If the U.S. is going to export LNG, if we are 
going to make long-term, multi-billion-dollar infrastructure 
investments, it is important for those exports to produce a 
climate benefit.
    Methane emissions from the natural gas industry are a 
challenge in that regard. Methane is a potent greenhouse gas, 
and it is crucial that we reduce those emissions.
    Mr. Bradbury, are there measures that can be taken to 
reduce methane emissions from the U.S. natural gas sector using 
existing technology?
    Mr. Bradbury. Yes. Absolutely, Congressman. There are--in a 
report we recently published, we identified a total of eight 
technologies that would cut these upstream greenhouse gas 
emissions by more than 50 percent. In my testimony includes 
more detailed analysis of that and through a couple of 
different scenarios.
    Mr. Waxman. These measures are cost-effective as well?
    Mr. Bradbury. They are. And all eight that we looked at are 
definitely cost-effective.
    Mr. Waxman. How long, Mr. Bradbury, would it take for these 
measures to generate enough savings to cover the cost of 
implementing them?
    Mr. Bradbury. The payback period--thank you for the 
question. The payback period, we found, is up to 3 years at 
most for each of these measures and technologies, sometimes 
only a few months. So we are talking about wasted energy in 
addition to a powerful and potent greenhouse gas, so it is much 
like energy efficiency, can be very cost-effective.
    Mr. Waxman. What is a reasonable target for methane 
leakage? If we took the cost-effective steps you described, 
would we meet the target?
    Mr. Bradbury. Yes. There are a couple targets you would 
want to shoot for. For natural gas to be less greenhouse-gas-
emissions-intensive than coal, you want your emissions levels 
to be--your methane leakage levels to be below 3 percent of 
total production. Right now, according to the recent EPA 
inventory, we are below 2 percent. So we are in a pretty good 
zone in that regard.
    And a better target, I think, for total leakage would be 1 
percent leakage as a portion of total production, which we can 
get to with these technologies and measures that I mentioned. 
At the 1 percent leakage point, that is where you are at break 
even with respect to diesel. If you are going to switch from 
natural gas to diesel, and you want there to be an immediate--
diesel fuel for long-haul trucks, for example, if you want to 
have an immediate climate benefit.
    Mr. Waxman. Thank you very much. I appreciate it.
    I am obviously looking at this whole question before us 
from the perspective of climate change, but I know that there 
is a lot of focus on the exports, and I think Ms. Jaffe, who I 
am happy to see again, has made a very powerful case. I am open 
to that issue, I want to think about it. But as usual, you are 
very astute in your expression of things that we ought to take 
note of, and I thank you so much for your testimony, and all 
the other witnesses as well, especially my two former 
colleagues, who have such a distinguished record in the energy 
field.
    Thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the gentleman from 
Illinois Mr. Shimkus for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I am going to try to get to four questions in 5 minutes, so 
if I ask it concisely, and I get somewhat a concise response, 
maybe I can get that done.
    I want to start with Mr. Bradbury there. Are you or any of 
your organization invested in any energy enterprises?
    Mr. Bradbury. No.
    Mr. Shimkus. Actually have skin in the game----
    Mr. Bradbury. No.
    Mr. Shimkus [continuing]. To be able to make a financial 
projection of whether there is a 3-year-to-1 payback on all 
this stuff? These are just theoretical, right? You are not 
putting real money into this?
    Mr. Bradbury. No, we are not putting our own money.
    Mr. Shimkus. OK. That is--thank you.
    Senator Dorgan, 2005, I was here, too. It was one of the 
great energy conferences where we actually debated amendments. 
I wish we could get back to that era, because it was a great 
debate in this committee room.
    I did look at the executive summary. I didn't read the 
whole report. You do in the executive summary have a bullet 
point on transmission, but it kind of--you are really referring 
to the transmission pipeline for transportation of either 
natural gas or liquid transportation fuels; is that correct? Or 
are you talking about the electricity?
    Mr. Dorgan. Mostly the electricity when we refer to that, 
but, you know, when you talk about transmission, you also want 
to be----
    Mr. Shimkus. I think it is something we really have to 
focus on, because what we see going on right now--and I just 
read an article today about Canada and Maine, and the market 
will move a product, and it will--there is--it is dislocating 
other types unless we have a very good policy of incentivizing 
the building of more pipelines.
    Mr. Dorgan. We do have--we have electric transmission 
problems and issues of stranded energy----
    Mr. Shimkus. Right.
    Mr. Dorgan [continuing]. Because we can't transport to the 
load centers----
    Mr. Shimkus. Correct.
    Mr. Dorgan [continuing]. Where you get wind or store----
    Mr. Shimkus. Especially with the green.
    Mr. Dorgan. And we also pipeline transmission issues.
    Mr. Shimkus. Right.
    Mr. Dorgan. Although we have built a lot of pipelines in 
the last 10 years, natural gas pipelines.
    Mr. Shimkus. Right. There are stories about us--as reverse 
flowing now natural gas from the plays to maybe the LNG 
terminals and stranding refined product along the path of the 
old stranded--I would hope that is something we can look at, 
and I will look through your report to see. I think it is a big 
issue. I know of two areas where retailers are now being 
stranded by their product because of LNG movement.
    Mr. Johnston. Let me mention to you on oil, every day in 
the Bakken in North Dakota, they are transporting 500,000 
barrels of oil a day by train; not by pipeline, by train.
    Mr. Shimkus. Right.
    Mr. Johnston. Burlington Northern has----
    Mr. Shimkus. Well, to address the greenhouse gas issue, 
what is a better ability if you are worried about this, I am 
personally not, but would be by pipeline; not by trucks, not by 
train, but by pipeline. So I would hope the environmental 
community--and we see what they are doing with Keystone XL, 
they are not helpful--they would understand that moving 
commodity products through pipeline is the most efficient, 
safest way, and actually in the greenhouse gas arena, it is a 
tremendous savings.
    Mr. Halleck, I have got an article here from a local paper, 
southern Illinois paper, which is where I am from, and I just 
want a quick response to these two statements I have 
highlighted in this article.
    Some envision the kind of economic boon they have heard 
about in other States: tens of thousands of workers drilling 
for oil and gas, local businesses barely keeping up with 
demand, and many municipal coffers flush with cash.
    Is that what you have observed?
    Mr. Halleck. I would concur with that, though, while we are 
in much better financial----
    Mr. Shimkus. Yes. This is poor southern Illinois. I 
represent 33 counties. And so there is--we have got a play 
coming, and so there is this whole debate, and you have lived 
it.
    The other part that says, others are spooked by stories of 
housing shortages, towns overrun with strangers, torn-up roads, 
and claims of polluted water, and worry that drilling would 
forever alter the serenity, beauty and very character of an 
area they consider special.
    Has that happened to your county?
    Mr. Halleck. That is not really a concern. The technology 
today is such that we actually have rigs that have been on 
site, and they are gone in 30 days. So that is no problem.
    Mr. Shimkus. Great. Thank you.
    And if the staff would put up this slide for Ms. Jaffe.
    I also chair the Baltic Caucus. And I hope this comes up 
right. I have a picture here.
    So that is a proposed LNG terminal that will go in in 
Lithuania. Also, I think there is one being proposed for 
Poland. I deal with Eastern European issues, democracy 
movements. I have been very focused in Russia does extort their 
neighbors through energy.
    If we have the ability to export liquefied natural gas, 
what does that do to two things: the ability of Russia to 
extort their neighbors, and the ability of the local Eastern 
European countries and allies, most of all who are NATO now, 
they are all in the EU, what does it help with their economy?
    Ms. Jaffe. Well, I think it is very important. You raised 
an extremely important point, because, number one, we don't 
want Russia to use the threat of a cutoff of natural gas to 
create a wedge between us and our allies in Europe. We want 
everyone in Europe to feel a strong alliance, economic and 
otherwise, with the United States and not have to worry about 
their energy supply being curtailed by Russia.
    Secondarily, you can imagine how positive it would be if 
the Russians threatened to cut off one of our allies in Europe, 
and an American company could supply them with natural gas 
through an export terminal from the United States.
    Mr. Shimkus. You all did great. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the gentleman from 
Texas Mr. Green for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. And I said in my minute 
my ranking member gave me, but, again, I want to welcome our 
two Senators, and appreciate your leadership on energy for many 
years.
    Senator Johnston, my only concern is that the one LNG 
export facility, Cheniere, it is on the Sabine side of 
Louisiana instead of on the Texas side, but the company 
actually is a Houston company, so we have worked together 
across that Sabine River for many years.
    And, Senator Dorgan, it goes without saying, some of the 
success in the Bakken shale and the report that you just did, 
and I will have some questions in a minute.
    Ms. Jaffe, I want to--we miss you in Houston at the Baker 
Institute at Rice University, but I know at UC Davis you are 
much closer to the wine country there, although we still have 
some Texas wine we are working on.
    But I represent one of the largest petrochemical complexes 
in the world in east Harris County, and I got some pushback a 
few years ago for supporting LNG exports, because I also 
represent a lot of folks who work in the fields, whether they 
be in south Texas or west Texas or anywhere else. But I support 
the exports, not just from the free-market perspective, because 
we need the additional incentives for production in certain 
parts of the country. And producers in south Texas are still 
producing dry gas, natural gas, simply because they get 
liquids. And when I drive through south Texas, I see the amount 
of flaring of the dry gas. It hurts me, because I know those--
one, it is bad for the environment, but all those producers 
would love to be able to have a market for that gas instead of 
sending it in the air. So our chemical industry and our utility 
sector want stable, low prices, but we need to ensure that the 
market will still be there and incentivize it.
    Senator Dorgan, you testified that after reviewing several 
recent studies on the impacts of LNG exports, the Bipartisan 
Policy Center and Energy Board concluded that domestic gas 
prices are more likely to drive export levels than exports are 
likely to determine domestic prices. This is an important 
point, because I think it is a fear that we have 19 export 
applicants that could end up constructing export terminals. I 
just don't see our market allowing 19 of them. But why do you 
think the domestic gas prices more likely will drive the export 
levels than exports are likely to drive the domestic prices? 
Why do you think that is going to happen?
    Mr. Dorgan. Well, first of all, I don't think any of us 
really understand very well the economics of moving liquefied 
natural gas from our country after recovering it and moving it 
halfway around the world. I don't think anybody fully 
understands the economics of it, but I do think that, you know, 
if natural gas prices were to rise in this country in any 
significant way, that would have an impact on whether it would 
be economical to continue that practice.
    The studies suggest that there would be an impact, but it 
is very, very modest. And, you know, just how little we knew 5 
years ago about where we are today describes how little we know 
today about what might or might not happen. All we can do is 
use an antenna for guidance on what should be the best 
practices and what should represent the best interests of our 
country.
    Mr. Green. Well, and my colleague from Illinois, I was 
proud to be on the committee, we did the 2005 energy bill, and 
at that time Congressman Tierney and I actually had an 
amendment to that bill that federalized importing, because I 
have a chemical industry, and we were getting our lunch eaten 
by Rotterdam, and the North Sea gas is cheaper, so we wanted to 
import it. And now the good example of the Cheniere there in 
Sabine River, they built an import facility, but now they are 
investing another $2 billion to build an export facility. So 
you are right, our crystal ball just doesn't work as well as we 
would like to it do.
    Ms. Jaffe, you mentioned the U.S. Asian allies, Japan and 
South Korea, are seeking flexible U.S. Gulf Coast LNG contracts 
for reasons of economic and geopolitical. Can you elaborate on 
their geopolitical calculation for wanting this LNG, 
particularly, obviously, Japan, because of their decision to 
downgrade nuclear, and they are buying that LNG from anybody 
who can sell it to them? So could you just elaborate on that?
    Ms. Jaffe. Yes. I think that it is important in the context 
of the Arab Spring, and also, of course, in the past history 
with Russia, that these countries want to be able to buy 
natural gas from a market where there is a multitude of 
competitive players so the gas is not controlled by a state 
monopoly, they don't have to worry about there being a change 
of power in the country and suddenly their contract isn't 
honored, or that there is some leverage, geopolitical leverage, 
that is at--you know, brought to bear in the discussion of 
supply.
    So the great thing about the United States market is that 
through innovation and competition, we have, you know, dozens 
and dozens and dozens of companies, and we have a very 
competitive market. We have what we call natural gas-on-gas 
pricing; so in other words, we don't have an artificial price 
tied to oil or some other commodity.
    So by allowing some amount of exports, what it means is 
countries like Japan or South Korea can ask for a natural gas 
price tied to a market price and not be subject to sort of 
artificial constraints, not have to worry about cutoff of 
supply. It just makes a big difference, makes a more dynamic 
market.
    And I do think that what is going to happen over time, 
though, you know, one can never have a crystal ball, is that as 
the United States market is more connected with the global 
market, then what you are going to see is oil-linked price 
contracts imposed by a Russia or by a Middle East country will 
not be able to stay up, because there will be so much supply, 
and you have a global market, and you will have more flexible 
competitive markets, more projects will compete into different 
markets.
    We have the industry developing these technologies where 
they have ships that can be moved from place to place to do 
production, or to have even a ship that can be a receiving 
terminal, and we will get to have a very commoditized market in 
natural gas where countries like Japan will not have to worry 
about their supply.
    Mr. Green. Mr. Chairman, I know I am out of time. I had a 
question for Mr. Bradbury. I would like to submit it.
    But I am glad we are at 2 percent leakage on methane, and 
that is below the 3. Believe me, every producer that I know 
would love to get down to 1 percent, because they would like to 
have that methane being sold on the market to somebody instead 
of releasing it into the air.
    So again, thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the gentlemen from 
Texas Mr. Olson for 5 minutes.
    Mr. Olson. I thank the chair.
    And welcome to our panelists. Special welcome to our two 
Senators, Senator Johnston, Senator Dorgan; and Ms. Jaffe, who 
spent some time at the Baker Institute at my alma mater, Rice 
University, in Houston, Texas.
    I am going to focus on the national security implications 
of LNG exports. Having deployed to the Persian Gulf and the 
Strait of Hormuz from June of 1994 until November of 1994, I 
have seen firsthand how important that region is to the global 
economy and, by extension, U.S. national security.
    This new U.S. energy renaissance gives our country a once-
in-a-lifetime chance to minimize the direct impacts on our 
economy from the Persian Gulf and to develop strong diplomatic 
relations and increase our national security. One way to do 
that, I think, is exporting LNG.
    We have talked about benefits with Japan's recovery from 
the earthquake, tsunami, South Korea. I want to focus on the 
world's largest democracy, India. One in six human beings lives 
in India, over 1 billion people. That is a huge market 
potential for American companies. And I am blessed to have a 
consulate from the Indian Government in Houston, Texas, who 
just reported on board this past fall. I spent 3 hours having 
lunch with him, 30 minutes talking about their need for U.S. 
LNG. He said basically to keep their economy growing, they have 
to have more sources of oil and gas, because they don't have 
much domestic sources at all.
    They are not getting pipelines built from the west, not 
going to come through Pakistan. Obviously they don't get along 
together. To the north, the Himalayas. If you can get a 
pipeline through the Himalayas, God bless you, 20,000-feet 
altitude, man, oh, man. That is the eighth wonder of the world. 
And to the south is a region of the world that is quickly 
destabilizing, which seems like all terrorists are moving down 
towards Myanmar, that part of the world. And again they need, 
they want our gas. So, Ms. Jaffe, could you care to comment on 
giving India natural gas? Benefits to the United States? Cons?
    Ms. Jaffe. I think the point that we really warrant to 
focus on is that the United States has this ability, which we 
have never had before, sort of like the opposite of Russia 
being able to cut people off, right? We might have the ability 
to supply our allies or to supply other countries. As we become 
more energy independent, and I really believe the combination 
of our improving efficiency of automobiles, combined with deep 
water and combined with the shale play, we are probably going 
to get to the point where we are not going to be--the imports 
we are going to have are going to be from Canada, or Saudi 
Arabia, is going to be bringing oil to the refineries it owns 
in the United States. And when we get to that point, we are 
going to have a lot of opportunities. We are going to have the 
opportunity to step up to the plate and we be the swing 
producer to the global market like the United States was in the 
1960s. So we will have the opportunity if we have an ally that 
is having an energy problem, we will have the opportunity to 
offer energy aid through sales of exports. And indeed we might 
be able to use our Strategic Petroleum Reserve more flexibly if 
we have an ally that has a supply disruption.
    So if you think about it, during Hurricane Rita and 
Katrina, how did we get past our terrible shortages in Houston 
and other cities is we were able to borrow gasoline from the 
emergency stockpile of Europe. And we, the United States, could 
wind up being in a position to be able to be a key supplier. We 
will be able to use our energy relationships to strengthen our 
national power. And when we have a better trade balance it will 
make us stronger in the global economy, we will be able to 
stand up to China in a different way because we are going to be 
an energy exporter when they are an energy importer. They are 
going to have the energy dependence that we have been talking 
about for 30 years and we are going to be a major energy supply 
source.
    So we really have a tremendous potential here to get it 
right. And you are already seeing yourself with improved 
relationships with India, that they care about the United 
States from an energy point of view, and that is exactly the 
opportunity we have in front of us.
    Mr. Olson. Yes, ma'am.
    Senators, either one care to comment about that, India LNG 
benefits for America?
    Mr. Dorgan. Make a point: I would not want us to be talking 
about using SPRO in this country to help an ally.
    Mr. Olson. Oh, yes. This is pure exports.
    Ms. Jaffe. Only if we didn't need imports at all. If we 
don't need any imports then we don't need the international 
tool. Our imports are not needed (off mike) our domestic 
production supply all our requirements.
    Mr. Olson. And I am on the negative side of my time, so I 
yield back the balance.
    Mr. Whitfield. Thank you very much. At this time I 
recognize the gentleman from Pennsylvania, Mr. Doyle, for 5 
minutes.
    Mr. Doyle. Thank you, Mr. Chairman. And welcome to all our 
witnesses, especially our two distinguished colleagues from the 
Senate. We appreciate your testimony.
    Mr. Chairman, I have been engaged on this issue for quite 
some time now and been particularly interested in the role the 
Federal Government takes in permitting LNG export facilities. 
And unlike some of my colleagues on this committee, I have 
actually been pleased with the careful consideration DOE has 
given to the issue. You know, it wasn't that many years ago 
when companies were building LNG import facilities, making bets 
on the need for imported LNG to meet our energy demand. Who 
would have guessed in less than a decade these same companies 
would now be petitioning DOE to turn those import facilities 
into exports facilities? So I don't fault DOE for taking a 
cautious and careful approach to approving these permits.
    By submitting a two-part study on the effects of LNG export 
on the U.S. economy and reviewing the hundreds of public 
comments submitted to those studies, DOE has taken the proper 
action to understand the issue. But that study showed us that 
in every scenario modeled LNG exports offer a net gain to the 
U.S. economy. This really shouldn't surprise any of us, the 
fact that economies gain from allowing trade is not new, but as 
a guy from Pittsburgh who has witnessed the effects of trade on 
the local economy I think what we should be concerned with is 
who gains, how much do they gain, and at what cost to the 
environment.
    And while I remain convinced that LNG exporting should be 
both allowed and supported by the Federal Government, I don't 
believe a careless, blanket approval of all pending permits 
would serve the purpose of the American people.
    Let me asked my two distinguished colleagues, you both 
indicate your support for LNG exporting whether by allowing the 
free market to act or by opposition to any kind of export ban, 
and I agree with that. Do you believe, though, that the 
Department of Energy does have a role to play, a proper role to 
play in the permitting of LNG export permits as determining it 
is in the public interest?
    Mr. Johnston [off mike]. A preference is to issue the 
permit, I think that is a proper role and I agree with you they 
did the proper thing in commissioning the study, the SPRO study 
which indicated in all of the different scenarios that it is in 
the national interest of consumers.
    Mr. Doyle. Yes, Senator Dorgan, you agree with that?
    Mr. Dorgan. And I think, you know, I think ultimately there 
will be far fewer facilities built than the numbers that are 
being tossed around these days.
    And let me before I leave here today, Mr. Chairman, have 
the record show my great restraint as an author of the 
renewable fuel standard in 2005, my great restraint sitting 
next to my friend Senator Johnston without responding to a bit 
of it.
    Mr. Johnston. We don't grow corn in Louisiana.
    Mr. Doyle. And to both my colleagues, you believe DOE 
currently has the sufficient information to act on these 
remaining permits?
    Mr. Johnston. I believe so.
    Mr. Doyle. Yes. Thank you.
    I want to will also ask Mr. Bradbury. First, I want to say 
welcome back to the committee, Mr. Bradbury, it is a pleasure 
to see you here. And as some of my colleagues on the committee 
may recall, Mr. Bradbury was instrumental in developing a 
mechanism in the Waxman-Markey bill, which later became called 
the Doyle-Inslee provision, which offered protection for 
energy-intensive and trade-exposed industries. It seems like 
you are back here today with some equally impressive work.
    While I note my support for LNG exporting, I take seriously 
the concerns you have raised about methane leakage and life 
cycle emissions. As you know, EPA just lowered its estimates of 
methane leaks during natural gas production by almost 20 
percent from what they had previously reported. Nonetheless, if 
concerns about methane leakage remain, it is important, I 
think, that we address them if we are going to support export 
of this resource to other countries.
    So to that end, Mr. Bradbury, could you please help us 
understand how the technologies you cite in your testimony 
work? Can they really significantly reduce fugitive methane 
emissions while being cost effective and have payback periods 
of 3 years and less? Could you give us some detail on that? And 
then secondly, if these technologies help a company retain 
their product by not letting it escape into the air, why aren't 
gas companies making the investment in them?
    Mr. Bradbury. Well, thank you for the question. I will do 
my best to respond as quickly as possible. And to the first 
question also, I think as a partial response to Mr. Shimkus' 
question earlier, which is that our projections of payback 
period for these technologies are actually not theoretical, 
they are based on published estimates from actual experience 
with these technologies, which you can find on Natural Gas STAR 
Web site and other sources as well.
    So as I noted earlier in response to Mr. Waxman's question, 
it really is, this is analogous to energy efficiency. You are 
not wasting product and so there is a benefit economically over 
time. More details on these technologies to some extent are in 
my testimony, but also in a full report, which I would be happy 
to share with you and discuss afterwards.
    A couple technologies I mentioned initially. So green 
completions I also mentioned earlier, which is very cost 
effective and now required for gas wells. There is the use of 
plunger lift systems for liquids unloading, it is essentially 
to remove liquids from a well so that gas can flow more freely. 
These systems avoid venting that is unnecessary when you are 
cleaning these wells up that could be used more widely. And 
just simple leak detection and repair, so sending people out to 
these sites to identify the leaks and then repair them. Of 
course it puts people to work doing that and you can get a good 
payback as well.
    And there is a final point I really would like to 
emphasize. The reason that companies aren't doing this in some 
cases, there are a couple of different answers. It is similar 
to why companies don't always have the most efficient systems 
in terms of energy efficiency, is there are competing 
priorities for investment and there is also market structure 
issues. The production company that owns the gas is often not 
the same as the service company or midstream company that 
processes the gas or the pipeline companies through which the 
gas flows. And FERC has authority over that to set tariffs and 
rates, but sometimes they are structured so that this is just a 
pass-through cost. So while it would beneficial for the 
environment and to consumers to reduce these leaks, it is not 
necessarily aligned properly through the market structure in 
terms of business interest.
    Thanks for the question, and great to see you again and 
great to be back. Thanks for your remarks.
    Mr. Whitfield. The gentleman's time has expired. At this 
time I recognize the gentlemen from Ohio, Mr. Johnson, for 5 
minutes.
    Mr. Johnson. Thank you, Mr. Chairman. And I, too, would 
like to thank the rest of our distinguished panel for being 
with us today to talk about this important topic.
    Mr. Halleck, you and I come from a region of the State of 
Ohio and a region of America where people are struggling. 
Unemployment is still excessively high. Many Americans struggle 
to provide their children with the clothes and supplies that 
they need to go to school. The average median income is well 
below the national average. Double-digit unemployment through 
much of our region. What is happening in oil and gas in Ohio is 
a big deal to the people that live there.
    In your testimony you talked about the astounding blessing 
that gas production, oil and gas production has meant to our 
county. Can you illustrate for us a little bit about what this 
transformation has been? What was it like prior to oil and gas 
development? 
    Mr. Halleck. Well, Congressman, what brought me initially 
some 30 years ago to Ohio, formerly I was in the clothing 
business. And I have watched the steel mills in our area, the 
automobile industry, I have watched a lot of things over the 
past 30 years, some through automation, but importation, just 
an overall decline in the economy in that part of our State. 
And there is really nothing to replace that. Someone asked me 
the other day about, what do you know about oil and gas, and I 
said really not much other than what I watched on the Beverly 
Hillbillies growing up. And I say with all due respect to our 
constituents, there is actually some of that today that is 
going on.
    I have been told we have over 200 new millionaires just in 
the county I represent. It is conservative by nature so you 
wouldn't always know that, but I can just tell by looking at 
the percentage that our general fund budget in terms of our 
sales tax, property taxes, and others has drastically improved. 
But it has been a game changer and it has given opportunity 
certainly to those that aren't only about I think 8, 10 percent 
of our communities went on to higher education. And this gives 
these folks that would lean more towards vocational training 
some, really some $100,000-a-year jobs that normally they would 
never have.
    Mr. Johnson. Sure. Let's talk a little bit about LNG 
exports. As you know, I have been a staunch supporter of LNG 
exports as well. We live in a manufacturing corridor. You 
talked about the steel mills. Manufacturing is an industry that 
is very important to the economy of our region. Can you talk a 
little bit about how important you think it is that we open up 
the lines for exporting liquid natural gas?
    Mr. Halleck. Well, if the estimates, and I am sure a lot of 
the reports have been maybe overly optimistic, but even if they 
are just optimistic, they are overwhelming in terms of the 
supply that we would have. In fact, Senator Johnston and I were 
talking earlier, in my humble opinion it would seem to me that 
if--we were talking about flaring--if we get to the point where 
natural gas is too cheap, then, for lack of a better term, they 
would turn off the spigot. I think it not only would stabilize 
prices, but certainly give us a sense of energy independence.
    Mr. Johnson. Do you see increased exporting of liquid 
natural gas as a threat to a manufacturing resurgence in Ohio 
or do you think it would help?
    Mr. Halleck. No, I think it would help. I don't see it as a 
threat.
    Mr. Johnson. Great. Great.
    We often hear from Hollywood and from opponents of oil and 
gas development that the only people that are benefiting from 
the oil and gas boon in places like eastern and southeastern 
Ohio is some CEO of a distant oil and gas corporation. How 
widespread has the benefit been? You talked about the new crop 
of millionaires that have been created, can you expand on that 
a little bit?
    Mr. Halleck. Well, it is certainly a trickle-down affect. 
Just in our county the other day we asked, there was a parcel 
of property that we own, or the county, I should say, and they 
wanted to use because it was close by a small stream for water. 
Just in a 2-week period it brought in almost $40,000. Now, that 
would not be a lot of money in Los Angeles, but that would be a 
lot of money in Lisbon, Ohio. That is just one small example.
    If you look at the farm equipment, because we are an 
agricultural community, which is not taxed, there has been 
literally tens of millions of dollars through the royalties 
that have been spent on people that were leasing land. So it is 
far reaching, and it is a trickle down certainly.
    Mr. Johnson. Well, thank you very much.
    Mr. Chairman, thanks for letting me participate and I yield 
back.
    Mr. Whitfield. The chair recognizes the gentleman from New 
York, Mr. Engel, for 5 minutes.
    Mr. Engel. Thank you very much, Mr. Chairman.
    Several years ago I founded the Oil and National Security 
Caucus, and one of the reasons I have an open mind about all of 
this is that I think that we cannot really be free with our 
policies as long as we rely on foreign oil. And so anything 
that can ramp up production of domestic resources for energy is 
something that I think we should look at, albeit there are some 
safety concerns, there are some environmental concerns. But I 
think it is something that we need to look at.
    So I have been focused on North American energy 
independence, and the increase in natural gas supplies 
obviously are a boon to this possibility. Can someone speak, I 
want to piggyback on the exporting of LNG, will we hurt our 
long-term energy security? Can someone speak to the long-term 
impact of exporting LNG? I know there is a rush to say that we 
should export it, but, you know, I am wondering should we not 
try to keep more for domestic purposes.
    Ms. Jaffe. I think the one thing you need to bear in mind, 
because of course markets change, and I know there is a 
concern, first people are telling us we don't have enough 
resource and then suddenly we have this hugely abundant supply. 
I think the point is that nothing is irreversible. So we can 
allow LNG exports, they can bring a benefit to our trade 
balance and our international stature. And if some later date 
30 years from now or 20 years from now we find that that policy 
no longer fits we might have different circumstances, we can 
revisit it. I don't see that it is necessarily going to be a 
threat to our energy security.
    There is a lot of opinion about how much resource we have. 
I do believe that the resource is so extensive that we probably 
could export a substantial amount from several terminals and 
have it actually not affect prices all that much except maybe 
occasionally seasonally. And I think that one of the impacts, I 
mean the reason that a Japan or an India or a South Korea are 
lining up to buy these exports is because they actually see a 
price advantage. In other words, they are paying very high-
priced oil-linked prices for natural gas. If they could at 
least have our market integrated, we have what we call gas-on-
gas pricing, then they could move the market to a more 
competitive footing where natural gas prices would trade based 
on natural gas prices and not based on instability in the 
Middle East.
    There is great advantages to having all the oil globally in 
the system move to natural gas. Japan is burning crude oil and 
oil for both electricity, and also China uses oil in their 
petrochemical industry. Just for both environmental reasons and 
for strategic reasons we would want to see the world moving 
more away from oil in those industries and even maybe in 
transportation to natural gas because it is so much more 
plentiful and so less controlled by artificial forces like 
Russia or OPEC.
    So I think that it is important at this time when we have 
the luxury of having abundance to make a statement as the 
United States that we favor free trade, we are going to honor 
our free trade agreements, we export natural gas to Mexico. I 
don't think we can turn around and tell South Korea, that we 
also have a free trade agreement with, but somehow we are not 
going to provide them with the same opportunities.
    So I think that we really have to look at the balance of 
our strategic and foreign policy and understand that at least 
in the immediate term chances are these exports are not going 
to affect domestic consumers, right? And, you know, again I 
want to emphasize this is sort of a topic for another time. 
When we export refined products in this country we are going to 
export LNG. The way to ensure that consumers are not harmed in 
a case where we have a sudden seasonal change in temperature or 
we have a sudden refinery accident and there is a disruption, 
the way to do that is to ensure that we have minimum inventory 
standards for companies operating in this country, which they 
have in Europe and they have in Asia. We can say that you have 
to hold a certain number of days of your customer supply. And 
the reason we have volatile prices in this country is that we 
don't do that, even though if we did we would not have to worry 
about the impact on consumer prices of being part of a global 
market.
    Mr. Engel. Well, thank you. I had another question but I 
guess all my time is used. I just want to welcome back our 
colleagues Mr. Dorgan, Mr. Johnston.
    Good to see both of you. Thank you all.
    Mr. Whitfield. Thank you, Mr. Engel.
    And thank the witnesses once again. We genuinely appreciate 
your being here with us to talk about this important subject 
matter. And I want to ask unanimous consent that we enter into 
the record a letter from Congressman Michael Turner on this 
issue, the mayor of Youngstown, Ohio, and the Cato Institute. 
And the record will remain open for 10 days for any additional 
submissions.
    [The information appears at the conclusion of the hearing.]
    Mr. Whitfield. Do you have a comment, Mr. Rush?
    So with that, today's hearing is concluded, and we look 
forward to working with all of you as we move forward. Thank 
you.
    [Whereupon, at 12:30 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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