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



 
U.S. ENERGY ABUNDANCE: REGULATORY, MARKET, AND LEGAL BARRIERS TO EXPORT

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 18, 2013

                               __________

                           Serial No. 113-57


      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. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7

                               Witnesses

Jennifer C. Moyer, Acting Chief, Regulatory Program, U.S. Army 
  Corps of Engineers.............................................     9
    Prepared statement...........................................    11
    Answers to submitted questions...............................   181
Jeff C. Wright, Director, Office of Energy Projects, Federal 
  Energy Regulatory Commission...................................    21
    Prepared statement...........................................    23
    Answers to submitted questions...............................   184
Christopher A. Smith, Principal Deputy Assistant Secretary and 
  Acting Assistant Secretary for Fossil Energy, U.S. Department 
  of Energy......................................................    30
    Prepared statement...........................................    32
    Answers to submitted questions...............................   186
Mike McGinn, Mayor, City of Seattle..............................    62
    Prepared statement...........................................    65
    Answers to submitted questions...............................   192
Harold P. Quinn, President and CEO, National Mining Association..    92
    Prepared statement...........................................    94
Ross E. Eisenberg, Vice President, Energy and Resources Policy, 
  National Association of Manufacturers..........................   100
    Prepared statement...........................................   102
KC Golden, Policy Director, Climate Solutions....................   117
    Prepared statement...........................................   119
Lucian Pugliaresi, President, Energy Policy Research Foundation, 
  Inc............................................................   134
    Prepared statement...........................................   136
Bill Cooper, President, The Center for Liquefied Natural Gas.....   154
    Prepared statement...........................................   156

                           Submitted Material

Coal dust analysis, Missoula, Montana, McCrone Associates, Inc...   177


U.S. ENERGY ABUNDANCE: REGULATORY, MARKET, AND LEGAL BARRIERS TO EXPORT

                              ----------                              


                         TUESDAY, JUNE 18, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:18 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Scalise, 
Shimkus, Pitts, Latta, McKinley, Griffith, Barton, Upton (ex 
officio), Rush, McNerney, Tonko, Green, Castor, and Waxman (ex 
officio).
    Staff present: Nick Abraham, Legislative Clerk; Charlotte 
Baker, Press Secretary; Sean Bonyun, Communications Director; 
Matt Bravo, Professional Staff Member; Allison Busbee, Policy 
Coordinator, Energy and Power; Patrick Currier, Counsel, Energy 
and Power; Andy Duberstein, Deputy Press Secretary; Tom 
Hassenboehler, Chief Counsel, Energy and Power; Jason Knox, 
Counsel, Energy and Power; Ben Lieberman, Counsel, Energy and 
Power; Nick Magallanes, Policy Coordinator, Commerce, 
Manufacturing, and Trade; Brandon Mooney, Professional Staff 
Member; Mary Neumayr, Senior Energy Counsel; Chris Sarley, 
Policy Coordinator, Environment and the Economy; Jeff Baran, 
Democratic Senior Counsel; Phil Barnett, Democratic Staff 
Director; Alison Cassady, Democratic Senior Professional Staff 
Member; Caitlin Haberman, Democratic Policy Analyst; and 
Elizabeth Letter, Democratic Assistant Press Secretary.

  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, 
and today's hearing is entitled ``U.S. Energy Abundance and the 
Regulatory, Market, and Legal Barriers to Export.'' I am going 
to recognize myself for 5 minutes for an opening statement. I 
would like to say in the beginning that we do appreciate the 
witnesses that are here with us today. We have two panels of 
witnesses, and I will be introducing you all right before you 
have an opportunity to give your opening statement, but I 
would--do want to thank you very much for joining with us this 
morning to discuss this very important issue. And with that, I 
will recognize myself for 5 minutes for an opening statement.
    I was reading an article a couple of days ago, and it was 
talking about worldwide there are two or three million people--
between two and three million people who do not have 
electricity today. Our trade deficit last year in the United 
States was $539 billion. Our unemployment rate is still pretty 
high, 7.5 percent range. Coal consumption is increasing every 
year worldwide, primarily because of increased use in China, 
India, and Asia. In fact, last year we exported 126 million 
tons, which was above 107, and the projections are that by 
2030, it is going to just continue to go up because of the use 
of coal worldwide. We all know that having basic electricity is 
vital to a society functioning, and as I said, our coal is 
going into some areas that certainly need help. All of you are 
very much aware of the abundance of coal we have in America 
today, recoverable coal. We also are the number one natural gas 
producer in the world in 2010 because of recent discovery in 
shale fields. So we have a tremendous opportunity in the U.S. 
to have a significant amount of export of both coal and natural 
gas, and it will help decrease our trade deficit. It will help 
increase the number of jobs available in America, and I think 
about the railroad industry that is moving a lot of coal and 
oil today, and just one railroad, the Burlington Northern in 
Santa Fe, I was talking to some of their people recently, are 
spending about $4.3 billion a year just maintaining their 
railroads and multiply that by the number of railroads around 
the country, and there is no government money involved in it. 
So we have private enterprise putting in money to create jobs 
in America to export a product and products, or at leas the 
potential of doing it that the world wants and the world needs.
    And so at today's hearing, we are going to focus on what 
are the obstacles to this, because we all know that there are 
significant obstacles. There are regulatory obstacles, market 
obstacles, permit obstacles, and then a lot of lawsuits are 
being filed. Mayor Bloomberg alone gave $50 million to the 
Sierra Club basically to file lawsuits against the coal 
industry. And I am a fan of the Sierra Club, and I will be the 
first to say that they have done a lot of good in America, but 
at the same time, when you are deliberately filing lawsuits to 
stop jobs from being produced in America, I think that is not 
something that we need very much of.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    Today's hearing is entitled ``U.S. Energy Abundance: 
Regulatory, Market, and Legal Barriers to Export.'' It builds 
upon our previous hearings that have assessed the tremendous 
potential for increased American energy production, including 
the opportunities to expand energy exports. Today, we will look 
at the barriers to realizing this export potential with an eye 
towards lessening regulatory hurdles and expeditiously 
approving our export opportunities.
    We all want to reduce our trade deficit and perhaps one day 
have a trade surplus. And America's growing energy abundance is 
already beginning to make this goal a reality, both by reducing 
the need for energy imports and by expanding exports. However, 
we should remain mindful that if our trading partners don't get 
their coal or natural gas from us, they will very likely get it 
from another energy-exporting nation with weaker environmental 
safeguards.
    And we can continue to increase energy exports. We have 
long had an abundance of coal in this country and have exported 
it for many years. But growing world demand for affordable and 
reliable energy has led to record-setting coal exports in 
recent years. In 2012, the U.S. exported 125.7 million short 
tons of coal and EIA estimates that amount to rise to 144 
million short tons by 2030. In 2011 in Kentucky alone, coal 
mining operations employed over 25,000 workers, and 1,760 of 
those jobs stemmed directly from the production of coal for 
export. We could continue breaking these records in the years 
ahead, bringing billions of dollars in revenues into the 
country and supporting jobs all along the supply chain from 
coal miners to railroad workers to dock workers.
    And over the past few years we have seen a remarkable 
expansion of domestic natural gas production to the point that 
we are now the number one producer in the world. As with coal 
exports, natural gas exports would create jobs and economic 
development while strengthening our ties with energy-importing 
allies like Japan and India who would much rather buy from us 
than from Russia or Iran.
    Unfortunately, those who are trying to shut down the 
production and use of coal and natural gas in the U.S. are 
attempting to do the same thing to exports. And much of their 
focus is on infrastructure. Not only do we need to mine the 
coal and drill for natural gas, but we need the transportation 
and pipeline systems to deliver it to the nation's port 
facilities. And we need to expand those port facilities to 
handle the growing volumes. But many of these job-creating 
infrastructure projects are being held up by an array of 
burdensome regulations, permit requirements, and legal 
challenges brought by litigious environmental groups. There are 
currently two licenses that have been approved to export LNG 
and 18 applications that have been filed and are pending with 
DOE.
    For example, the growth of coal exports will necessitate 
the construction of new port facilities and the expansion of 
existing ones, which comes under the purview of the Army Corps 
of Engineers. The last thing we need is the kind of years-long 
bureaucratic delays comparable to what we have seen with 
Keystone XL, but the threat of such delays is very real.
    LNG facilities also face a host of barriers, originating 
with the Natural Gas Act of 1938 and extending to more recent 
measures. Even beyond federal licensing issues, these projects 
also face the threat of litigation from activist organizations.
    The reality is that market forces will determine the amount 
and to what extent we export our energy from the U.S. Policies 
that delay or prevent energy exports are detrimental to energy 
producing states like Kentucky, and they hurt the nation as a 
whole. And I might add that the environmental arguments against 
energy exports don't stand up to scrutiny. Instead of arbitrary 
and irrational barriers proposed on U.S. exports, the U.S. can 
be a global energy leader by exporting affordable and reliable 
energy to povertystricken countries that would otherwise have 
no electricity.
    I have concerns that the approval process for these export 
projects is not a balanced one as it clearly should be, 
especially in light of the opportunities before us. We need to 
restore that balance. I look forward to hearing the insightful 
testimony from our government and industry witnesses today.

                                #  #  #

    Mr. Whitfield. I still have a minute and 30 seconds left, 
so I would like to yield the balance of my time to the 
gentleman from Louisiana, Mr. Scalise.
    Mr. Scalise. Well thank you, Mr. Chairman.
    If you look at the barriers to export, I know in South 
Louisiana, the first LNG facility that has been permitted, 
Cheniere, is spending billions of dollars--this is all private 
money--to be able to export natural gas. This is something that 
I think if you look across America, there are going to be more 
opportunities as we explore this revolution in shale with 
hydraulic fracturing and horizontal drilling, the things that 
it has opened up, the opportunities not just to create jobs for 
America, for Americans to create billions of dollars in 
economic activity in the States that have chosen to be a part 
of this revolution, but also it has allowed America not only to 
be energy independent in terms of natural gas, which has been 
great, not just for natural gas but for manufacturing in our 
country. It is going to reindustrialize a lot of the chemical 
facilities, a lot of other facilities that were looking at 
moving out of the country because it has provided a stable 
source of energy. It has also provided us an opportunity to 
export energy, which is something that we should be looking at 
doing more of, because again, this allows us to be competitive. 
It allows us to bring that trade balance down.
    And so if you look at the threats to the ability to export 
more, a lot of these are coming from federal agencies right 
now. You know, we had the Secretary of Energy last week talking 
about energy independence and all-of-the-above, and this is 
part of it.
    So I appreciate the focus, Mr. Chairman. I yield back the 
balance of my time.
    Mr. Whitfield. Gentleman yields back. At this time, I would 
like to 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 
thank the witnesses for appearing before the subcommittee 
today. Mr. Chairman, I commend you for holding today's timely 
hearing on the potential impacts of exporting both coal and LNG 
to overseas markets.
    There is no doubt in my mind that the energy sector will 
play a huge role in helping to get the American economy back on 
track, while also creating the jobs and the economic 
opportunity that can benefit all sectors of the American 
population. Just as I believe that energy will play a 
substantial role in helping to bolster the U.S. economy, I also 
believe that the increased production of natural gas will play 
a crucial role within the energy sector of helping us become 
more competitive and energy independent.
    With the new technologies of hydraulic fracturing and 
horizontal drilling, we are already seeing natural gas 
production defy expectations of only a few years ago, when most 
experts believed that the U.S. would need to become a net 
importer of natural gas in order to meet its domestic demands. 
However, today, Mr. Chairman, through the increased use of 
fracking and horizontal drilling, we have seen natural gas 
production in the U.S. rise by 34 percent between 1990 and 
2012, and the EIA projects that under existing policies, 
natural gas production will increase by an additional 39 
percent by 2040. Even with the EIA predicting that domestic 
consumption of natural gas will increase modestly in the 
electric, industrial, and to a lesser extent, the 
transportation industries, the agency still expects for the 
U.S. production of natural gas to outpace demand, resulting in 
the U.S. becoming a net exporter of natural gas by 2020.
    Which brings us to today's hearing, Mr. Chairman, where we 
will have the opportunity to hear from relevant stakeholders 
from within federal agencies and from within industry on the 
regulatory, market, and legal barriers to exporting natural 
gas, as well as the potential impacts and unintended 
consequences of making these exports. It is my hope that 
today's hearing will shed more light on important issues 
associated with exporting LNG and coal, including the impact on 
domestic prices, the potential for jobs, the effect on our 
manufacturing base, as well as the effect on the U.S. trade 
balance.
    Additionally, Mr. Chairman, as a record-setting 2012 where 
we witnessed an historical number of heat waves, wildfires, 
flooding and drought, and with 2013 already showing signs of 
record-breaking tornadoes, wildfires, and hurricanes sweeping 
across our Nation and destroying lives and property, it is 
imperative that we also hear about climate change as we debate 
whether to export coal and LNG overseas. As policymakers, it is 
our duty to understand the totality of the consequences for the 
decisions we make in regards to exporting coal and LNG.
    Mr. Chairman, with that, I yield back the balance of my 
time.
    Mr. Whitfield. Thank you, Mr. Rush. At this time, I 
recognize the chairman of the full committee, Mr. Upton, for 5 
minutes.

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

    Mr. Upton. Well thank you, Mr. Chairman.
    America's energy landscape is indeed changing for the 
better, creating opportunities for jobs, economic growth, 
energy security, and an enhanced standing around the world. But 
this bright energy future is far from guaranteed. Federal laws 
and regs that are stuck in the past could devastate newfound 
opportunity, in addition to an Administration that sometimes 
seems more intent on rewarding a handful of environmental 
activist allies rather than capitalizing on our new energy 
abundance that certainly would create jobs and stimulate the 
economy for the benefit of all.
    According to CRS, America has the largest fossil fuel 
reserves of any nation on earth, and estimates keep growing 
because of technological advances. At the same time, the global 
demand for energy is on the rise. According to the World Bank, 
more than 1.2 billion people--that is b as in big--17 percent 
of the world's population, are still without access to 
electricity. So when you put two and two together, the U.S. has 
the potential to become the world's preeminent supplier of 
affordable and reliable energy, and with commonsense planning 
and continued safe and responsible development, our country can 
indeed help to take the power back from OPEC and geopolitically 
unstable regions of the world and be a force of change to help 
bring nations out of poverty with our energy resources.
    We are already seeing increased exports of coal. Rapidly 
rising domestic natural gas production is likely to become the 
next American-made energy source to reach the global market. As 
a recent report conducted for the DOE concluded, America can 
export a portion of its natural gas abundance while, in fact, 
still maintaining affordable domestic supplies to continue to 
power our manufacturing renaissance.
    All that is missing is the additional infrastructure to 
make expanded exports possible, and achieving our export 
potential would have the added benefit of creating thousands, 
tens of thousands, of new jobs.
    Unfortunately, the build-up of red tape over the last 
couple of decades has become a real obstacle, especially for 
the kinds of major projects that will be needed such as 
pipelines, ports, and LNG facilities.
    The cumbersome federal approval process is out of step with 
where we are as an energy-producing Nation today, and that is 
partly due to the ingrained mindset of energy scarcity that has 
proven slow to change despite the dramatic and unexpected rise 
in domestic energy supplies. But it is also due to overlapping 
laws and regs that create multiple opportunities for delays and 
for litigation. The Keystone XL pipeline is a perfect example 
of the kind of project delays we are talking about. We have 
been waiting for nearly 5 years for federal approval, and when 
it comes to the projects necessary to expand exports, thereby 
increasing jobs and improving our trade balance, we should not 
have to wait that long. Just as we are putting jobs at risk by 
failing to approve Keystone, we may forego jobs and economic 
growth by not pursuing energy export projects in a timely 
fashion.
    The private sector has made rapid progress in unlocking our 
energy abundance. What the American people now need is a 
regulatory process that can keep up with the evolving energy 
landscape.
    Are there other members wishing--I will yield the balance 
of my time to Mr. Barton.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    America's energy landscape is changing for the better, 
creating opportunities for jobs, economic growth, energy 
security, and an enhanced standing around the world. But this 
bright energy future is far from guaranteed. Federal laws and 
regulations that are stuck in the past could devastate newfound 
opportunity, in addition to an administration that seems more 
intent on rewarding a handful of environmental activist allies 
rather than capitalizing on our new energy abundance that would 
create jobs and stimulate the economy for the betterment of 
all.
    According to the Congressional Research Service, America 
has the largest fossil fuel reserves of any nation on earth, 
and estimates keep growing because of technological advances.
    At the same time, the global demand for energy is on the 
rise. According to the World Bank, more than 1.2 billion 
people--17 percent of the world's population--are still without 
access to electricity. Put two and two together, and the U.S. 
has the potential to become the world's preeminent supplier of 
affordable and reliable energy. With commonsense planning and 
continued safe and responsible development, our country can 
help to take the power back from OPEC and geopolitically 
unstable regions of the world and be a force of change to help 
bring nations out of poverty with our energy resources.
    We are already seeing increased exports of coal, and 
rapidly rising domestic natural gas production is likely to 
become the next American-made energy source to reach the global 
market. As a recent report conducted for the Department of 
Energy concluded, America can export a portion of its natural 
gas abundance while still maintaining affordable domestic 
supplies to continue powering our manufacturing renaissance.
    All that is missing is the additional infrastructure to 
make expanded exports possible--and achieving our export 
potential would have the added benefit of creating thousands of 
new jobs.
    Unfortunately, the build-up of red tape over the last 
several decades has become a real obstacle, especially for the 
kinds of major projects that will be needed such as pipelines, 
ports, and LNG facilities. The cumbersome federal approval 
process is out of step with where we are as an energy-producing 
nation today.
    This is partly due to the ingrained mindset of energy 
scarcity that has proven slow to change despite the dramatic 
and unexpected rise in domestic energy supplies. But it is also 
due to overlapping laws and regulations that create multiple 
opportunities for delays and for litigation.
    The Keystone XL pipeline is a perfect example of the kind 
of project delays we are talking about. We have been waiting 
for nearly five years for federal approval of Keystone XL. When 
it comes to the projects necessary to expand exports, thereby 
increasing jobs and improving our trade balance, we should not 
have to wait that long. Just as we are putting jobs at risk by 
failing to approve Keystone XL, we may forego jobs and economic 
growth by not pursuing energy export projects in a timely 
fashion.
    The private sector has made rapid progress in unlocking our 
energy abundance. What the American people now need is a 
regulatory process that can keep up with this evolving energy 
landscape.

                                #  #  #

    Mr. Barton. Thank you, Mr. Chairman.
    There are three things that we need to know with regards to 
natural gas exports. Number one, we are the world's largest 
producer of natural gas. Number two, we have the world's 
largest amount of reserves of natural gas, and number three, we 
have the world's cheapest price. Prices in the United States 
are \1/3\ of the--less than \1/2\ the price over in Europe, 
less than \1/3\ of the price in Asia, and less than \1/4\ of 
the price in South America. It would seem it is a win/win if we 
could license some export facilities, get these natural gas 
products overseas, bring the wealth back from overseas that 
pays for it and use that to create more jobs in America.
    The same thing can be said on coal. The good news on coal 
is it doesn't have some of the regulatory requirements for 
export that natural gas does.
    So Mr. Chairman, I think this is a good hearing, and I look 
forward to hearing from the witnesses. I will yield to whoever.
    Mr. Whitfield. Gentleman yields back. At this time, I 
recognize the gentleman from California, Mr. Waxman, for 5 
minutes.

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

    Mr. Waxman. Thank you, Mr. Chairman.
    At today's hearing, we will focus on the export of 
liquefied natural gas and coal. These are complex issues and it 
is important for the subcommittee to understand how they relate 
to our energy policy. There are multiple factors to consider 
when evaluating exports. Proponents of increasing our exports 
of natural gas and coal stress that exports can help our 
balance of trade and create new economic opportunities. 
Opponents raise a number of concerns ranging from potential 
environmental harm to price impacts for U.S. consumers and 
manufacturers.
    In my view, a key factor on this issue, as on so many other 
energy issues, is climate change. Climate change is the biggest 
energy challenge we face. We can't have a conversation about 
America's energy policy without also having a conversation 
about climate change. The energy policy decisions we make today 
will have an impact on whether we can prevent the worst impacts 
of climate change in the future. We need to understand and 
weigh those risks, otherwise we are in danger of locking in 
infrastructure that will produce carbon pollution for decades 
to come, or creating stranded investments that must be shut 
down before they serve their useful life.
    Last week, the International Energy Agency released a 
report concluding that the world is not on track to meet the 
goal of limiting global average temperature to rise below 3.6 
degrees Fahrenheit above the preindustrial levels. Climate 
scientists tell us that if global average temperatures increase 
beyond this threshold, society will face devastating impacts.
    It is not too late to keep temperatures below the most 
dangerous levels if we act now to cut carbon pollution. The 
International Energy Agency found that taking key actions now 
to reduce emissions could be done at no net economic cost, 
while delay would impose trillions of dollars in costs on 
society.
    It is through that lens we need to examine whether to 
construct new export terminals to ship America's natural gas 
and coal overseas. Liquefied natural gas and coal export 
terminals are huge, multi-billion dollar investments that will 
last for decades. It would make no sense to build these 
facilities only to find out that they are unsustainable because 
of the climate implications.
    I have an open mind about natural gas exports. Natural gas 
combustion for electricity emits less carbon pollution than 
coal. If natural gas exports displace coal consumption, that 
can produce a significant net climate benefit, especially if we 
tackle the problem of fugitive methane emissions. On the other 
hand, if natural gas exports raise gas prices in the United 
States, that could cause some utilities to switch back to coal, 
erasing some of the carbon pollution reductions that our 
country has recently achieved. We should fully understand these 
climate impacts before these facilities are built, not after.
    With respect to coal exports, the United States and the 
rest of the world need to reduce our dependence on carbon-
intensive fuels like coal, and move towards a cleaner, low-
carbon energy future. Building billions of dollars in new 
infrastructure that guarantees China a steady supply of cheap 
coal for decades to come is the opposite of what we should be 
doing. Governor Inslee of Washington State, Governor Kitzhaber 
of Oregon, the two States that would be most directly affected 
by new coal export terminals, wrote a letter to the White House 
on this very point. They argued that ``before the United States 
and our trading partners make substantial new investments in 
coal generation and the infrastructure to transport coal, 
extending the world's reliance on this fuel for decades, we 
need a full public airing of the consequences of such a path'' 
and they call on the White House to thoroughly examine this 
matter. I agree with these Governors. If we do not, at the very 
least, understand the consequences of our energy policies 
before we implement them, I think we would be making a mistake.
    I thank our witnesses for appearing today and I look 
forward to your testimony.
    Mr. Whitfield. Thank you, Mr. Waxman.
    At this time I would like to introduce the first panel, and 
as I said in the beginning, we appreciate your being with us. 
Thank you for coming and we look forward to your comments.
    First we have Mrs. Jennifer Moyer, who is the Acting Chief, 
Regulatory Program at the U.S. Army Corps of Engineers. We have 
Mr. Jeff Wright, who is the Director of Office of Energy 
Projects at the Federal Energy Regulator Commission, and we 
have Mr. Christopher Smith, who is the Principal Deputy 
Assistant Secretary and Acting Assistant Secretary of Energy--I 
mean, for Fossil Energy at the Department of Energy.
    So thank you for joining us, and each one of you will be 
recognized for 5 minutes for an opening statement. If you would 
remember to pull the microphone close to you and just be sure 
to turn it on, and when your time is expired, there are two 
little boxes and the red light will go on.
    So Ms. Moyer, we will recognize you for your 5-minute 
opening statement. Thank you.

   STATEMENTS OF JENNIFER C. MOYER, ACTING CHIEF, REGULATORY 
    PROGRAM, U.S. ARMY CORPS OF ENGINEERS; JEFF C. WRIGHT, 
DIRECTOR, OFFICE OF ENERGY PROJECTS, FEDERAL ENERGY REGULATORY 
    COMMISSION; AND CHRISTOPHER A. SMITH, PRINCIPAL DEPUTY 
 ASSISTANT SECRETARY AND ACTING ASSISTANT SECRETARY FOR FOSSIL 
               ENERGY, U.S. DEPARTMENT OF ENERGY

                 STATEMENT OF JENNIFER C. MOYER

    Ms. Moyer. Thank you. Chairman Whitfield, Ranking Member 
Rush, and members of the subcommittee, I am Jennifer Moyer, 
Acting Chief of the Regulatory Program for the U.S. Army Corps 
of Engineers. Thank you for the opportunity to discuss the 
Corps' regulatory authorities under Section 10 of the Rivers 
and Harbors Act of 1899, and Section 404 of the Clean Water 
Act. I will specifically discuss the Corps' role in permitting 
of shipping facilities with a focus on coal and the issues 
currently being discussed in the Pacific Northwest.
    The responsibility for making final permit decisions has 
been delegated to our 38 district commanders. They are the 
closest to the proposed activities, have staff and expertise to 
evaluate applications, and know the aquatic resources and 
navigation issues involved.
    Section 10 permits are required for work in navigable 
waters of the U.S., while Section 404 permits are required for 
the discharge of dredged or fill material into waters of the 
United States. First, a little background on the existing 
shipping terminals along the Gulf Coast and East Coast, which 
have accounted for most U.S. coal exports over the past 10 
years.
    Depending on originating and export facilities locations, 
coal is shipped over existing rail networks or by barge on our 
Nation's inland waterway system. In 2012, total U.S. coal 
exports increased about 126 million tons due to a substantial 
increase in the amount of steam coal exported, which is used 
for generating electricity. The National Environmental Policy 
Act, or NEPA, mandates that agency conclusions be supported by 
critical thinking and reasoned analysis of the potential 
environmental consequences of a proposed agency action, such as 
a decision on a pending permit application.
    The Corps first identifies the federal action under 
consideration and then decides whether we have sufficient 
control and responsibility for activities outside of our 
regulatory jurisdiction; that is, waters of the United States, 
such that the issuance of a Corps permit would amount to 
approval of those activities. The Corps limits its review to 
only the specific activity requiring a Corps permit and those 
portions of the activity over which the Corps then has 
sufficient control and responsibility. The Corps is evaluating 
shipping facility proposals at three separate and independent 
locations in the Pacific Northwest. These three facilities have 
generated considerable public interest, in part because these 
facilities' primary purpose would be to receive coal via rail 
from the Powder River Basin in Wyoming and Montana for shipment 
via barges and oceangoing vessels to other locations, including 
Asia.
    When considered in accordance with the laws and regulations 
I have discussed above, many of the activities of concern to 
the public, such as rail traffic, coal mining, shipping of coal 
outside of U.S. waters, and the burning of coal overseas are 
outside of the Corps' control and responsibility. These 
activities are too far attenuated and distant from the proposed 
activities being evaluated by the Corps to be considered 
effects of the Corps' permit actions. The Corps expects to 
receive many comments from the public and from sister federal, 
state, and local agencies, and especially from tribes on these 
issues, and we will carefully consider all the comments we 
receive.
    Based on anticipated direct, indirect, and cumulative 
impacts, the Seattle District is currently preparing a draft 
environmental impact statement for the Gateway Project, and a 
separate draft environmental impact statement for the 
Millennium Project. For the Coyote Island Project, the Portland 
District is currently preparing an environmental assessment. 
The three proposed projects are not a Corps plan or a program, 
therefore preparation of a programmatic EIS in this case is not 
appropriate. Because they are independent projects at different 
locations whose impacts are not related and they are 
unconnected single actions under NEPA, preparation of an area-
wide or regional EIS is not appropriate, based on our review of 
pertinent regulations. Based on these facts, we have determined 
that preparation of neither a programmatic EIS nor an area-wide 
or regional EIS is appropriate.
    The scope of analysis established by the Corps in the 
review of each proposal will include the specific activity 
required by a Corps permit, the environmental effects or 
impacts of that specific activity, and those portions of the 
entire project over which there is sufficient federal control 
and responsibility to warrant a Corps NEPA review. The 
preparation of the NEPA documents for these projects, all three 
of them, is at an early stage.
    In summary, our Seattle and Portland Districts are 
reviewing these proposals and carrying out the NEPA scoping 
process to determine which potential environmental effects to 
analyze in detail. The Corps Districts will carefully consider 
each of these proposals while appropriately bounding the scope 
of analysis and consideration of the impacts in accordance with 
existing regulations, policies, and guidance.
    I appreciate the opportunity to be here today and will be 
happy to answer any questions that you may have.
    [The prepared statement of Ms. Moyer follows:]

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    Mr. Whitfield. Thank you, Ms. Moyer.
    Mr. Wright, you are recognized for 5 minutes.

                  STATEMENT OF JEFF C. WRIGHT

    Mr. Wright. Chairman Whitfield, Ranking Member Rush, and 
members of the subcommittee, my name is Jeff Wright and I am 
the Director of the Office of Energy Projects at the Federal 
Energy Regulatory Commission. The Office of Energy Projects is 
responsible for, among other things, the authorization and 
oversight of the construction and operation of onshore and 
near-shore liquefied natural gas terminals. Today I will 
discuss the process which the Commission uses to review 
applications for facilities for the export of LNG.
    With respect to LNG, the Commission does not authorize the 
import or the export of LNG. That authority rests with the 
Department of Energy. Accordingly, applications for authority 
to import or export LNG must be submitted to DOE, while 
applications for the construction and operation of import or 
export related facilities must be submitted to the Commission.
    The Commission's review process is comprised of three 
distinct phases: pre-filing review, application review, and 
post-authorization review. Each stage of the review process 
requires its submission of detailed information that involves a 
review and consultation with key stakeholders and other federal 
agencies, such as the Coast Guard and the Department of 
Transportation.
    Section 311 of the Energy Policy Act of 2005 requires 
perspective applicants seeking Commission authority to 
construct and operate an LNG terminal to participate in a pre-
filing process for a period of at least 6 months. This is the 
beginning of the Commission's staff review, and it involves not 
only an early analysis of the project proposal, but also 
provides a transparent forum for consultation and discussion. 
The pre-filing process is designed to engage all stakeholders 
in order to identify and resolve potential issues related to 
the construction and operation of a facility before the filing 
of a formal application. During this process, project-specific 
issues are raised throughout the environmental scoping process 
and/or by other means, such as open houses, public meetings, 
site visits, and/or filed comments. At this stage, information 
needs are identified and studies are conducted as necessary to 
fill data gaps.
    The end of the pre-filing process occurs when the applicant 
files its formal application. Once the formal application has 
been filed, any person can move to intervene in the 
Commission's proceedings. Interveners become parties to a 
proceeding and have the right to request rehearing of 
Commission orders and seek relief of final agency actions in 
U.S. Circuit Courts of Appeal. In addition, all interested 
parties have the opportunity to place their concerns regarding 
the project into the record and file any evidence they feel is 
important for the Commission to consider.
    During the application review phase, the Commission staff 
analyzes the formal application and once sufficient information 
to address environmental and safety issues exists in the 
record, it establishes a schedule for the production of the 
environmental review documents. The environmental document is 
then issued for public comment, and comments received on that 
document are addressed. The final environmental document 
contains staff's conclusions regarding the feasibility, safety, 
and environmental impacts associated with the proposed 
facilities. The document also includes any recommended measures 
for ensuring safety and mitigating any environmental impacts 
identified through analysis of the proposal and consideration 
of concerns raised during the pre-filing and application 
review.
    After issuance of the final environmental document, the 
Commission considers the entire record of the proceeding. If 
the Commission finds that the environmental and safety impacts 
from the construction and operation of the LNG facility are 
acceptable and authorizes the proposal, the project specific 
mitigation measures recommended in the environmental document 
are included as conditions to this authorization.
    During the post-authorization review phase, detailed plans 
for the Commission-required mitigation are developed. Approval 
of these detailed plans must be received before construction 
can commence. During the construction period, mitigation 
measures are implemented and monitored. As part of its ongoing 
detailed post-authorization project review, staff inspects the 
construction and progress to ensure that all required measures 
are implemented. Inspections during construction entail the 
review of quality assurance and quality control plans, 
nonconformance reports, and cool down and commissioning plans 
to ensure that the installed design is consistent with the 
safety and operability characteristics of the proposal approved 
by the Commission.
    Finally, at the end of construction, the project sponsor 
will file a request for authorization to commence operation of 
the facility. The information contained in this request must 
demonstrate how the project sponsor has complied with all of 
the Commission's requirements and must be consistent with the 
results of the Commission's inspections. This final 
authorization from the Commission will not be granted unless 
all measures to ensure safe and secure operations and the 
necessary environmental protections are in place and serving 
their intended purpose. Once a facility is placed in service, 
it is subject to continuing inspections by the FERC staff for 
the life of the facility. This ensures that the facility 
continues to be operated and maintained in accordance with the 
Commission's original authorization.
    This concludes my testimony. I will be happy to answer any 
questions you may have.
    [The prepared statement of Mr. Wright follows:]

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    Mr. Whitfield. Thank you, Mr. Wright.
    Mr. Smith, you are recognized for 5 minutes.

               STATEMENT OF CHRISTOPHER A. SMITH

    Mr. Smith. Thank you, Chairman Whitfield, Ranking Member 
Rush, and members of the subcommittee. I appreciate the 
opportunity to discuss the Department of Energy's program 
regulating the export of natural gas, including liquefied 
natural gas.
    The Department's authority to regulate the export of 
natural gas arises from the Natural Gas Act, which provides two 
statutory standards for processing applications to export LNG 
from the United States: one for export to free trade agreement 
nations, and one for export to nations with which the United 
States does not have a free trade agreement.
    By law, applications to export natural gas to free trade 
agreement nations are deemed consistent with the public 
interest and the Secretary of Energy must grant authorization 
without modification or delay. As of today, the Department of 
Energy has approved 24 long-term applications to export a lower 
48 LNG to free trade agreement countries, and there are three 
other currently pending.
    For applications to export natural gas to non-FTA nations, 
the Secretary of Energy must grant the authorization unless, 
after opportunity for hearing, the proposed export is found to 
not be consistent with the public interest.
    The Department's review of applications to export LNG to 
non-FTA countries is conducted through a publically transparent 
process which includes full public interest review. To date, 
the Department has granted two long-term applications to export 
domestically produced lower 48 LNG to non-FTA countries. In the 
Sabine Pass order, the Department of Energy stated that it 
would evaluate the cumulative impact of that authorization and 
any future authorizations for export authority when considering 
subsequent applications. Following the issuance of that order, 
the Department of Energy undertook a two-part study of the 
cumulative economic impact of LNG exports, to which were 
received over 190,000 comments.
    On May 17, the Department of Energy granted the second 
long-term application to export LNG, which was granted to 
Freeport LNG in a conditional order, pending successful 
environmental review. The order was granted after an extensive, 
careful review of the application, the LNG export study, public 
comments for and against the application, and public comments 
of the cumulative impact of LNG exports filed in the LNG export 
study.
    Currently, the Department of Energy has 20 non-FTA export 
applications pending. Going forward, the Department will 
continue processing the pending applications on a case-by-case 
basis, following the order of precedence previously established 
and set forward on the Department of Energy's Web site. 
Finally, the Department will assess the impact of any market 
developments on subsequent public interest determinations as 
further information becomes available.
    Due to the adjudicatory nature of this process, Mr. 
Chairman, I will be unable to comment today on issues that are 
presently being addressed in our pending proceedings. However, 
I can speak to the Department of Energy's statutory authority, 
our process to review applications, our two-party LNG export 
study, the comments we received on those studies, and other 
recent developments in LNG export. With respect to these 
topics, the Department and I are committed to being as 
responsive as possible to any questions that the committee may 
have.
    In conclusion, Mr. Chairman, I would like to emphasize that 
Department of Energy is committed to moving this process 
forward as expeditiously as possible. We understand the 
significance of this issue, as well as the importance of 
getting it right. Thank you.
    [The prepared statement of Mr. Smith follows:]

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    Mr. Whitfield. Thank you all very much for your testimony. 
We appreciate your being with us, as I said.
    Ms. Moyer, let me ask you a couple questions here. You said 
the--what was the word you used, deputy commander or division 
commander? You had 38 division commanders, is that right?
    Ms. Moyer. District commanders.
    Mr. Whitfield. District commanders. And they have the 
authority to make the final decision on, for example, Port 
Morrow's application?
    Ms. Moyer. Yes, sir.
    Mr. Whitfield. OK. Now the President recently had made 
comments that he was considering requiring all federal agencies 
to consider the climate change effect, including global impacts 
of their actions. This is an unprecedented step with far 
reaching geopolitical implications that it effectively puts the 
U.S. in the position of evaluating the energy consumption--and 
environmental policies of our trading partners. Now in your 
testimony, you stated that the ultimate burning of coal 
overseas is outside the Corps' control and responsibility. So 
does this mean for the purposes of NEPA that the Corps of 
Engineers does not intend to consider the climate change 
impacts related to any of the three, for example, proposed 
facilities in the West that have applied for license for 
export?
    Ms. Moyer. With respect to climate change or greenhouse gas 
emissions, the Corps will limit its focus on emissions to those 
emissions that will be associated with the construction of the 
facilities for those impacts that will occur within our scope 
of analysis, our limited scope of analysis, but the appropriate 
application of our regulations have led us to the conclusion 
that the effects of the burning of the coal in Asia or wherever 
it may be is too far removed from our action to be considered 
as an indirect effect or cumulative effect of our action 
itself.
    Mr. Whitfield. Right, which I think is a right decision. 
You also indicated in your testimony that the Corps is not 
planning to complete an area-wide environmental impact 
statement for the three export terminals currently pending 
before the Corps as one entity. Is that correct?
    Ms. Moyer. Yes, sir.
    Mr. Whitfield. So you do intend to proceed each one of 
those individually?
    Ms. Moyer. Yes, sir.
    Mr. Whitfield. OK, which I think also is the right 
decision. I know that there are groups out there that want an 
area-wide environmental impact statement, which certainly makes 
it a lot easier to create obstacles and lawsuits and so forth, 
so I appreciate that very much.
    Mr. Wright and Mr. Smith, would one of you just clarify for 
us the different responsibilities that you have for the 
liquefied natural gas export facility? Mr. Wright, Department 
of Energy, I guess, authorizes, is that correct?
    Mr. Wright. The Department of Energy--and I will let Mr. 
Smith speak to that, but in my knowledge, the Department of 
Energy authorizes the import or the export of the physical 
commodity. FERC, or the Commission, authorizes the facilities 
to facilitate the import or the export of the commodity.
    Mr. Whitfield. Mr. Smith?
    Mr. Smith. Mr. Chairman, that is exactly correct.
    Mr. Whitfield. OK. And so far, you have issued--you have 
authorized two facilities to non-free trade areas, is that 
correct?
    Mr. Wright. I believe the Department of Energy has 
authorized two exports to non-free trade agreement projects. 
The Commission has authorized the construction of one facility, 
and that is Cheniere Sabine Pass facility for export.
    Mr. Whitfield. Right. Yes, thanks for reminding me. Mr. 
Smith is at the Department of Energy, you are at FERC, so thank 
you.
    OK, that is all the questions I have for now, so Mr. Rush, 
I would recognize you for 5 minutes.
    Mr. Rush. I want to thank you, Mr. Chairman. Your questions 
have been quite interesting, and the testimony has been 
informative, and it has touched on the issue of LNG exports 
from a myriad of perspectives.
    My concern is I would like to also hear more about 
exporting LNG and how it would impact U.S. consumers. Unlike 
oil prices, which are set on the global market, natural gas 
prices are set on a regional scale in North America and Europe 
and Asia. Today, Americans are paying very low prices for 
natural gas, less than $4 per gallon as opposed to $10 in 
Europe and $12 or $15 in east Asia. Most experts, however, 
expect this price to increase over the coming years with the 
EIA estimating that Henry Hub spot prices for natural gas will 
increase by 2.4 percent as producers begin drilling in more 
difficult terrain.
    The question I have is how will exporting LNG impact the 
cost of natural gas for American families and consumers, and 
American businesses and manufacturers? Will this impact be 
significant, and will it be widespread across many different 
sectors of our economy? Mr. Smith, do you want to take a stab 
at that?
    Mr. Smith. Yes, thank you, Congressman, for that question. 
So as the Department of Energy goes through its process of 
evaluating these applications to export LNG, we are keenly 
aware and concerned about the potential impacts on American 
businesses, on American families, issues that might be related 
to changes in the price for natural gas. We certainly see that 
there is a tremendous opportunity that our country has in terms 
of our large natural gas resources. We do want to make sure 
they are being developed prudently and that we are making good 
public interest determinations in terms of export decisions.
    As part of that, as I mentioned in my oral testimony, when 
we put out the Sabine Pass order, the Department of Energy 
declared that it would consider the cumulative impacts of LNG 
exports, which was the reason why we commissioned a 
comprehensive study that looked at not only impacts here in the 
United States, but also the global market's capability of 
absorbing LNG into other markets internationally.
    The conclusion of that study was overall that the impacts 
of LNG exports would be positive for the consumers. There would 
potentially be some price impacts, as you have additional 
demand that is placed on our supply based on exporting LNG. But 
the conclusion of the study that was done for DOE concluded 
that overall for our economy and then for American consumers it 
would be positive.
    Mr. Rush. I have an additional question, and I think this 
question centers around the issue of jobs. Would there be an 
overall gain or loss in manufacturing jobs and other types of 
employment when we start exporting LNG and how would exporting 
LNG impact jobs overall in the U.S.? And you and any of the 
other witnesses can chime in on this, the answer to this.
    Mr. Smith. Well, thank you for the question, Congressman. 
So we did look very closely at economic impact and jobs. You 
certainly have a potential positive impact from the 
construction activity of building the terminal of actually 
producing the gas to be exported.
    The concern that was raised by some opponents of the LNG 
exports was that potential price rises might have a negative 
impact on energy intensive users of natural gas like chemical 
plants or some manufacturers. The evidence that we looked at 
said that in balance that LNG exports at various levels would 
be positive for the economy----
    Mr. Rush. Mr. Wright, would you want to chime in on that?
    Mr. Wright. Well, we don't get into the economic analysis, 
but in terms of approving construction, obviously when you 
build something there will be jobs there, and----
    Mr. Rush. Ms. Moyer, would you?
    Ms. Moyer. Certainly when we are evaluating applications 
from a private entity for a facility, we look at cost 
implications. We aren't looking at economic benefits and 
detriments.
    Mr. Rush. We don't have any infrastructure for any of this, 
right, and the question is where is the infrastructure going to 
come from, and how much would it cost?
    Mr. Smith. Well, if you look at the Sabine Pass terminal, 
the Sabine Pass terminal is actually an LNG import terminal 
that is being converted into an export terminal, so there is 
already a footprint that is going to be expanded in order to 
make that conversion to export LNG, but for all of these 
investments, there is going to be significant multi-billion 
dollar capital investments that are required in order to create 
the capacity to export LNG.
    Mr. Whitfield. Gentleman's time is expired. At this time, I 
recognize the gentleman from Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman. Before I ask my 
questions, I want to say welcome to Mr. Bill Cooper who is on 
the second panel. He is a former staffer for the Republican 
staff of the Energy and Commerce Committee, and we are glad to 
have him here in the audience. I welcome him.
    I want to ask a question of Mr. Smith. I have never seen a 
longer title. The Principal Deputy Assistant Secretary and the 
Acting Assistant Secretary for Fossil Energy. That is quite a 
mouthful. How many Deputy Assistant Secretaries for Fossil 
Energy are there, since you are the principal one?
    Mr. Smith. Well, I have a long title because I am wearing a 
lot of hats right now. I will say that the chairman nailed the 
title when he introduced me, so thank you for that.
    Mr. Barton. I do want to also make sure that I understand 
this. I am told that in a past life, you actually worked for 
Chevron, is that correct?
    Mr. Smith. I worked for Chevron and actually grew up in Ft. 
Worth, Texas, not exactly in your district, but----
    Mr. Barton. And yet you still got appointed to your 
position. Congratulations.
    Mr. Smith. I was actually appointed to my position because 
of my specific industry background, so----
    Mr. Barton. That is good. That is very good.
    Well, my first question I will just--I will ask you, Mr. 
Smith. Does the law stipulate which entity has to be applied to 
first for an export permit? Do you have to get approved at DOE 
to export LNG, or could you go directly to FERC and ask to have 
the facility approved before DOE has approved that it could be 
exported, or does it matter?
    Mr. Smith. The law actually gives us some flexibility, and 
it gives applicants some flexibility. So the way that we have 
handled that question is we have to come up with some order in 
which we are going to consider applicants, so applicants are 
free to apply to FERC, they are free to apply to the Department 
of Energy, but we have given priority to those applicants who 
have already started that FERC pre-filing process, which is the 
process in which you are starting to spend real money. And we 
are also considering--so we are considering applicants on a 
first come, first serve basis, with priority given to those who 
have started the FERC pre-filing process.
    Mr. Barton. So the law doesn't stipulate it, and the 
practice is that an entity can apply either place, but the DOE 
gives preference to those applicants that have already started 
the facility permitting process at FERC, is that correct?
    Mr. Smith. We are considering first those applicants who 
have started the FERC pre-filing process.
    Mr. Barton. OK, and is this go either place first policy 
going to be maintained, or is there a possibility that you 
might clarify it and set some specific criteria as to what you 
have to do first?
    Mr. Smith. Well, the Department looked at a lot of factors 
when we were considering the order in which we were going to 
rule on applications. There is a lot of ways that we could have 
done that. We could have looked at business models, we could 
have done other evaluations, but the standard that we had was 
we wanted something that was open, that was transparent, that 
was simple, that was fair, and that helped us push projects 
that might be more valuable to the front of the queue. So we 
wanted a very subjective standard that didn't have some--sorry, 
a very objective standard that didn't have some subjectivity 
where we had to evaluate business models. So that is the order 
that we are moving forward. There is a PDF on the fossil energy 
Web site that lists those applications in order, and the 
process that we are using going forward.
    Mr. Barton. And Mr. Wright, does FERC have a time table for 
its review of its process that you try to get the permit to 
build and construct done in so many months, so many years? Do 
you have a guideline for that?
    Mr. Wright. Well we do, and we are in relatively new 
territory with export applications for construction. The import 
applications of the regasification facilities were much 
simpler, and given that we get all the information we would 
need, including the pre-filing period, we would authorize LNG 
import facilities somewhere between 18 to 24 months. With 
export facilities, the engineering is much more critical, it is 
much more safety conscious, environmental conscious because of 
the use of refrigerants and natural gas liquids. What we are 
seeing is we are very dependent upon the applicant being able 
to finish its engineering studies to supply us with the 
information for our evaluation.
    Mr. Barton. My time is expired, but could you give us--you 
try to get your review done by X months, X--is there an X that 
you use, or is that not possible?
    Mr. Wright. We would love to get our review--formal 
application review done in 18 to 24 months.
    Mr. Barton. Eighteen to 24 months.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Gentleman's time is expired. At this time, I 
recognize the gentleman from California, Mr. Waxman, for 5 
minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Ms. Moyer, the Corps has been asked by Governor Inslee of 
Washington State and Governor Kitzhaber of Oregon and others to 
prepare an environmental impact statement that looks at the 
cumulative impacts of the proposed West Coast coal export 
terminals. They have asked that this analysis include an impact 
exporting U.S. coal to China on climate change. In your 
testimony, you appear to reject this request. You state 
``shipping coal outside of U.S. territory and the ultimate 
burning of coal overseas are outside the Corps' control and 
responsibility.'' Ms. Moyer, is this accurate? Has the Corps of 
Engineers decided not to examine the climate impacts of these 
coal export terminals as part of its environmental impact 
statements?
    Ms. Moyer. What we have determined is that the effects of 
shipping of the coal outside of U.S. waters and the burning of 
the coal wherever its ultimate destination would be is outside 
of our scope of analysis. However, the climate change effects 
or the emissions associated with the activities within our 
scope of analysis, such as the construction activities 
associated with building the facilities, the emissions that may 
be associated with the increase in vessel traffic, those types 
of effects that may have an impact on climate change will be 
associated with our analysis for each of the facilities.
    Mr. Waxman. Ms. Moyer, I think the Corps is making a big 
mistake. As I understand it, some of the most important 
responsibilities of the Corps of Engineers are to protect 
navigable waters, to protect cities like New Orleans from 
flooding, to protect beaches and coastlines, and to ensure that 
major waterways remain open to commerce. Is that correct?
    Ms. Moyer. Yes.
    Mr. Waxman. All of these values which the Corps is charged 
with protecting are threatened by climate change. Sea level 
rise can dislocate millions of families and cause hundreds of 
billions of dollars in damages. Extreme weather like Superstorm 
Sandy can destroy coastlines. Droughts can make even the Mighty 
Mississippi impassable. And according to the world's best 
climate scientists, all of these impacts are caused or 
exacerbated by climate change. Do you agree with this?
    Ms. Moyer. Yes, I do.
    Mr. Waxman. There are many causes of climate change, but 
experts tell us that the single biggest source of the emissions 
causing climate change is China, specifically burning coal in 
China. The governors of Oregon and Washington and many others 
have said that exporting coal to China could continue China's 
dependence of coal and worsen climate change. They have asked 
you to examine this issue, yet you are telling us you won't do 
this. My question to you is, how can you conclude that 
exporting coal to China does not contribute to climate change 
if you even refuse to look at this issue?
    Ms. Moyer. I would say that the Corps' responsibilities and 
authorities with respect to our Civil Works Program are 
dramatically different from the regulatory framework that 
governs our work within the framework that we are looking at 
these proposals, and primarily the proposals that we look at 
within our regulatory program are for nonfederal activities. 
And within that context, these issues are not part of the 
Corps' scope of analysis. The burning of the coal in Asia, 
although very important aspects, they are not part of our 
framework. They are not within our scope of analysis, and they 
are too far attenuated to be considered indirect effects of the 
actions that we are----
    Mr. Waxman. Well, I think you should reconsider your 
position. There is no bigger threat to navigable waters than 
climate change. Scientists tell us that those impacts will 
include sea level rise, more intense storms, increased 
flooding. Those impacts will all adversely affect navigable 
waters. It is the responsibility of the Corps of Engineers to 
protect the Nation's navigable waters. The Corps cannot meet 
its responsibility by ignoring these climate impacts.
    Before billions of dollars are spent building new coal 
export facilities, we need to understand the impacts of those 
exports, including the climate impacts of burning all of that 
coal. I just think that makes common sense, so I would urge you 
to reconsider the position in light of the impact that I think 
is so important to the core goal of the Corps of Engineers.
    Thank you, Mr. Chairman. I will yield back my time.
    Mr. Whitfield. Gentleman's time--gentleman yields back. At 
this time, I recognize the gentleman from Louisiana, Mr. 
Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman, and I thank the panel 
for their testimony.
    When I gave my opening, I talked a little bit about the 
export facility at Cheniere, their investment alone represents 
about $10 billion, again, private money being used to build 
this export facility so that we can create more jobs, and not 
only become energy independent at home, but also reduce our 
trade balance by exporting to other countries as well. In 
addition to Cheniere, there are I think 18 pending applications 
to build additional export facilities that are moving slowly 
through the process.
    I want to ask you, Mr. Smith, because in your testimony you 
talked about the economic impact on LNG exports. If you can 
expand on that, you know, in general, what are your thoughts on 
what LNG exports and expanding this would mean to our Nation's 
economy first, if I could ask you that?
    Mr. Smith. Well thank you, Congressman, for the question.
    So when we look at our job in terms of evaluating public 
interest, again, the standard that is set in the statute is 
that we--there is a rebuttable presumption that exports are in 
the public interest, and it requires us to do a public interest 
determination for all of the applications that we are 
considering. So as part of that, we consider a very wide range 
of factors when we are evaluating exports. We look at economic 
growth, we look at jobs, we look at balance of trade, we look 
at prices, we look at impact on American businesses and 
families, we look at impact on manufacturing sector, on users 
of natural gas, we look at environmental impacts. So there is a 
very wide range of standards that we use.
    Part of that study or part of that evaluation we went out 
and requested a detailed economic study that was done in two 
parts, the first by our own IEA within the Department of 
Energy, and the second by a third party consultant. The overall 
result of that study which was done for the Department and 
entered into the public docket for public review was that at 
various levels, we found that LNG exports would be beneficial 
for the U.S. economy. The study----
    Mr. Scalise. Did you quantify jobs, economic impact?
    Mr. Smith. Yes, the study looked at jobs, it looked at 
economic----
    Mr. Scalise. How many jobs did it conclude?
    Mr. Smith. I don't have a number of jobs, and certainly 
there was--if you look at different sectors, LNG exports would 
have a different impact of certain sectors than other sectors. 
But overall net, we saw that there would be a positive economic 
impact for the U.S. economy, and a fairly flat impact on jobs 
overall.
    Mr. Scalise. So when you work in the Department of Energy 
and you have a study you commission that shows that LNG exports 
would have no real positive impact on our economy, and then you 
see that there are other agencies within the Federal Government 
that in various ways are trying to come and impede the 
production of natural gas in America, which of course, if you 
don't produce it in America then you can't export it. What do 
you all do, if anything, to work with these other agencies that 
are trying to get in the way of what States are doing very 
successfully to regulate hydraulic fracturing to give them--to 
make it clear to them that, if you are spending your time and 
resources that these agencies complain with sequestration and 
spending limitations, they complain that they don't have enough 
money, yet they are spending some of those vital resources to 
try to do things that would be counter to our own Nation's 
economy that would hurt these jobs that you are talking about 
that you tell. Do you all share this with these other agencies 
as they are going off on these kind of separate tangents?
    Mr. Smith. We work very closely with all the agencies here 
within the Federal Government, because we have one mission, one 
shared mission which is to ensure that we prudently develop 
what is a very important resource, our natural resources here 
in the United States, particularly natural gas, and also 
ensuring that we do so with a minimal impact on the 
environment.
    The most important thing that Department of Energy is doing 
right now in terms of prudent development is to take concerns 
seriously, bring good objective science to quantify concerns 
that people who live close to where these wells are being 
drilled have, to help demonstrate that we take the concerns 
seriously and that the regulations that are in place are 
effectively mitigating those risks which we have scientifically 
quantified.
    Mr. Scalise. And so you know, our States do that already so 
that you don't have a need to duplicate things that are already 
being done successfully. Our States actually do--each State 
regulates hydraulic fracturing and horizontal drilling and they 
do it very well, and so as you have these concerns--as each 
State has their concerns, I think somebody in Shreveport, 
Louisiana, where they have got the Haynesville shale plate, 
they feel much more comfortable that if there is any kind of 
concern, they can pick up the phone and call their State 
representative or call their State Department of Natural 
Resources and get those problems addressed, rather than calling 
some kind of--some bureaucrat that they can't identify, maybe 
can't even get in touch with at Washington, DC. So I would 
appreciate if you would share this information so other 
agencies know that some of the things they are doing run 
counter to the very things you showed in your report about 
jobs.
    I appreciate that. Yield back the balance of my time.
    Mr. Whitfield. Gentleman yields back. At this time, I 
recognize the gentleman from California, Mr. McNerney, for 5 
minutes.
    Mr. McNerney. Thank you, Mr. Chairman.
    Ms. Moyer, I believe this is the first public 
acknowledgment that the Corps is not going to do regional EIRs. 
Is that correct, that this is the first time that that has been 
publically acknowledged by the Corps?
    Ms. Moyer. That we are not doing a regional or an area-
wide?
    Mr. McNerney. Right.
    Ms. Moyer. Yes. Well, I thank you for making that 
statement; however, it seems to me that the combined effect on 
traffic and noise pollution, road coal dust, and all these 
other things would have a regional impact. How did the Corps 
come to that decision that a regional or area-wide impact was 
not appropriate?
    Ms. Moyer. By doing a very careful review of our existing 
regulations and pertinent case law, it is very clear that these 
facilities are widely separated. They are not in the same 
watershed. They have very different proposed impacts when you 
look at each individual facility. And they are not connected 
actions. Each facility is not dependent on another facility to 
go forward, and when you look at that in the context of the 
existing framework of regulations, those are the factors that 
lead you to do an area-wide, and none of those factors----
    Mr. McNerney. So you think that doing the specific EIRs for 
each individual facility will be sufficient to capture those 
issues and protect the local population?
    Ms. Moyer. I do. I do, and each district is in the process 
of doing a specific NEPA evaluation. The two in Seattle 
District are undergoing environmental impact statements. The 
project in the Portland District, the Coyote Island terminal is 
currently doing--undergoing the process of an environmental 
assessment to determine if they need to do an EIS or not.
    Mr. McNerney. Do the governors of the two states involved 
agree that that is the appropriate approach?
    Ms. Moyer. They are involved in the process in the normal 
way that we engage in those coordination attempts. Now, the 
State is a cooperating agency and is actually a co-lead agency 
on the two projects in Washington State, so that is a federal, 
state, and actually the counties where the projects are located 
in Washington State are also participating as co-lead agencies 
on the Washington State projects.
    Mr. McNerney. Thank you. Mr. Wright, would you reiterate 
how the FERC and the DOE jurisdictions on LNG break down?
    Mr. Wright. Basically, the Department of Energy is in 
charge of approving the importer, the export of the commodity, 
the natural gas, the movement itself. FERC is in charge of 
approving the facilities necessary to effect that movement of 
the import or the export of the natural gas.
    Mr. McNerney. And the operations of the facilities?
    Mr. Wright. Yes.
    Mr. McNerney. Is there much collaboration between the two 
agencies?
    Mr. Wright. Well we do talk, yes. I mean, we do have 
different procedures and we don't necessarily participate in 
each other's procedures, but we are aware of what is going on 
at each other's agencies.
    Mr. McNerney. Do you all feel this is a controversial 
issue, LNG exports?
    Mr. Wright. From my perspective as an environmental and 
safety regulator, it is controversial issue in that people--
some people do not like infrastructure. They do not like the 
impact on the environment. Others go further and worry about 
the effects on the economy, but we are not charged with looking 
at the effects associated--economic impact.
    Mr. McNerney. So how much gas do you expect will escape 
from these LNG terminals?
    Mr. Wright. I don't have a number for that, sir.
    Mr. McNerney. That would be--I mean, I heard zero but I 
don't hardly believe that. I would like to see that. I mean, 
natural gas is a strong greenhouse gas, much stronger than 
carbon dioxide, although it doesn't persist in the environment 
as long, but in the short term do we need to worry about that? 
Are you in charge of regulations to determine the technical 
quality of the materials that go into building an LNG terminal?
    Mr. Wright. We do an engineering review of what is proposed 
and what will be constructed there and look for the most 
efficient and safest way to build the LNG terminal.
    Mr. McNerney. So what can you do, then, to prevent rogue 
gas from escaping from LNG terminals, or what will you do?
    Mr. Wright. Well not being an engineer myself, my engineers 
would meet with the project proponent. They would talk it 
over--and they do this in technical conferences--talk over what 
valving, what piping they are going to use, and whether it is 
the current state-of-the-art, if you will, and that would be 
the one way to protect against fugitive emissions is using the 
most relevant, the most current facilities and construction 
materials possible.
    Mr. McNerney. So, coming from an engineering background, 
thank you for indulging me, Mr. Chairman, a little bit. Field 
testing, test data, some way of assuring rather than just 
saying it is the newest equipment would be in order.
    I will yield back.
    Mr. Whitfield. Gentleman's time is expired. At this time, I 
recognize the gentleman from Illinois, Mr. Shimkus, 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. For my friend from 
California, we do have LNG facilities today and they have been 
operating for decades, some of them, and I just find it hard to 
believe that we--they would create a facility that would leak 
gas, a commodity they want to sell, on the market.
    We had talked before about--I usually bring a poster. I 
haven't done it this Congress--of coal miners who lost their 
jobs in the '92 Clean Air Act. And so sometimes I get questions 
or where is it? Well, this is a great debate about bringing a 
new poster about coal mining jobs that are available in 
southern Illinois because of the exporting of coal. So I have 
an Illinois basis supply site story--that is not the first one 
I wanted to use. I want to use the Ernst and Young analysis, 
and it says that 15 percent, which is 5.5 million short tons, 
were exported abroad--this is just in Illinois--and accounted 
for 860, 15 percent of the total 5,868 coal mining jobs in just 
my state alone. The total estimate direct, indirect, and 
reduced contribution related to exports from 2011 is 4,190 
jobs, $281 million of labor income, and $524 million of gross 
value added.
    So we are poised as a country to really be in a great 
position to turn--over my past decade of being here, it is 
always we are sending our money to the Middle East because they 
have the energy. Now we can say people are going to be buying 
our energy. They are going to be sending their money to us, 
which will help across the board in our balance of payment, our 
trade, on our revenues to our country providing the services, 
especially in a sequestration. This is just a tremendous win/
win if we get it right. If we get through the regulatory 
hurdles and we get the export facilities, whether it is for LNG 
terminals or whether it is for coal, and we start exporting 
this stuff to folks who want to purchase it.
    The other--so here is another one. This is one I held up 
before. Illinois Basis supply site story. Illinois Basin 
producers are positioning themselves to nearly double 
production over the next 10 years. Now for the climate change 
folks, that is scary. I mean, for people in southern Illinois 
who want jobs, that is very, very exciting. But the caution is 
that these expansions are market dependent.
    So you know, the fight about LNG terminals or whether the 
fight is on coal terminals, it is a climate debate to try to 
destroy the market so that we don't have the market to expand 
our selling of the fossil fuel bounty that we have in our great 
land. That is what this debate is about, and everyone knows it, 
and so that is why we need to move forward for jobs and lower 
costs of energy and the like.
    Illinois just moved yesterday and the governor signed the 
fracking bill. We think it will be exploited greatly in 
southern Illinois and crude oil will be flowing again like it 
did during World War II, and we will need, again, market. So 
Mr. Chairman, I would suggest that we have one more, and this 
is on exports of LNG and coal. I think that there may be a 
time, based upon the demand of liquid transportation fuels 
right now, and our supply and our renewables that we might be 
able to export refined product across the world to those in 
need. The world market is going to go up about 1 percent at a 
minimum, so we may want to follow this up with another 
opportunity for jobs.
    So in my last minute, let me turn to Ms. Moyer, because we 
are talking about kind of the hurdles that we are facing. What 
is the average time frame for the Corps to complete an 
environmental impact statement for the purpose of a marine 
terminal?
    Ms. Moyer. I don't have the timeframe.
    Mr. Shimkus. We don't have an average timeframe?
    Ms. Moyer. I don't. I can get that information. We can get 
you some information on that.
    Mr. Shimkus. When can the draft environmental impact 
statement for the Gateway Pacific terminal project be expected?
    Ms. Moyer. They just finished scoping and at the end of 
this month, they are going to release the scoping report so 
that that will outline what issues and effects they are going 
to be considering in that draft document. So from there, then 
they will draft the EIS. So I don't have the final timeline for 
that, but they are moving forward with that process.
    Mr. Shimkus. And when do you expect the draft EIS for the 
Millennium Bulk terminal project?
    Ms. Moyer. They are initiating scoping this summer, and as 
I mentioned previously, they are doing a joint process with the 
State and the county, so it is the Corps, the State, and the 
county, and I think that although it makes things go a little 
bit more slowly than if the Corps was doing it by itself, 
moving together--forward together will ultimately get us all to 
the same----
    Mr. Shimkus. You are hoping that a partnership will help 
you get to the finish line faster than a supposed fight that 
may occur if you are not?
    Ms. Moyer. Right, right.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Mr. Whitfield. Gentleman's time is expired. At this time, I 
recognize the gentleman from Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. Just an aside, I am 
glad to hear my colleague from Illinois is going to be 
producing oil, because we are good friends but we do have 
differences coming from Texas and Illinois on ethanol. But I am 
hoping you are going to produce a lot more oil than you do 
ethanol.
    But again, thank you, Mr. Chairman, for holding the 
hearing. I thank our witnesses. Mr. Smith, I want to thank you 
because I enjoyed meeting with you last week, and I hope you 
don't mind, I will repeat some of my questions for the record, 
and based on your remarks recently at the Senate energy 
hearing, it has been suggested the remaining applications maybe 
considered at a one project every month pace--every 2 months 
pace. Is that true?
    Mr. Smith. What we are able to say is two things. First, we 
are looking at these on a case-by-case basis so it is going to 
vary between projects, but if you look at our performance for 
the Freeport application between closing of the public comment 
and the release of the application was just over 2 months.
    Mr. Green. OK. You mentioned also that further information 
becomes available at the end of 2013, including the EIA's 
annual energy outlook report. The Department will assess the 
impact of any market developments on subsequent public interest 
determinations. Are you suggesting that you plan to take 
another pause at the end of the year? If so, aren't you 
concerned that it will give certain companies a competitive 
advantage?
    Mr. Smith. Thanks for the question, Congressman. What we 
are going to do is ensure that we are all using the most 
appropriate information that is available, so as market 
conditions change or as new information becomes available, we 
are going to be constantly reassessing these applications on a 
case-by-case basis.
    Mr. Green. OK. This question is for both you and Mr. 
Wright. When it comes to your statutory responsibility in 
regards to LNG exports and imports, are there any issues or 
limitations within the Natural Gas Act that you would like to 
see changed in order to do your job more expeditiously and 
effectively? Either FERC--and I know it is a two--well, three-
step process, that is why the Corps is here, but maybe FERC and 
DOE.
    Mr. Smith. Thank you for the question. I would state that 
our job as a member of the Executive Branch is to ensure that 
we are executing the law as written, both the letter and the 
spirit of the law, so if Congress should change the law we will 
certainly be executing the spirit of that law as changed.
    Mr. Green. But you don't have any suggestions on 
improvements in the law?
    Mr. Smith. I would not take it upon myself to make 
suggestions to this body about what they should change.
    Mr. Green. Mr. Smith--or Mr. Wright?
    Mr. Wright. As per the Energy Policy Act of 2005, FERC was 
named--explicitly named the lead agency for processing LNG 
cases as well as pipelines, and within that context we set the 
schedule and we set the schedule not only for ourselves, but 
for other agencies. So I would agree with Mr. Smith. We have a 
good deal of authority that we need. If this body believes we 
need more, we will welcome it.
    Mr. Green. OK. Mr. Wright, in conducting the environmental 
reviews, do you find that other agencies are responding in a 
timely manner?
    Mr. Wright. In most cases, yes, agencies do. Some agencies 
do have statutory considerations that prevent them from 
adhering to our usual--our schedule that we put out. That was 
acknowledged in the Energy Policy Act of 2005, but in general, 
the agencies do a very good job.
    Mr. Green. Mr. Smith, you mentioned that Section 3A of the 
Natural Gas Act creates a rebuttable presumption that a 
proposed export of natural gas is in the public interest. Why 
do you choose then to conduct a full public interest review?
    Mr. Smith. Well I mean, our interpretation of that law 
simply states that it is incumbent on those who would expose 
exports to demonstrate that approving a particular export 
application would not be consistent with the public interest, 
which means that we have to take those things into 
consideration. The law states that we have to consider the 
public interest, and that is what we do through our processes.
    Mr. Green. Mr. Booth and Mr. Cooper on the second panel 
argues that the case-by-case order of applicants that you plan 
to review violates the Administrative Procedures Act, because 
that approach was never offered up for a notice and comment 
period, and how do you respond to that.
    Mr. Smith. Well, you know, we have an obligation to make 
sure that we do consider each of these applications. We have to 
have some sort of sequence for doing that, so we don't have--we 
have not put in place anything that would state that there is a 
rule or something unique that applicants have to do before they 
will be considered, but in doing our work with the finite 
resources that we have, we have to have some sort of process 
for getting through the queue of applicants, and we wanted that 
to be open and transparent and fair.
    Mr. Green. Thank you, Mr. Chairman. I know I am almost out 
of time, but coming from Texas, it seems like every port from 
literally the Sabine River to the Rio Grande is going to get in 
line, so hopefully we can keep that production going in south 
Texas, make sure we can do that. Use it and export what we 
can't use. Thank you.
    Mr. Whitfield. Chair at this time recognizes the gentleman 
from Nebraska, Mr. Terry, for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman, and it is only 
appropriate that I ask questions after Mr. Green from Texas, 
because it was 2005 that he and I teamed up to expedite the 
process to import liquid natural gas, as we felt there was a 
shortage of natural gas to meet our then current needs. That no 
longer exists today, and now we are talking about, perhaps, 
those same facilities that were being permitted to import 
liquid natural gas can now turn around and be exporters 
ourselves of natural gas.
    So I was interested--and I think it was Mr. Wright that 
there was a conversation regarding taking into account any 
price impacts on consumers. Was that you that answered that 
question?
    Mr. Wright. No, it was not.
    Mr. Terry. That was you, Mr. Smith? Sorry, Mr. Smith.
    Mr. Smith. That was me.
    Mr. Terry. And so in regard, what was your finding on any 
impact on prices?
    Mr. Smith. So we commissioned a study that was delivered to 
the Department of Energy, and that study found that in some 
cases that there could be some price impacts in terms of 
creating additional demand.
    Mr. Terry. Can you be more specific?
    Mr. Smith. Well there are lots of cases, so we looked at a 
number of cases, so we found in the base case it is actually 
very difficult for LNG to compete in global markets, and so 
there would be zero or no impact on prices. We ran other cases 
that looked at limited supply of LNG globally. We looked at 
other cases that looked at increased demand for LNG globally, 
and we looked at some cases to combine some of those. But in 
different scenarios, we know that LNG is, at least 
historically, has been a fairly volatile commodity in terms of 
price, but we found that overall, the overall impact on the 
economy, the results of the study said would be positive.
    Mr. Terry. Is our current supply of natural gas that is 
readily available recoverable? Is it meeting our current needs 
of natural gas in the United States?
    Mr. Smith. I would say yes.
    Mr. Terry. In fact, there is an argument that we have an 
oversupply of liquid--I am sorry, of natural gas currently. So 
there is actually opportunities to increase demand, is that 
correct?
    Mr. Smith. I think the--right now certainly you see some 
surplus of natural gas in lots of basins, in fact, you see some 
areas in which companies are flaring natural gas, so certainly 
you could unambiguously state that in many parts of the 
country, you see some surpluses of natural gas.
    Mr. Terry. Thank you.
    Mr. Wright, a question for you. Based off of the reason why 
we needed to streamline permitting of export--I am sorry, 
import facilities in the United States so we could take more 
natural gas, an amendment that Gene Green and I had. So 
currently now for exporting, what role do State and county and 
local agencies play in connecting with siting of any LNG 
facilities under Section 7 of the Nat Gas Act?
    Mr. Wright. Well, actually under Section 3 of the Natural 
Gas Act----
    Mr. Terry. Or Section 3.
    Mr. Wright. Yes. States are invited to participate in the 
process and they are--if they wish to assign an agency to 
comment upon it, they are to do so within 30 days of the filing 
of the application. So their involvement begins early on in the 
process.
    Mr. Terry. And counties and localities have the same 
ability to provide you information?
    Mr. Wright. Oh, certainly. Anyone has the ability to 
provide information to us.
    Mr. Terry. But they don't have the ability to stop a 
project now, other than if you take into account their 
comments?
    Mr. Wright. Well that is part of what the environmental 
process is, the NEPA process.
    Mr. Terry. Now what is the position of your office on 
whether the State has authority under the Coastal Zone 
Management Act to allow county officials to effectively veto a 
Section 7 natural gas pipeline application by withholding a 
local permit?
    Mr. Wright. Well, that has actually happened. In thinking 
back, it was a proposal to bring a pipeline across Long Island 
Sound some years ago and that was effectively vetoed by the 
delegated--federally delegated authority to the State.
    Mr. Terry. So that could happen again?
    Mr. Wright. Yes, it could.
    Mr. Terry. All right. And last--and this is to both Mr. 
Smith and Mr. Wright and Ms. Moyer. Have you heard of--have any 
lawsuits been filed against your agencies by environmental 
groups permitting--regarding permitting LNG export facilities? 
Mr. Smith?
    Mr. Smith. We would certainly expect all of the actions of 
the Department to be scrutinized and contested, and in fact, we 
have had some legal issues that we are currently litigating, so 
yes.
    Mr. Terry. All right.
    Mr. Wright. We have had rehearings filed in the Sabine 
Pass, the one action we did take. I do not believe we were 
taken to court over that, though.
    Mr. Terry. All right.
    Ms. Moyer. I am not aware of any, but I can----
    Mr. Terry. Thank you.
    Mr. Whitfield. Gentleman's time is expired. At this time, I 
recognize the gentlelady from Florida, Ms. Castor, for 5 
minutes.
    Ms. Castor. Thank you, Mr. Chairman.
    This hearing presents us with an issue that America must 
confront. With everything science is telling us about climate 
change and carbon pollution, should our country be promoting 
and increasing exports of coal? I tend to agree with the 
ranking member, Mr. Waxman, when he says there is a difference 
between coal exports and natural gas. For coal, coal is the 
single largest contributor to climate change and global 
warming, and the resulting impacts, looking out at the years 
ahead, are quite dire for our country and all across the globe. 
It is going to impact our national security as our military 
leaders have said. It is a great risk to coastal areas like my 
home State of Florida, health issues. So can America, on the 
one hand, provide any global leadership to fight climate 
change, and then on the other hand, promote and increase 
exports of coal?
    Ms. Moyer, I know in your previous testimony here today you 
said that examination of the broader climate change impacts 
really are not within the framework of the Army Corps, but you 
did acknowledge that climate change is very serious. So 
shouldn't someone, some agency consider the larger impacts of 
expanding coal exports on climate change?
    Ms. Moyer. Certainly I think that climate change is a huge 
issue that is facing us all. That is my personal opinion, and 
what was in my testimony and what I will reflect on again is 
that NEPA and the Corps zone regulations direct that the Corps 
consider whether the Corps' permit action is part of a larger 
action, or whether it is a limited--whether we have a limited 
handle on what is being proposed. And if it is part of a larger 
project, we have to decide what aspects outside of our 
jurisdiction do we have control and responsibility for and 
therefore, expand our scope of analysis.
    And in the context of these proposed terminals, we have 
looked at the context and we have determined that we don't 
control coal mining. We don't control shipping by rail or 
shipping on the high seas----
    Ms. Castor. Well a number of elected officials and 
community leaders, environmental groups, public health 
organizations have raised concerns about the potential impacts 
of building and operating new coal export terminals in 
Washington State and Oregon. The impact of the coal export 
terminals on water quality in the region's fisheries are one 
important concern. In a letter to the Army Corps, the Puget 
Sound Partnership, a State agency established to lead efforts 
to protect and restore Puget Sound, outlined several concerns 
with the proposed Gateway Pacific terminal near Cherry Point, 
Washington. The Partnership raised ocean acidification as a 
major concern. Ocean acidification is caused by oceans rapidly 
absorbing carbon dioxide from the atmosphere, and the State of 
Washington has launched a major initiative to address the 
impact, since it harms the State's shellfish populations and 
commercial fisheries. How will the Army Corps examine the 
impact of the proposed coal export terminals on ocean 
acidification in the Pacific Northwest?
    Ms. Moyer. It is my understanding that ocean acidification 
is another resulting--or another result from climate change, so 
it leads back to----
    Ms. Castor. But is it regional. You said some impacts are 
too attenuated for the Corps, but that is a regional impact or 
a very localized impact.
    Ms. Moyer. Well ocean acidification, it is the result--what 
is in those letters is tied back to the local impacts from 
overall ocean acidification. And I am not at all discounting 
that there are those concerns from folks in that area.
    Ms. Castor. All right, let me ask another specific 
question. The Washington State Department of Fish and Wildlife 
suggested the Corps evaluate potential impact of coal dust 
generated by the Ute Gateway terminal, which would affect water 
quality in nearby streams and wetlands. Others have raised 
broader concerns about the water quality impacts along the rail 
and barge routes. How will the Army Corps study the impacts of 
coal dust from the proposed coal export terminals?
    Ms. Moyer. As I mentioned in my testimony, the Corps is 
going to look at those effects that are within its scope of 
analysis so the ones that are occurring within the facility 
itself and those areas in which we have----
    Ms. Castor. What about the health of the Columbia River and 
other important salmon habitats?
    Ms. Moyer. Those aspects of it that are within our control 
and responsibility certainly will be considered. Both all of 
the effects, direct, indirect, and cumulative will be 
considered, but those areas that are outside of our scope of 
analysis will not be considered.
    Ms. Castor. Thank you very much.
    Mr. Whitfield. Gentlelady yields back. At this time, I 
recognize the gentleman from Louisiana, Dr. Cassidy, for 5 
minutes.
    Mr. Cassidy. Thank you.
    Mr. Wright, the Sabine Pass liquefication project in 
Cameron Parish took 441 days, and it may--I don't know if this 
is going to be Mr. Wright or Mr. Smith. I think, Mr. Smith, you 
mentioned that it was only 2 months between the closing of the 
application process to approval, so 60 days, so clearly there 
are 381 days in which the process took the time to get done. So 
what bottlenecks are coming up that are prolonging this 
process?
    Mr. Smith. So thank you for the question. So we certainly 
understand the sense of urgency around these regulatory 
processes, and we are endeavoring to move these forward as 
expeditiously as possible in all cases.
    In the timeline that you just mentioned, after the Sabine 
Pass order was finished, we stated in the Sabine Pass order 
that we did have to consider the cumulative impact of that 
order and any subsequent orders when we are looking at 
additional authorizations. This is a very important and complex 
public interest determination that has to look at domestic and 
global impacts, domestic markets, global markets, impacts on 
consumers, American businesses and families, jobs, et cetera. 
It is not a trivial point, and we did----
    Mr. Cassidy. So was there a bottleneck, per se, or was it 
just that complexity of the issue was such that it just takes 
that long?
    Mr. Smith. I think it was a tremendously complex and 
important issue, and----
    Mr. Cassidy. Now since a lot of those issues are generic, 
as presumably subsequent approvals will not take as long?
    Mr. Smith. I would agree. One of the reasons that we 
pointed out that the period between the end of the comment 
period and the actual issuing of the order was something, you 
know, just north of 2 months was to state that the public--the 
cumulative impact study, which was a complex study, is not 
something that we see that we are going to have to replicate 
between each one of these orders.
    Mr. Cassidy. Now just because I know this is how the game 
works, there may be an agency that sits on it and doesn't 
process it. Is there any way to one, identify agencies which 
perhaps were not as expeditious as they could be, and two, if 
there was such an agency--it doesn't have to be named--is there 
any way to put the Bunsen burner underneath them to get them to 
actually get it moving?
    Mr. Smith. Our job is very specific. It is to--and very 
explicit. It is to work together to move as expeditiously as 
possible to get a good public interest determination----
    Mr. Cassidy. That is not really answering my question.
    Mr. Smith. Well, Congressman, I think it does address the 
issue. I mean, we are currently----
    Mr. Cassidy. So there is never an agency that seems to be a 
little dilatory in terms of how quickly they respond?
    Mr. Smith. Well in this case, we have got two primary 
agencies that have jurisdiction. We control the authorization 
to export the molecule. FERC controls the authorization to 
build the terminal. We are working together very closely to 
make sure that we are getting this work done.
    Mr. Cassidy. Mr. Wright, would you add anything to what has 
been said?
    Mr. Wright. What I would say, and I said earlier this 
morning, a lot of our problems or difficulties in processing do 
stem from the applicant. We encourage or by statute they are 
supposed to stay in the pre-filing period for at least 6 
months. Some companies are very eager to get out of the pre-
filing, thinking that going to the application mode would 
hasten the processing. It does not. Pre-filing is a very free 
flowing information flow period. You go to a formal 
application, our ex parte rules take over. Things have to be 
done much more in writing and on the record. That said, I 
believe Cheniere would have been processed much sooner. They 
did not complete their air modeling analysis during the pre-
filing, so substantial--they jumped right to the formal 
application, therefore substantial information was required 
after their certificate filing was made.
    Mr. Cassidy. Got you. Is there any limitation or timeframe 
in which individuals or organizations can file claims in court 
to request a rehearing of the Commission orders?
    Mr. Wright. Thirty days after the Commission issues its 
order rehearings are due.
    Mr. Cassidy. So there is a definite kind of define 
timeframe, cannot exceed?
    Mr. Wright. Yes, sir.
    Mr. Cassidy. Great. Mr. Smith, any comments? You look like 
you were looking off in space pensively.
    Mr. Smith. No additional comments.
    Mr. Cassidy. Got you. I yield back. Thank you.
    Mr. Whitfield. Thank you, Dr. Cassidy. At this time, I 
recognize the gentleman from West Virginia, Mr. McKinley, for 5 
minutes.
    Mr. McKinley. Thank you, Mr. Chairman. I have a series of 
things I would like to get a react to on it. The Energy Policy 
Research Foundation has said that neither net world coal 
combustion nor the greenhouse gas emissions will change 
substantially as the result of an expansion of our coal 
exports. Interesting statement. That was one. The other comes 
from McClellan, who used to be chairman of the National 
Research Council, Committee on Toxicology. He was past chairman 
of the EPA's Clean Air Scientific Advisory Committee. He said 
that coal continues to play an important role of meeting the 
energy needs around the world, with steady improvements made in 
its transport and use. Coal has been transported through the 
Northwest by rail for decades, and there has never been any 
evidence of harm associated with this rail transport. Could any 
of you respond to those two comments?
    Mr. Smith. Well, I can give a response. We don't have 
oversight over coal exports, but I would certainly say two 
things. First, we do have significant concerns about climate 
change and we think there are specific things that we need to 
do to be reducing greenhouse gas emissions into the 
environment. The second is that we are----
    Mr. McKinley. If I could, on climate change. Could you tell 
me what is your end game? If we are 400 parts per million of 
CO2, where do you want to stop it, at 400 or do you want it 
back at 250, or where are we trying to go?
    Mr. Smith. Well, I cannot give you a specific answer to 
that question because it is not simply something that is not 
under my jurisdiction, but I can say that in terms of the 
research and development we are doing for coal, we are making 
an historic investment to ensure that coal is part of the clean 
energy economy of the future, that we are making steps to 
ensure that we are able to reduce greenhouse gas emissions from 
coal-fired power plants, that we are creating the technologies 
that we can sequester it in a way that is safe and 
environmentally sustainable, and that we are able to take 
advantage of this very important domestic energy resource.
    So there are technological research and development 
solutions to the challenges that we see of making sure that all 
of our energy resources remain relevant and contribute to our--
--
    Mr. McKinley. All right, so we didn't really answer either 
of the two questions, but go back--if we don't export coal, do 
we really think the other nations are going to not find coal 
someplace else?
    Mr. Smith. Again, Congressman----
    Mr. McKinley. My question--really, are we trying to take 
ourselves out of the market and all the jobs that are related 
to it, from transportation to mining it and all the support 
facilities? I am trying to understand, because I think the 
Congressman from Illinois was right. This isn't a fight about 
exports; this is a fight about coal. The war on coal continues 
here in Washington. So I am trying to really grasp where we are 
going, because they are going to find coal someplace else, or 
they are going to find natural gas, LNG, from someone else, are 
they not? Are they not? Are they not going to--if we don't sell 
it to them, will they not find it someplace else?
    Mr. Smith. Well, one can observe that there is lots and 
lots of coal that is being burned in China and India. There are 
lots of plants going up. There is lots of activity there. There 
are things that we are doing that are very proactive in terms 
of----
    Mr. McKinley. So we are just taking ourselves out of the 
market if we were to allow this to either be postponed, 
delayed, or terminated, isn't that right?
    Mr. Smith. I can't speak to exports. Again, Ms. Moyer could 
speak to exports.
    Mr. McKinley. Could you please add into this, because I am 
curious about from all the jobs that are associated with it in 
our industry, and coming from West Virginia, 50 percent of the 
export of coal comes from West Virginia, and so I take it very 
personally when someone says we potentially could ban the 
exporting of coal and/or natural gas.
    Ms. Moyer. And certainly----
    Mr. McKinley. Could you get closer to your mike, please?
    Ms. Moyer. Sure.
    Mr. McKinley. Thank you.
    Ms. Moyer. And certainly knowing that you are from West 
Virginia, you are certainly most likely very familiar with the 
fact that the Corps of Engineers doesn't regulate the--or have 
the responsibility for regulating the development of coal 
resources.
    Mr. McKinley. I understand, but I am trying--but you have 
got the terminal and they are threatened, but yet we have 
testimony from people, we have got mayors from all over the 
Northwest who say they support this.
    Ms. Moyer. And what I explained in my testimony is that the 
Corps of Engineers has very limited authority in these shipping 
facilities where you have a limited scope of analysis. We are 
not looking at a lot of these attenuated effects. We are 
sticking to the footprint of the project itself and the 
associated indirect effects.
    Mr. McKinley. I am sorry, I have run out of my time. I am 
sorry. Maybe we can chat more about the----
    Mr. Whitfield. Gentleman's time is expired.
    Mr. McKinley. Thank you very much.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. I kind of feel like we are tag teaming. 
McKinley just tagged me.
    Let's pick it up where we left off. Virginia has--and most 
of them are in my district, 9,000 plus workers who deal with 
coal, and one of my concerns is as I was listening to some of 
the other questions that you would think that some of the 
folks, you know, want to dictate to the rest of the world 
everything that happens, and I think we learned a long time ago 
that while the United States has huge influence, we can't 
dictate to other countries of the world. And so I do feel your 
pain, Ms. Moyer, in trying to, you know, you are trying to do 
your job within the parameters that you are given, but you 
can't make decisions because it is complex as to what happens 
and whether or not coal production in the United States for 
exports would really change the amount of coal being burned, 
because you would not disagree with me if I were to tell you 
that over the last several years, the Australians, the 
Indonesians, the Indians, the Russians, the Chinese, some of 
the southern African countries have all increased their coal 
production, and I would submit in part because there is some 
hesitancy to use American coal for fear that the American coal 
resources will be shut down. But you wouldn't disagree with me 
if I indicated that there were numerous nations around the 
world that have increased their coal production and their coal 
usage, would you?
    Ms. Moyer. I don't know what they have done. I am not 
familiar with those.
    Mr. Griffith. And that is why you can't make a decision 
when you are trying to decide whether or not a new facility 
should be opened up, you can't look at all of that. You have to 
decide what the impact is on building that facility and do what 
your job is in the parameters that are given to you by the law 
on that facility, not looking at the worldwide impact of what 
might or might not happen as we move forward. Isn't that 
correct?
    Ms. Moyer. Correct.
    Mr. Griffith. And Mr. Smith, I am glad to hear that you all 
are looking at coal and things that we can do. I have been very 
excited about the work at Ohio State where they have come up 
with a process that has worked in the small scale to do a 
chemical looping that has virtually no pollutant, a little 
bit--I think 1 percent of the carbon dioxide currently 
produced, but they get the energy out of the coal without 
having any of the NOX and SOX and mercury, and only 1 percent 
of what is currently produced on carbon dioxide, and I would 
wonder if you could tell me what you know about that project 
and as they move forward on the project in Alabama, how much 
assistance you all are going to give them in moving that 
project on to the fast track. Because if that works, not only 
can we export American coal, but we can export technology that 
makes it so that Mr. Waxman and I can agree that it is good to 
have jobs and we don't have global warming in the process. What 
are you doing?
    Mr. Smith. Thank you, Congressman, for that question.
    So over the course of the last several years, we have made 
an historic $6 billion investment in technologies to reduce the 
cost to capture CO2 out of the coal-fired power plants and to 
demonstrate that we can successfully and sustainably store CO2 
either in saline aquifers or in depleted oil fields for 
enhanced oil recovery. That is a critically important goal to 
ensure that we are using all of our domestic resources as part 
of our all-of-the-above strategy.
    Mr. Griffith. But if I might, because obviously we all have 
limited time, but you know, if this technology that Ohio State 
University has developed and has been working on, if that 
works, that answers all those other questions. I mean, we don't 
have to worry as much about carbon sequestration, because there 
isn't going to be very much carbon output. You end up with 
basically a process that is all housed within, you know, the 
box, and of course, the bigger the box we have to see how it 
works. And so I would strongly encourage that the Department of 
Energy take a very serious look at that and see what we can do 
to fast track that project to see if it works, because I think 
it has the same potential to have us sitting here in 5 years 
going you know, we thought we weren't going to be able to do 
this, and schazaam, it happened that we are now saying about 
natural gas, because just a couple of years ago, they were 
saying we were going to have to import and now we are talking 
about what we can do to expedite exports. And I would note in 
that regard, hoping that you all are looking at the impact of 
jobs if we do approve LNG for export, but some people have said 
well that will make the prices go up. We are still waiting in 
Virginia for the approval to do offshore drilling. We think we 
have a lot of natural gas. We think we might have some oil, but 
we think we have got a lot of natural gas out there. If we are 
able to export, not only do we create jobs in the United 
States, but I don't think there is any impact to--any 
significant impact to the price because that will just spur 
more exploration in the United States for more natural gas. We 
ought to use our resources to create jobs, wouldn't you agree?
    Mr. Smith. We are enthusiastic about chemical looping and 
all the projects you mentioned, and we are working together on 
those goals.
    Mr. Griffith. Anything you can help us to do to get 
approval for offshore drilling in Virginia would be fantastic.
    Thank you. I see my time is up and I yield back.
    Mr. Whitfield. Gentleman yields back. At this time, I 
recognize the gentleman from New York, Mr. Tonko, for 5 
minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    It appears DOE's consideration of public interest is 
somewhat limited in part due to the declarations of statute 
that exports of LNG to countries we have a trade agreement with 
are consistent with the public interest. I want to explore the 
concept a bit more.
    Unlike metal, paper, cloth or agricultural commodities, one 
natural gas is exported and used, that is it. The fossil 
reserves of it cannot be regenerated and it cannot be reclaimed 
through recycling. So if we could, Mr. Smith, how does DOE 
account for this in its determination of public interest?
    Mr. Smith. Well, the statute creates two different and 
separate categories. There is a categories with which the 
United States has a free trade agreement. There is a separate 
category for those countries with which the United States does 
not have a free trade agreement. So by statute, we don't have 
discretion over exports to those countries, so following the 
letter in the spirit of the law, those applications are 
approved without delay or modification or further consideration 
by the Department. So when we talk about public interest 
determinations and all the work that we are doing, studies, 
evaluations, those apply to those countries with which the 
United States does not have a free trade agreement.
    Mr. Tonko. OK, thank you. And the determination of the 
price that will benefit domestic manufacturing without 
providing a distinctive--or a disincentive, excuse me, to 
continue extraction is a difficult task. How does DOE consider 
each application for export in a national context?
    Mr. Smith. So the Department certainly doesn't set prices 
or determine business models, so the way that we have to look 
at that is look at our global dynamic equilibrium models that 
would help us consider what would be the impact on the domestic 
prices to various scenarios for export to other countries. So 
these are studies, they are estimates. They are based on the 
best available data that we have in place, and that is the 
methodology that we use to try to estimate what might be the 
impact of approving applications.
    Mr. Tonko. Is the number of facilities you would approve 
contingent on our oversupply and the number of existing 
facilities?
    Mr. Smith. Well certainly as we look at each facility, we 
are going to have to consider the cumulative impact of 
facilities that we already approved. So part of that is 
understanding, well, what is the supply and demand balance in 
the United States. What do we think about the size of the 
resources that are available, and our ability to ensure that we 
can prudently and safely develop those resources. So those are 
all things that go into the modeling and the consideration 
where we are making these public interest determinations.
    Mr. Tonko. Yes, and how does the public interest test apply 
to the reduction of domestic reserves of any essential fuel and 
feed stock that can not be easily replaced?
    Mr. Smith. I am sorry, I am not sure I understood the 
question. How does the----
    Mr. Tonko. Right, how does the public interest test apply 
to the reduction of domestic reserves of an essential fuel and 
feed stock that cannot be easily replaced?
    Mr. Smith. So we do believe that we have got a vast supply 
of natural gas in the United States, 100 years of supply, 800 
trillion cubic feet of natural gas within the Marcellus Shale 
alone, so we think this is a large resource that will be 
attractive if we can produce it in a way that is safe and 
environmentally sustainable. So we have to consider the size of 
the resource, and that is part of the public interest 
determination that we make for each of these applications.
    Mr. Tonko. And the extraction of fossil fuels obviously has 
benefits, both private and public, but it also has costs, 
especially in the communities where this activity is occurring. 
If exporting LNG stimulates additional extraction and the gas 
is not being used as a fuel or feed stock here, how are the 
costs to communities where extraction takes place accounted for 
in your determination of public interest?
    Mr. Smith. Well thanks for that question, and certainly we 
have a keen understanding and awareness that the most important 
factor in prudent development and effective use of the resource 
is to ensure that the people who live and work close to where 
the wells are being drilled are comfortable with the processes 
that we have scientifically quantified the risks, and that we 
are demonstrating that the regulations are mitigating those 
risks. So that is the core part of the research and development 
that we do within my office in terms of environmental 
sustainability and safety of domestic coal and gas production. 
So we consider that in our public interest determination, but 
we are also doing that in real time in terms of real research 
and development that is helping us to ensure that those 
resources develop safely.
    Mr. Tonko. OK. Thank you very much. I yield back, Mr. 
Chairman.
    Mr. Whitfield. Gentleman yields back. At this time, I 
recognize the gentleman from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Thanks, Mr. Chairman. I appreciate that, and 
also I want to thank our witnesses today. I appreciate your 
testimony.
    You know, it has been a common theme that has kind of gone 
through a lot of the questioning is a lot on the timeline for 
the applications to go through, and if I could just maybe 
follow up on a couple of these, if I may.
    Ms. Moyer, one of the things when you are looking at these 
applications, how often do you have third party litigants that 
are going to be filing lawsuits? Do you have any idea, like in 
the current cases out West how many third party litigants you 
have?
    Ms. Moyer. As far as I know, we don't have anybody that has 
sued us yet because we haven't taken an agency action.
    Mr. Latta. OK. if I could turn, then, to Mr. Smith. I think 
that--I am sorry, Mr. Wright. I believe that Mr. Barton had 
asked a question as to from start to finish and filing of an 
application how long it takes, did I understand it was 18 to 24 
months? Is that correct what I heard?
    Mr. Wright. I was using the example of our experience with 
the regasification plants, the import terminals, but I tried to 
point out is using the Sabine Pass example of about 15 months 
is kind of risky in that it is each one of the export terminals 
are presenting kind of issues of first impressions. So I can't 
put my exact finger on a processing time for export terminals.
    Mr. Latta. OK. Well because I am just kind of curious, 
because in your testimony where you kind of lay out your 
timelines and what is happening, from the pre-filing process it 
says for a period of about at least 6 months, and then you have 
right in the same paragraph the question again--if I could 
bring this up, is on the interveners become parties to the 
proceedings and have the right to request a rehearing of 
Commission orders and seek relief of final agency actions in 
the U.S. Circuit Court of Appeals. When that happens, how much 
time is needed for that to get something out of the Court of 
Appeals.
    Mr. Wright. Well, that would be up to the actual project 
proponent. If you get through our rehearing process and we find 
that your project is approved, if someone sues you in the Court 
of Appeals, you can go ahead and commence construction 
activities at your risk. People do that on the pipeline side.
    Mr. Latta. OK, and if I could turn--Mr. Smith, if I could 
ask you, it is kind of interesting that in your testimony you 
show--state that in the one case, I think it was the Sabine, if 
I got that correct, it says in response to the Notice of 
Availability, DOE received over 188,000 initial comments and 
approximately 2,700 reply comments. How long did it take you 
all to get through that? Any idea?
    Mr. Smith. From the time that we closed that comment period 
to the time we issued the order, it was somewhere around 2, 
2\1/2\ months was the period of time that we took to evaluate 
all of the comments, write the order, and get the report 
published and the Federal Registry notice and out to the 
applicant.
    Mr. Latta. OK. In that period of time, just out of 
curiosity then, how many folks do you have looking at the 
comments and then also how much time is spent looking at pretty 
much each of those comments, since you had, again, 188,000 
initial comments and then again the 2,700 reply comments. Any 
idea how much you spent on each one of those?
    Mr. Smith. Thanks for the question. Some of those comments 
are repetitive because some of them are letter writing 
campaigns. Some of them are very comprehensive, so they could 
be entire studies or comments that are very complex, so I 
couldn't really give you a rule of thumb for each comment, 
because it depends.
    Mr. Latta. And also, just again because I said that there 
is a common theme here of folks on the committee looking at--on 
the time side. When you issued, it says here, that on May the 
17th, 2013, DOE granted the second long-term application on the 
Freeport, and it said--in your statement, it says the order was 
granted after an extensive review of the application to export 
LNG for Freeport. How long--when you say extensive, how much 
time is that for that review?
    Mr. Smith. Well, there are two things that happened between 
Sabine Pass and Freeport. First, we commissioned an extensive 
study that looked at domestic and international impacts of LNG 
and how those would impact American businesses and families and 
consumers, so that took a period of time. That study, once 
completed, we want this to be an open and transparent and very 
visible process, so we put that study in the docket for public 
review. That was when various stakeholders had the opportunity 
to comment, and so that was the genesis of those comments that 
you just asked me about. When that was completed, we took a 
period of time to evaluate the comments and then we got the 
order written.
    Mr. Latta. Thank you very much, Mr. Chairman. My time is 
expired and I yield back.
    Mr. Whitfield. Gentleman's time is expired, and that 
concludes the questions for this panel, except Ms. Moyer, one 
question I wanted to ask you. How many export facilities are 
under review by the Corps right now?
    Ms. Moyer. In the Pacific Northwest?
    Mr. Whitfield. Yes--no, nationwide.
    Ms. Moyer. I don't know. I could get back to you on that. I 
don't know.
    Mr. Whitfield. But in the Northwest, three?
    Ms. Moyer. Just the three.
    Mr. Whitfield. OK. Well we will stay in touch with you on 
that. I want to follow up on that.
    But thank you all very much for being with us. We 
appreciate your expertise and testimony.
    At this time, I would like to call up the second panel, and 
on the second panel today we have the Honorable Mike McGinn, 
who is the Mayor of the City of Seattle. We have Mr. Ross 
Eisenberg, who is the Vice President, Energy and Resources 
Policy for the National Association of Manufacturers. We have 
Mr. Harold Quinn, President and CEO of the National Mining 
Association. Mr. KC Golden, Policy Director for Climate 
Solutions. We have Mr. Bill Cooper, President of the Center for 
Liquefied Natural Gas, and we have Mr. Lucien Pugliaresi, 
President for the Energy Policy Research Foundation.
    So I want to thank all of you for joining us today. We look 
forward to your testimony on this important subject matter, and 
each one of you will be given 5 minutes for an opening 
statement, and then I am sure that there will be some questions 
from members as they come back in. So thank you for joining us, 
and Mr. McGinn, we will call on you for your opening statement 
to begin with, and each one of you will be given 5 minutes. As 
I said earlier, there is a little box that--if it is working. 
Is it working? If it is working a red light will come on, but 
we look forward to your testimony and Mr. McGinn, you are 
recognized for 5 minutes.

  STATEMENT OF HONORABLE MIKE MCGINN, MAYOR, CITY OF SEATTLE; 
      HAROLD P. QUINN, PRESIDENT AND CEO, NATIONAL MINING 
  ASSOCIATION; ROSS E. EISENBERG, VICE PRESIDENT, ENERGY AND 
  RESOURCES POLICY, NATIONAL ASSOCIATION OF MANUFACTURERS; KC 
GOLDEN, POLICY DIRECTOR, CLIMATE SOLUTIONS; LUCIAN PUGLIARESI, 
 PRESIDENT, ENERGY POLICY RESEARCH FOUNDATION, INC.; AND BILL 
    COOPER, PRESIDENT, THE CENTER FOR LIQUEFIED NATURAL GAS

               STATEMENT OF HONORABLE MIKE MCGINN

    Mr. McGinn. Thank you, Chairman. It is----
    Mr. Whitfield. I am sorry, I should say Mayor McGinn.
    Mr. McGinn. That is--anything works. Chairman, thank you 
for the invitation to testify. It is a real honor to be here.
    A long time ago when my hair wasn't gray and my beard was 
red, I worked for Congressman Jim Weaver of Oregon over there 
in the Longworth Office Building, and Northwest politics often 
involve energy. Congressman Weaver was deeply involved in 
champion conservation as opposed to new nuclear power plants at 
that time, and conservation was indeed the wiser choice. The 
whoops nuclear power plants that were endorsed by Congress 
ended up defaulting on billions of dollars of municipal bonds.
    We now face another significant energy choice for the 
Pacific Northwest, one that could have dramatic consequences 
for our economic and environmental well-being: whether 110 
million tons of coal a year will be transported across the 
Northwest and shipped to China from Northwest ports. To put 
that in perspective, the carbon emissions from that coal are 
more than the emissions projected from the Keystone XL 
Pipeline.
    So I want to describe this just a little bit. To ship this 
coal to China, terminals are proposed north of Bellingham, 
Washington, near Longview, Washington, as well as in Oregon and 
British Columbia is looking at coal ports as well. To ship this 
coal, we would be looking at--to get to Bellingham, we would be 
looking at 18 coal trains a day, each a mile and a half to 2 
miles long, traveling from the Powder River Basin in Montana 
and Wyoming, through Spokane and eastern Washington, down the 
length of the Columbia River, the border between Oregon and 
Washington, and then from south to north, almost to the 
northwest corner of the State in Bellingham, traversing 
multiple towns and traveling along the Puget Sound coastline. 
The coal trains are uncovered. They lose approximately 2 
percent of their load on the route. The proposed coal terminal 
near Bellingham sits on ancestral Native American lands and is 
opposed by the Lummi Nation, both because it violates the 
burial grounds and because coal pollution in Puget Sound 
threatens their salmon rights, and those are treaty rights.
    I tell this story because the local impacts of coal trains 
upon communities throughout Washington are significant. Over 40 
local elected officials, including tribal leaders, have joined 
me in the leadership alliance against coal because of the 
serious negative impacts on their communities, and I would like 
to talk about that. Coal train traffic will clog the railroads. 
Coal dust and diesel exhaust from the engines pollute water and 
lungs. Neighborhoods along the rail lines will see decreased 
quality of life, and it will have significant negative 
transportation impacts. I ask you to consider the impacts upon 
communities as these coal trains go through.
    In Seattle, in our industrial area we have four at-grade 
crossings, and then we have four at-grade crossings between our 
downtown and our waterfront. Each of these areas are 
significant job-creating areas in their own right, and in order 
for freight traffic to reach our port, they have to go across 
these rail lines. We worked with consulting firm parametrics to 
take a close look, and we are talking about increased gate down 
time up to 2 to 3 hours each day. That has economic impacts as 
well as public safety impacts upon our police and fire 
departments. Now imagine that impact on cities and towns along 
the entire route. These railroad lines tend to go right through 
the middles of towns at grade.
    And then let's take a look again at just the broader 
impacts. We have spoken about the climate impacts already. This 
is equivalent to all the gasoline burned by 50 million people 
each year. Now unless we stop these coal terminals from being 
built, we will be responsible for hastening the advance of 
climate change here at home and around the world.
    Now I have heard members of this group talk quite a bit 
about jobs. I just want to say, we have been working really 
hard in Seattle to recover from the recession caused by lax 
oversight of our financial institutions in this country, and we 
are creating jobs. We are building the greenest buildings in 
the world. We are retrofitting buildings, and those are local 
jobs. You have to be in that crawlspace. You have to be 
operating those energy control systems. We have been 
eliminating waste, putting savings--putting the money we save 
to productive use. That is frugal, that is efficient, and that 
is reducing demand for our clean wind and water power, which 
means we can put that electricity to better use in our economy. 
In fact, we should be exporting our green building technology, 
not coal. In fact, we are. Our architects are building 
buildings in China and all over the world, because they are 
some of the leading architects in the world.
    I want to return to the issue of the whoops nuclear power 
plants that I mentioned at the beginning. We somehow have this 
belief that economic growth requires ever-increasing amounts of 
energy use. We prove that to be wrong in the Northwest. We have 
had significant economic growth while reducing our energy use. 
We have grown by being more efficient and cleaner, enhancing 
our quality of life. That is the pathway to creating good jobs.
    The same is true with coal trains. They will hurt us 
economically. We have better ways to create jobs. Thank you.
    [The prepared statement of Mr. McGinn follows:]

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    Mr. Whitfield. Thank you, Mayor Quinn--I mean, McGinn.
    At this time, I would like to call on Mr. Quinn for a 5-
minute opening statement.

                  STATEMENT OF HAROLD P. QUINN

    Mr. Quinn. Thank you, Mr. Chairman and members of the 
subcommittee. I appreciate you having this hearing today. My 
remarks focus on the economic contributions of U.S. coal 
exports as well as potential for contributing more through the 
expansion of that capacity.
    As you, Mr. Chairman, know, many members of this 
subcommittee are aware, coal has been the fastest growing 
energy source globally over the past decade, and some forecasts 
actually peg coal surpasses oil as the leading energy source 
globally within the next 2 years. As it so happens, the United 
States happens to have the most of what the rest of the world 
needs and demands, 260 billion tons of recoverable coal 
reserves. To put that in perspective, U.S. coal reserves equal 
the proven oil reserves of the entire Middle East, Russia, and 
the continent of Africa combined.
    So when it comes to energy independence, U.S. coal stands 
in the forefront by providing our Nation the resource to build 
and power our economy while also supplying this energy resource 
to countries around the globe. In fact, U.S. coal exports 
represent the only positive addition to the U.S. trade balance 
from the energy sector. Now last year we shipped about 125 
millions of steam and metallurgical coal, double the amount we 
shipped 4 years ago. We shipped this coal to 76 countries 
around the globe through ports located in States on the East 
Coast, the Gulf, West Coast, and Great Lakes.
    The economic contributions from coal export activity are 
documented in a report prepared by Ernest and Young released 
last month by the National Mining Association. Here are a few 
of the highlights: $16.6 billion was added to the GDP; coal 
exports supported more than 168,000 jobs and a wide range of 
businesses, from coal mines, railroads, barges, trucks, cargo 
handling, and ports. For every million tons of coal exported, 
more than 1,300 jobs are added to the U.S. economy. These 
direct jobs created by coal exports pay on average $96,000 
annually in wages and benefits, nearly 50 percent more than the 
national average.
    The trend of growing seaborne coal market is unmistakable. 
The developing world is demanding more coal to power historic 
transformation from agrarian societies to commercial powers. 
This transformation, unprecedented in terms of scope and pace, 
is built upon a coal-centric infrastructure of steel, cement, 
and of course, electricity. But coal is also supplying the 
energy and infrastructure needs of a developed world as the 
cost and reliability of energy supplies becomes an increasing 
concern in sustaining our economic futures. With a top of class 
reserve base, workforce, and transportation infrastructure, the 
U.S. is well-positioned to participate more fully in the 
growing seaborne coal trade.
    Now whether we are able to participate to our full 
potential will turn on the building of our port capacity, in 
terms of volume as well as location. Proposals to build coal 
export facilities in the Pacific Northwest are critical to 
connecting our western mines to the growing Asian markets. The 
Interior Basin coal fields have been extraordinary growth in 
export demand and the proposals to expand existing capacity in 
the Gulf will make that region even more competitive.
    Now like any major infrastructure project, major risks are 
posed by timing and capital costs. This is why an efficient, 
timely, and reliable process for reviewing permit applications 
are critical to ensuring that these long-term investments 
become a reality and bring enormous economic benefits locally 
and nationally.
    Make no mistake, if we do not seize this opportunity, other 
coal exporting nations will, along with the benefits of 
economic growth and jobs. Major exporting nations like Canada 
and Australia fully understand the fierce competition exists 
for these markets and that an efficient and timely regulatory 
process provides a competitive advantage. Last year, Canada's 
Prime Minister Steven Harper announced the ``One Project, One 
Review'' initiative to streamline the process for permitting 
major infrastructure projects. Here are some of the features: 
deadlines for determining the type and scope of environmental 
assessments; binding deadlines for completing reviews and 
issuing decisions on permits; enhanced coordination, 
consolidation, and responsibilities for provincial and federal 
agencies reviewing these projects, eliminating duplication 
between the provincial and federal environmental assessments. 
These best practices for coordination, clarity, and 
responsibilities and accountability with goals and timeframes 
are not unlike the directives in the President's Executive 
Order 13604 on improving performance of federal permitting on 
infrastructure projects. They are also reflected in 
recommendations to the President's Council on Jobs and 
Competitiveness. Applying these practices to reviewing coal 
export projects will unleash our full potential for providing 
more Americans opportunities for high wage and highly skilled 
jobs right here in the United States.
    Thank you, Mr. Chairman. Thank you, members.
    [The prepared statement of Mr. Quinn follows:]

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    Mr. Whitfield. Thank you, Mr. Quinn.
    Mr. Eisenberg, you are recognized for 5 minutes.

                 STATEMENT OF ROSS E. EISENBERG

    Mr. Eisenberg. Good afternoon, Chairman Whitfield, members 
of the subcommittee. Thank you for having me here today to 
express the views of the National Association of Manufacturers 
and our 12,000 members, and also of the Alliance for Northwest 
Jobs and Exports, a broad coalition of manufacturers and 
agricultural, labor, civic, and other organizations that 
support new export projects in Oregon and Washington State, the 
projects we have been talking about today.
    The NAM was founded in 1895 on principles of free trade. At 
the time, the United States was in the midst of a very deep 
recession, and many of the Nation's manufacturers saw a strong 
need to export their products. The NAM believes that free trade 
and open markets should govern in the context of energy 
exports, and we also oppose bans or other similar market-
distorting mechanisms to energy exports.
    Although today's hearing has focused on both LNG and coal, 
my testimony today will focus primarily on coal. Manufacturing 
jobs support coal exports in the United States. These jobs 
include mining and support activities for mining, construction, 
railroad transportation, transport by water and truck, port 
operations and cargo handling, and all the manufacturing supply 
chain jobs that support all of these activities. Now the 
economic impact of the three terminals here today, Marrow 
Pacific, Millennium Bulk terminals, and Gateway Pacific 
terminal, if allowed to move forward, would be very 
significant. All together, the three port expansions hold the 
potential to create as many as 11,730 jobs and $831.4 million 
in wages for the Pacific Northwest. This is an undeniably large 
economic boost for our region which, like the rest of the 
country, still continues to fight against high unemployment. 
These projects would trigger increased activity from a wide 
range of manufacturing industries, including cement, iron and 
steel, wood products, aluminum, transportation, and shipping, 
among others.
    The NAM and the Alliance were very pleased to hear today 
that the Army Corps will abide by the law and the regulations 
and carefully consider each coal export proposal on its merits 
while appropriately bounding the scope of their analysis and 
their consideration of the impacts. The Corps determined that 
neither a programmatic nor an area-wide or regional EIS are 
appropriate when considering the proposed permits for the three 
projects. The facts and circumstances related to each project 
differ substantially, and they are not the type of connected 
actions that warrant any sort of combined review. We are 
encouraged that the Corps is committed to carrying out its 
duties in accordance with the law. This is a great first step 
towards creating thousands of manufacturing jobs in the region.
    Now, opponents of these projects have characterized this as 
a choice between the environment and the economy. It is not. 
These three infrastructural projects plan to fully comply with 
all the required environmental laws and regulations. The 
projects will thoroughly examine air quality, water quality, 
marine life, wetlands, human health, rail traffic, vessel 
safety and traffic, endangered species, and the dozens of other 
potential impacts of their projects required by all federal, 
State, and local permitting laws. They would like nothing more 
than to proceed with the permitting process in an orderly 
fashion as the law requires. The Corps appears ready to give 
them that opportunity.
    Understand, however, that what the law requires isn't 
necessarily what the opponents are calling for. They are asking 
to broaden the scope of the environmental review to such a 
degree that the analysis will be so long and so exhaustive that 
it will delay the projects indefinitely. Both Mayor McGinn and 
Mr. Golden will testify here today that they flat out oppose 
the terminals and they believe a cumulative programmatic or 
area-wide EIS is what it takes to stop the projects from being 
built. To their credit, they are being pretty transparent about 
their goal. Now I respect their opinions and their positions, 
but I worry that their quests to stop these projects can have 
serious consequences for all exports.
    A cradle to grave life cycle impact analysis that includes 
the environmental impact of the cargo, in this case, the coal, 
would be a very, very dangerous precedent to be setting, 
because everything we ship has a life cycle and environmental 
impact. So what if the cargo was another fuel or a bulk 
agricultural product like wheat or corn or soybeans? Would the 
government need to perform a programmatic EIS to determine the 
life cycle and environmental impact of that? In the case of 
corn, would the EIS have to look at the environmental impact 
not only in the transportation of the products, but also the 
planting, cultivating, growing, and harvesting of crops? What 
if the cargo were cars, tractors, electronics, toys, steel, 
chemicals, pumps, air conditioners? You can see where I am 
going here. How far up and down the supply chain would agencies 
be required to go to assess the impact? The possibilities are 
literally endless and are very, very deeply troubling to 
manufacturers.
    When NEPA was enacted in 1969, the intent was require 
federal agencies to account for, document, and disseminate to 
the public the environmental impacts of their actions. 
Congress's intent in enacting NEPA was not to curtail or 
significantly delay federal action. NEPA requires excellent 
action, but there are boundaries to that action and those 
boundaries must be respected. Free trade and exports aren't 
particularly divisive concepts in the United States, but for 
some reason--and as we are seeing here today, for some reason 
when you put the word ``energy'' in front of export, we all 
wind up wrapped around the axle. The United States is energy-
rich and domestic supply will soon exceed demand. Exports of 
energy are a reality. Manufacturers support an objective, 
orderly, and ultimately legal permitting process for energy 
exports.
    Thank you.
    [The prepared statement of Mr. Eisenberg follows:]

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    Mr. Whitfield. Thank you, Mr. Eisenberg.
    Mr. Golden, you are recognized for 5 minutes.

                     STATEMENT OF KC GOLDEN

    Mr. Golden. Mr. Chairman, Ranking Member Rush, members of 
the committee, thank you for the opportunity to testify today. 
My name is KC Golden. I am the policy director for Climate 
Solutions. We are a regional organization focusing on promoting 
practical and profitable solutions to global warming. I am here 
today to talk about coal export. Not about corn, not about 
toys, but about coal exports.
    Proposed coal export projects are a very big deal for our 
region, and so we appreciate your willingness to carefully 
examine the costs and benefits before proceeding. Northwest 
citizens and communities are deeply concerned about the impacts 
of coal export on public health, on property values, on 
existing jobs, on Main Street businesses, and our economic 
future. In my brief comments, I will focus primarily on the 
climate impacts, but I want to emphasize that all of these 
impacts deserve full and fair consideration before any public 
decisions are made to issue permits or leases, let alone 
subsidies for coal export.
    We take climate disruption very seriously in the Northwest. 
We have to. Our mountain snow pack is critical economic 
infrastructure for our region. Our fishing, our farming, our 
forestry communities depend critically on that snow pack. Our 
power system is built on it. And like communities everywhere, 
we are concerned about increasing and growing risks from 
extreme weather to human life and human property in the 
Northwest. And so Washington and Oregon and communities in the 
Northwest are implementing climate action plans now. We know we 
can't fix this problem alone, but we are determined to do our 
part. We are determined to prove up effective solutions in our 
communities. The centerpiece of these plans is our transition 
to a clean energy economy. Our commitments to energy efficiency 
and to clean energy and to transportation choices are working. 
Our economy is stronger. Our industries are more competitive. 
Our communities are healthier. Our emissions are down, and our 
future is looking up because of these commitments.
    And so now, turning from that strategy to coal exports 
would be a tragic and abrupt reversal from that successful 
strategy for the Northwest. And dumping over 100 million tons 
of coal a year into global energy markets would have 
significant irreversible impacts on the climate, and therefore 
on our communities as well.
    Now the coal industry argues that our coal would simply 
replace other sources of supply and not increase in that 
emissions. Our understanding is that supply and demand doesn't 
work that way. It will only replace other sources of supply 
insofar as it is cheaper, otherwise they wouldn't buy it. And 
if it is cheaper, then more of it will be consumed. Now if it 
turns out to not be cheaper and this coal isn't competitive in 
these markets, then these projects may well go belly up as 
previous coal export projects did, leaving our community with 
substantial stranded costs. Neither outcome is acceptable to 
us.
    Economic modeling of this emissions effect shows that 
emission increases would be substantial, and even more 
troubling, they would have the effect of green lighting the 
investment of enormous amounts of capital into new coal 
infrastructure in the fast growing Nation economies. And by the 
way, these are coal plants that lack the technology to 
sequester or responsibly dispose of the carbon. The 
International Energy Agency is one that these long-lived 
capital intensive investments would lock in emissions that 
virtually guarantee dangerous climate disruption. The coal 
industry disputes this analysis, so instead of trying to 
exclude analysis of climate impacts from the environmental 
process, I would suggest that they welcome the opportunity to 
set the record straight and a rigorous, transparent evaluation 
of these impacts. This is obviously a much longer discussion 
than we have today, and so let me close by emphasizing this 
simple request for federal agencies and decision makers. Please 
examine all of the relevant impacts carefully, rigorously, 
transparently, and comprehensively, including climate effects, 
before any public permits or subsidies are issued for coal 
activity. Let's look at whether coal leases for export are fair 
to federal taxpayers and in the public interest before BLM 
issues any more of them. Let's not be afraid to ask and answer 
the big questions about how this will affect our economic 
future and the climate that our kids will live in. These are 
big, fateful decisions, not just for the region, but for the 
country. These choices deserve full transparency and public 
accountability. All we are asking is that we simply look before 
we leap, and make these decisions in the full light of day.
    Thank you. I look forward to any questions you may have.
    [The prepared statement of Mr. Golden follows:]

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    Mr. Whitfield. Thank you, Mr. Golden.
    Mr. Pugliaresi, you are recognized for 5 minutes.

                 STATEMENT OF LUCIAN PUGLIARESI

    Mr. Pugliaresi. Thank you, chairman. Chairman Whitfield, 
Ranking Member Rush, thank you so much for inviting me to 
testify on this very important topic.
    [Slide shown.]
    Let's go to the first slide. I have a few graphs I would 
like to show you. Let me just say that over the last 10 years, 
we have had economic growth rate for the national economy of 
less than 2 percent. This is not a problem; this is a national 
crisis. I want to start out by seeing what happened with 
natural gas. If you came here in 2008 and testified of natural 
gas and members of the committee asked what can we do about the 
shortage of natural gas? Should we lease more land? Should we 
try new kinds of innovation? All the government witnesses would 
have said it doesn't matter what we do. The path you see there 
in blue, if you look at the vertical axis, that is truly in 
cubic feet per year, and in 2008, we all believed that we were 
going to have massive imports of natural gas. But, in fact, 
because of the advances in hydraulic fracturing, because of the 
incurred private land, because there was no NEPA review, 
because ideas could move quickly from one province to another, 
we rapidly increased our gas supplies. These are very important 
lessons here. It is not just the technology, it was the whole 
process.
    [Slide shown.]
    Next slide. The next slide I think shows us very clearly 
why the real debate is not whether we are going to export too 
much natural gas, but whether we may lose out from a highly 
competitive market and export too little. The vertical axis 
shows you billion cubic feet per day, and you see that narrow 
blue line that goes across there? That is the most likely world 
demand for LNG in the world market between 2020 and 2025. It is 
a very competitive market. All these projects we have going 
forward are of not much--should not be of much concern. We 
don't even need a DOE export process. The capital markets 
themselves are going to determine who gets these projects, and 
the real issue for our country is how do we contain the 
political and the regulatory risks?
    I can tell you today there is no Canadian pipeline company 
that will consider building a line across the U.S. border. The 
experience of Keystone has shifted long-term expectations. This 
is not a friendly place to do business.
    [Slide shown.]
    Next slide. This shows you the Federal Energy Regulatory 
Commission timelines for approving projects. Once again, as you 
can see, it can take up to--until you get the final project, up 
to 9 years. I think we are much too preoccupied with exporting 
too more. The more likely outcome is that we are going to go 
slowly, very measured, and we may miss out on some markets.
    [Slide shown.]
    Next slide, please. If you just take the projects which 
are--the vertical axis here is billion cubic feet per day, and 
these are the projects which have contracts. Actually, these 
are the projects that are most likely to get permission to 
proceed. And as you can see, it is very modest, somewhere 
between 5, 6, maybe 7 billion cubic feet a day. We don't have a 
process that--we should not be worried about exporting too 
much. That is not our problem. We have to learn to--we have to 
work on how we can be competitive to get a big part of this 
market.
    [Slide shown.]
    Next slide. I know we talked about coal today. One of the 
things I would like to point out is that, you know, how you get 
economic value is that you sell something for more than it 
costs, and it is true that if we were to expand--you see in the 
middle there? This curve shows you what we call the supply 
curve or merit order curve. The relative cost of producing coal 
and delivering it to Asian markets. And the U.S. can expand, 
for example, in the Powder River Basin, take a lot of that 
value and we will, as Mr. Golden pointed out, help to lower the 
price, but that lowering the price will be very small. The 
implications of that lower price will not be substantial on 
total coal use worldwide.
    [Slide shown.]
    And then finally the last slide. This is, you know, one 
sort of presentation of what we call the North American 
petroleum renaissance, and the vertical axis there shows you 
both our imports, and then our imports when we look at it as a 
North American entity, U.S. and Canada together as a percentage 
GNP. If we can contain our regulatory and political risk, if we 
can allow a relatively, you know, stable set of projects to go 
forward that the market wants us to do, by 2020, total non-
Canadian water-borne imports into the United States are going 
to be virtually insignificant. AS you can see, it will probably 
be well less than \2/10\, \3/10\ of GNP. It is for that reason 
that we, you know, we need to focus on this huge opportunity of 
high value projects which are for us. We have a large number of 
high value projects for some reason we can't get permission to 
proceed.
    [The prepared statement of Mr. Pugliaresi follows:]

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    Mr. Whitfield. I thank you very much, and I am going to ask 
unanimous consent that we include with your statement those 
slides, because I don't think they were formally submitted, so 
we will include those with them as well.
    At this time, Mr. Cooper, you are recognized for 5 minutes.

                    STATEMENT OF BILL COOPER

    Mr. Cooper. Thank you, Chairman Whitfield and Ranking 
Member Rush, Mr. Barton, and other members of the subcommittee. 
My name is Bill Cooper. I am the President for the Center for 
Liquefied Natural Gas. Thank you for this opportunity to 
present my views on the regulatory barriers to LNG exports.
    The Department of Energy has issued two exceptionally well-
reasoned orders in the Sabine Pass and Freeport cases, which 
Assistant Secretary Smith--I will abbreviate his title--
Assistant Secretary Smith referenced in his testimony. Both of 
those orders adhered to the statute, DOE's rules and policies, 
and the rulings DOE has previously established in its orders it 
has issued. Such orders provide regulatory certainty to the 
community of the regulated, and I certainly commend them for 
their good work.
    When DOE makes a decision on an application, it is a good 
decision. The problem is there is no certainty as to when DOE 
will make a decision, and its effort to establish the order in 
which it will proceed is unlawful. Effective December 5, 2012, 
DOE published its order of precedence, the queue informing the 
public as to the manner in which it would process the 15 
applications pending before it and all subsequently filed 
applications. Preference was given to the pending DOE 
applications that had received approval from the Federal Energy 
Regulatory Commission to use the FERC pre-filing process in the 
order the DOE application was received. All other pending and 
future DOE applications would be processed thereafter in the 
order of filing at DOE. Even with its attempt to provide 
procedural guidance as to the order in which it will consider 
the applications, DOE did not provide any timelines as to when 
those decisions would be forthcoming. After 15 applicants 
reasonably relied upon the only rules DOE had published, DOE 
changed those rules by predicating when it would consider each 
application, not based upon when those applications were filed 
at DOE, but based upon when an application filed--an applicant 
filed with another agency, and DOE announced that decision 
after the fact.
    While many may argue about the conditions of the queue, 
namely when an applicant filed with FERC or whether contracts 
should be in place, that is not the issue. The issue is the 
establishment of the queue in the first place, or if it is 
accepted that a federal agency can amend its rule by agency 
decree and apply those amendments retroactively, there could be 
no end to the process and no regulatory certainty. The result 
would be an agency repeal of the congressionally mandated 
Administrative Procedures Act. DOE's issuance of its order of 
precedence for the queue is unlawful for the following reasons.
    Number one, the establishment and use of the queue is, in 
essence, an amendment to the rules promulgated by DOE as set 
forth in Title 10 of the Code of Federal Regulations, part 590, 
and therefore is subject to the same notice and comment 
requirements as the original rules. Notice of the queue was not 
published in the Federal Register with an opportunity for the 
public to comment. The failure to provide such notice and 
comment renders the queue void. Any amendment to an existing 
rule cannot be applied retroactively, thus rendering their 
queue ineffective as to the 15 pending applications at the time 
of the queue's issuance, even if the queue was properly issued, 
which it was not. DOE should acknowledge that the queue was not 
properly issued and should proceed with its determinations of 
all pending applications based upon its lawfully established 
rules. With the queue being void, it cannot be applied even to 
the applications filed after the announcement of the queue. DOE 
should proceed with its determinations of all pending 
applications within a reasonable time from the closing of the 
time period set forth in the Federal Register. The mere passage 
of time does nothing to add to the evidentiary record upon 
which DOE must base its decision. That evidentiary record 
closed when the public comment period closed. Any federal 
agency should adhere to its rules. No matter how noble the 
intentions of an agency may be, placing retroactive duties upon 
applicants when it is too late for those applicants to do 
anything about it undermines the rule of law, the need for 
regulatory certainty, and the demands of justice.
    Thank you for the opportunity to present my views today.
    [The prepared statement of Mr. Cooper follows:]

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    Mr. Whitfield. Mr. Cooper, thank you, and I thank all of 
you for your testimony.
    At this time, I will recognize myself for 5 minutes.
    Recently I had a friend who had attended the World Economic 
Forum in Dalvos, Switzerland, and when he came back he was 
talking about so much of the discussion over there was about 
the energy situation in America and how Europeans and many 
parts of the world were genuinely concerned about the abundance 
of energy that we have in America. The new oil finds, the new 
shale gas finds, the reserve of coal that we have, and they 
recognize that America is really at a point that we did not 
expect to be not too many years ago that we do have the ability 
to be energy independent, strong energy security. And when we 
were preparing for this hearing, I was thinking about well, 
what are the obstacles to export? And there are divergent views 
on this panel, and that is why we have panels. That is why we 
have open discussions. That is why we have debate, to get that 
out there.
    But in my view, the major obstacle to energy exports from 
this country is the Obama Administration. And when he was 
running for President, he really didn't talk a lot about global 
or climate change issues in most parts of the country. But yet, 
if the Council on Environmental Quality, as a result of 
President Obama's action, does require consideration of both 
the increase in greenhouse gases and a project's vulnerability 
to flooding, drought, or other extreme weather that might 
result from global warming, it is going to transform the way 
any project will be considered or have the opportunity to be 
built in our country.
    It will be a major bottleneck, and what it illustrates to 
me is that in the energy sector, the most important issue to 
this Administration is global warming, more important than any 
job outside of the green energy sector. More important than the 
trade deficit of last year, $455 billion--$573 billion, more 
important than that. More important than the opportunity to 
reduce global poverty and increase the standard of living 
because of the millions of people in the world who do not have 
electricity. And that is why people are coming--companies are 
coming to America to ask for our energy. And yet, this 
President and his Administration are making a statement that 
global warming is more important than anything else when it 
comes to energy. And we need to have a national debate about 
it, because I tell you what, the greenhouse--under the Clean 
Air Act, you look at pollutant, anything can be a pollutant. In 
the Massachusetts EPA case, they said that it is up to the EPA 
to make a decision, and they did their endangerment finding and 
they decided they were going to regulate greenhouse gases. So 
if they come out with this regulation where we cannot even 
build a new coal power plant, even though the new plant 
emissions are much lower than the old plants, and then if they 
go further and start regulating existing plants, then America 
is going to find itself in a very difficult situation, 
particularly when it comes to being competitive in the global 
marketplace to attract industry for jobs.
    Now I am all for green energy, and we can talk about all 
sorts of green energy projects that work and all sorts that 
fail. Right across the line in Tennessee, 20 miles from my 
hometown of Hopkinsville, Hemlock Corporation spent $1.3 
billion building a plant for component parts of solar panels. 
They said they were going to create 2,500 jobs. They built a 
$20 million railroad line into that plant and they received 
about $200 million of stimulus funds. Three years ago they 
started construction. In January, they announced they are not 
even going to open this plant. So the danger, from my 
perspective, is that the government is trying to dictate what 
energy will be used instead of letting the American people and 
the marketplace really decide that issue.
    So this has been a very helpful hearing for me personally. 
I want to thank all of you for testifying. We have many 
challenges ahead of us.
    My time is expired, so I will recognize the gentleman from 
Illinois, Mr. Rush, for 5 minutes.
    Mr. Rush. I want to thank you, Mr. Chairman, and you used 
your time to let your feelings be known. I think we understand 
or know how you feel now. But I want to formulate my questions 
on a different kind of path.
    In the first panel, I talked a lot about jobs and the cost 
of doing business, and on the prices that the American people 
will be confronted with, so I would like to ask each of you, 
since you are on the front line, the question of what will be 
the net impact on prices, on jobs from your perspective if we 
were to export LNG and coal? And notwithstanding the treatise 
from my friend from Kentucky, Hopkinsville, Kentucky, I would 
like to know do you have any concerns about climate change 
also, and what other concerns. So I would--Mr. McGinn, if you 
would just start, what would be the net impact on prices and 
jobs for the American people?
    Mr. McGinn. Well, I think we look at the--clearly there are 
jobs in the production and transport of coal and the shipping 
of it, but we look at the impact on our economic activities in 
our cities and towns along that train route, and we see 
negative impacts. You also have the health impacts, for 
example, 200 doctors in Bellingham spoke about the impacts of 
diesel exhaust and coal dust on people living near an export 
facility. We know in particular those can hit some of our 
minority communities harder who live closer to those train 
tracks or closer to the facilities. I mentioned the Lummi 
Indians' concern who have lived, you know, for centuries on 
salmon and they are concerned about the effects on salmon.
    So we see all of the positive economic activity in Seattle 
and our region, and the coal trains concern us, and of course 
we are worried about climate change, because what we do is we 
export the coal and it comes back to us in the form of mercury 
emissions which find their way into fish and find their way 
into all of our bodies. It comes back in the form of global 
warming, which has potentially devastating effects on our 
economy and quality of life, and that is why we, again, keep 
pointing to what we believe are more productive ways to create 
jobs.
    Mr. Quinn. Thank you, Congressman. Just to follow up on the 
Mayor's comments, I would say this. I have already documented 
the economic lift from coal exports, 1,300 high wage jobs for 
every million tons we export. I would say if you are concerned 
about the impact on your locality, I respect your opinion since 
you are a resident, but I would say let's go to Virginia, to 
Norfolk, let's go to Baltimore, let's go to New Orleans, let's 
go down to the Gulf in Houston, Galveston, and I think you will 
find that those ports exporting amounts of coal, they are most 
welcoming in that economic activity and found those ports good 
neighbors.
    In terms of climate change, let me assure you that if you 
need to write an EIS on what the impact is, it will be as 
follows. Stopping U.S. coal exports will not make any material 
change in global emissions of CO2. What it will do 
is it will deny the opportunity of billions of people accessing 
electricity modern energy, as coal has over the last 2 
decades----
    Mr. Rush. I would like to hear from----
    Mr. Quinn [continuing]. And it will cost millions of jobs 
in the United States.
    Mr. Rush. Mr. Eisenberg?
    Mr. Eisenberg. Thank you, Congressman. Speaking on both--
and I am not an economist but I have read almost every study. 
On the issue in terms of just about every study that has been 
done on LNG and coal exports, almost every single one of them 
comes out with a net increase, including the ones that the 
government has put together, a net increase in jobs and 
minimal, if any, effects on price. You know, again, these are 
studies not done by us but some of them have been done by the 
government. That is almost pretty much uniformly what they say.
    On climate, manufacturers are committed to reducing 
greenhouse gas emissions, to being more efficient, to coming up 
with the technologies that will deal with climate change. It is 
a serious issue and we take it very, very seriously.
    But again, as Mr. Quinn said, is this really--the issue 
that we are talking about today in the context of coal exports 
is does climate belong in the NEPA review on a Section 10 
Rivers and Harbors Act or a Section 404 permit to dredge and 
fill area for ships, and the answer really is no. Legally it is 
no. And so, it just does not belong as part of this. We do 
think that we are at the table for a conversation on climate 
but it doesn't belong legally in the context of this.
    Mr. Barton [presiding]. Gentleman's time is expired. Chair 
recognizes himself for 5 minutes.
    Mr. Cooper, when we passed the Energy Policy Act back in 
2005, I believe that you were a staff member of the Majority 
Staff and helped do the staff work on the conference report, is 
that correct?
    Mr. Cooper. I was a staffer on the Energy Policy Act of 
2003. Many of those provisions made it into the 2005 Act. I had 
left the Hill at that point in time.
    Mr. Barton. See, I thought you were here in 2005. You just 
took my question away.
    Mr. Cooper. Maybe I should have been.
    Mr. Barton. OK, well then I won't ask the question that I 
was going to ask. I will make a brief statement and then I am 
going to ask a few questions.
    None of these projects are going to be done if they don't 
make economic sense. Does everybody agree with that?
    Mr. Cooper. Yes.
    Mr. Barton. I mean, I would--you don't agree--Mr. Golden, 
you don't agree with that? Why would somebody put money into a 
project that doesn't make economic sense?
    Mr. Golden. We have had at least two coal export facilities 
sited, built on the West Coast and abandoned for lack of global 
markets. I think the global markets are extremely volatile. I 
think we are making----
    Mr. Barton. But that is a different----
    Mr. Golden [continuing]. A bet that may or may not turn 
out.
    Mr. Barton. But at the time that they were built, there was 
an expectation by their developers that they did make economic 
sense. Do you agree with that?
    Mr. Golden. Sure, it just turned out to be wrong.
    Mr. Barton. Well, you know, that is the market, you know. A 
lot of people run for Congress with the expectation they will 
win. They come up with a shortage of votes and they don't meet 
expectations, so--but if you go from the premise that no matter 
how good the project is, if it doesn't pass an economic test, 
one, it is probably not going to be built. I will agree with 
Mr. Golden that sometimes rosy colored glasses work, but it 
certainly is not going to sustain itself.
    So that when we look at these LNG facilities and when we 
look at the coal export facilities, we start with the premise 
that the people that are going to purchase the products 
overseas think that they will help their nations and their 
people and the expectation is that the people that are 
developing the projects to sell the natural gas or the coal 
believes it will make sense economically here.
    Now in the interest--in the sense of the coal exports, 
there is really no requirement in federal law for any kind of a 
public interest test, is that not correct?
    Mr. Cooper. Well, there is nothing, of course, Congressman, 
such as LNG is going through in terms of whether it is in the 
public interest to export.
    Mr. Barton. Because----
    Mr. Cooper. You know, public interest test in the context--
in a different context for the 404 permits that we have to go 
through to get the----
    Mr. Barton. Right, and see, because when the various 
federal laws that govern energy policy were passed, coal has 
never been considered to be something that is in a shortage 
potential situation----
    Mr. Cooper. Correct.
    Mr. Barton [continuing]. So we didn't--the reason that 
natural gas has some constraints on its export is because for 
the last 40 to 50 years, there have been large periods of time 
where we thought that we were going to have natural gas 
shortages in the United States, so we wanted to reserve that 
product for domestic use. We are now in a situation where we 
have a potential surplus and all the indicators are that that 
surplus is going to grow, but even in the case of natural gas, 
the premise is that it is in the public interest to be exported 
and you have to prove otherwise.
    So my question is to the panel, this latest Department of 
Energy decision to put a variable of cumulative impact, that is 
nowhere seen in any federal law that I have read. Does anybody 
point to a statute that requires a variable called cumulative 
impact? Mr. Pugliaresi, you are shaking your head.
    Mr. Pugliaresi. No, I think the critical issue here is 
these are very expensive, capital intensive projects, and 
buyers and sellers are not going to come together if they have 
a lot of uncertainty in how the government is going to behave. 
This is the problem, and it is a worldwide market. We want to 
capture that extra value, because out of that extra value comes 
revenues to State, federal, and local governments, return on 
capital construction, and sustainable economic growth. The 
biggest problem we have had in the last 10 years is that we 
have lots of high valued projects with enormous economic value 
to the national economy, and we can't get them--we can't get 
permission from the government.
    Mr. Barton. My time is expired, but I plan on sitting down 
with Chairman Whitfield and Mr. Rush and hopefully come up with 
some questions for the record where we send to the Department 
of Energy to have them clarify a little bit more their 
statutory authority for using cumulative impact and to more 
properly define exactly what that is.
    With that, my time is expired and I want to yield to the 
gentleman from New York for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    Mayor McGinn, you described a number of ways in which a new 
coal export terminal could affect local communities, and you 
further developed that with the ranker on the committee, 
Representative Rush. What are the city and State doing to 
examine and quantify the potential impact of increased coal 
train traffic on air quality? Is there anything being done in 
that regard?
    Mr. McGinn. Yes, there are a couple of things. One is local 
University of Washington researcher is doing research on both 
the effects of the coal dust and diesel exhaust along the 
route. That requires setting up monitoring stations along the 
length of the route to understand the impacts, and he actually 
ended up crowd sourcing the funding for that. He was concerned 
that he wouldn't be able to get it from traditional sources, 
but he is doing that work. There is the Puget Sound Regional 
Council, which is our regional planning agency for 
transportation and economic purposes, is looking at a region-
wide analysis of four, that would the four counties that are 
comprised around central Puget Sound. So those are two of the 
analyses that are underway right now, and we are also looking 
at a health impacts analysis as well.
    Mr. Tonko. Thank you. Mr. Eisenberg's testimony directly 
challenges the merits of your request for a comprehensive 
programmatic environmental review of all of the coal terminal 
proposals, and I believe the witness argues that assessing the 
environmental impacts of each terminal on its own should be 
deemed adequate. And we heard from Ms. Moyer from the Army 
Corps of Engineers with a similar viewpoint in her testimony. 
Why do you think it is important to examine all of the terminal 
proposals together rather than individually?
    Mr. McGinn. Well, it is embedded within the National 
Environmental Protection Act and our State Environmental 
Protection Act that you should look before you leap. You should 
understand the impacts of a decision before making it. We have 
clearly identified a wide range of impacts along the entire 
length of the line. I think the question that was raised by Ms. 
Castor was right on point. Shouldn't some agency of government 
be evaluating all of the impacts, including, of course, the 
cumulative impacts that come from climate change? So I do not 
believe the decision of the Army Corps of Engineers should be 
allowed to stand. If we are going to understand the 
implications of this decision, we need to look at all the 
impacts, and I would say both the governors of Oregon and 
Washington have made the same request.
    Mr. Tonko. Thank you.
    Mr. Golden, again, the witness Mr. Eisenberg says a life 
cycle analysis of the climate change impacts of exported coal 
would be a mistake. He says that if the climate impacts of coal 
exports are examined, there will be no limit to the analysis of 
the climate impacts at every step of the supply chain. I am 
interested in your response to that concern.
    Mr. Golden. Well as I said, I am not here to testify about 
corn or toys, but about coal export. You know, that question is 
actually a very important question in designing a comprehensive 
climate policy. Where do you look at the impacts, where do you 
assess accountability for those emissions? Unless I mistake the 
committee's intentions, we are not designing a comprehensive 
climate policy today. I hope I will be called again when you 
decide to. But in this case, the choices before us are simply 
do we look at the climate impacts of this proposal or not? And 
given that those impacts are prospectively very large, and I 
understand that is disputed, but let's argue about that--given 
that those impacts are irreversible, I simply think it would be 
irresponsible not to look at them as part of the decision 
making process.
    Mr. Tonko. And in terms of the approach of taking project 
by project assessment of potential climate change, is there a 
better approach than that, or----
    Mr. Golden. I think it is very important to look at this 
comprehensively. You know, some of these local decision makers, 
you have county commissioners and others who are looking at 
these permits in their jurisdictions, and I think we can 
forgive them for saying, you know, some of these things, the 
real impacts east of the mountains in other communities or the 
climate impacts are a little above my pay grade. We ought to--
the responsible agencies ought to take a comprehensive look at 
that. I don't think we can afford to close our eyes. If the 
permit board decides that, you know, within a very narrow 
legalistic interpretation of its responsibility and control it 
can't do that, then I think we should find somebody who can.
    Mr. Tonko. Seeing that my time is elapsed, I will yield 
back, Mr. Chairman.
    Mr. Whitfield. Thank you very much. At this time, I 
recognize the gentleman from West Virginia, Mr. McKinley, for 5 
minutes.
    Mr. McKinley. Thank you, Mr. Chairman.
    Mayor, when is your election coming up? Don't you have 
something coming up soon?
    Mr. McGinn. Yes, it is indeed. This August is the primary 
and this November is a general.
    Mr. McKinley. So this makes a good photo op here, doesn't 
it?
    Mayor, I have got a couple questions for you, and when I 
read through your testimony, because it seems like maybe you 
left some things out that you had talked about. One is you 
referenced--and maybe I didn't hear right, because I don't hear 
as well as I should, but the--on page four you talk about on 
mining leasing on public lands, that there is a, in your words, 
``massive subsidy'' for coal companies. I have got a copy of 
the report and I haven't found the word ``subsidy'' in there at 
all. Can you tell me where I would find that word ``subsidy'' 
that you are referring to?
    Mr. McGinn. No, and I think this goes back to the issue 
that the chairman was talking about, about let them----
    Mr. McKinley. Can you just tell me where it is?
    Mr. McGinn. Well if you will, it goes back to this issue 
the chairman was talking about about whether the marketplace, 
you know, is letting this go----
    Mr. McKinley. These are steel bids, are they not, Mayor? 
They don't have to--they can accept or reject them. There is no 
check, there is no subsidies to these companies and you know 
that. This is just a matter of you didn't like the bids that 
were received for that.
    But I am more troubled with----
    Mr. McGinn. You are testifying now, Congressman, and it is 
your committee.
    Mr. McKinley. No, you are challenging me on the thing and 
Mayor, you are here before us.
    Mr. McGinn. I understand that, and I appreciate the 
opportunity.
    Mr. McKinley. On page three, you had a ``more troubling'' 
and I thought it sent a shiver up my spine, and it should for 
anyone from a coal producing area. When you said on page three 
that ``we should keep our coal in the ground where it 
belongs.'' Did you really mean that?
    Mr. McGinn. Yes, I did.
    Mr. McKinley. That we shouldn't be mining or using coal in 
America?
    Mr. McGinn. This gets us the fundamental issue of climate 
change, and this is the difference between corn and toys and 
the other things that were mentioned. The difference here is 
that we have taken huge quantities of fossil fuels from beneath 
the surface of the Earth and put them into the atmosphere with 
potentially devastating effects upon the future of us and 
future generations as well.
    Mr. McKinley. You are entitled to have that opinion about 
climate change. I am willing to acknowledge that there is 
climate change going on. The question I am still trying to 
determine as an engineer--I am one of two engineers in 
Congress--is whether or not the climate change is caused by man 
or is it natural and cyclical. We can come to the agreement 
that it is changing. We know that, but you seem to be saying 
that so many on the other side that it is all due to man or 
burning coal fossil fuels, and that just simply does--that is 
why there is an ongoing debate on it, and you are coming from 
your position. But with all due respect, you coming here and 
trying to lecture us about climate change, Mayor, I would 
strongly suggest you take a look at the crime rate in Seattle, 
Washington, when you have 94 percent of the cities across 
America have a lower crime rate than you have in that city----
    Mr. McGinn. Well, that is actually----
    Mr. McKinley. When you have 3,707 violent crimes in your 
community and 33,248 last year, was it, I think you ought to 
take a look at that and become more aggressive----
    Mr. McGinn. We have one of the lowest crime rates of a 
large city in the country.
    Mr. McKinley [continuing]. About not to burn a hole in 
America----
    Mr. McGinn. We are at a 30-year low for our crime rate, 
Congressman, and----
    Mr. McKinley. I yield back my time.
    Mr. McGinn [continuing]. And we are proud of our police 
force and the work they do fighting crime.
    Mr. Whitfield. Gentleman yields back. At this time, I 
recognize the gentleman from Virginia, Mr. Griffith, for 5 
minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Mr. Quinn, Virginia ranks 12th in the U.S. in total coal 
production. Of that total, 43 percent or nearly 11 million 
short tons of Virginia coal was exported abroad. Now, my 
district and the other districts in coal have been greatly 
impacted by a lot of the regulations that have come out. If 
exports are also taken away, what do you think is going to 
happen to the economy in the regions that I represent? Is it 
going to get better or is it going to get worse?
    Mr. Quinn. Cleary worse, Congressman. Southwest Virginia, 
and frankly, export market is the key market because it has 
better margins and all that coal goes for metallurgical steel 
making in Europe as well as steam, so it is very important.
    Mr. Griffith. I knew that was going to be the answer, but I 
did want to get that question out on the record. The jobs that 
we have been seeing that we lost, almost monthly we have had 
announcements of people losing those jobs, and I think it was 
either you or Mr. Eisenberg, somebody mentioned that when you 
add in the benefits, you are almost at $100,000 a year, and 
most people don't realize coal miners today make somewhere 
around $75,000 a year, and then you add in benefits, who knows 
how high that goes. And so these are good paying jobs.
    I would also point to you and ask you, Mr. Pugliaresi, that 
you mentioned something about the impacts on local, State, and 
the Federal Government, and one of my counties, the income that 
they receive from taxes in the county, not assistance they get 
from the Federal Government or from the State government, there 
are estimates that as much as 70 percent of that money comes 
from the coal severance tax that Virginia has. So when we cut 
back on coal exports, we are actually cutting money to the 
schools in a number of the counties in my district and I think 
you are aware of that, is that correct?
    Mr. Pugliaresi. Yes, and I think we are sort of missing the 
point. We always--I think what we are talking about, we always 
talk about we need more jobs, and of course we need more jobs. 
But we could return our economy to 17th century agriculture and 
we could all go to work tomorrow, but we will be very poor. We 
have these fossil fuels whose value in the marketplace is 
substantially above their cost of production, and all that 
value could come to us. And it doesn't just come to the owners, 
it comes to State, local, and federal governments. It comes to 
economic growth and sustainable growth.
    Mr. Griffith. And to our children and grandchildren.
    Mr. Pugliaresi. That value, we should not give it up 
cavalierly.
    Mr. Griffith. I don't disagree with that at all, and in 
fact, politically we would be better off as well, because as 
somebody mentioned--and I have heard so much good testimony 
today, but somebody mentioned that the other nations of the 
world are aggressively pursuing the markets, Australia, Canada. 
If we don't pursue this market, they will get those markets and 
wouldn't we be in a better position when we have a 
disagreement, perhaps, with our colleagues in China if they are 
relying on using our coal resources to generate their 
manufacturing?
    Mr. Pugliaresi. I think that if you look in the place--for 
example, natural gas. Prime Minister Abe visited us, visited 
President Obama recently. There was no announcement made. I 
thought that was unfortunate because these exports are also 
elements of soft power for us.
    Mr. Griffith. No question about that.
    Mr. Pugliaresi. When our allies look at us and say we are a 
supplier of LNG, we are a supplier of petroleum products, of 
coal----
    Mr. Griffith. I am going to get your speculation here. I 
speculate, and I wonder if you do, too, that part of the reason 
that we are suddenly talking about a trade agreement with the 
Europeans might actually be because of our large supply of 
natural gas. Do you think that might be one of the things they 
are discussing over in Ireland as we speak?
    Mr. Pugliaresi. I am sure it is an element.
    Mr. Griffith. I am sure it is an element as well.
    Mr. Cooper, a study by the National Economic Research 
Associates Group states that natural gas price increases at the 
time LNG exports could begin range from zero to .33 NCF per 
1,000 cubic feet. I always just call it the unit that we use to 
measure how much it costs. Given these figures and the fact 
that we haven't tapped into all of our natural gas resources, 
like those off the shore--off the coast of Virginia and other 
East Coast States, do you think if we export natural gas that 
it is going to have any major impact on the cost of natural gas 
in this country?
    Mr. Cooper. No. Every credible report that has been 
conducted that has examined the price impacts due to LNG 
exports have said it would be minimal, if at all.
    Mr. Griffith. And so the bottom line as I am hearing the 
testimony today is that we actually strengthen ourselves in the 
world, we create more wealth in the United States if we are 
allowed to export our natural resources of which we have an 
abundant supply that will last us for quite some time, and I am 
concerned that when the time comes and we have to deal with 
whatever issues are facing the country, if we are a poorer 
Nation, it makes it a lot harder for us to deal with those 
issues. If we are a richer Nation, we have got the resources to 
deal with whatever issues may confront us. And last but not 
least, I will give my plug-in again for this project with 
chemical looping with hardly any pollution at all, because I 
think this could actually be an answer to problems that all of 
us are concerned about, and find a resolution for our Nation 
and move us forward.
    I thank you and yield back.
    Mr. Whitfield. Thank you, Mr. Griffith. Do you have 
anything else?
    Mr. Rush. No, I don't have any other questions, but Mr. 
Chairman, I just didn't realize--I mean, this is a new day for 
this subcommittee when you have come upon the intersection 
between coal and crime. I never thought we would see this day 
here in this committee. Never cease to amaze me in this 
committee--this subcommittee.
    Mr. Whitfield. That is why this committee is so 
interesting.
    Mr. Cooper, if you wouldn't mind just providing the 
committee your thoughts on the criteria that DOE should use in 
deciding what order to proceed on these pending applications. 
You talked a little bit about that in your testimony. Would you 
mind just giving us your views on that?
    Mr. Cooper. Yes, sir. The existing Code of Federal 
Regulations which contain the promulgated rules by the 
Department of Energy essentially set forth the contents of the 
applications that are required, which involve where the gas is 
coming from, how abundant the natural gas supply is, the 
commercial terms of the arrangements. And the public interest 
standard, while Congress set it, did not put a lot of criteria, 
actually no criteria on it, and that has been developed over 
the years. We don't particularly have any issues with the fact 
that the agency can develop that public interest standard as it 
adjudicates the cases over time. We think that the role of 
Congress to set policy and the role of any regulatory agency to 
flesh out that policy on a case-by-case basis is sound. Even 
the cumulative impacts that was discussed previously do not 
particularly concern us if they are handled within the 
promulgated rules and the structures that DOE has in place, and 
not to change that after the applicants have already filed to 
where they can't respond. What I mean by that is when we look 
at--when DOE looks at cumulative impacts, if it looks at the 
existing facilities compared to the existing supply picture, we 
think that that will justify the issuance of these applications 
for LNG exports. The question is the timing.
    Mr. Whitfield. OK, thank you, Mr. Cooper.
    I want to thank you all again. I know some of you came very 
long distances, and we appreciate your making the trek across 
the country or from wherever. We appreciate your testimony and 
look forward to working with all of you as we move forward.
    And with that, the hearing is adjourned and the record will 
remain open for 10 days for any additional materials. Thank 
you.
    [Whereupon, at 1:21 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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