[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




                       THE CRUDE OIL EXPORT BAN: 
                          HELPFUL OR HURTFUL?

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

                                HEARING

                               BEFORE THE

         SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 14, 2015

                               __________

                           Serial No. 114-22

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
TOM EMMER, Minnesota

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

         Subcommittee on Terrorism, Nonproliferation, and Trade

                        TED POE, Texas, Chairman
JOE WILSON, South Carolina           WILLIAM KEATING, Massachusetts
DARRELL E. ISSA, California          BRAD SHERMAN, California
PAUL COOK, California                BRIAN HIGGINS, New York
SCOTT PERRY, Pennsylvania            JOAQUIN CASTRO, Texas
REID J. RIBBLE, Wisconsin            ROBIN L. KELLY, Illinois
LEE M. ZELDIN, New York


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Michael McCaul, United States House of 
  Representatives................................................     3
The Honorable Joe Barton, United States House of Representatives.     8
Mr. Jason Grumet, founder and president, Bipartisan Policy Center    12
Ms. Elizabeth Rosenberg, director, Energy, Economics, and 
  Security Program, Center for a New American Security...........    22
Mr. Jason Bordoff, founding director, Center on Global Energy 
  Policy, Columbia University....................................    32
Mr. Stephen Kretzmann, founder and executive director, Oil Change 
  International..................................................    42

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Michael McCaul: Prepared statement.................     5
The Honorable Joe Barton: Prepared statement.....................    10
Mr. Jason Grumet: Prepared statement.............................    15
Ms. Elizabeth Rosenberg: Prepared statement......................    24
Mr. Jason Bordoff: Prepared statement............................    34
Mr. Stephen Kretzmann: Prepared statement........................    44

                                APPENDIX

Hearing notice...................................................    64
Hearing minutes..................................................    65
The Honorable Dana Rohrabacher, a Representative in Congress from 
  the State of California: Prepared statement....................    66
The Honorable Scott Perry, a Representative in Congress from the 
  Commonwealth of Pennsylvania: Prepared statement...............    69

 
                       THE CRUDE OIL EXPORT BAN: 
                          HELPFUL OR HURTFUL?

                              ----------                              


                        TUESDAY, APRIL 14, 2015

                     House of Representatives,    

        Subcommittee on Terrorism, Nonproliferation, and Trade,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10:15 a.m., in 
room 2172 Rayburn House Office Building, Hon. Ted Poe (chairman 
of the subcommittee) presiding.
    Mr. Poe. The subcommittee will come to order. Without 
objection, all members may have 5 days to submit statements, 
questions, extraneous materials for the record subject to the 
length limitation in the rules.
    The United States is now the largest crude oil producer in 
the world. We have more oil than we can refine or store. The 
majority of U.S. refineries were built to handle heavy, sour 
crude, but oil production is light, sweet crude. The United 
States' refineries cannot keep up with the new production.
    Normally producers would simply pump oil into storage 
containers, but experts say those storage tanks could fill up 
before the end of this very month. Instead of exporting excess 
oil like producers get to do in other nations, the ban is 
already forcing U.S. oil producers to leave oil in the ground 
and lay off workers. About 50 percent of the working rigs in my 
home state of Texas have had to shut down in just the last 6 
months. Seventy thousand oil workers have been laid off since 
Thanksgiving.
    The solution to this problem is clear: Export crude oil; 
have the ban lifted so that it can be exported. Critics of 
lifting the ban are afraid the United States' oil exports will 
lead to higher domestic gas prices. However, many studies have 
debunked this myth. Gas prices are more closely linked to the 
international market, or Brent Price, than the domestic price 
of crude because refined products like gasoline are traded 
freely on the international market. So the more crude oil we 
have, the more we can put on the international market, and the 
lower the international price of crude. The lower the 
international price of crude the lower the price of gas for 
America.
    A Rice University study released in March 2015 reviewed 
previous studies that examined the impact of removing the ban 
on gas prices. They found that all studies underscore that 
lifting of the export ban will not translate into higher 
gasoline prices. In fact, studies generally project gasoline 
prices in the U.S. will fall once the ban is lifted.
    U.S. crude entering the global market will increase the 
international oil supply and decrease the price of gas. The 
only thing the studies do not agree on is just how much the gas 
prices will drop. Lifting the ban will also lead to more jobs 
and higher GDP. An IHS study predicts crude oil exports would 
support nearly 300,000 jobs by 2018. Removing the export ban 
would add 26 billion to the GDP per year and improve labor 
income about $158 per year on average.
    As it improves the U.S. economy, removing the ban will also 
improve our national security. The original purpose of the ban 
put back in 1973 was to insulate the United States from the 
volatility of the international oil market. Ironically, today 
the ban exposes the United States' market to volatility. If 
ISIS continues to wreak havoc and disrupt oil prices in places 
like Libya and Iraq, having more U.S. crude oil on the market 
would help prevent a spike in the price of crude oil and gas 
prices. Lifting the ban would free us up to help our allies.
    Europe gets 40 percent of its oil from Russia. Exporting 
crude oil would give the Europeans an alternative to having to 
depend on Russia. It would also increase our influence in Asia. 
Japan and South Korea partly rely on crude oil from Iran to 
satisfy the growing energy consumption. U.S. exports can help 
diminish that reliance.
    It is ironic to me, with the so-called deal with the 
Iranians, that it is now the U.S. Government's long-term policy 
to allow Iran to export crude oil and inject billions of 
dollars in their own economy. At the same time, it is still the 
U.S. Government's policy to prohibit American producers from 
doing the same. It seems to me what is good for the Iranian oil 
exports, should be the same deal that the United States' oil 
producers get.
    U.S. exports offer a stable energy to our allies and 
decrease their reliance on dictators and state sponsors of 
terror. Lifting the ban shows the U.S. is serious about 
supporting free markets around the world. We criticize China 
for not exporting rare earth materials and yet we are not 
exporting crude oil. Removing the ban will give us more 
credibility when we criticize export bans in other nations.
    All in all, it is time we remove the crude oil export ban. 
Exporting crude oil will lower gas prices, increase American 
jobs and strengthen our national security. And that is just the 
way it is, to coin a phrase.
    I will now yield to the ranking member, Mr. Keating from 
Massachusetts for his opening statement.
    Mr. Keating. Well, thank you, Chairman Poe. And I would 
like to thank our witnesses, my colleagues, for being here. I 
feel a little bit relieved, because I am juggling between an 
important bill in Homeland Security today. And it is great to 
see the chairman here, and I think it also shows how important 
he believes this issue is for his district.
    And I look forward to an informative discussion today 
concerning what our witnesses see as the costs and benefits of 
lifting the current ban on exporting U.S. crude oil. It is 
vital that we consider the economic, environmental, and foreign 
policy implications of our dependence on fossil fuels and of 
the imports by the United States and our allies of oil and gas 
from volatile regions such as the Middle East and Eurasia.
    And while some oil companies advocate for diversification 
of energy sources on geopolitical grounds, I have seen 
instances of some oil companies actually obstructing renewable 
energy technologies, thereby undercutting their own argument, 
some of them, for diversification. I am concerned about the 
environmental consequences of ending the crude oil export ban 
and look forward to hearing from our witnesses in that regard.
    Lifting the export ban would cause the domestic price of 
crude oil to increase, many say, which would then lead to an 
increase in the production of U.S. crude oil. An increase in 
the production of domestic crude oil would have serious 
negative environmental impacts as well.
    For example, rising domestic crude oil production would 
heighten the risk of spills in transporting crude oil by 
pipeline, rail, truck, barge or tanker, and the negative health 
and environmental impacts of those spills are a concern as 
well. In addition to expanded domestic crude oil production, it 
would likely cause a significant increase in the release of 
carbon dioxide which contributes to climate change.
    The environmental cost of producing crude oil and 
continuing to rely on fossil fuels underscores that U.S. energy 
policy must seek to diversify our sources of energy and 
increase the production of wind, solar and other forms of 
cleaner, renewable energy. So I hope that is part of the 
discussion today as well and with that I yield back, Mr. Chair.
    Mr. Poe. I thank the ranking member. All members may file 
their statements. Without objection, all the witnesses' 
prepared statements will be made a part of the record, and I 
will now introduce our first two witnesses on the first panel, 
both Members of Congress.
    Congressman Michael McCaul represents the 10th 
congressional district in the great state of Texas. Congressman 
McMaul, as already stated, is chairman of the House Committee 
on Homeland Security.
    We also have Congressman Joe Barton. He is from Texas as 
well and represents the 6th district. Congressman Barton is the 
chairman emeritus of the House Energy and Commerce Committee. 
Both representatives have introduced legislation to lift the 
crude oil export ban that is pending before this subcommittee.
    I appreciate both of you being here. I will say for the 
record, Mr. McCaul does have a markup very soon. And without 
objection as soon as you testify you may leave, and Mr. Barton 
will stick around and answer all of the questions that would 
have been addressed to you after he testifies.
    Mr. McCaul?

STATEMENT OF THE HONORABLE MICHAEL MCCAUL, UNITED STATES HOUSE 
                       OF REPRESENTATIVES

    Mr. McCaul. Thank you, Mr. Chairman, and I am sure Mr. 
Barton will do a fine job answering questions directed at me. I 
must say we mentioned how intimidating it is to be sitting in 
the well here with the chair and ranking member so high up on 
the dias, and I can only imagine what the criminal defendants 
in your courtroom, how they must have felt before they went 
before you. Fortunately, I never had that opportunity.
    So I just need to say thank you for having this hearing and 
markup on this very important issue. It is long overdue to lift 
the 40-year-old ban on crude oil exports. And I think it is 
fitting that we should have this discussion in the Foreign 
Affairs Committee because crude oil exports is a major foreign 
policy issue.
    Around the world our friends and allies are looking for a 
stable and reliable supply of American energy. And countries 
like Russia abuse their status as a dominant energy supplier to 
bully their neighbors in Europe and Central Asia, while supply 
disruptions from places like Iran and Libya leave the global 
oil markets vulnerable to price spikes. The geopolitical 
benefits of American energy exports as a diplomatic tool will 
both make us stronger economically and provide critical support 
to our partners around the world.
    But don't take it from me, take it from the European 
Union's trade negotiators who leaked a memo last year 
acknowledging that the crisis, and this is their 
quote: unquote. deg. ``The crisis in Ukraine confirms 
the delicate situation faced by the EU with regard to energy 
independence.''
    And then they urged the administration privately to lift, 
they said, ``Lifting bilateral restrictions on gas and crude 
oil to increase security and instability through open 
markets.'' To lift these restrictions to increase security and 
stability--this is the European Union. This is not you or I 
talking on the Republican side of the aisle.
    Or take it from Larry Summers, President Obama's former 
director of the National Economic Council and President 
Clinton's former Treasury secretary, hardly a Republican from 
Texas--I put that one in my script. He argues that if we wish 
to have more power and influence in the world in support of our 
security interest and in support of our values, and if we wish 
to have an influence, that we pay for with neither blood nor 
taxes, I do not see a more constructive approach than 
permitting the export of fossil fuels. Larry Summers. Of course 
the ranking member knows him well having represented the Boston 
area, and of course Harvard University being there. Some of my 
colleagues--I yield.

    [The prepared statement of Mr. McCaul follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
                              ----------                              

    Mr. Keating. Mr. Chairman, you have gone there too, as a 
Texan.
    Mr. McCaul. Some of my colleagues are skeptical. I don't 
question their intent, but they are skeptical about lifting the 
ban. They contend that allowing crude oil exports could 
increase gas prices. They also argue that keeping our crude oil 
here at home makes us more energy secure.
    Allow me to address both of these points. First, the 
nonpartisan Government Accountability Office found that 
removing crude oil export restrictions will actually decrease 
gasoline prices by 1.5 to 13 cents per gallon for American 
consumers. The Energy Information Administration explained this 
somewhat counterintuitive phenomenon, pointing out that the 
effect that a relaxation of current limitations on U.S. crude 
oil exports would have on U.S. gasoline prices would likely 
depend on its effect on international crude oil prices rather 
than its effect on domestic crude oil prices.
    We already allow for the free trade of gasoline so there is 
no reason why crude oil should be treated differently. Keeping 
the ban in place will in fact make us less energy secure, 
restrict economic growth, and without the option to export to 
foreign markets our producers will continue to be forced to 
sell their crude oil at an artificially discounted rate--which 
is already causing them, as the chairman mentioned, to cut back 
production by 50 percent. This is a real problem in states like 
mine where independent small producers are laying off workers. 
It also holds back growth in states that produce little to no 
energy at all because of the effect on other industries that 
support crude oil producers.
    Moreover, U.S. refineries are not fully optimized to 
process the explosive growth in domestic production of light, 
sweet crude in states like Texas and North Dakota, rather, they 
are configured to refine heavy crude from countries such as 
Canada and Mexico. Allowing for the free trade of crude oil 
will make the market more efficient by correcting this 
producer/refiner mismatch.
    In conclusion, Mr. Chairman, the crude oil export 
restrictions enacted in the wake of the 1970s era oil embargo 
are no longer justified given today's market conditions. And as 
the chairman of Homeland Security, if this has a devastating or 
detrimental impact on ISIS and Iran, I think that would be a 
positive thing in our foreign policy and homeland security and 
I urge the subcommittee to repeal the export ban in its 
entirety as my bill does. But I think it is critical that 
Congress create a safety valve that ensures the President has 
the ability to restrict our exports in the case of unforeseen 
national emergencies. My bill, H.R. 156, the Crude Oil Export 
Act, which has been referred to this subcommittee, has such a 
provision.
    So I want to thank you again for drawing attention to the 
issue. It is an important issue. I think there will be a 
healthy debate on the committee that I serve on as well on this 
issue and I look forward to the day that they are both marked 
up and sent to the House floor for a vote. And with that I 
yield back.
    Mr. Poe. I thank the chairman, Chairman McCaul, and you can 
leave whenever you need to get to your committee. However, 
hopefully Mr. Keating the ranking member will stick around here 
for awhile.
    The chair now recognizes the gentleman from Texas.
    Mr. McCaul. When we have votes I will need the ranking 
member on the markup. So with that I yield back.
    Mr. Poe. All right.

 STATEMENT OF THE HONORABLE JOE BARTON, UNITED STATES HOUSE OF 
                        REPRESENTATIVES

    Mr. Barton. Well, thank you, Mr. Chairman, and thank you 
Ranking Member Keating, Mr. Sherman, Mr. Cook, Mr. Perry, Mr. 
Ribble, and Mr. Rohrabacher for attending this hearing. A 
special thanks to you, Chairman, for scheduling it. I am glad 
that your committee doesn't have a limitation on the number of 
Texas witnesses. Most committees do, but I am glad that you are 
ecumenical. I am going to submit my written statement for the 
record and just speak extemporaneously.
    My bill is a very simple bill. It is a page long. It 
repeals the ban on crude oil exports that was first established 
back in 1975. It repeals it in its entirety. It is not phased 
in and phased out. It just repeals it very simple, and then it 
requires a study of what to do, if anything, with the strategic 
petroleum reserve which we established at about that same time 
as a buffer against any future Arab oil embargoes.
    Back in 1975 when the ban was put in place the world was a 
different place. U.S. production was declining and imports were 
increasing. We were in a bad economic situation. And it was 
felt at that time that oil was of such strategic importance 
that it should not be allowed to be exported. It is the only 
energy commodity that is so restricted. We export coal. We 
export natural gas. We even export wood chips and electricity. 
But we don't export crude oil.
    Now oil is fungible, Mr. Chairman and members of this 
subcommittee. There are differences in viscosity and sulfur 
content, but basically oil is oil. It can go anywhere. If we 
had a barrel of West Texas intermediate and we had a barrel of 
Saudi light, an expert with some testing could tell the 
difference but nobody on this committee could tell the 
difference.
    So the reason that I think we need to repeal the ban is 
pretty straightforward. U.S. oil production is increasing. It 
is over 10 million barrels a day and going up at least for the 
time being. We produce more oil than Saudi Arabia which is 
number two, or Russia that is number three. If we were to 
repeal the ban on crude oil exports, we would allow U.S. 
producers to sell their oil to any willing buyer whether it was 
domestic or foreign.
    What difference does that make you might ask? Well, it is 
pretty straightforward. Because we have a ban on producers 
selling on the world market today they can only sell to 
domestic refiners. Now that is automatically a bad thing. I am 
a friend of the U.S. refining industry. But because they can't 
sell on the world market and because there is such a glut of 
oil being produced in the United States, U.S. refiners don't 
have to pay the world market price. So they get a discount, 
what I call a ``domestic discount.'' And again, that in and of 
itself is not automatically a bad thing.
    But the refiners take this discount, they offer our 
producers less, they refine it and then they export on the 
world market. We are exporting about 3 million barrels a day of 
refined products. Those products are sold at world market 
prices, but the producer who is producing the crude oil is not 
getting the world price.
    Now that discount has varied over time. Right now it is 
about $10 a barrel. It has been as high as 30. If we repeal the 
ban, Mr. Chairman, on crude oil exports that discount 
disappears. Now that is not necessarily a bad thing for U.S. 
refiners, but it will be a good thing for U.S. consumers 
because putting more U.S. oil or any U.S. oil on the world 
market will tend to depress or at least stabilize world market 
prices, and that will result in lower pump prices over time for 
our consumers whether they be in Massachusetts, California, 
Texas or wherever.
    So Mr. Chairman, my time is about to expire but let me 
simply say, this is a win-win. It is a win for the consumer. It 
is a win for the producer. It is a win for the strategic 
interests of the United States, and it puts pressure on the 
Saudis and the Russians which are not, at least in the case of 
Russia is not always our friend.
    With that, my time is expired. I would be happy to answer 
any questions. But thank you for the hearing and thank all the 
members for their attendance.
    [The prepared statement of Mr. Barton follows:]
    
    
    
    
                              ----------                              

    Mr. Poe. I thank the gentleman for his testimony. Are there 
any questions from members of the panel?
    Mr. Rohrabacher. Mr. Chairman. Mr. Rohrabacher. And let me 
just congratulate our colleagues, Mr. McCaul and Barton, moving 
forward like this. This is a really important issue and in the 
long run it is going to have a very positive impact on our 
people. And it is time that government got off our hind end and 
just got out there and got some things done and this is one of 
the things we could do to make things better. So thank you very 
much for your leadership.
    Mr. Poe. Thank you. The gentleman yields back.
    Anyone else?
    I want to thank you, Mr. Barton, for being here. You are 
excused. You do not have to stay.
    Mr. Barton. Thank you, sir. And let me simply say I am 
willing to discuss this one-on-one with any of the members of 
your subcommittee or the full committee. I do sincerely 
appreciate you having a hearing and I look forward to 
discussing this in the future. Thank you. Thank you.
    Mr. Poe. Thank you, Mr. Barton.
    We will get ready for our next panel, if they will come up. 
I want to thank our panelists for being here. I will introduce 
each one of you, and then we will go in the same order for your 
testimony; and limit your testimony to 5 minutes please.
    Mr. Jason Grumet is the founder and president of the 
Bipartisan Policy Center. Previously Mr. Grumet founded and 
directed the National Commission on Energy Policy.
    Ms. Elizabeth Rosenberg is director of the Energy, 
Economics and Security Program at the Center for a New American 
Security. Prior to this position, Ms. Rosenberg served as a 
senior advisor at the U.S. Department of the Treasury to the 
assistant secretary for Terrorist Financing and Financial 
Crimes, and then to the undersecretary for Terrorism and 
Financial Intelligence.
    Mr. Jason Bordoff is professor of Professional Practice in 
International and Public Affairs and founding director of the 
Center on Global Energy Policy at Columbia University. Before 
joining the Columbia faculty, Mr. Bordoff served as special 
assistant to the President and senior director for energy and 
climate change on the staff of the National Security Council.
    Dr. Stephen Kretzmann is the founder and executive director 
of Oil Change International. Mr. Kretzmann has worked on 
environmental and social issues around the global fossil fuel 
industry for the last 25 years.
    Mr. Grumet, we will start with you, and you have 5 minutes.

     STATEMENT OF MR. JASON GRUMET, FOUNDER AND PRESIDENT, 
                    BIPARTISAN POLICY CENTER

    Mr. Grumet. Thank you very much, Chairman Poe, Ranking 
Member Keating, Mr. Sherman. I will thank you again, Chairman 
Poe, Ranking Member Keating, Mr. Sherman, Mr. Ribble, Mr. 
Rohrabacher, the committee, for the privilege to be with you 
this morning. As I hope my testimony reveals, the Bipartisan 
Policy Center supports efforts to lift restrictions on crude 
oil exports.
    In the broadest sense, this ban is a 40-year-old 
anachronism. It was passed at a moment of significant national 
weakness. The irony is that this policy is now inhibiting one 
of our nation's greatest strengths. Our energy abundance has 
profound potential to continue to accelerate our economic 
recovery, to strengthen our interests internationally, and we 
do believe it is time for it to be reconsidered and lifted. 
Left unaddressed, the policy will undermine domestic production 
and it will weaken our recovery.
    But more relevant, I think, to this committee, keeping U.S. 
resources and market power on the sidelines empowers our 
adversaries to use their energy as a weapon. It diminishes our 
ability to produce a myriad, and pursue a myriad, of policy 
imperatives, and it undermines our ability and credibility to 
advocate for free trade in open markets.
    What I would like to do is try to summarize and frame a few 
ideas around the economy and then around foreign policy, and if 
the clock allows a few words about maybe a path forward. And 
let me just begin in the crucible of at least the political 
conversation which of course is gas prices.
    Inevitably, the political debate will ultimately come down 
to assertions and perceptions about the impact of any policy 
change on the price at the pump. But fundamentally, consumers 
are really somewhat on the sidelines in this debate. This 
debate is fundamentally a commercial dispute between producers 
who want access to the prices in a global market and refiners 
who are enjoying, as the Congressman said, the discount of a 
lower cost crude supply.
    For many, I think, the expectations about consumer impact 
rest on the misconception that refiners through some 
imagination of altruism are going to pass on these savings to 
consumers and drivers. But this simply is not how competitive 
markets work. Refiners appropriately seek the highest price for 
their product capturing any windfall for their shareholders. 
Because gasoline and refined products are of course sold 
globally, it is the global price that affects us here in the 
U.S. and not the price of domestic crude.
    And there have been a number of studies which I hope we 
will talk about a little bit that basically endorse this 
proposition. The group, IHS, did a detailed assessment which 
asserted that prices in the U.S. would fall by 8 to 12 cents a 
gallon. Mr. Bordoff has done fine work that I believe suggests 
that the price could go down by up to 8 cents a gallon. Rice 
University, the Energy Information Administration, and the 
Resources for the Future, have all essentially confirmed the 
same idea: That lifting the mandate will increase global 
production, and in doing so, add supply to the market which 
will create reductions in price and more resiliency.
    And while none of us can pretend to know exactly what the 
extent of those benefits are--and I would suggest, Mr. Poe, 
that if we did I would ask you to pause the hearing so we could 
all run and call our brokers--it is pretty clear that adding 
supply to the global market is going to have a beneficial 
impact on prices.
    One last point about economics and that is the simple but 
obvious point about jobs. The abundance in energy has been a 
dramatic, I think, improvement to recent economic struggles and 
by increasing production we will in fact increase the 
availability of good high paying jobs in this country. It is 
true that the market for jobs around energy production has 
diminished as prices have gone down, but consumers have had 
that benefit of lower prices. The double whammy of the ban is 
that it depresses economic productivity at home without in fact 
providing those consumer benefits, and that I think is the 
reason economically why we believe it is a barrier to progress.
    Let me turn now to trade and then a moment on how we 
project power. I think the U.S. has righteously decried 
resource nationalism for decades and protectionism that has 
inhibited and hindered global energy markets. And until 
recently our four decade old ban was essentially, I would like 
to think, was kind of a quaint hypocrisy. It was an aberration 
in policy, but it really had no impact on markets because we 
had no excess capacity in fact to share with the world. This 
has now of course changed, and for the Congress to perpetuate 
the ban at this moment I think would in fact undermine our 
credibility in promoting open markets.
    Finally, talking about the impact on foreign policy, the 
ban simply empowers our adversaries. Absent spare capacity in 
the global market, any unanticipated loss of supply can have a 
devastating effect on our economy and the economy of our 
allies, and so in a no-margin environment people who wish us 
harm are essentially empowered. Our ability to pursue our 
national interests are also inhibited. If our economy and the 
global economy is essentially looking over its shoulder at 
every moment, our ability to have significant coalitions like 
that we brought together around Iran, I think, would be 
disabled. Our ability to go to our allies and say, ``Listen, we 
need you to stick with us; sanctions only work if, in fact, 
they are broadly applied and we can now give you confidence 
that this is not going to cause you economic harm at home,'' we 
were able to say that because of domestic production. Lifting 
the ban would only strengthen our hand.
    And so while it is impossible to precisely delineate the 
prospective foreign policy of our energy abundance, I don't 
think it is exaggerated to say that our ability to fortify the 
global energy market will neutralize a myriad of threats and it 
will increase our options and strengthen our hands across the 
globe. And I thank you for the opportunity to be here.

    [The prepared statement of Mr. Grumet follows:]
    
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    Mr. Poe. Thank you.
    Ms. Rosenberg?

    STATEMENT OF MS. ELIZABETH ROSENBERG, DIRECTOR, ENERGY, 
  ECONOMICS, AND SECURITY PROGRAM, CENTER FOR A NEW AMERICAN 
                            SECURITY

    Ms. Rosenberg. Thank you, Chairman Poe, Ranking Member 
Keating, members of the committee, for the opportunity to 
testify today on the U.S. crude oil export ban. Recent dramatic 
increases in U.S. energy production have reshaped our oil 
industry, our industrial output and many of our global trading 
relationships, as my co-panelists and the prior testifiers 
already indicated. The oil boom has improved our GDP and 
balance of trade and meaningfully advanced our energy and 
national security. These benefits however will be clipped if 
policymakers do not change 1970s era crude export policies that 
prevent U.S. oil from moving to markets overseas.
    In today's abundant oil market, supply conditions with a 
problematic mismatch between increasing new volumes of domestic 
light oil and a refining industry geared toward heavier oil, 
having export restrictions does not make sense. They prevent 
U.S. producers from accessing international buyers able to 
process more light crude and who will pay international 
benchmark prices. They depress domestic prices and distort the 
market. And in turn, this constrains the growth potential for 
domestic producers and our economy more broadly. Only a subset 
of American refiners benefit from the depressed domestic oil 
prices and they do not pass on cost savings to consumers as 
gasoline prices are largely set by global benchmarks.
    Removing the oil export ban while promoting responsible 
production and energy efficiency will help to alleviate energy 
market distortions, and improve productivity, natural resource 
stewardship and economic performance. It will stimulate energy 
production growth which will decrease domestic gasoline prices 
and expand GDP.
    Strengthening our economy, the engine of our national 
security, strengthens the United States to lead on 
international economic, strategic and defense matters. Lifting 
the ban will also support our foreign partners and our 
interests abroad. More U.S. crude shipped overseas will 
diversify the global supply pool and allow our trading 
counterparts abroad to achieve a better mix of imported energy 
commodities. This will enhance market efficiencies and lower 
costs for consumers.
    These factors make the United States a more important 
trading partner for economies abroad and therefore expand U.S. 
leverage in trade negotiations and in the conduct of our 
foreign affairs. At a critical moment in the evolution of trade 
negotiations with Atlantic and Pacific partners, the United 
States should affirm a commitment to free trade and energy and 
expectation that trading partners will adopt similar 
commitments. Additionally, open energy trade is in line with 
U.S.-WTO commitments and will be indispensable in winning 
potential future natural resource trading disputes.
    Another important benefit of lifting the oil export ban is 
the contribution it will make to energy security. When more of 
the oil supply pool comes from stable producers such as 
producers in the United States, the overall market is more 
stable. U.S. crude will be shipped by fewer maritime hot spots 
and choke points such as the Straits of Hormuz and the South 
and East China Seas.
    Particularly in times of market crisis, the unrestricted 
ability of U.S. producers to export will make them more 
responsive to market signals and better able to adapt quickly. 
This contributes to market conditions that can quickly resolve 
and possibly even deter actions by foreign producers to use oil 
as a strategic weapon. Lifting the export ban will also give 
the United States more flexibility to sustain and expand energy 
sanctions in the future. Notwithstanding the potential for a 
successful nuclear deal with Iran, this is important as a 
contingency measure, at a minimum.
    Allies of the United States, many of whom reluctantly 
participated in energy sanctions in the past, may prove 
unwilling to participate in future sanctions unless the United 
States makes a proactive effort to stimulate alternative oil 
supplies and keep the market balanced. If the United States 
cannot convince allies to join on energy sanctions against 
adversaries in the future, the threat of new sanctions will not 
be credible and their effect will not be forceful.
    Washington has a unique window of opportunity to harvest 
dividends from abundant domestic energy. Policymakers should 
lift the oil export ban and promote responsible energy 
production to promote economic growth and allow the United 
States to reap the geopolitical advantages of having a larger 
and more flexible role in the global oil market.
    Thank you for the opportunity to testify and I look forward 
to answering your questions.

    [The prepared statement of Ms. Rosenberg follows:]
    
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    Mr. Poe. We now turn to Mr. Bordoff for your statement.

 STATEMENT OF MR. JASON BORDOFF, FOUNDING DIRECTOR, CENTER ON 
           GLOBAL ENERGY POLICY, COLUMBIA UNIVERSITY

    Mr. Bordoff. Chairman Poe, Congressman Keating, members of 
the committee, thank you for the invitation to be with you 
today. I would like to summarize some of the findings from a 
recent report I co-authored at the Columbia University Center 
on Global Energy Policy, copies of which you should have in 
front of you.
    The oil export ban was originally adopted in the 1970s in 
response to concerns not only about oil scarcity after the Arab 
oil embargo, but also to prevent producers from getting around 
domestic price controls by exporting their oil into the global 
market where they could fetch a higher price. Price controls 
were eliminated 30 years ago, but the export restrictions 
remain.
    U.S. oil production, as we all know, has boomed and imports 
have plummeted as a result. We are still going to be an 
importer of oil though for as far as the eye can see, most 
likely, so why are we even talking about exports? As we talked 
about this morning, the concern is the ability of domestic 
refiners to absorb the kind of oil that we are producing in the 
U.S. U.S. shale oil is very light oil, while many of our 
refineries have invested billions to handle heavy sour oil. You 
can run light oil through those refineries but it becomes 
increasingly economically challenging to do so. So as we have 
heard the price of U.S. oil may become discounted relative to 
the world price to incentivize domestic refiners to take it.
    It is about $6 today for a variety of reasons. A lower U.S. 
price would in turn mean less U.S. production, lower economic 
activity and higher net imports. To date, U.S. refiners have 
made low cost adjustments where they can. We have backed out 
mostly the import of light oil, and we have also exported what 
is allowed. Exports after all are not completely banned. They 
are restricted. Exports are allowed, for example, to Canada, 
and our exports there have surged, to almost \1/2\ million 
barrels a day. And we have also had a surge in the export, as 
you heard, of refined petroleum, which is also allowed.
    As U.S. production grows, however, at some point you run 
out of these low cost options. The oil price crash means that 
the pace of U.S. supply growth is slowing down. The Energy 
Information Administration said yesterday production will 
probably decline next month, the first decline in U.S. shale 
oil output in 4 years. Storage is at an 85-year high.
    However, the oil export issue is still relevant. First, 
production may rebound faster than we expect. Second, the 
export ban may still depress U.S. prices periodically and 
temporarily, for example, during refinery maintenance or in 
response to other outages. Third, U.S. production may be more 
sensitive to any price discount at today's lower levels. And 
then fourth, the policy process takes time. So I think it makes 
sense to prevent a market problem rather than wait for one to 
develop and then respond to it.
    Now what about gasoline prices? Wouldn't lower U.S. oil 
prices mean lower U.S. pump prices? Well, we have talked about 
that already. The answer is no. This is because gasoline and 
diesel can be freely traded in the global market so the price 
is set by the world price. If U.S. crude is discounted that 
means refineries can buy crude more cheaply, but they still 
sell their product at the global price. And we saw this from 
2011 to 2013 when the U.S. price was depressed not by the 
export restriction but by pipeline bottlenecks in Cushing. And 
as you heard, the Brookings Institution, Resources for the 
Future, Rice University, the Energy Information Administration 
and others, have found exports won't raise pump prices, they 
might slightly lower them.
    We also want U.S. supply to respond to global 
circumstances. Consider how OPEC decided in November to let oil 
prices fall, forcing higher cost producers like the U.S. to cut 
production instead. We know shale oil can go off line very 
quickly compared to conventional oil, but it can also bounce 
back quickly too. And if the world price were to rise again to 
the $70s or $80s or $90s, U.S. oil supply could rebound quickly 
to slow that price rise to temper the impact on consumers at 
the pump. But that U.S. supply response may be impeded if we 
have to sell our crude at a discounted price.
    Briefly I would add, allowing exports I think is consistent 
with America's longstanding commitment to free and open markets 
and it enhances our credibility in trade negotiations and 
avoids creating a potentially harmful precedent. Increased U.S. 
supply can also weaken the economic power, fiscal strength and 
geopolitical influence of other large oil producing companies 
and enhance U.S. diplomatic leverage in certain circumstances.
    And then, finally, I want to talk about the critical issue 
of climate change. We need to do much more to address climate 
change. To the extent oil exports boosts U.S. oil supply and 
lowers global prices, oil use and carbon emissions will rise, 
but climate change, I think, is best addressed with policies 
targeted at that problem. Restricting trade is a very costly 
way to achieve modest emission reductions relative to the 
benefits. Many government policies may raise emissions, like 
achieving faster GDP growth or a deal with Iran that allows 
Iran to sell more oil, but may still be desirable when the 
benefits are weighed against the costs.
    Members of the committee, thank you again for inviting me 
to appear here today and I look forward to answering your 
questions.
    [The prepared statement of Mr. Bordoff follows:]
    
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    Mr. Poe. Thank you, Mr. Bordoff. We now turn to Mr. 
Kretzmann.

   STATEMENT OF MR. STEPHEN KRETZMANN, FOUNDER AND EXECUTIVE 
               DIRECTOR, OIL CHANGE INTERNATIONAL

    Mr. Kretzmann. Chairman Poe, Ranking Member Keating and 
members of the subcommittee, thank you very much for the 
opportunity to testify today. These comments are a summary of 
my written statement which you all should have for the record.
    Oil Change International believes the crude oil export ban 
should not be lifted and that maintaining the ban would be 
helpful from the perspectives of community safety and climate 
protection. Our analysis predicts that lifting the ban will 
lead to a hazardous increase in U.S. oil production. This 
production would in turn likely lead to greater greenhouse gas 
emissions and threats to public safety such as increased crude 
by rail traffic.
    The crude oil export ban was certainly not designed to play 
a role in climate change mitigation or to reduce the likelihood 
of a mile-long freight train full of crude oil destroying a 
community in America's heartland, however, it plays an 
important role in regulating an industry that currently has few 
limits placed upon it. More broadly, this issue points to the 
urgent need to harmonize energy policy with climate policy. We 
cannot drill our way out of the climate crisis, and arguments 
to that effect are nothing short of climate denial.
    Oil Change International conducted an analysis of the 
impact of lifting the crude oil export ban on U.S. oil 
production. We estimated a projected production increase of 
more than 476,000 barrels per day by 2020, which incidentally 
is very similar to the estimate that was arrived at by the 
American Petroleum Institute of 500,000 barrels per day.
    The critical question to consider is what will oil 
producers do when confronted by this additional U.S. supply? 
The conventional wisdom had been that OPEC would counter new 
supply by reducing production to support higher oil prices. 
This conventional wisdom has been proven completely wrong over 
the last year. In the past 9 months it has become increasingly 
clear that Saudi Arabia is determined to maintain market share 
rather than cut production to support higher prices. This makes 
the conclusion that increased U.S. production will lead to 
increased global production and increased emissions clearer 
than ever.
    Lifting the crude oil export ban will likely increase crude 
by rail traffic putting 25 million Americans at greater risk of 
disaster. Since 2005, the amount of tank cars on U.S. railways 
has increased over 4,000 percent. At any given time there are 
about 135 100-car trains carrying a total of 9 million barrels 
of crude oil through American communities. If all of the 
projected increase in U.S. production were to go by rail, crude 
by rail traffic would see a 50-percent increase. If increased 
production were to reach the top end of the CGEP analysis, some 
1.2 barrels of oil per day, this could more than double crude 
by rail traffic from today's levels.
    Dozens of terminals on the Gulf Coast, at least four on the 
East Coast and at least six planned terminals on the West 
Coast, have facilities or will be designed with facilities for 
unloading crude oil from trains and loading it onto tankers for 
export. Lifting the crude oil export ban would put hundreds of 
communities and the lives of 25 million Americans at increased 
risk of an oil train disaster such as the one in Lac-Megantic, 
Canada, last year where 47 people perished because an oil train 
derailed and exploded.
    It seems only a matter of luck that the incidents to date 
have not caused further loss of life. Crude oil trains pass 
through more than 400 counties including major metropolitan 
areas such as Philadelphia, Seattle, Chicago, Newark, Richmond 
and dozens of other cities. This is an already untenable 
situation that we cannot afford to exacerbate by creating 
further traffic for exports.
    Lifting the crude oil export ban would also hinder progress 
toward the goal of climate protection. The stark reality laid 
out by the latest climate science is that more than three-
quarters of existing proven fossil fuel reserves need to stay 
in the ground if the world is to maintain a two in three chance 
of limiting global warming to two degrees Celsius.
    While it is not clear how much of U.S. oil reserves in 
particular need to be left in the ground, it is clear that 
lifting the ban would increase the incentives for production 
which is precisely the wrong signal to be sending. In fact, a 
gradual slowdown in U.S. and global oil production over time is 
exactly what we need in order to avoid catastrophic climate 
change. Any policy that could result in a net increase in 
global greenhouse gas emissions needs to be evaluated in terms 
of its climate impact.
    As President Obama noted in June 2013 in regards to the 
Keystone XL pipeline, our national interest will be served only 
if this project does not significantly exacerbate the problem 
of carbon pollution. This climate test should be applied to all 
policy decisions as well as the permitting of infrastructure to 
extract, transport and process fossil fuels. The lifting of the 
crude oil export ban almost certainly fails this test. Our 
communities and climate in short are worth more than so-called 
free trade and the profits of the oil industry. Thank you very 
much.
    [The prepared statement of Mr. Kretzmann follows:]
    
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    Mr. Poe. Thank all our panelists. I will begin with myself 
asking questions. Try to limit questions by the members to 5 
minutes, and so therefore you have 5 minutes to answer these 
questions.
    Start with you, Ms. Rosenberg. We have lifted, so to speak, 
the sanctions, the ban on Iran for exporting crude oil. That 
would be the long term policy if this deal goes through 
allowing Iran to export some of their crude oil. Does it make 
sense to you that we would allow Iran to put more oil on the 
world market but still prohibit America from putting more oil 
on the world market?
    Ms. Rosenberg. Thank you for the question, Mr. Chair. In 
fact, I don't think that makes sense at all. The U.S. has the 
greatest degree of leverage and influence in the market if it 
allows its producers to produce and sell their oil in an open, 
international market. Then the United States will be in a 
better position to, if necessary, if the additional sanctions 
or the reimposition of sanctions is appropriate in a policy 
circumstance, be able to quickly move, to credibly impose that 
policy and ask international allies to join with the United 
States in doing so which of course represents a sacrifice on 
their own part. They will be looking for alternative supplies 
to enter the market in order to go along with that policy. 
Lifting the crude exports ban will help make that a reality for 
them.
    Mr. Poe. Let me talk about our allies. Countries need 
obviously crude oil imports. Europe is a primary example. And 
they have mentioned to me that it seems to be we want them to 
support sanctions against a country so they can't export, but 
we don't provide them an alternative for importing crude oil 
from the United States. That seems to be our policy. Would that 
help our ability to deal with our allies in an easier way if 
they had an alternative for, okay, you want us to have 
sanctions on Iran where we get oil, but you don't provide us 
crude oil. Do you think that would be a better policy to say, 
okay, here comes the Cavalry? We are going to supply you some 
Texas crude oil.
    Ms. Rosenberg. I think such a policy would put the United 
States in a much stronger position to encourage and influence 
our allies to join with the United States in imposition of 
sanctions. And experience from the Iran case would certainly 
bear that out where international allies said to the United 
States, this is very difficult for us economically. We join in 
this policy because we think it is the right foreign policy 
measure, but we have come to a point, or are near a point, 
where we can go no further unless there are alternative 
supplies.
    Mr. Poe. Russians, well, the Europeans get about 40 percent 
of their energy oil from Russia. How would lifting the export 
ban on America thwart Russian monopoly, aggression maybe, 
policy, how would that impact it in your opinion?
    Ms. Rosenberg. Lifting the----
    Mr. Poe. U.S. ban.
    Ms. Rosenberg. Lifting restrictions on U.S. exports.
    Mr. Poe. U.S. ban on American exports, not on Iranian 
exports.
    Ms. Rosenberg. Exactly. What it will do is stimulate 
greater supply from the United States, and greater diversity in 
the international supply pool, which will make Russia work much 
harder to supply Europe with oil. That will reduce its revenue 
if it plans to keep its market share, which is certainly in 
line with U.S. policy toward Russia which involves degrading 
their revenue generation ability in the energy sector in the 
medium and long term.
    Mr. Poe. The United States is critical of China for not 
exporting its rare earth minerals. There may even be a 
complaint with the World, WTO, I am not sure. Are we somewhat 
hypocritical by criticizing China for not exporting but yet we 
don't export our energy?
    Ms. Rosenberg. Not only hypocritical but also poorly placed 
to influence other countries to embrace free trade policies not 
just on energy but on other natural resource commodities. More 
broadly, at a time when the United States is engaged in very 
serious, significant discussion about free trade arrangements 
with Atlantic and Pacific partners, now is the opportunity for 
the United States to be sending the signals to some of those 
countries particularly in East Asia that will be making trade 
related decisions that will in fact impact our economy in the 
decades to come.
    Mr. Poe. Thank you.
    Mr. Kretzmann, you mentioned that the U.S. policy, our U.S. 
policy, of not exporting crude oil is because of the 
environment concerning climate change or to protect the 
environment. More exports would allow the environment not to be 
as good as it should be. I assume then that your organization 
then recommended to the administration that they not lift the 
ban on Iran because Iran now will be able to produce more 
energy and therefore they will pollute more. And so did you 
make this recommendation to the administration that they don't 
lift the ban on Iran because they are going to produce more and 
it is going to hurt the climate?
    Mr. Kretzmann. In general, we actually believe oil 
production across the globe should be phased down to levels 
that are consistent with the climate challenge. And so, no, we 
didn't make a specific recommendation on Iran, but we weren't 
called on to either. And we are quite consistent----
    Mr. Poe. Maybe that is why they didn't.
    Mr. Kretzmann. We are quite consistent--yes, I am sure. We 
are quite consistent on the fact that less oil needs to be used 
and we need to keep oil production and consumption to limits 
that are prescribed by global climate science.
    Mr. Poe. The other comment that you made is that more rail 
cars are in America now because there is more oil. We could 
probably diminish the rail car capacity if we had more 
pipelines. That is just an observation. But my time is expired. 
I will yield to the ranking member.
    Mr. Keating. Thank you, Mr. Chairman. It is great to know 
that in the whole scope of things our sanctions with Iran deal 
more with, much more with their ability to have a nuclear 
weapon than international oil prices.
    We talked about the effect and I think it really can't be 
questioned that lifting the ban would create more jobs. But in 
my state of Massachusetts, and I know how Texas has such an 
interest in this and I understand that too, in my own state one 
of the fastest growing industries has been surrounding the 
renewable energy. And I would just like to ask what effect 
would this have on the growth of renewable energy, wind energy, 
solar energy, geothermal in our country? I will ask Mr. 
Kretzmann.
    Mr. Kretzmann. I think unfortunately ongoing policies that 
support the further growth of the oil industry in the United 
States tend to at least diminish investment in renewables, 
although on the other hand we are seeing more than we have ever 
seen before and that is good news. But I think the sooner that 
we can make it clear that our energy future is about 
renewables, and oil and coal and natural gas are about our 
energy past, the faster we can move markets to create more 
investment to create that transition that we all know is 
coming.
    Mr. Grumet. Mr. Keating, Massachusetts did a profound job 
of advancing renewables but the vast majority of it is in the 
electric power section. The wind power is displacing coal and 
natural gas. We have almost no oil left in the electric sector. 
So I think the renewables question here really relates not so 
much to wind or solar or bio, but to biofuels and ethanol. And 
I think there is a conversation to be had about how domestic 
oil prices create or discourage market for alternative 
transportation fuels, but really not so much of a conversation 
about the interaction with wind power.
    Mr. Keating. Because I have noticed in Europe how they are 
ahead of us in so many of these other areas as well and I 
assume some of their problems with access to oil and their 
concerns that were referenced by our witnesses today also 
spurred growth there in renewables.
    But I would just too like to touch base on the effect 
economically on our domestic refineries. What effect would this 
have on our refineries and could you put it in the context of 
what has been happening over the last few decades with our 
domestic refineries too? I will address that to anyone that 
wants to take that.
    Mr. Grumet. I will take a shot, and Jason Bordoff knows 
more about it than I do so he will go next. I think the most 
important point I would like to make is that honestly none of 
us know. And it is critically important to recognize that the 
question here is not should we mandate oil exports, the 
question is should we step back and actually let that truth 
reveal itself?
    There are arguments made that in fact the most economic 
outcome would be for the refining industry to make significant 
investments here at home so it could process all of our 
domestic oil. The depressed price right now suggests that is 
not the case at the moment, but it is entirely possible that 
could be true. It is not my guess, but it could be true. The 
only way we figure that out is if you lift the restriction and 
let the truth become the truth.
    I think the mistake here, and we have often found there is 
a certain seduction to wanting to know the answer which 
encourages us all to want to try to pick market outcomes, the 
history of Congress picking market outcomes has not actually 
been a very proud one. And so I think most broadly, the best 
thing that we could do is not try to figure out whether it is 
the producers or the refiners who have the best of this 
projection and, in fact, let the market make that 
determination.
    Mr. Keating. Yes, and if the refiners have that discount. 
And I would just like to ask you, what has been happening with 
domestic refineries? Have they contracted? Have they become 
more scarce? And if that is the case what effect could this 
have on that domestic job industry?
    Mr. Bordoff. I can take a crack at answering it. I mean I 
think we know a little bit what the impact would be. As we 
heard, the U.S. refineries have been running at a very high 
utilization rate. The U.S. has gone from being the largest 
importer of refined petroleum in the world in 2006 to the 
largest exporter today. That is a dramatic turnaround.
    It is true that we saw refineries that depended on light 
crude, particularly in the Northeast, at risk of closing 
several years ago, and some were kept open because they were 
acquired by airlines or private equity firms or others and they 
have been enjoying a benefit of the discount that we are 
talking about, so this is sort of the direct corollary of the 
issue we are talking about.
    To the extent that this is as big of an issue for 
production as many producers say, it is because there is a 
discount that would otherwise develop in the market and that 
would benefit some refineries. If you don't allow that discount 
to develop they won't enjoy access to discounted crude and they 
won't have that benefit. The question is whether, if you are 
concerned about the access to refined petroleum product in the 
Northeast, you think the right policy approach is to put in 
place an economy-wide restriction on energy trade in order to 
create a price discount that is, in effect, a subsidy to some 
refineries that are economically challenged, or whether it 
makes sense to allow energy trade and develop other policies to 
promote security of energy supply for refined petroleum in the 
Northeast. The administration recently put in place a gasoline 
product reserve in the Northeast. There are a host of other 
measures that one could put in place as well.
    Mr. Keating. Thank you. I yield back, Mr. Chair.
    Mr. Poe. I thank the ranking member. The chair will now 
recognize the gentleman from Wisconsin, Mr. Ribble.
    Mr. Ribble. Good morning, everybody, and thank you for 
being here. Mr. Bordoff, have you done any research in your 
study about the comparative regulatory regimes in environments 
around the globe as it relates to oil production? In other 
words, is the U.S. regulatory regime regarding cleanliness, 
safety and what not, similar to that that is going on in 
Venezuela, Iran, Russia, Saudi Arabia? Could you talk about 
that for a minute?
    Mr. Bordoff. We didn't look at it in this study. I would 
say the answer is generally no. I think the U.S. has quite high 
regulatory and safety and environmental standards relative to 
many of the countries you just mentioned for oil production.
    Mr. Ribble. Yes, those are the primary other competing 
nations, correct? Did I miss anybody there? Canada, I suppose.
    Mr. Bordoff. Yes, and Canada. If we think about where U.S. 
refineries are getting their oil from and the heavy crude that 
they are optimized to run we would be on the margin importing a 
little more from Canada and Venezuela along with Mexico and 
some others. Yes.
    Mr. Ribble. Ms. Rosenberg, do you have any comments on 
that?
    Ms. Rosenberg. Nothing further, thank you.
    Mr. Ribble. Okay, thank you.
    Mr. Kretzmann, in light of that would you agree with Mr. 
Bordoff's assessment?
    Mr. Kretzmann. I think that there is certainly great room 
for improvement in U.S. oil production standards.
    Mr. Ribble. That wasn't my question.
    Mr. Kretzmann. But I hear your question and I think U.S. 
oil production standards are often higher than in some other 
countries, although perhaps not absolutely the top of the class 
worldwide. That said, I think the question implies----
    Mr. Ribble. Who is top of the class worldwide?
    Mr. Kretzmann. Norway, I think, is pretty good, and 
actually Brazilian offshore is also really good. But besides 
that the question implies that somehow U.S. oil production 
would replace other oil production, and the experience in the 
market over the last 6 months makes it clear that it will just 
be added to ongoing production. And so----
    Mr. Ribble. The question didn't imply that at all. The 
question implied that U.S. regulatory regime is more stringent 
than other countries. That is all the question implied.
    Mr. Kretzmann. Oh, I certainly assumed that what you were 
saying was wouldn't you rather have U.S. oil than other oil, 
and that seems to be a reasonable conclusion to pull. And my 
point is, it is not a question of one or the other, it is 
actually going to be both.
    Mr. Ribble. But in light of that though then wouldn't you 
say you would rather have cleaner production than less clean 
production?
    Mr. Kretzmann. I would rather have less production.
    Mr. Ribble. I get that. You would rather have no 
production.
    Mr. Kretzmann. Ultimately I would rather have production 
that brought us within climate limits.
    Mr. Ribble. Right. And I don't know that in light of that, 
the approach of saying, ``Let us get rid of production'' is the 
fastest way to get at a cleaner climate. I think the faster way 
is to get at the user than it is to the producer. Producers 
respond to demand as opposed to creating demand. They respond 
to it. And if you can change that paradigm you are likely to 
reduce demand. However, I would say until that time comes--and 
let us face it. With CAFE standards and other things that have 
happened, things have gotten better rather than worse in light 
of carbon use.
    It just seems to me it would behoove global climate 
interest to have production happening in places that are 
cleaner and safer as opposed to places that are dirtier and 
less safe. And so it is almost like you are arguing against 
your position here.
    Mr. Kretzmann. No, not at all. Producers actually impact 
demand quite a bit as we have seen over the last year. I mean 
the increase in production that has happened since the U.S. 
increase in production, which has been quite substantial over 
the last several years, and then the Saudis not responding by 
reducing their production has actually significantly lowered 
the price as we see and that in turn has increased global 
demand. And so producers obviously impact global demand, and 
that is an important part of the equation for us to consider 
from an economics perspective when thinking about how to 
influence the market. I mean this is a complex challenge about 
how to begin to wind down our global addiction to fossil fuels 
in order to respond to climate change. I think we all recognize 
that. But there are things that we have to do both on the 
supply and demand side in order to meet that challenge.
    Mr. Ribble. Yes, and I guess my only challenge to you in 
your thinking, and it is not necessarily related to the trade 
issue, is that as you look in the long view it seems to me that 
you are better off really accepting the fact that between now 
and where you would like to be there are maybe better processes 
to get there than the one that you are pursuing at this 
particular moment. That would just be my suggestion.
    Mr. Grumet, could you also help me understand a little bit 
better on how you come to the conclusion that gas prices would 
be lower even though oil prices would be higher?
    Mr. Grumet. I don't believe my testimony indicates that 
global oil prices would be higher.
    Mr. Ribble. But the U.S. produced oil would be sold at a 
higher price.
    Mr. Grumet. The U.S. produced oil would be sold at the 
global market price. And I think the question for gasoline 
prices is the relationship between the refinery and the 
ultimate market. So the assumption that a discounted crude 
price, a refinery in the U.S. can get crude at $6 or $7 a 
barrel less than someplace else, is that that will somehow 
again altruistically be passed on to you and me. And that would 
be an irresponsible choice by a refiner with obligations to 
shareholders.
    What a refiner should do is seek the best price for their 
product. Because they of course appropriately have access to a 
global market, they will get the same price as any of the 
global competitors. And so the challenge of course is to find a 
way to have the benefits of a robust global market that creates 
consumer benefits and foreign policy benefits, and at the same 
time make sure that we have a dynamic economic situation here 
at home.
    Mr. Ribble. All right, thank you. I yield back.
    Mr. Poe. I thank the gentleman. And the chair recognizes 
the gentleman from California. Mr. Sherman?
    Mr. Sherman. I have a lot of comments here. It may eat into 
my question time so the witnesses can relax for awhile. I talk 
to a lot of Ambassadors, as we all do, I never bring up oil. 
Oil is not--in sense of oil production, but I just ask them 
what is on their mind and none of them have ever said, gee, the 
most important thing is U.S. exports of oil. So I am not sure 
that we are going to get huge concessions on other trade issues 
by adopting the policies that three of our witnesses would 
like.
    As to the environment, environmentalists have not focused 
on the tremendous harm to the environment of wars in the Middle 
East. And the fact is that lower energy prices worldwide will 
drive down the power of the those who cause those wars. The 
most extreme example, well outside our discussion here, was 
already brought up, and that was Iran. Yes, Iran may be 
producing another million barrels a day. That may be bad for 
the environment. But if we reduce by 1 percent the likelihood 
that nuclear weapons are used and you weigh that against 1 
million barrels a day, now I am not sure which you go to reduce 
the chance of a nuclear Iran, but whatever we can do to do that 
is a plus for the environment even if it means 1 million 
barrels a day.
    The idea that we should have bottlenecks and problems and 
restrictions to drive up the price of oil so that we have less 
carbon, maybe we should get rid of the bottlenecks and the 
problems and then have a tax to support infrastructure and that 
way we can have infrastructure instead of bottlenecks.
    As to rail transport, the only thing worse than bringing a 
train through my district loaded with crude is to bring a train 
through my district loaded with refined gasoline. And so if we 
encourage moving a lot of gasoline around so we can export it 
that might be worse. But I would hope that as part of the bill 
we put together we go even further than the administration 
already has in terms of safety of our oil by rail 
transportation. I think we are being given kind of a false 
choice. It is, stick with the present policy, which is kind of 
crazy, or lift all the barriers. Well, one thing we might do is 
go completely the other way and that is ban the export of 
refined petroleum. Make them give the discount to people who 
live in my district. That ought to be explored so that we can 
go in both directions.
    We can also take a look at our rules for exporting natural 
gas, which I know are unpopular with some members of the 
committee. But perhaps we can just go to that point instead of 
completely lifting the ban, and have the administration have to 
license the export. And I would point out that in the natural 
gas area, Americans are paying much less than the world price. 
Part of that is physics and the cost of transportation, but 
part of it might be our limitations on export.
    For those who support this idea, you might want to make it 
a little easier for us to vote for it. When people hear this 
they hear a threat to the security and price of the oil and the 
gasoline they buy at the pump. So you may want to explore the 
idea of expanding swaps and making it practical. One could 
imagine a situation where if you bring in a barrel of crude you 
get a chit. And if you want to export a barrel of crude you 
need a chit. I think the price of these chits would be about a 
penny a barrel, and that solves 99 percent of your problem. 
Because if we can turn to people and say, yes, this is a swap, 
for every barrel we are exporting we are importing a barrel, a 
company is importing and exporting or is in partnership with 
the import or the export. That is very different than saying 
that you are going to take that oil from North Dakota or 
wherever, bring it to the Port of Los Angeles right by my 
thirsty consumers, and ship it to Japan, if that is the only 
part of the picture.
    We drive a lot in Southern California and that is, if this 
is part of a system for more efficient refinery and more 
efficient pricing that is swaps, that is a lot better picture 
to put forward than to see all that oil leave our country, 
until of course we all buy Teslas and then we will be able to 
do it. And I look forward to that day and I yield back.
    Mr. Poe. I thank the gentleman from California. The chair 
recognizes the gentleman from South Carolina, Mr. Wilson.
    Mr. Wilson of South Carolina. Thank you, Judge Poe, and 
thank each of you for being here today.
    Mr. Grumet, do you believe that lifting the crude oil 
export ban would bolster the U.S. negotiating position on other 
trade issues?
    Mr. Grumet. Mr. Wilson, thank you. I think that is an 
important point that a number of us have spoken to, and again 
it goes back to kind of a fundamental value question. The 
United States of America has always been, I think, the global 
leader in advocating for open markets, efficient and free 
trade. And we have a little bit of a challenge. There is a bit 
of a hypocrisy in suggesting to others that they share their 
riches with the world but we are somehow going to hold tight on 
this commodity.
    And again I think Mr. Bordoff makes the important point, 
that this is a policy that was adopted in a very different 
environment. It really was not designed to kind of be Fortress 
America, but that is the effect it is now having, and now in 
fact it actually does matter. Now we have a profound 
opportunity through this remarkable abundance that none of us 
predicted to reassert a voice in a global economy in a very, I 
think, challenging global environment.
    This is benefiting us in a myriad of ways. It is benefiting 
us in trade. It is benefiting us in our ability to provide 
opportunities to our European allies to fend off some of the 
manipulations of the Russians. It is enabling us to hold 
together coalitions around sanctions. So I think you have heard 
a lot of consistency at least from the first three witnesses 
that there is a very significant advantage to being part and a 
forceful player in this global market.
    Mr. Wilson of South Carolina. And thank you for your 
points. And Ms. Rosenberg, I am particularly interested in 
lifting the crude oil ban. What would be the effect on jobs? 
And I put it in the context of Keystone Pipeline that was with 
our Canadian allies, the bringing of crude product through our 
country. I know personally that almost 1,000 jobs, permanent 
jobs, would be created in a community that I represent.
    Michelin Tires makes the tires for Fort McMurray, Alberta, 
Canada. They are 12 feet high, $60,000 each, and nearly 500 
jobs. And then MTU makes engines for the processing of the oil 
sands. Again you could get three engines in this room. They are 
very nice engines. And again nearly 500 jobs. A total of 1,000 
jobs just in the district I represent. And so by lifting the 
ban, what would be the effect on jobs across our country?
    Ms. Rosenberg. Thank you for the question. Essentially, 
lifting restrictions on crude exports sends a signal to those 
producers who find it difficult to access international 
benchmark prices for their crude to be able to access them, 
which drives an incentive for them to expand production, expand 
their market share. Broadly speaking, what that does is create 
additional jobs for those producers and for associated 
industries that support them in services in those communities, 
et cetera.
    Now the number of jobs that that will create there are 
different studies, they offer different numbers, and it is 
important to remember this is also a function of what the 
international oil price is. If it is particularly strong that 
will incentivize greater investment, and that is of course a 
cyclical, it is a cyclical market that moves up and down. I 
would defer to Jason Bordoff whose study has a particular 
comment on this if he wants to speak to it, but in broad terms 
it is true that job creation would be a function of lifting 
export restrictions.
    Mr. Wilson of South Carolina. And Mr. Bordoff, again an 
excellent report. And on the issue of jobs what do you see?
    Mr. Bordoff. Well, our study didn't estimate a particular 
number of jobs, but generally we had a range of the impact it 
could have on production. Our estimate was anywhere from zero 
to 1.2 million barrels a day and it depends on a host of 
circumstances including how quickly U.S. production grows, how 
much of a price discount might otherwise emerge, how quickly 
refineries can adapt.
    But it is a function of how big an impact this has on U.S. 
production; so to the extent the export restriction is eased, 
the more significant an impact it has on increasing U.S. 
production, the more economic activity, the more employment you 
are going to see in the oil and gas sector in the U.S. The 
magnitude and timing of that impact is frankly highly 
uncertain, particularly given the price collapse that we have 
seen and what is happening to U.S. production, but 
directionally it is going to be positive.
    Mr. Wilson of South Carolina. Well, and I know personally, 
in fact my family, I understand the opportunities provided by 
the oil industry, the liberating, fulfilling lives that people 
can have. My great grandfather started with Standard Oil New 
Jersey in Virginia in 1895. My grandfather was the division 
manager at Standard Oil of New Jersey in South Carolina Esso, 
and then my dad was a sales representative for Exxon Humble, 
and I am very grateful in them. My brother was an oil jobber.
    So I know that the oil industry is very important to 
providing opportunity and I appreciate every effort to expand 
it for the benefit of jobs and opportunity and fulfilling lives 
to the American people.
    Mr. Poe. Yield back?
    Mr. Wilson of South Carolina. Yes, I do.
    Mr. Poe. All right. The chair recognizes the gentleman from 
Texas, Mr. Castro.
    Mr. Castro. Thank you, Chairman Poe, and thank you to each 
of the witnesses for your testimony this morning. Of course 
this is an issue. This is a policy, a longstanding policy, 30 
years or so. We seem to be taking on a lot of these issues 
lately with Cuba being another one, and it seems to me that 
there are basically three issues here--one of geopolitics, 
another of environmental concerns, and third, the domestic 
business consideration that has expressed itself as a battle 
between producers and refiners. But I guess with those three 
things in mind, I have a few questions.
    First of all, if we were going to put together a bill that 
would lift the ban as it exists, whether it is a partial 
lifting or a complete lifting, what would the safeguards look 
like, right? So, for example, what if we were in a situation 
like the 1970s again where you had a scarcity of resources? 
What would the safeguards be that we would need to put in place 
to make sure that we don't go through a situation like that 
again? I mean there was a reason that this ban was put in place 
back then, right? If we are in a situation like that again what 
do we do?
    And then the second part is, since this is kind of the 
first round of discussions about this, if you were going to 
design a grander bargain, a larger bill where you would allow 
for some perhaps partial lifting of this ban, but also an 
infusion of resources or the support of policies to develop 
alternative energies, what would that look like? What would a 
grander bargain look like? Please.
    Mr. Grumet. Well, as the Bipartisan Policy Center we love 
grand bargains, Mr. Castro, so I am going to take a shot, I 
think maybe try to address the second part of your question 
first. I think the first point is that while the benefits 
economically, I believe, strongly outweigh the costs, and there 
will be costs, there will be a handful of refiners, a few in 
the Northeast, who are clearly going to have to struggle with 
this recalibrating market. And I believe that the Congress is 
going to have hopefully look to opportunities to smooth that 
transitional challenge. I have yet to see a specific proposal 
to do so.
    There is not a lot of conversation: I mean I love phasing 
and all those kinds of ideas, but I think there is a certain 
reluctance upon the part of those who feel that they might be 
injured to suggest a path forward because they believe it will 
in fact make it easier for you to pursue that path. I think as 
the debate becomes more and more serious and this becomes, I 
think, what it will be which is an inevitable move to change 
policy, I think those ideas will come forward. I certainly 
hope----
    Mr. Castro. What would you do? What safeguards would you 
put in place?
    Mr. Grumet. You are asking another important question which 
is what happens if something changes, right? I mean all of a 
sudden the oil market is certainly proven to be volatile. The 
President, in current law, has significant authority to make 
decisions in the national security interest to right now allow 
exports in contradiction to the ban, and I certainly think that 
that authority should be mandated or, sorry, preserved and even 
strengthened in reverse. So once this market, I think, is 
opened and we have the opportunity to engage in the 
international stage, the President certainly must have a 
sustained authority to interrupt those exports if necessary to 
ensure the security interests of the nation. And so I think the 
way one crafts that is important, but that it an important 
aspect of this debate that I certainly hope Congress continues 
to pursue.
    Mr. Castro. Sure.
    Ms. Rosenberg. Following on that briefly, I think there are 
two main elements of the question that you just asked. And the 
first one is how do we make the U.S. economy its most resilient 
version in order to protect U.S. consumers from the 
circumstances of the 1970s that were so economically painful, 
particularly deriving from energy sector changes, dramatic 
changes?
    And the second element of your question I see is that what 
are the reassurances that you could put, the policy measures 
particularly including reassurances that you could put into a 
piece of legislation that give consumers the confidence to know 
that in fact this policy is consistently on an ongoing basis 
performing in a way that benefits them and additionally that 
maintains for the executive branch the ability to put the 
brakes on if circumstances merit?
    And speaking to that particular issue, the way to provide 
information, there are a variety of ways to do that. One 
popular way is to ask the EIA, for example, to produce regular 
public information and updates as they have done in the past 
but specific to this policy which would give consumers the 
confidence to know that this is working to their advantage. 
Additionally as we just mentioned, the policy that gives the 
administration the ability to restrict exports if that makes 
sense in circumstances would do so.
    Mr. Castro. Let me have 20 seconds.
    Mr. Bordoff. I just want to very quickly--I am sorry. I was 
just going to answer your question which is if the President 
allows exports under a national interest determination, he can 
revoke it. EPCA allows the immediate issuance of regulations to 
restrict exports without seeking public comments in the event 
of a true supply emergency and disruption. And if Congress 
repealed the ban it could give the President authority to re-
ban, or the Secretary of Commerce could impose controls under 
the Export Administration Act, short supply controls, or 
potentially the President can invoke his emergency authority 
under the International Emergency Economic Powers Act to limit 
crude oil exports. So authorities exist in the event of a true 
emergency like the 1970s.
    Mr. Castro. Okay, I am out of time but can I just make a 
final comment, Chairman? Thank you. That I think it is going to 
be difficult to lift that ban carte blanche. That there is 
going to have to be safeguards in place and I think we ought to 
consider whether there is an opportunity to also support 
alternative energies if this is going to happen. So thank you. 
I yield back.
    Mr. Poe. The gentleman yields back. The chair recognizes 
the gentleman from California, Mr. Rohrabacher, for his 
comments.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman, and 
thank you, Mr. Chairman, for holding this hearing. Mr. Bordoff, 
in your testimony you mentioned several times about these 
trains, about dangerous long trains. No, but I think you did 
too and I caught that. Maybe I am mistaken.
    Well, then I won't ask you the question. I will just 
suggest which is the next--well, let me ask you this then. Did 
your organization support the Keystone Pipeline? No, no, Mr. 
Bordoff.
    Mr. Bordoff. I am a professor at Columbia University. We 
don't take institutional positions on particular issues.
    Mr. Rohrabacher. Well, did you support the Keystone 
Pipeline?
    Mr. Bordoff. I have said that with Keystone, I think we 
should be focusing on the issues that really matter to achieve 
meaningful reductions in climate change and carbon emissions, 
and I think a decision in either direction on Keystone doesn't 
have a huge impact on affecting greenhouse gas emissions.
    Mr. Rohrabacher. Now, first of all, let me just note that--
is it Kretzmann?
    Mr. Kretzmann. Yes, that is right. Kretzmann.
    Mr. Rohrabacher. Mr. Kretzmann, first of all, let me say 
that it is refreshing to have someone as open and honest as you 
are about your positions testifying before us. Most of the 
people who come here opposing the pipeline, the Keystone 
Pipeline, and supporting all of these various controls are not 
as open about what their goal really is, and you honestly have 
expressed you want us to end oil production. You are not in 
favor of any more oil production and would shut down oil 
production now if you could. And that is, frankly, refreshing 
to hear someone being this open about this because that is not 
what we get.
    And in terms of your motive, I understand and appreciate 
it, the fact that you believe that production of CO2, which 
goes hand in glove with oil production in our country, that 
that is harmful to the world environment via a theory that CO2, 
increased CO2, will increase the temperature of the planet.
    Let me just note, Mr. Chairman, I would ask unanimous 
consent at this point, to be put in the record, the name of 10 
prominent scientists from around the United States who totally 
disagree with that particular theory that more CO2 means that 
there will be higher temperatures.
    Mr. Poe. Without objection it will be made part of the 
record.
    Mr. Rohrabacher. And so, and I know there are other 
scientists who disagree with that. So we have people who are 
prominent scientists on both sides of this issue, and I can't 
help but notice, however, that the predictions based on that 
particular theory haven't been coming true in the last 18 years 
based on--I mean I can remember the debate that we have had 
here, where several scientists were quoted as saying we are 
going to reach a tipping point, and the tipping point will be a 
major jump within a very short period of time of temperature. 
And not only have we not seen this tipping point and major jump 
in temperature, but there has been a basically no increase in 
temperature for 18 years, yet the CO2 rates have gone up.
    So just my, the scientists that I am talking about as well 
as my common sense tells me, we shouldn't be basing policy or 
energy policy on that theory. And I respect the fact that you 
are an intelligent person and the people who you have spoken to 
are intelligent, but we have a difference of opinion on that. 
And I would think that trying to implement what you have 
honestly expressed, which I believe is not being honestly 
expressed by others, would mean a major decline in the standard 
of living of our people. And I would appreciate an honest 
discussion, so thank you for being here and being open in your 
testimony today. But I will give you 30 seconds to refute 
everything I said.
    Mr. Kretzmann. That may take a little bit longer but I will 
make some reference quickly. Thank you for your honesty, 
Congressman. On a variety of different things I would say that 
it is quite clear the majority of, the vast majority, 97 
percent of climate scientists are completely clear on the 
dangers associated with climate change. And I would like to 
submit for the record the contents of skepticalscience.com, in 
which you will find the questions that are often posed by 
people who are questioning climate change and answers from 
climate scientists. So if that would be possible I would love 
to do that.
    Re your question about not observing temperature changes, 
you should look at the temperature of water. Because the oceans 
have been absorbing the heat over the several decades and that 
is where the heat is going and they are pretty much done with 
absorbing the heat, now we are going to see the rest of it jump 
up very high. That is what the scientists tell me.
    I do not want to bring oil production to zero immediately. 
That would be irresponsible and disastrous. However, it is 
clear that if we can, we will need to cut oil production and 
fossil fuel use down to essentially zero by 2050. That is a 
long time particularly for a country as great as ours that can 
put a man on the moon and do anything we want to. I believe we 
can make this transition, and I believe we can do it in a way 
that will be healthy for our economy and great for our 
communities and we will all have a better standard of living at 
the end of it.
    Mr. Rohrabacher. Thank you for expressing that vision. I 
disagree with it but----
    Mr. Kretzmann. That is not a surprise.
    Mr. Rohrabacher [continuing]. I appreciate that. Thank you 
so much, Mr. Kretzmann.
    Mr. Kretzmann. Thank you, Mr. Chairman.
    Mr. Poe. I thank the gentleman. Yields back. The chair 
recognizes the ranking member for a final comment.
    Mr. Keating. Thank you, Mr. Chairman. I just, since my 
colleague and friend wanted to submit 10 different scientific 
references against climate change, I would like unanimous 
consent to put in a paper reflecting the 12,000 peer reviewed 
scientific articles, 97 percent of which indicate climate 
change exists as well.
    Mr. Poe. If you have those names they will be submitted to 
the record.
    Mr. Kretzmann. I can get names for you.
    Mr. Keating. And just in closing, thank you again, Mr. 
Chairman. Thank the witnesses. And I think each of you in your 
own way really gave important information and I appreciate your 
testimony. I would just say too there is another cost that, 
really, it is hard to quantify perhaps besides just the cost in 
the Northeast, the potential with the refineries contracting 
more, and that is the cost of climate change. I have the 
highest yielding dollar fish industry in that city of New 
Bedford that I represent and climate change has affected 
drastically the fishing industry.
    And also in terms of the flooding and the erosion, our 
tourist industry is threatened and is threatened right now from 
that. And look at the cost of the historic snowfalls that the 
Northeast and my state in particular have suffered through. So 
I have left the cost of spills and mitigation of that and 
clean-ups as well. So there is costs all the way around and I 
think it is an important discussion to have. And I appreciate 
the witness and I appreciate the opportunity, Mr. Chairman, to 
have this hearing.
    Mr. Poe. I thank the gentleman. And just a final word. I am 
very concerned about the loss of jobs because of the recent 
developments, 50 percent of the rigs in the state of Texas have 
been shut down since Thanksgiving; 70,000 people have lost 
their jobs. I think it is important that we at least treat 
America the same way we treat the Iranians. If we lift the ban 
on exporting Iranian oil we ought to lift the ban on exporting 
American oil. I think it makes sense. It is a national security 
issue. It is also an energy issue, and it is a jobs issue as 
well.
    But I do thank all of the panelists for being here and the 
members who have participated in this lively discussion. The 
subcommittee is adjourned.

    [Whereupon, at 11:49 a.m., the subcommittee was adjourned.]
                                     
            

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