[Senate Hearing 116-372]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 116-372

                    THE IMPACTS OF COVID-19 ON THE 
                            ENERGY INDUSTRY

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 16, 2020

                               __________
                               
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                       Printed for the use of the
               Committee on Energy and Natural Resources

        Available via the World Wide Web: http://www.govinfo.gov
        
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
40-918                      WASHINGTON : 2021                     
          
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       MARIA CANTWELL, Washington
STEVE DAINES, Montana                BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana              DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi        MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona              ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota

                      Brian Hughes, Staff Director
                      Lucy Murfitt, Chief Counsel
    Tristan Abbey, Senior Policy Advisor for Strategy and Economics
                 Renae Black, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
            Brie Van Cleve, Democratic Senior Energy Advisor
                     Darla Ripchensky, Chief Clerk
                            
                            
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from 
  West Virginia..................................................     2

                                WITNESS

Nalley, Stephen, Deputy Administrator, U.S. Energy Information 
  Administration, U.S. Department of Energy......................     4
Turk, David M., Acting Deputy Executive Director, International 
  Energy Agency..................................................    10
Jacobson, Lisa, President, Business Council for Sustainable 
  Energy.........................................................    17
Macchiarola, Frank J., Senior Vice President, Policy, Economics 
  and Regulatory Affairs, American Petroleum Institute...........    41
Roberts, Jackie, West Virginia Consumer Advocate, and President, 
  National Association of State Utility Consumer Advocates.......    51

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

American Exploration & Production Council:
    Statement for the Record.....................................   122
American Fuel & Petrochemical Manufacturers:
    Letter for the Record........................................   126
American Gas Association:
    Letter for the Record........................................   128
American Public Gas Association:
    Letter for the Record........................................   130
American Public Power Association:
    Statement for the Record.....................................   134
America's Power:
    Statement for the Record.....................................   139
Biotechnology Innovation Organization:
    Letter for the Record........................................   142
Electric Power Supply Association:
    Statement for the Record.....................................   146
International Association of Drilling Contractors:
    Statement for the Record.....................................   155
International Liquid Terminals Association:
    Statement for the Record.....................................   157
Jacobson, Lisa:
    Opening Statement............................................    17
    Written Testimony............................................    19
    Responses to Questions for the Record........................   104
Large Public Power Council:
    Letter for the Record........................................   160
Louisiana Mid-Continent Oil and Gas Association:
    Letter for the Record........................................   166
Macchiarola, Frank J.:
    Opening Statement............................................    41
    Written Testimony............................................    43
    Responses to Questions for the Record........................   111
Manchin III, Hon. Joe:
    Opening Statement............................................     2
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
Nalley, Stephen:
    Opening Statement............................................     4
    Written Testimony............................................     7
    Response to Senator Barrasso's question regarding temporary 
      federal royalty relief.....................................    70
    Response to Senator Barrasso's question regarding nuclear 
      fuel imports...............................................    72
    Responses to Questions for the Record........................    91
National Rural Electric Cooperative Association:
    Statement for the Record.....................................   168
Roberts, Jackie:
    Opening Statement............................................    51
    Written Testimony............................................    53
    Responses to Questions for the Record........................   117
Solar Energy Industries Association:
    Letter for the Record........................................   171
Turk, David M.:
    Opening Statement............................................    10
    Written Testimony............................................    12
    Responses to Questions for the Record........................   101

 
                    THE IMPACTS OF COVID-19 ON THE 
                            ENERGY INDUSTRY

                              ----------                              


                         TUESDAY, JUNE 16, 2020

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:07 a.m. in 
Room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski, Chairman of the Committee, presiding.

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

    The Chairman. Good morning, everyone. The Committee will 
come to order. We are here today to discuss the impacts of the 
COVID-19 pandemic on the energy industry with a special focus 
here in the United States.
    Though every layer and every facet of American society has 
seemingly been affected, oftentimes dramatically, by the 
pandemic, it is clear to me that as Chairman of this Committee 
the energy sector has suffered acutely and uniquely. Energy is 
the foundation of our economy. Limits on business, travel and 
social activities in an effort to contain the virus have had 
far reaching consequences for our nation's energy producers in 
terms of fossil fuels, renewables, and advanced technologies, 
such as nuclear power. The resulting decline in demand can be 
found just about everywhere. Less flying means less jet fuel, 
less driving means less gasoline and diesel, less commercial 
activity means less electricity, less consumption means less 
production and less investment today means less development 
tomorrow. So, for a producing state like Alaska, less 
production and less investment and less development are pretty 
ominous signs over the horizon. That is why I hope, truly, the 
demand has been paused, rather than destroyed.
    Energy is, all at once, a finished product, a feedstock, a 
raw material, an input, an output, a value added good, a 
natural resource, a tradeable commodity, and a precious asset. 
It is critical infrastructure and emergency reserves, financial 
collateral, and competitive exports. And let's not forget it is 
also a source of high-paying and high-skilled jobs in its own 
right. All these factors are why the American energy sector is 
well-positioned to accelerate our nation's economic recovery.
    Take the oil industry. Less than five years ago we repealed 
the outdated ban on American oil exports. In short order, we 
saw our nation flip from a net energy importer to a net energy 
exporter, a truly generational shift. Today production has 
fallen. Prices are erratic. Stakeholders in the sector are 
justifiably worried about their family's futures. But the 
oversupply and low prices that we have seen may also 
incentivize new businesses to be created. We are seeing reports 
that many companies are looking to make their supply chains 
more resilient by shifting more of their necessary 
infrastructure and capital back home to the United States. That 
has been a point that my friend and colleague, Senator Manchin, 
continues to raise. I also continue to believe that Congress 
should revisit its many mandates to the Department of Energy to 
sell off hundreds of millions of barrels of crude oil in the 
coming years. The Department's recent purchase of some 120,000 
barrels is a step in the right direction, but I think we need 
to do more than just inch forward in the right direction. We 
need to refill our strategic stocks when the prices are low, 
and as prices rise we are missing a great opportunity. It is 
not rocket science to figure out that you buy when the prices 
are lower.
    Our panel of witnesses today is uniquely qualified to 
comment on some of these matters. We welcome representatives 
from the Energy Information Administration (EIA), the 
International Energy Agency (IEA) and private sector officials 
covering oil, natural gas, electricity, renewables and clean 
energy sources. For those interested in supply chains, we also 
have a hearing scheduled for next week on minerals' role in 
forming and strengthening them. That is another topic that has 
really come to the fore during this pandemic, and it rests at 
the intersection of the important work that is being done 
today.
    With that, I turn to my colleague, the Ranking Member, 
Senator Manchin, for your comments.

              STATEMENT OF HON. JOE MANCHIN III, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Madam Chairman, and thank you 
for convening this hearing to discuss the impact of COVID-19 on 
the energy sector. I would be remiss if I did not first 
acknowledge the more than 117,000 Americans and 88 West 
Virginians who have lost their lives to COVID-19. I know 
everyone in this room is heartbroken for their friends and 
loved ones and continues to keep them in their thoughts.
    I wanted to welcome our panel of distinguished witnesses 
and give a special thank you to Jackie Roberts, who serves both 
as the President of NASUCA, the National Association of State 
Utilities Consumer Advocates, but also as our West Virginia 
Consumer Advocate. She fills some big shoes and is doing a 
great job--I have all the greatest respect for what you do to 
keep everybody honest and make sure that we are taking care of 
the citizens and not putting undue burdens on the citizens of 
West Virginia.
    No sector of our economy has gone unscathed, and today's 
witnesses will help the Committee begin to take inventory of 
the devastation of the energy sector from the workers to the 
businesses to our international standing. In a matter of 
months, we have gone from record low unemployment to the 
highest rate since the Great Depression. Between March and 
April, the energy industry has lost 1.3 million jobs. That is a 
13 percent drop that essentially wipes out all industry-wide 
job growth in the last five years. We have seen job losses 
across the board nationwide from clean energy with over 620,000 
lost jobs to the motor vehicle sector and the traditional 
energy sector which includes mining, fuels and electricity. 
Just in my State of West Virginia, 9,400 jobs in the energy 
sector were lost, two-thirds of which are traditional energy 
jobs. These job losses are impacting each of our states and our 
constituents are hurting.
    Many Americans can't keep up with their bills and they are 
having to choose between paying their utility bills and putting 
food on their table. Most states and many utilities have taken 
steps to prevent utility customers from being disconnected for 
non-payment. The middle of the pandemic is not the time to cut 
people off from critical electricity, gas or water service. I 
look forward to hearing from Jackie as the President of the 
Association of Utility Consumer Advocates about what assistance 
customers need and what state regulators are doing to protect 
customers in the short- and long-term.
    Energy markets have also taken a hit. U.S. energy 
consumption is expected to drop 5.7 percent in 2020. We saw 
historic lows, even negative prices, for domestic oil. Domestic 
production is also down in response to global market dynamics 
and decisions from international players that resulted in an 
oversupply of crude oil in the market. We also saw energy 
projects halted and put into limbo because of labor loss or 
supply chain disruptions. Just as our country was weakened by 
our lack of domestic medical equipment production, in the 
energy sector, it was weakened by insufficient domestic 
manufacturing of critical energy components. I have been 
focused on this issue as increasing our domestic energy 
manufacturing seems like it is a good way to create jobs while 
also shoring up our supply chain. It is a win-win in my book.
    The COVID-19 pandemic has also brought into sharper focus 
the importance of science and technology to help us solve 
today's challenges and capitalize on tomorrow's opportunities. 
Today the Department of Energy (DOE) and the national labs are 
putting their supercomputers to work to understand the 
Coronavirus and screen drug compounds to expedite vaccine 
development. There is more that labs can do, like using 
CO2 to decontaminate N-95 masks and other PPE at the 
National Energy Technology Lab (NETL) in my home state in 
Morgantown, West Virginia. I have been pleased to see Secretary 
Brouillette in support of using the labs to help the nation 
respond to this pandemic. This work is critical to guiding 
American technology advances and ensuring that we have the 
scientific and technical capabilities to seize opportunities 
and address our most pressing problems whether that be a 
pandemic or climate change. I spoke with Dr. Birol, again, just 
within the last few weeks and he stressed the importance of 
enacting legislation like our bipartisan American Energy 
Innovation Act as part of our recovery. It is still a great 
piece of legislation, and we have not given up on it yet.
    The Chairman. That is right.
    Senator Manchin. We are expecting a 14 percent drop in U.S. 
CO2 emissions from the energy sector in 2020. That 
will be the largest drop ever in our history, but emissions 
will begin to bounce back as our country reopens.
    Our bill provides over $24 billion in authorizations for an 
energy innovation roadmap to advance critical technologies like 
CCUS and energy storage with needed research and development 
but also with deployment dollars to get these technologies in 
the ground. We have the bipartisan framework in our energy 
bill, and I believe that good work can be complemented with 
additional targeted investment in light of the changes in the 
intervening months to help our energy sector recover, that put 
people back to work and also advance our clean energy goals.
    With that, I appreciate every one of you for coming today 
and appearing and helping us through this most difficult of 
times. I look forward to hearing from you--your views and also 
impacts to the consumers and global markets and a lot, lot 
more. Thank you.
    The Chairman. Thank you, Senator Manchin, and thank you for 
your continued advocacy and push on our energy bill. I think 
you and I recognize that, particularly as we are looking to 
assist our economy with recovery, this is ready-made for 
action. We just need to get around one hurdle and, hopefully, 
we will be on our way. But thank you for that continued 
support.
    Let's now turn to our witnesses and, as we have been doing 
these past several weeks, it is a bit of hybrid hearing. Just 
as there are some members present, there are members who are 
participating telephonically, by Webex and our witnesses are 
kind of split on that too. So for those of you who have joined 
us in person today, thank you, and for those who are with us 
online today, we appreciate that you are taking this time to 
join this important conversation.
    We are led off this morning by Mr. Stephen Nalley. Stephen 
is the Deputy Administrator for the U.S. Energy Information 
Administration. We welcome you back to the Committee.
    On the line we have Mr. David Turk, who is the Acting 
Deputy Executive Director for the International Energy Agency. 
We welcome you, David.
    Ms. Lisa Jacobson has been before the Committee before. 
Lisa is the President for the Business Council for Sustainable 
Energy. We appreciate you being here with us.
    We also have Mr. Frank Macchiarola. Frank is the Senior 
Vice President of Policy, Economics and Regulatory Affairs for 
the American Petroleum Institute. Many of us remember him from 
his time here in the Senate.
    Then as Senator Manchin has noted, Ms. Jackie Roberts is 
with us as the President of the National Association of State 
Utility Advocates.
    We welcome each of you. We would ask that you try to keep 
your comments to about five minutes so that we can engage in 
the conversations back and forth. Your full statements will be 
included as part of the record, and we will go in the order in 
which I have introduced you. We will begin with you, Mr. 
Nalley.

STATEMENT OF STEPHEN NALLEY, DEPUTY ADMINISTRATOR, U.S. ENERGY 
     INFORMATION ADMINISTRATION, U.S. DEPARTMENT OF ENERGY

    Mr. Nalley. Chairman Murkowski, Ranking Member Manchin and 
members of the Committee, good morning. I appreciate the 
opportunity to testify about the U.S. Energy Information 
Administration's assessment of the impact of COVID-19 has had 
on energy markets. My testimony reflects EIA's latest forecast 
from our June ``Short-Term Energy Outlook,'' or STEO, that was 
released last Tuesday.
    COVID-19 mitigation efforts have resulted in reduced 
domestic and worldwide economic activity which has caused 
unprecedented changes in energy supply and demand patterns. For 
overall context, EIA's June STEO forecast is 7.4 percent 
decline in U.S. GDP in 2020 which is largely related to COVID-
19 mitigation actions. We rely on inputs to our model from IHS 
market forecasts for U.S. GDP and Oxford Economics for a global 
GDP. As we all know, travel restrictions and stay-at-home 
orders have greatly impacted the energy economy, most notably 
crude oil and petroleum liquids. EIA forecasts the domestic 
consumption of petroleum liquids will decline in 2020 with 
gasoline consumption falling almost 13 percent and diesel 
falling 10 percent. We believe the most significant declines 
have already occurred and the consumption will recover over the 
next 18 months; however, we do not expect consumption to return 
to 2019 levels by the end of 2021. Similarly, global 
consumption of petroleum and liquid fuels will decrease by more 
than 8 million barrels per day in 2020 and most of the decline 
has already occurred.
    U.S. crude oil production which reached an all-time high of 
12.9 million barrels per day in November 2019, fell to 11.4 
million barrels per day in May 2020. We forecast the decline 
will continue until March 2021. Globally, we forecast that 
supply will fall by almost 6 million barrels per day in 2020, 
mainly as a result of voluntary cuts by OPEC and its partner of 
countries. Given these changes, we expect global liquid fuel 
inventories to grow by 2.2 million barrels per day in 2020, on 
average, with inventory builds having peaked in April of this 
year. Concerning prices, Brent crude oil averaged $29 per 
barrel in May compared with $18 in April as some OPEC producers 
voluntarily deepened their production cuts beyond the initial 
April 12th agreement. We expect monthly Brent prices to average 
$37 per barrel during the second half of 2020 and rise to an 
increase of $48 per barrel in 2021. EIA expects upward pressure 
on prices to increase as inventories decline in 2021.
    COVID-19 mitigation activities have also affected natural 
gas and electricity markets. Reduced U.S. manufacturing along 
with lower LNG export have lowered our forecasts of U.S. 
natural gas consumption in 2020. We expect a four percent 
decline in U.S. natural gas consumption and a three percent 
decline in production. Although we forecast recovery in 2021, 
we do not expect U.S. production and consumption to return to 
2019 levels during the forecast period. EIA expects weaker 
natural gas demand will cause relatively low prices in 2020, 
but the rising demand into next winter will force upward 
pressure on prices. We forecast that the U.S. benchmark Henry 
Hub natural gas spot price will rise to an average of $3.08 per 
million BTU in 2021 compared to $1.75 in May of this year.
    In looking at electricity, our June ``Outlook'' reports 5.7 
percent less electricity consumption in the U.S. in 2020 when 
compared to 2019. We expect all sectors to purchase less 
electricity this year with the biggest percent declines 
occurring in the commercial sector. We expect milder 
temperatures in 2020 to reduce residential heating and cooling 
demand and more than offset increased activity from stay-at-
home measures that have already been in place. We forecast 
electricity prices across all retail sectors will vary little 
in 2020 from their 2019 level.
    Our ``Outlook'' also reports that U.S. coal production will 
fall by 25 percent in 2020, the result of both decreasing 
demand for U.S. coal exports and declining coal-fired electric 
power generation.
    In closing, the uncertainties in the current environment 
are especially challenging. EIA will continue to update our 
monthly STEO forecast to reflect evolving energy market 
conditions. Our next STEO is scheduled to be released July 7th. 
We will also continue to provide a comprehensive portfolio of 
data and analysis reports to inform policymakers, market 
participants and the public at large about important energy 
trends and issues.
    Chairman Murkowski, Ranking Member Manchin and members of 
the Committee, thank you for the opportunity to present this 
information today. This concludes my testimony.
    [The prepared statement of Mr. Nalley follows:]
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    The Chairman. Thank you, Mr. Nalley.
    Let's now go to our screen to hear from David Turk at the 
IEA. Mr. Turk.

 STATEMENT OF DAVID M. TURK, ACTING DEPUTY EXECUTIVE DIRECTOR, 
                  INTERNATIONAL ENERGY AGENCY

    Mr. Turk. Chairman Murkowski, Ranking Member Manchin and 
distinguished members of the Committee, thank you very much for 
the opportunity to appear before you today. I wish we were 
there in person, but at least we're here virtually. I'm very 
pleased to be able to share with all of you our very latest 
data and analysis from the IEA on the impact of COVID-19 on 
energy markets. Put simply, the COVID-19 pandemic has created 
the biggest shock to global energy systems since at least World 
War II. So let me run through some of our numbers.
    We estimate that global energy demand will fall 6 percent 
in 2020, the equivalent of losing the entire demand of India. 
Advanced economies are expected to see the biggest declines 
with demand falling 9 percent in the U.S. and 11 percent in the 
European Union. All major fuels and technologies are affected. 
Our very latest numbers just released earlier today shows that 
oil demand is expected to fall by 8.1 million barrels per day 
for 2020. That's an 8.2 percent drop, the largest in history, 
before recovering by 5.7 million barrels per day in 2021. Coal 
demand will fall 8 percent, electricity demand will fall 5 
percent, natural gas demand falling 4 percent, renewables have 
been the most resilient of all the fuels so far and the only 
energy source that we expect to grow in 2020, although, I 
should say, at much lower levels than we forecast before the 
crisis.
    Global energy-related CO2 emissions are set to 
fall by almost 8 percent in 2020 reaching their lowest level 
globally since 2010. This would be the largest decrease in 
emissions ever, nearly 6 times the decrease we saw in the 2009 
financial crisis. But this decline, of course, comes on the 
back of many premature deaths and economic trauma around the 
world. History has also shown that unless there are smart and 
concerted recovery efforts around the world, more on that in a 
minute, emissions can be expected to come roaring back just as 
they did in 2009.
    Now let's look at our latest investment numbers from the 
IEA. At the start of 2020, global energy investment was on 
track for record growth of around 2 percent from 2019. After 
the COVID-19 pandemic brought large swaths of the world economy 
to a standstill, global investment is now expected to fall 20 
percent. So we had predicted a 2 percent increase, now we're 
looking at a 20 percent decrease. This is almost $400 billion. 
Global investment in oil and gas expected to fall by almost a 
third in 2020. Power sector spending is on course to decrease 
by 10 percent. Energy efficiency is also suffering. Estimated 
investment in energy efficiency is set to fall by an estimated 
10 to 15 percent.
    Now let me take this opportunity to again thank Chairman 
Murkowski for being a leading member of our Global Commission 
for Urgent Action on Energy Efficiency. Thank you very much, 
Chairman, for all your leadership in that very important group.
    So, distinguished members of this Committee, you can see 
that we truly have a historic shock to the global energy 
system. But our story is, of course, far from finished. What 
happens next will be absolutely critical. Countries around the 
world are planning and enacting economic recovery plans that 
will shape country's energy infrastructure for decades. On 
Thursday, just two days from now, we will be releasing our 
``World Energy Outlook Special Report on Sustainable 
Recovery.'' This special report, which I predict will be our 
most impactful analysis of the year, will provide actionable 
recommendations across the energy system on how governments 
could put energy and sustainability at the heart of stimulus 
plans to boost economies, to create jobs and build more modern, 
resilient and clean energy systems. With its boundless human 
ingenuity, rich resources and track record of successful 
innovation of new technologies, the United States is extremely 
well-positioned to continue to lead the world in the 
development and deployment of energy technologies that can help 
ensure a secure, affordable and sustainable supply of energy 
for decades to come.
    Chairman Murkowski, Ranking Member Manchin, distinguished 
members of this Committee, thank you again for the opportunity 
to be with you today and thank you for your continued support 
and partnership for the International Energy Agency. Thank you, 
Chairman.
    [The prepared statement of Mr. Turk follows:]
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    The Chairman. Thank you, Mr. Turk, and know that we will be 
looking with great interest at this report that will be coming 
out on Thursday as we work to consider what comes next in this 
next round of recovery and support. I think the suggestions 
that we might be able to learn from will be helpful to us as we 
craft some additional policy here.
    Ms. Jacobson, let's turn to you and your comments from the 
Business Council for Sustainable Energy. Welcome.

  STATEMENT OF LISA JACOBSON, PRESIDENT, BUSINESS COUNCIL FOR 
                       SUSTAINABLE ENERGY

    Ms. Jacobson. Chairman Murkowski, Ranking Member Manchin 
and members of the Committee, thank you for the opportunity to 
testify today. On behalf of the Business Council for 
Sustainable Energy (BCSE), I would like to express our 
appreciation for this Committee's longstanding, bipartisan 
work. Founded in 1992, the Council is a coalition of companies 
and trade associations representing energy efficiency, natural 
gas and renewable energy sectors. BCSE is pleased to have a 
small business partner under its banner, the Clean Energy 
Business Network.
    Today's hearing is of critical importance as the COVID-19 
health crisis has touched every American. We've tragically lost 
over 117,000 American lives during this pandemic and, in an 
effort to save lives, the nation is taking unprecedented 
measures to keep individuals and families safe. In my testimony 
today I will underscore three main points: the U.S. energy 
workforce was expanding pre-COVID-19 and now the sector is 
facing economic challenges and dramatic job losses, the Federal 
Government can take actions to provide near-term relief and 
clean energy industries can be drivers of the economic 
recovery, and the Federal Government has a role to play with 
policy support.
    Clean energy sector employees range from utility, 
construction and manufacturing workers to contractors, 
installers and technicians to building managers and service 
providers. While some workers have received essential status 
during the pandemic, others, especially workers in the 
residential sector, have seen their business activity halted or 
dramatically curtailed. Many clean energy workers have made 
significant contributions to maintain safe, secure and reliable 
power and energy services to customers during the pandemic and 
they continue to do so. Utilities, grid operators and 
manufacturers adopted sequestering policies for essential 
workers. Construction workers, electricians and engineers 
stayed on the job building large-scale energy projects. HVAC 
technicians worked to maintain and update critical systems in 
health care, nursing homes and other public facilities. These 
contributions had an impact. Our country had the electricity it 
needed at a scary and uncertain time.
    The U.S. energy sector supported 6.8 million jobs at the 
start of 2020. Clean energy sectors supported over 3.4 million 
jobs and were poised for significant growth. Updated research 
released yesterday covering energy efficiency, renewable 
energy, clean vehicles, grid and storage and clean fuel sectors 
shows that 620,000 jobs were lost since early March. With 
energy efficiency and renewable energy workers being the 
hardest hit with 500,000 job losses. While the rate of job loss 
slowed in May compared to April and March, over 27,000 jobs 
were shed last month. While the rate of--well, let's shift to 
other economic impacts. Project construction and permitting has 
been delayed, financing has been slowed, and supply chains have 
been disrupted.
    Given the diversity of clean energy sectors, a range of 
policy solutions are being considered. The objectives are to 
provide market stability in this uncertain period and to spur 
investment in jobs for economic recovery when the time is 
right. The Federal Government took an important step in May 
when the IRS provided continuity, safe harbor relief to 
accommodate COVID-19 delays for projects eligible for the ITC 
and the PTC. I want to thank Chairman Murkowski, Ranking Member 
Manchin, Senator Wyden, Senator Cantwell, and other members of 
this Committee for urging the Treasury Department to act. And 
there are other adjustments to the current law that would 
provide market continuity and enable the tax incentives on the 
books to be utilized. Direct pay mechanisms for the ITC and PTC 
to make the tax provisions refundable is an example and to 
provide immediate relief to vulnerable families and 
communities, funding for low income home energy assistance 
programs should be expanded.
    Looking to economic recovery, BCSE members urge action on 
the American Innovation Act this year. In addition, the mission 
critical Facility Renewal Program, is an example of a proposal 
that would leverage federal grant funding with private sector 
capital to put energy efficiency workers back on the job, 
providing upgrades to schools, hospitals, military bases and 
other mission critical buildings.
    Looking at the tax code, a number of measures could be 
implemented to incentivize resilient infrastructure, 
transmission upgrades, microgrids, renewable energy, energy 
efficiency and other clean energy investments. In early June 
over 800 contractors and manufacturers signed a letter to 
Congress to improve and expand the current Section 25C tax 
credit for homeowner energy efficiency improvements.
    These are just a few of many proposals that clean energy 
sectors are considering to put people back to work and build 
back better. Thank you.
    [The prepared statement of Ms. Jacobson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Ms. Jacobson. We appreciate that.
    Let's go now to Frank Macchiarola at API, the American 
Petroleum Institute. Welcome, Frank.

   STATEMENT OF FRANK J. MACCHIAROLA, SENIOR VICE PRESIDENT, 
 POLICY, ECONOMICS AND REGULATORY AFFAIRS, AMERICAN PETROLEUM 
                           INSTITUTE

    Mr. Macchiarola. Thank you. Chairman Murkowski, Ranking 
Member Manchin and members of the Committee, the subject of 
this hearing, Impacts of COVID-19 on the Energy Industry, is an 
important one and I thank you for the opportunity to testify 
today on behalf of the oil and gas industry.
    The COVID-19 pandemic has fundamentally altered our way of 
life and our nation's economy. Each and every person and 
business has been impacted by the outbreak of the Coronavirus, 
and our industry is no different. The conditions created by 
COVID-19 present substantial business and operational 
challenges for the oil and gas industry, including an 
unprecedented market imbalance, significant commodity price 
declines and heightened efforts to maintain continuous 
operational integrity in the face of the pandemic. First and 
foremost, COVID-19 is a human crisis in the communities in 
which we work and live. In response to the pandemic, our 
industry donated more than $100 million to relief efforts, 
including support for local food banks and hospital systems as 
well as supplies of personal protection equipment, medical 
gear, hand sanitizers and disinfectants to health care 
providers on the front lines of fighting this virus.
    Across the United States, the oil and gas industry has 
stepped up during this challenging time. However, several 
factors came together to put an enormous strain on our 
workforce and, in fact, our overall energy security here in the 
United States. Some of these factors were the result of long-
term trends while others were the result of changing conditions 
rapidly. At its core the commodity price decline we experienced 
was the result of an oversupplied market and, more importantly, 
a swift and steep decline in demand for oil. On the supply 
side, after ramping up to a record production level during a 
demand decline, Saudi Arabia, along with other OPEC+ nations, 
including Russia, finally agreed to reduce supply after 
pressure from the Administration and Congress.
    By early June U.S. producers had responded significantly to 
market signals by lowering production by 2 million barrels per 
day from the highest levels of mid-March. While the supply 
response was helpful, it pales in comparison to the historic 
drop in demand. Global demand for April was estimated to be the 
lowest month of oil demand in nearly 20 years. While recent 
weeks indicate a rebalancing in the markets as economies open 
up and as demand returns, this downturn still continues to have 
an impact.
    This unprecedented market disruption has created 
significant challenges for the oil and gas industry. As 
Chairman Murkowski noted in her opening statement, ``American 
energy has suffered acutely and uniquely.'' But this crisis has 
not altered our values. Free markets and private enterprise 
serve as the foundation of America's oil and gas industry and, 
as such, we are not seeking industry-specific financial relief. 
In other words, we don't want a government bailout.
    With respect to broader efforts, we supported the CARES Act 
which provided economic stabilization across the United States' 
economy to maintain systemic liquidity and to provide continued 
employment. On the operational side, we worked with government 
agencies to ensure continuity of operations by designating our 
workforce as essential and to provide regulatory flexibility 
for non-compliance. We also work to support EPA's fuel waivers 
under the Clean Air Act and to support the Energy Department's 
use of existing authorities to effectively manage the Strategic 
Petroleum Reserve. It's also important to note that we make 
clear what we're against. We discourage retaliatory trade 
measures that could further disrupt global markets, and we 
successfully opposed a petition before the Texas Railroad 
Commission to impose mandated supply constraints on oil 
producers.
    As recent weeks have shown, the most effective way to 
address this market disruption is through economic 
stabilization and a safe and swift return to robust economic 
activity. While several unique factors during the COVID-19 
pandemic created unprecedented conditions, our industry has 
experienced difficult times before. The resilience and 
innovative spirit that define America's oil and gas industry 
throughout our history remains alive and strong. We see it in 
the essential workforce that continues to deliver the energy 
and products that America needs to keep us moving forward. As 
America recovers, the oil and gas industry remains committed to 
providing our nation--and billions of people around the world--
with the affordable, reliable and cleaner energy that will make 
better years to come.
    Thank you for the opportunity to testify today and I look 
forward to your questions. Thank you.
    [The prepared statement of Mr. Macchiarola follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Macchiarola.
    Ms. Roberts, welcome to the Committee. We appreciate your 
comments this morning.

 STATEMENT OF JACKIE ROBERTS, WEST VIRGINIA CONSUMER ADVOCATE, 
 AND PRESIDENT, NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER 
                           ADVOCATES

    Ms. Roberts. Thank you. Chairman Murkowski, Ranking Member 
Manchin, distinguished members of this Committee, I'm Jackie 
Roberts. I'm the Consumer Advocate for West Virginia and 
President of the National Association of State Utility Consumer 
Advocates. Consumer Advocates represent the interests of 
utility customers in state proceedings, federal proceedings 
before the FCC and in state and federal courts. We are obliged 
by law to do so.
    There are a couple takeaways, I think, that are important 
to note today. The first is that utilities are essential 
services. Without utilities we don't have homes or apartments 
to live in and that includes not only electricity, gas, 
telecommunications, but water. LIHEAP, increase in LIHEAP 
funding has been very helpful but it's not just help for the 
low income that is necessary for consumers. With about 160 
million people in this country that live paycheck to paycheck, 
we're seeing many consumers that have never missed a utility 
payment that now can't. I understand that the relief packages 
provided to citizens were to help in this gap between being 
unable to work and returning to work, but unfortunately, the 
timing of residents and customers receiving this aid has caused 
many not to be able to pay their utility bills, their rent or 
their mortgages. As a result, there are increased revenue 
shortfalls for utilities which, that harm not only the 
utilities but harm the customers that eventually must pay those 
bills. We need to have data-based, evidenced-based solutions in 
working with utilities and customers to get through this time 
of economic strain.
    The second takeaway that I think is so important is that 
the return to work does not mean that we have achieved economic 
recovery. There is a lag between when people return to work, 
how they return to work, whether they return to work and when 
utility moratoria for shutoffs should end. We're not there yet, 
and I don't think we're going to be at a point anytime soon 
where the moratoria should end. Each state knows its utilities 
and knows its customers well. We appreciate Congress not 
issuing national moratoria for utilities. Consumers advocates 
do this work every day, negotiating between customers and 
utilities. We know how to do this, and we believe that state-
based moratoria are the best way to handle the customers' and 
the utilities' needs.
    LIHEAP, as I said, is important and the increases in LIHEAP 
are essential to low income customers and the lifting on some 
of the caps for LIHEAP are important, but we also need help for 
customers that are just out of work and have no money. Direct 
support to utilities for these customers is something that 
could be considered. Utilities also suffer from lost revenues 
from not receiving the payments from customers. For some 
utilities this is a, this presents a liquidity problem where 
they just don't have sufficient revenue to operate their 
businesses. This is most likely to occur, not for the investor-
owned utilities but for public power and co-ops where the 
customers actually own the utility. Relief for those types of 
utilities is going to be important and we need evidence-based, 
data-based solutions for providing that relief, and they will 
vary from state to state and utility to utility.
    Broadband is also essential for customers, especially in 
this time of telecommuting and medical telecommuting. It's 
essential that we have broadband service. The digital divide in 
many states, West Virginia is one, is real and severe. Many of 
our residents have no access whatsoever to broadband and that 
is a problem that will affect the recovery of the economy.
    Tax normalization resulting from funds, customer funds, 
held by utilities could be a solution to help bridge the 
economic gap between customers and utilities. Excess deferred 
income tax credits from the Tax Cuts and Jobs Act must be 
returned under normalization, tax normalization, rules at a 
certain rate. So going forward there are hundreds of millions, 
if not billions of dollars the utilities are holding that are 
undeniably customer money. Access to that customer money might 
be a way to help bridge the gap between a customer's inability 
to pay and the utility's need for revenues.
    I thank you for considering customers and realizing the 
importance of utilities. One other thing I'd like to say in 
closing is that water utilities do not receive any LIHEAP 
funding and if you think electricity is essential, water is 
particularly essential, especially in this time of a health 
crisis. So thank you for the opportunity to testify, and I look 
forward to answering your questions.
    [The prepared statement of Ms. Roberts follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Ms. Roberts. We so appreciate the 
perspective that you are providing to the Committee from the 
consumers. It is absolutely key to the discussion here. So, a 
good range. I appreciate all that you have contributed this 
morning.
    As I mentioned, well, it was actually you, Mr. Nalley, you 
pointed to the report that will be coming out with regards to 
the updates. I think you said July 7th you are going to have an 
update from EIA. Again, it was Mr. Turk that said there would 
be a report out on Thursday. So know that the work that you are 
doing in these spaces really does help to inform us. It is 
important that we are not only looking back but also that we 
are looking forward as much as we can look forward at this time 
with continuing uncertainty. We don't know whether there is 
going to be another surge or a wave so that could throw all of 
your predictions out. And Mr. Macchiarola says that while the 
oil and gas sector is hanging in there, you are somewhat used 
to the volatility that comes with those markets, but we all 
know that you can sustain certain periods of uncertainty and 
volatility but when it continues for a long period of time, 
that is when things really get rocky and difficult to predict.
    What I would ask for is some conversation, probably with 
you, Ms. Jacobson and Mr. Macchiarola, in terms of those things 
that we should be considering in this next iteration of 
economic recovery, relief, stabilization, whatever it is that 
we are calling it. Ms. Jacobson, you had indicated some areas 
where you think that from a regulatory perspective it certainly 
helped and some tax provisions as well, but I would ask both of 
you in terms of the relief that we provided under CARES, 
including the PPP, the Paycheck Protection Program, and the 
Main Street Lending Program, do we need to be doing more on 
that side to help going forward, again, looking at the 
recovery? Or is there more that we should consider in addition 
to what you have already provided in your testimony? I don't 
need you to repeat that, but if there is more, I want to try to 
understand how we can be responsive in this area.
    Ms. Jacobson, let's go to you first.
    Ms. Jacobson. Thank you.
    You know, I think you're right. I mean, the energy sector, 
just like all parts of the economy, especially, you know, all 
the focus mostly on small businesses right now, things like the 
Paycheck Protection Program were essential and when it was 
being developed, we didn't have clear information about what 
the needs were and then Congress and the Administration 
appropriately acted to make adjustments. We might still need to 
make adjustments, but we made, we did a number of surveys since 
early March of our own membership and asked them about PPP and 
when you look at the Bureau of Labor Statistics (BLS) data you 
see, in particular, that construction workers and small 
businesses in those sectors participated heavily in the PPP 
which also overlap with residential energy efficiency and other 
clean energy workers. So we think there's a high participation. 
You can't see it directly through the BLS data, but we can make 
some assumptions.
    So if we look at the job losses that we've experienced in 
those parts of the clean energy economy, when PPP does 
transition, we could anticipate some challenges there. I think 
we all need to work together and see if additional adjustments 
should be made. But I'll just say, you know, in my written 
testimony I call out a particular testimonial from someone who 
responded to our survey, thanking Congress and the 
Administration for making the adjustments to PPP that you did 
recently. It made a world of difference for those companies. 
So, thank you.
    The Chairman. Let me ask you, Mr. Macchiarola, from the oil 
and gas sector, perhaps not so much PPP, but the Main Street 
Lending Program, I hear very loud and clear that the interest 
is not to have industry-specific financial relief. But in terms 
of those things that Congress can weigh in on to help 
facilitate all industries, how might the oil and gas sector be 
benefited moving forward?
    Mr. Macchiarola. Thank you for your question, Chairman 
Murkowski.
    I think it's critical as Congress looks at the next phase 
of economic stabilization, again, to provide for stabilization 
across the economy. From our perspective in the oil and gas 
industry, the most important thing that Congress could do is to 
help get demand back which really means help get the economy 
back in a safe and swift fashion because from our perspective 
that was the number one driver of prices and the significant 
impact that the industry felt was really a result of demand. I 
would also say we appreciated the Department of Energy 
effectively managing the Strategic Petroleum Reserve. We 
thought that was smart using their existing authorities that 
they had. Finally, EPA providing flexibility with fuel waivers.
    But in terms of asks going forward, our major request would 
be, essentially, do no harm, to prevent short-term measures 
that are, you know, may be put in place with good intentions as 
solutions that have long-term impacts. What I'm talking about 
there are things like punitive trade measures or tariffs or 
production quotas. We think that's the wrong direction to go 
in. We really appreciate the leadership of Congress and the 
Administration in not heading in that direction.
    The Chairman. We appreciate that, thank you.
    Let's go to Senator Manchin.
    Senator Manchin. Thank you, Madam Chairman.
    Ms. Roberts, I am really grateful for the advocates, the 
consumer advocates, like yourself, because it is so important 
for our system to have a balance. I support including $900 
million in energy utility assistance.
    Ms. Roberts. Great.
    Senator Manchin. For low income customers in our CARES Act 
and allowable expenses under the Paycheck Protection Program 
that was included into the CARES Act, the data coming in so far 
from April-May shows skyrocketing non-payment of utility bills. 
I was interested in what you had said also that the deferred 
income tax balances on utility books due to the corporate tax 
reductions in the Tax Cuts and Jobs Act, that Congress should 
eliminate the tax normalization rules. How much money is it--
you said ``billions of dollars''--they are holding?
    Ms. Roberts. Well, I know in West Virginia it's hundreds of 
millions.
    Senator Manchin. That the utilities are holding. They have 
that money.
    Ms. Roberts. Because they're limited in how they can return 
that customer money to customers----
    Senator Manchin. Could it not be used to offset the non-
payments?
    Ms. Roberts. It could be if they weren't limited by tax 
normalization----
    Senator Manchin. Gotcha.
    Ms. Roberts. We used a lot of the money to, in some cases, 
reduce rates. We established a fund for low income people, for 
veterans, for those who are on medical equipment.
    Senator Manchin. But there has always been a surplus of 
money that they have never used all of the money that is set 
aside for the normalization, right?
    Ms. Roberts. No, all the money as a result of the Tax Cuts 
and Jobs Act has not been used. There is still money available, 
but the tax normalization rules prevent it from being used 
sooner than on a normalized basis.
    Senator Manchin. We are going to bring that to their 
attention. It is not in our jurisdiction, but we will bring it 
to the attention of Finance. It is so interesting to find out 
that there are ways of helping. And also, the thing that you 
said that I did not realize, I don't know if the Chairman did 
or not, that LIHEAP is not for water.
    Ms. Roberts. No, it's not.
    Senator Manchin. Never has been.
    Ms. Roberts. Or for our telecommunications.
    Senator Manchin. Yes.
    Ms. Roberts. You're correct, non-payments are skyrocketing 
and part of that has to do with the timing of the relief that's 
come.
    Senator Manchin. Yes, I know, it has been----
    Does anybody else want to comment on that or--what we are 
talking about there? This is to all of you. What policy 
solutions are needed to strengthen U.S. energy manufacturing up 
and down the supply chain? We are seeing that we know we had a 
deficiency for our COVID-19 response as far as our medical 
equipment and testing and all that because most of it was done 
overseas. But now we are finding out a lot of the energy 
projects are not being able to be----
    Do you all have any idea on that as far as what we could 
do? Mr. Nalley, you might be able to speak to that or Ms. 
Jacobson? Either one of you?
    Ms. Jacobson. Thank you very much for the question.
    Senator Manchin. Have we known that we have had most of the 
critical manufacturing for our energy fleet coming from 
offshore?
    Ms. Jacobson. Yeah, we have currently and, you know, now 
and before the COVID-19 pandemic, we have a global energy 
marketplace and yes, supply chains have been disrupted. I can 
speak anecdotally, you know, from the surveys that we've done, 
this is a top issue for the companies and industries that I 
work with, and they're trying to adjust and manage and be 
strategic going forward. But there are some really important 
public-private partnerships that the Federal Government already 
is looking at. And when I think about things like the American 
Energy and Innovation Act or, you know, the Surface 
Transportation bill, there are many opportunities to create 
market demand, combining that with programs through the 
Department of Energy like the Advanced Manufacturing Office or 
things like new tax incentives to promote manufacturing here at 
home.
    So we're, kind of, in a whole new reset moment on this 
conversation with incredible urgency. I think you're very 
appropriately going to be focusing on supply chains next week. 
I look forward to hearing how the witnesses respond because 
things are evolving in real time. But I think there are current 
tools that we already utilize that can be explored again and 
perhaps expanded. And again, I think close interaction with 
industry is going to be very important at this time so we make 
sure that whatever Federal Government attention and resources 
are put to bear that they're done appropriately and 
strategically in the current environment we're in.
    Senator Manchin. Thank you, Madam Chairman.
    The Chairman. Thank you. Thank you, Senator Manchin.
    Senator Barrasso.
    Senator Barrasso. Thank you, Madam Chairman. I want to 
thank you and I want to thank Ranking Member Manchin for 
holding this important and timely hearing today.
    The COVID-19 pandemic has affected every aspect of modern 
life. As nations close down around the world in an effort to 
slow the spread of the virus, economies around the world ground 
to a halt. Demand for energy as a result, slowed significantly, 
reduced demand for electricity, transportation fuels which 
power the modern world. In the early days in the pandemic an 
oil price war between Saudi Arabia and Russia led to massive 
oversupply of crude oil on global markets. Oil prices tanked. 
Crude oil storage facilities filled up. On April 20th of this 
year, oil prices actually traded in the negative. Over the past 
few months I have encouraged the Secretary of the Interior to 
provide lease extensions to provide royalty relief and 
suspension of production for oil, gas, coal, soda ash 
producers, on federal land. This form and these forms of 
temporary relief will help provide a measure of certainty and 
will help operators weather this devastating time. So the 
question, Mr. Nalley, how will temporary federal royalty relief 
and suspensions improve the outlook for oil and gas producers 
on federal land?
    Mr. Nalley. Senator Barrasso, thank you.
    In most of our modeling, our forecasts are based upon 
current rules and regulations, so I don't really have anything 
to offer today in terms of what proposed legislation might do.
    Senator Barrasso. The question of allowing some of this 
sort of thing, in terms of the specifics of providing royalty 
relief, how will that improve the outlook for production? Will 
these companies then say, well this will allow me to continue 
to produce because it is not going to cost them as much? How do 
you see that, rather than just from a legislative standpoint?
    Mr. Nalley. I'd have to get back to you with--our folks 
could take a look at that and we could get back to you with 
that information.
    Senator Barrasso. Alright.
    [Information regarding temporary royalty relief follows.]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Barrasso. The EIA recently released its annual 
report on uranium production. I want to focus on that now, if I 
could. The report shows 2019 production of American uranium was 
down 89 percent from 2018. Wyoming has led the United States in 
uranium production. The outlook for our nation's uranium 
production, I believe, is dire. We need to reverse this 
alarming trend. That is why I have supported immediately 
establishing the Department of Energy's Uranium Reserve. It is 
something that they have proposed.
    Absent immediate action from Washington to increase uranium 
demand, does the EIA expect American uranium production to 
recover?
    Mr. Nalley. So I would agree with you that the production 
in uranium is, you know, at record lows and we don't have any 
forecasts on that built into our Short-Term Energy Outlook. We 
do provide two reports annually and a quarterly report to help 
answer those questions.
    Senator Barrasso. In April of this year, the Department of 
Energy identified how Russia has weaponized its energy supplies 
in an effort to undermine America's energy and our national 
security interests. We have known it all along and the 
Department of Energy is now identifying it, saying that Russia 
is behaving in that way. Due to Russia's illegal trade 
practices, Congress previously capped Russian uranium imports 
at 20 percent of our nuclear market. The caps are set to expire 
at the end of this year, 2020. I am working to extend it and 
reduce how much Russian nuclear fuel can be used in our nuclear 
power plants in the United States, so we are not increasingly 
dependent upon Russia as they undermine our market in an effort 
to give them a bigger market share.
    The Energy Information Administration provides valuable 
market information to develop our national uranium policies. 
Mr. Nalley, what data does your agency provide to inform policy 
decisions about nuclear fuel imports and how does this play 
into it?
    Mr. Nalley. So again, it's on an annual basis as the 
nuclear import data comes out. We can get that information, you 
know, back to your staff or you.
    Senator Barrasso. I would appreciate it if we could get all 
of that information from you.
    [Information regarding nuclear import data follows.]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Barrasso. Thank you. Thank you, Madam Chairman.
    The Chairman. Thank you, Senator Barrasso.
    Let's turn to Senator King.
    Senator King. A couple of questions. I will start with Mr. 
Nalley about the duration of what we are talking about. This is 
not a recession in the sense that the financial crisis of 2008 
was a structural issue. This was, essentially, a pause, we hope 
it was a pause, in demand. And so, I understand I am asking you 
to predict two different things: one is whether we are going to 
go into a second wave and a further constriction of demand and 
also what are the long-term economic effects. But it seems to 
me that it is possible that once we get a vaccine or we are 
otherwise out of these woods, that demand will spike back 
rather rapidly.
    I just saw this morning we had a 17 percent increase in 
retail sales just in this past May. Talk to me about how long 
this is going to last and is this going to be a V-, an L-, a W-
shaped, recovery that we are talking about?
    Mr. Nalley. Well, good morning.
    So I think the uncertainty that we're all dealing with is 
the most challenging. We, you know, are using underlying 
forecasts for IHS markets, for U.S. GDP and Oxford economics 
for a global GDP. And so, you know, modeling, we use as, you 
know, sort of, foundational pieces in our modeling. We have 
really great people taking a look, paying attention to all the 
issues and all the trends that are going on. And as you said, 
some of the things with the second wave are those types of 
things, we're really looking for signals that were coming, 
other sources to make sure that we're capturing this right. We 
have, you know, people working very hard to make sure that we 
are, you know, getting this just right each month. And as I 
said, we put out a new STEO forecast in July. So we will 
update, you know, our forecast at that point based on the best 
information we have then.
    Senator King. Do you see the job losses as job losses or 
job vacancies? In other words, after we get out of this, the 
undermining of the economy that we are enduring right now, will 
those jobs come back or are they jobs that are going to be 
permanently lost because of changes in design of the workforce 
or other factors? In other words, are these jobs--we talk about 
them being lost--are they lost or are they merely on hiatus for 
some period of time until there is a recovery?
    Mr. Nalley. Right, so EIA's forecast and data are really 
focused on supply and demand patterns and we collect very 
little and publish very little information about jobs. I'd 
actually defer to other panelists to comment on----
    Senator King. Let me go to Ms. Jacobson then. Are we losing 
jobs or are we losing companies? And respond to my question 
about whether these are job losses or temporary job losses?
    Ms. Jacobson. Right, well, I mean, I completely agree we're 
in a very uncertain environment, but I think when we're looking 
at the data in terms of the residential energy job losses, 
things like renewable energy and energy efficiency workers, I 
think it depends on a number of factors, but primarily when 
customers and households feel that it's safe to have 
technicians and installers and contractors in their home to do 
work. And you know, that is a very variable and unpredictable 
thing.
    You know, I wanted to share with you, Senator King, I 
received a testimonial from Mid Maine Weatherization as part of 
some surveys we did in anticipation of this hearing. It's not 
exactly clear the moment in time that they put this forward 
but, you know, here we have, you know, a small business, a 
weatherization, energy efficiency business saying, we've been 
unable to work. If our business loan is denied, then we will 
unfortunately lose our business. So in addition to the factors 
of when it is appropriate from a health perspective to continue 
this kind of work, there's also the business cycle and the 
business model challenges and those benefit, as we discussed 
before, from things like the Paycheck Protection Program and 
other measures.
    Senator King. I was going to follow up and ask, I wonder if 
that company availed themselves of the Paycheck Protection 
Program.
    Ms. Jacobson. Right.
    Senator King. I think you mentioned that had been effective 
in helping many of these businesses to weather this abrupt 
downturn.
    Ms. Jacobson. Yes, and as I also mentioned, I think there's 
a little concern about what might happen when the 24 weeks end. 
So I think we all need to watch that closely. You know, 
clearly, clean energy sector broadly, 70 percent of employees 
are employed by small businesses. So things like the PPP are 
critical.
    Senator King. I agree. Thank you.
    Thank you, Madam Chairman.
    The Chairman. Thank you, Senator King.
    Let's go to Senator Lee. Morning.
    Senator Lee. Good morning. Thank you very much, Madam 
Chair. Thanks to all of you for being with us and your 
willingness to inform us today.
    Mr. Macchiarola, I would like to start with you. In oil 
fields, well shut-ins typically occur under circumstances that 
are less than ideal and something big or something of a last 
resort because this is an indication that, you know, in many 
circumstances, it is not possible to continue to coax a well 
back into production. So flow from the well is halted, and the 
well is capped. Can you tell us why a well shut-in could be so 
catastrophic?
    Mr. Macchiarola. Sure. The data is a little uncertain on 
this and we did have a request from your office and are happy 
to follow up with you on it as well. I think we do have 
evidence of natural gas wells being less productive post shut-
in and there was a concern. In fact, one of the concerns we 
raised during the Texas proration debate was that, was that 
very concern, Senator. That if you shut that, shut-in a well, 
you may raise the real possibility that the well is not as 
productive when it comes back online. Of course, this was a 
significant concern for the entire industry during this crisis.
    As I mentioned at the top, we saw levels of demand decline 
in April that were down to 20-year lows and we still saw during 
that period of time the most productive month of productivity 
out of Saudi Arabia during that same period of time. So it's a 
big concern. It's obviously alleviated itself somewhat as a 
result of economies coming back and demand returning. But it's 
an important question that you raise and something that we're 
going to look further into, particularly as possibilities of 
shut-ins arise.
    Senator Lee. But you have definitely seen an increase in 
the rate of shut-ins since the beginning of the pandemic? That 
is----
    Mr. Macchiarola. Yeah. Yes.
    Senator Lee. And do you think that extractive companies are 
going to need to reinvest in oil well infrastructure in order 
for us to have the capacity to return to pre-crisis production 
rates?
    Mr. Macchiarola. Well, Senator, we're a capital-intensive 
industry. So what you saw in a lot of the adjustments during 
the COVID period were on short-cycle projects, capital 
expenditure reductions there. Longer-term projects you saw, you 
know, generally speaking, a degree of less pullback but, you 
know, our sense is that, you know, to both your question and 
Senator King's, you know, we have a--our industry is one that 
has a long-term outlook.
    And so, over time as you look out to demand and to 
population growth so the next 30 years what we're going to see 
global population according to the U.N. grow from about seven 
and a half billion people to over nine billion people. Those 
folks are going to expand the size of global middle class and 
prosperity around the world, and they're going to need energy 
to do that. And over 50 percent of that energy is going to come 
from oil and natural gas out over the next three decades. And 
so, to your point, it's absolutely essential that we make those 
capital investments and that we really restore America's energy 
leadership. Over the past ten years we've moved from a period 
of energy dependence to being the world's leading producer of 
oil and natural gas. That's had tremendous benefits for the 
United States. And in fact, though we're experiencing a very 
difficult time right now, it would be worse for the energy 
industry if we had not had this dramatic expansion over that 
period of time.
    But thank you for your question and happy to follow up with 
your staff as well.
    Senator Lee. Thank you very much. That is very thoughtful.
    Thank you, Madam Chair.
    The Chairman. Thank you, Senator Lee.
    Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Madam Chair and Ranking 
Member, and thank you to the panelists, I so appreciate the 
conversation today.
    Ms. Jacobson, I would like to start with you. Environmental 
Entrepreneurs issued a report yesterday that found that an 
additional 27,000 clean energy jobs were lost in May 2020 
bringing the total COVID-19 related losses in clean energy 
workforce to over 620,000. Now more than 5,000 of those clean 
energy jobs were in my home State of Nevada. The energy sector 
continues to be the hardest hit during this pandemic, and 
rooftop solar companies which rely on face-to-face interaction 
with consumers to secure future projects are also struggling to 
keep projects in the pipeline.
    Can you talk a little bit more about the impacts of COVID-
19 on your members and what are they doing to adapt business in 
a COVID world? And then secondly, what should we be doing in 
Congress? I know you talked a little bit about the PPP program, 
but what else can we be doing to help build back that energy 
sector economy and boost job growth?
    Ms. Jacobson. Yeah, well, thank you very much for the 
question and yes, the reporting that's been done on job loss 
and the energy sector overall as well as what it's providing in 
terms of a view into clean energy sector's job trends has been 
so helpful over the past couple of months. So I'm really 
grateful for the, to the supporters of that research. I think 
first and foremost across the board, and this is true for 
businesses in your state too, you know, safety. Number one is 
the safety of their employees in whatever, you know, kind of 
work environment they're in and whatever current business 
condition they're in. So if they are contemplating expanding 
the opportunities that they have to work again in homes, then 
their number one concern is making sure that their employees 
are following all the state and local rules and that they are 
protecting both themselves, their families and their customers. 
And so, I think there are things that the Federal Government 
can do through the State Energy Offices as well as other areas 
to help state and locals and tribes understand how they can 
help businesses as we reopen, when it's safe to do so.
    You know, also they are trying to help their employees 
navigate all the support that they might need at a local level 
and the Federal Government is helping workers who are either 
furloughed or are out of work and then, you know, they're 
trying to access the business programs that are available to 
them across the board as we've discussed before. In terms of 
what the Federal Government can do now to assist those types of 
businesses, I mean, for, you know, to talk for a second more 
about the residential sector, this is again, energy efficiency 
and renewable energy. You mentioned solar installers, you know, 
they may be in partnership with utilities and many of those 
programs, you know, immediately ceased once the health pandemic 
was in full force in early March and they've not resumed. And 
that's a big partnership that they have with their utility 
programs.
    So again, they're in a very constrained environment right 
now, but in terms of what the Federal Government can do from a 
policy perspective, in terms of immediate relief, if there are 
policies that are on the books that were set to expire or have 
additional deadlines, you know, within this year or the next 18 
months, we should look at them because we've now lost at least 
a quarter of business activity. It may be extended. And so, you 
know, four things that Congress has already said are important 
policies, we want to make sure they can be fully utilized.
    And then on the economic recovery side, you know, the last 
time we made a big strategic investment like this on a national 
level was with the stimulus program after the financial crisis, 
and we've seen that, those strategic investments coupled with 
partnerships with the private sector and state and local 
activity, a great transformation and very significant job 
growth and economic activity in the energy sector that came 
from those investments.
    So I think we need to look at research development and 
deployment programs. Again, I really urge Congress and the 
Administration to pass the American Energy Innovation Act this 
year. We have a surface transportation bill that's pending. 
There are many pieces in there that would be very helpful to 
send a signal to the marketplace that, you know, clean energy 
jobs can be forward-leaning in our recovery and again, we need 
to be in an environment when it's safe for business activity to 
resume. So I think we need to be talking over these next 
several weeks and months about how best to progress.
    Senator Cortez Masto. Thank you. Thank you, Ms. Jacobson.
    I know my time is up. I will submit the rest of my 
questions for the record. Thank you, Madam Chair.
    The Chairman. Thank you, Senator Cortez Masto. Yet another 
rallying cry for our energy bill. We appreciate that. Thank 
you, Ms. Jacobson.
    Let's turn to Senator Daines.
    Senator Daines. Thanks, Chair Murkowski.
    Montana has a very robust energy industry, and it is 
struggling. For Montana, it was the perfect storm. Oil prices 
drop in the negatives due to Russia and Saudi Arabia 
manipulation while demand across the board dropped overall due 
to COVID-19. Coal jobs also saw a major hit with a number of 
companies having to lay off workers where unemployment was 
already an issue. No one was left untouched, whether it is 
miners, refiners, pump stations, and energy generators, they 
all felt an impact. We have been working with the 
Administration to find targeted solutions, but we have still 
got a lot of work to do. I think more temporary relief, both 
regulatory and royalty relief, for our energy producers is 
needed. I also think the quicker we can get people back safely 
to work, back to traveling, back to a normal day-to-day 
routine, the better it will be for industries across the board.
    I do want to focus on a few key issues that are important 
to keeping Montana's energy industry working. Mr. Macchiarola, 
as you know, this is a historic week for conservation and our 
public lands. Passage of the Great American Outdoors Act will 
guarantee the next generation of public lands conservation and 
the economic benefit they provide for the nation. This week is 
also a time to remember a very important link between energy 
production and conservation. The Land and Water Conservation 
Fund and public land maintenance is funded by energy revenue. 
That means that the stronger our energy sector, the more we can 
invest in our public lands. However, if the oil and gas 
industry is weakened because of COVID-19, foreign price 
meddling or because of federal bans on oil production, like 
some Members of Congress have advocated for, then our ability 
to protect our public land is also weakened. How can we make 
sure the U.S. continues to be energy dominant so programs like 
the Land and Water Conservation Fund will continue to see 
funding year after year?
    Mr. Macchiarola. Thank you for your question, Senator 
Daines. And just to put some--you use the phrase energy 
dominance in the United States. Just to put a perspective, I 
think, on what you mean, back in 2008, the last time we faced 
an economic disruption we were producing about 6.8 million 
barrels per day here in the United States and using close to 20 
million barrels a day. At the beginning of this crisis we 
produced about 13.1 million barrels per day here in the United 
States. That energy security that that provided was essential, 
not just in providing for good paying jobs and growth in 
employment and the economy but also in our national security as 
we faced threats from producers around the world.
    You raised the issue of the Land and Water Conservation 
Fund (LWCF). In Fiscal Year 2019, the federal revenues from 
production of energy were the second largest source of revenue 
for the Federal Government. I think the Department of Interior 
took in about $11.7 billion. Nearly a billion of that went to 
the Land and Water Conservation Fund, important programs of 
conservation on trails and national park areas and ball fields. 
In fact, in all the states across the country that funding is 
essential for conservation measures, couldn't be done without 
the royalties and the revenues that are paid as a result of 
American energy. So I think you're absolutely right, Senator, 
that combination of both being able to restore our standing in 
the world, to be able to raise employment and enhance our own 
economic security, coupled with the fiscal stability that it 
provides for government revenues for those important projects 
is just essential.
    Senator Daines. Thank you. A follow-up question for you. As 
you know, this is a historic week for LWCF, but also there was 
another court decision that will have a sweeping negative 
impact, not only on energy infrastructure projects, but also 
broadband and utility infrastructure. A Montana judge recently 
struck down the Army Corps of Engineers Nationwide Permit 12 
which is used to safely and expeditiously approve permits for 
projects crossing U.S. waterways. I believe an API analysis 
shows that over 70 pipeline projects alone would be affected. 
One of these projects that may be affected is the Keystone XL 
Pipeline which enters the United States in Montana. This 
project along with numerous other pipeline infrastructure 
projects is hugely important for high-paying Montana jobs and 
revenues for local communities. It is a big, big part of the 
future for our counties out in Eastern Montana to support local 
government, the revenues coming into those counties because of 
the pipeline.
    What do Congress or the Administration need to do to get 
the Nationwide Permit 12 restored so infrastructure jobs can 
continue to grow in places like Montana?
    Mr. Macchiarola. Yeah, thanks for your question, Senator 
Daines.
    So an interesting juxtaposition in court cases. You saw the 
Supreme Court approve the Atlantic, the right-of-way in the 
Atlantic Coast pipeline and a couple of weeks ago, as you 
mentioned, you saw the, a Federal District Court in Montana 
revoke the Nationwide Permit 12. It's imperative that we 
restore the Nationwide Permit 12 with--there are currently 
about 70+ infrastructure projects ongoing in the United States. 
An assessment of 11 of those projects total about capital 
expenditures of around $32.3 billion, that's about half a 
million jobs, 150,000 jobs directly on construction of those 
projects. It's absolutely essential from an employment 
perspective, from an economic perspective, from an energy 
security perspective that we get this right.
    We hope that, you know, there are successful appeals to 
this. We're also going to work with Congress and the 
Administration to restore Nationwide Permit 12. We know the 
importance of this project in getting Keystone over the finish 
line. It's absolutely essential that we invest in our energy 
infrastructure here at home. It is essential, again, for our 
energy security. It's essential also for our economy, but it's 
also essential for our environment as well. That, those 
projects are critical for the use of American energy with the 
highest standards around the world of environmental 
stewardship. And so, I would, you know, urge Congress to 
restore the Nationwide Permit 12 and we will be working 
vigorously with the Administration----
    Senator Daines. We talk about shovel-ready projects. One 
judge just grabbed the shovels out of the hands of American 
workers for 70 different pipeline projects. Thanks for your 
comments.
    Chair Murkowski, I have a couple more questions that I will 
submit as QFRs.
    The Chairman. Great. Thank you. We appreciate that.
    Let's turn to Senator Hirono, please.
    Senator Hirono. Thank you, Madam Chair.
    This is for Lisa Jacobson. In the face of the pandemic and 
the reality of the growing costs of climate change we need to 
look for opportunities to build a stronger, cleaner economy. In 
May, Hawaii Electric announced it is negotiating contracts for 
460 megawatts of renewable energy and three gigawatt-hours of 
energy storage projects to help replace fossil fuel plants on 
the islands of Oahu, Maui and on the Big Island. But not all 
states have taken Hawaii's steps to becoming 100 percent 
renewable energy to save residents money in the long run. 
Unfortunately, we do not have a similar long-term national 
plan.
    In your testimony you detailed the job losses in the clean 
energy sector and corporate expansion of federal support for 
research, development, and demonstration at DOE to support 
private investment in clean energy sectors and resilience. How 
quickly could clean energy businesses start rehiring if 
Congress prioritized support for clean energy in an economic 
recovery bill?
    Ms. Jacobson. Thank you very much for the question.
    You know, I think it will be different for different 
programs and different segments of the energy economy in terms 
of how quick the impact will be but, you know, I think, 
generally speaking, across the Business Council's membership 
we've received about 150 different types of policy proposals 
that would be helpful both in immediate relief and different 
phases of economic recovery. And we've gone through and have 
tried to characterize as best we could. And I would say many of 
those do fit into the one- to two-year timeframe.
    So we did immediate relief which are things like, as I 
said, you know, looking at the laws on the books and if we need 
to, for market stabilization purposes, provide a delay in a 
phasedown or an extension in a deadline because those 
particular policies couldn't be utilized, well then, we need to 
look at that and do so quickly. That will send a very strong 
signal to the market. And then, in the research, development, 
and deployment arena there are different types of efforts. 
There are some things where we have programs that have proven, 
a proven track record or we have experience from the American 
Recovery and Reinvestment Act that we can get a lot of economic 
benefit and jobs quickly, but we should look at those programs 
first, especially if they are under existing authority. And 
then, the private sector is watching, you know, urgently with 
everybody to see when it's appropriate to get moving again.
    And you mentioned, of course, clean energy and the 
environmental imperatives that we face. So strategic 
investments across the energy sector are essential, but I'm 
very appreciative of this Committee's interest in looking in 
clean energy industries, in particular, as we think about the 
policy landscape for economic recovery and renewal.
    Senator Hirono. Is the level of funding in the American 
Energy and Innovation Act--which you said that we should pass 
as soon as possible--that the Senate was considering in March 
sufficient given the economic crisis we now face?
    Ms. Jacobson. I think the American Energy and Innovation 
Act is a foundational set of policies. We know it is, you know, 
the process that went into it, its strong, bipartisan support, 
the breadth of technologies and industry sectors it would 
impact, you know, is quite remarkable and extremely valuable at 
this time. I think, you know, we're at a point now though where 
whatever benchmarks we had in terms of investment, we need to 
reassess given the conditions on the ground and the business 
environment we're in. So I know that many of the proposals that 
BCSE members have shared with me provide, you know, enhanced 
and expanded investments in existing policies and programs that 
work, you know, looking for ways to use the tax code to drive 
market change with the private sector.
    So you know, we're in a game-changing moment. And so, you 
know, what we were looking at a year ago we might need to do 
much more to stimulate the energy economy in the months and 
years ahead.
    Senator Hirono. One more question. You have called for 
Congress to increase funding for LIHEAP, and we are seeing 
losses at the utilities because of lower demand, et cetera, in 
the commercial sector. So how high is the need among customers, 
consumers, for assistance with utility bills that you and other 
utility customer advocates are seeing across the country and 
are there other things Congress could do besides increasing the 
funding for LIHEAP? What else can we do to make it easier for 
people to get help with their utility bills in addition to, as 
was said, increasing the funding for LIHEAP?
    Ms. Roberts. Thank you for that question.
    The LIHEAP is critical for low income customers but let's 
step back a second and say, what is the issue here with 
customers not paying utility bills and the effect on utilities? 
It's really a cashflow problem. Customers will have to pay 
their utility bills. They're not being forgiven their utility 
bills. There are moratoria. So we will take all the LIHEAP 
money we can get and we will administer all the LIHEAP money 
that you would allow. But we also need money for customers that 
never were on LIHEAP, have always paid their bills and they 
just aren't working now. So those are two areas that are 
important.
    Helping the customers also helps the utilities because it 
helps their cashflow and it helps them recover from the really 
high levels of arrearages they're seeing now, and I hope that 
answers your question.
    Senator Hirono. Thank you, Ms. Roberts.
    I have two more questions that I will submit for the 
record, Madam Chair.
    The Chairman. Very good, thank you, Senator Hirono.
    Let's turn to Senator Cassidy. I am told that your video 
may or may not work, but hopefully we can hear you.
    Senator Cassidy. Yes, I hope you can hear me.
    The Chairman. Yes, we can.
    Senator Cassidy. Can you see?
    The Chairman. You are good, Bill.
    Senator Cassidy. Great.
    Obviously, the demand destruction that was discussed 
earlier has had an incredible impact upon energy states. I am 
told there has been $40 billion in capital expenditures cut 
across energy businesses and in two parishes in Louisiana there 
were 25,000 jobs lost related to drilling in the Outer 
Continental Shelf, and I could go on.
    Mr. Nalley, EIA projects demand will recover quicker than 
supply but that U.S. production will decline until next spring. 
How much further production does EIA forecast will be taken 
offline by domestic producers, and related, which basins are 
most vulnerable to further production cuts?
    Mr. Nalley. I appreciate the question.
    I'll have our staff get that information and get back to 
you.
    Senator Cassidy. Okay.
    If there is a resurgence of COVID-19 cases later this year, 
what impacts does EIA think that will have on crude inventories 
and oil prices, assuming that the storage levels are still 
higher than pre-COVID and oil prices still lower the next year?
    Mr. Nalley. Alright, well, I think one of the difficulties 
in the modeling forecasting of this, particularly in the short-
term, is things like that, is there a resurgence or not? And 
so, you know, we're looking at all those things. Our folks are 
paying attention to all the signals and using the underlying 
principles of, you know, GDP and trying to make sure we build 
that into our models to make sure we do the best of forecast 
through next year. But there's nothing in there, in our current 
forecast that has a second wave or, you know, to answer that 
question.
    Senator Cassidy. Well, it seems like you need to do that 
sort of thing, just because all the public health folks are 
saying that is a risk. I am not chiding, I am just asking, 
because it does seem that would be necessary.
    Another question, Mr. Nalley. The natural gas market has 
not been as hard hit as the oil market, but I am told EIA still 
expects natural gas production to decrease by two percent in 
2020. What are your overall thoughts on the future of the gas 
market and how will the decline of crude oil production affect 
associated gas production? And then related to that, if there 
is a decline in associated natural gas production, what will 
happen to dry gas basins such as the Haynesville? Do you expect 
those to increase their production? So your overall thoughts in 
the future. What is the impact of decreased associated gas 
production and if you see decreased associated gas production, 
do you see an increase in production from dry gas basins?
    Mr. Nalley. Well, we expect U.S. dry gas production to 
decline on average about 87.--89.7 BCF per day in 2020 from the 
2019----
    Senator Cassidy. That is dry gas?
    Mr. Nalley. I'm sorry?
    Senator Cassidy. That is dry gas production or overall gas?
    Mr. Nalley. That's dry gas.
    Senator Cassidy. Gotcha.
    Mr. Nalley. So what we expect, like you said, the 
production declines further into 2021 to an average of about 
85.4. So we can get some information back to you and your staff 
about the individual areas.
    Senator Cassidy. Okay.
    Mr. Macchiarola, I understand there tends to be, when we 
talk about offshore oil and gas production, a general breaking 
in point for older versus newer offshore, deepwater wells, and 
obviously that factors into the discussions of royalty relief, 
et cetera. Can you comment on what those break-even points are 
for older versus newer wells?
    Mr. Macchiarola. Yeah, so, Senator, as a trade association 
we often don't get into discussions of price, but what I can 
tell you is as you, as a general matter, as you enter into more 
frontier areas--the costs associated with that deepwater 
production usually tend to be more costly than areas in 
shallow, and then over time those costs recede. But costs in 
general have a number of factors associated with the basin that 
you're in, the overall cost profile that you have, the service 
and supply arrangements that you have, your debt profile.
    With respect to your question on royalties, though, 
Senator, it's a bit tricky because on the one hand we set up 
royalty relief back in a time where we wanted to enhance 
production. I'm thinking of the Deep Water Royalty Relief Act 
that this Committee was responsible for, in fact, and that was 
a time, again, when we were trying to enhance energy production 
here in the United States. Fast forward to the situation we 
were in most recently, we did not want to increase 
productivity, we wanted to rebalance the market. The imbalance 
between demand and supply was quite significant during this 
period of time. But we also recognized that producers and 
operators of U.S. companies were struggling, in part because of 
market conditions and in part because of oversupply activities 
on the part of OPEC+ nations.
    And so, I think it made a lot of sense for the Department 
of the Interior to look at existing authorities that they had, 
both with respect to questions of relief, as well as questions 
of extensions of leases. Ultimately, as I noted at the top, we 
did not advocate for royalty relief, but we appreciated the 
Administration, really across the board, looking at their 
existing authorities to be able to mitigate what was really an 
energy crisis. I think about EPA and their fuel waivers. The 
Department of Energy on the Strategic Petroleum Reserve.
    Senator Cassidy. So if you could wrap up, because I know I 
am way over time.
    Mr. Macchiarola. Sure.
    And then to your point, the Interior looking at individual 
operators and their particular situation with respect to 
royalties. So I thank you for your question and am happy to 
follow up after the hearing as well.
    Senator Cassidy. Thank you. I yield back.
    The Chairman. Thank you, Senator Cassidy.
    I understand that Senator McSally has asked to defer to 
Senator Hoeven at this point in time. So we will go to Senator 
Hoeven.
    Senator Hoeven. Thank you, Madam Chairman, I appreciate it.
    My first question is for Deputy Administrator Nalley, and 
it is regarding the Strategic Petroleum Reserve, something I 
know that our Chairman has worked very hard on through the 
years. I have legislation that is both bipartisan and bicameral 
that would authorize purchases by the Department of Energy for 
the Strategic Petroleum Reserve. My question for Deputy 
Administrator Nalley is, do you agree that filling up the 
Strategic Petroleum Reserve would help alleviate some of the 
supply concerns that we see right now in the oil markets?
    Mr. Nalley. I'm sorry, I didn't hear the last part of the 
question.
    Senator Hoeven. That passing this legislation and filling 
up the Strategic Petroleum Reserve would be a good idea to help 
alleviate some of the supply challenges we have right now in 
the energy market.
    Mr. Nalley. Alright. So I would actually defer to some of 
the policy parts of the Department of Energy to respond to that 
question.
    Senator Hoeven. Alright, then I would ask Mr. Turk that 
same question, as far as his thoughts on it.
    Mr. Turk. What's going on around the world is many 
countries are taking advantage of the price being low to fill 
up their strategic reserves and certainly companies are with 
their commercial reserves. So just a few numbers for you from 
other countries. For China, our implied stock calculations show 
1.2 billion barrels of crude oil stocks at the end of May. This 
year alone, January to May, that's 200 million barrels that 
they've added. India was fortunate to have some available 
strategic storage capabilities as well and their Minister just 
announced that they're adding 20 million barrels to their 
strategic stocks in April and May. So certainly countries are 
looking at the price points and the opportunity to add to their 
strategic reserves. So that's what we see internationally.
    Senator Hoeven. Also, Mr. Macchiarola, your opinion on the 
same question.
    Mr. Macchiarola. Yeah, thanks for your question, Senator.
    We thought it made a lot of sense for the Department of 
Energy to cancel their planned sell during this, during the 
outset of this, the COVID-19 pandemic and then put it on offer 
for leasing, ultimately 23 million barrels of capacity in the 
Strategic Petroleum Reserve. I believe 15 of that has already 
been leased. That made a lot of sense for them to utilize their 
existing authorities that the Department had and, you know, to 
mitigate against what was, as I noted, a significant imbalance, 
a potential real issue with respect to storage down, coming 
down the pike. You know, we encourage the Department to 
continue to look at this. In addition to the testimony from IEA 
regarding the storage response from other countries, I do note 
that this issue has been alleviated by both the storage 
measures that have been taken, as well as the rebalancing of 
demand over this period of time.
    I appreciate your question and am happy to look at this 
further as well.
    Senator Hoeven. Alright. I would like to go back to Mr. 
Nalley and ask about coal-fired electric capacity. Obviously we 
have seen, and you project, a reduction in coal production and 
usage correlating with the COVID epidemic and so forth. My 
question would be, do you believe that the early closure of 
coal-fired, baseload electric plants that we are seeing will 
have a lasting impact on reliability in terms of the grid as 
demand returns?
    Mr. Nalley. So, as you said, we do show a decline and we 
don't think that it will have a, sort of, an issue on, from a 
reliability standpoint. There are enough things in place where 
plants have to go in and get authorization to do, so we don't 
think it has a long-term effect on reliability.
    Senator Hoeven. Alright.
    And what about the impact, as far as developing carbon 
capture, an impact there? I address that one to Mr. Turk, in 
our efforts to develop carbon capture technologies.
    Mr. Turk. So we certainly view CCUS technology--carbon 
capture, utilization and storage--as a critical technology for 
the power sector but for industrial applications as well. And 
we, we're very pleased to see some real momentum and progress 
over the last several years and certainly a big congratulations 
to those of you involved in the Senate and the 45Q legislation 
which was a real bright spot for CCUS with projects coming 
online and really providing an incentive in a very powerful 
way.
    Candidly, what we're seeing going into COVID is there are 
some challenges, there are some new challenges on the CCUS 
side. And it's certainly incumbent upon countries who view CCUS 
as a priority and, again, we certainly do, as a critical part 
of a clean energy future to take that into account as they 
craft legislation and look for programs to make sure that 
momentum going into the COVID crisis continues and goes forward 
coming out of the crisis as well.
    Senator Hoeven. And so, by developing CCUS--very important 
in terms of addressing CO2, what about not only 
utilizing the 45Q or 48A tax credits but what if they were to 
be--funded, wouldn't that also help--carbon capture----
    Mr. Turk. So certainly there's more room for creativity and 
expanding, from our perspective, the 45Q legislation's reach in 
a variety of different kinds of ways and from our perspective, 
again, given the potential, the real potential on CCUS, 
certainly, whether it's the U.S. Government or other 
governments and we've heard a lot from other governments very 
interested in what's going on in the U.S. on 45Q and some of 
the implementation along those lines. So our hope is there's 
not only creativity in expansion on the U.S. side but that 
others learn from your example as well and put in place some 
schemes and systems that will help CCUS along and especially 
even more important now in the COVID crisis and coming out of 
the COVID crisis.
    Senator Hoeven. Thank you. Thank you, Madam Chairman.
    The Chairman. Thank you, Senator Hoeven. I don't know if 
Senator McSally is back online yet. If she is, we will turn to 
you. I don't see her up on the screen yet, so I have one more 
set of questions, then I think we will turn to Senator Manchin. 
If Senator McSally comes in, we will move over to her.
    Mr. Turk, you mentioned the role that I have, and I am very 
pleased to be involved with the Global Energy Efficiency 
Project through the IEA. Ms. Jacobson, you also indicate in 
your testimony that it was in the energy efficiency side that 
we really saw probably the most significant, in terms of job 
hits out there. Ms. Jacobson, you mentioned that more can be 
done with LIHEAP, particularly, that could make a difference in 
how we can help with recovery efforts here on the efficiency 
side. So a question to you. If there were other areas that we 
might be looking to, I would pay pretty close attention to what 
is going on with the Weatherization Assistance Program. So your 
thoughts on what more we might be able to do. Then I would like 
to turn to you, Mr. Turk, from the international perspective, 
in terms of some of the areas of energy efficiency that we are 
seeing reflected in other countries as they also are seeing 
this impact in this COVID or post-COVID environment.
    So Ms. Jacobson and then Mr. Turk.
    Ms. Jacobson. Thank you and yes, unfortunately energy 
efficiency workers, in particular in the residential sector, 
have been among the hardest hit when it comes to U.S. energy 
job losses. And in terms of the policy ideas that our members 
have brought forward, they try to tackle different classes so 
it might be, you know, commercial and industrial and things 
that we can do at the residential level and there are different 
policy tools for different outcomes that we're seeking.
    But in terms of, you know, broad-based, in addition to RD&D 
and, again, we've talked about the legislation that you've led, 
the American Energy Innovation Act before, so in addition to 
that, things like expanding state energy programs that are 
administered by the state energy offices in partnership with 
governors are critical. We know this works, and I'm happy to 
engage with your staff with more detail. There are many 
programs that can be, again, there may be current existing 
authorities or in other cases, you know, we have proven results 
so that we can quickly get those programs moving and that will 
bring energy efficiency workers back.
    You know, there was an initiative that's a relatively new 
proposal but builds on that model that tries to address 
critical infrastructure in buildings but also takes advantage 
of public-private partnerships. And I think no matter what we 
do with federal dollars, we need to be looking either directly 
or indirectly to be leveraging private capital. So I encourage 
that. There are also small business retrofit programs in the 
efficiency sector that are being considered. So there's a--and 
then finally the tax code. I mentioned one, just one, of many 
tax provisions that industry feels would help get energy 
efficiency workers back on the job.
    The Chairman. Great. Thank you.
    Mr. Turk, your comments?
    Mr. Turk. Well, first, Madam Chairman, let me certainly 
reiterate our thanks from the IEA side for your leading role in 
the Commission on Urgent Action for Energy Efficiency. And as 
you know the recommendations from that Commission are coming 
out next week. So we very much hope that those high level, 
actionable recommendations that you and your other members of 
the Commission put together are incredibly helpful here, and I 
think incredibly timely report to come out.
    Secondly, as you also know and I think others, members of 
the Committee, certainly globally we weren't doing as well on 
efficiency as we should have been going into the crisis. The 
efficiency improvements, our economy globally is still getting 
more efficient but it's not nearly at the rate we were 
improving just a few years ago. So we had some efficiency 
challenges going into the crisis and we're seeing some 
challenges, as I said, on the investment side, 10 to 15 percent 
less investment in energy efficiency we're expecting this year 
in 2020 because of the COVID crisis. Now the good news here is 
exactly what my fellow panelist just said, certainly with 
stimulus programs, economic recovery programs. And when I use 
that term, I don't just mean our country is going to do one 
stimulus program and move on. It's all the related legislation, 
the tax legislation, procurement, all the other kinds of 
things, including in your excellent American Energy Innovation 
Act. But energy efficiency has a huge number of jobs associated 
with it and done right, especially building up and scaling up 
existing programs, can be hugely beneficial, especially on the 
jobs front, but the economic growth and then building toward 
the energy future we all want.
    One area in particular is certainly buildings. Buildings 
have a huge amount of improvement. We have made improvement 
over years, but there's a whole lot more improvement and 
potential there, very cost-effectively. So there's a real 
opportunity to scale up those efforts, in particular.
    Thank you.
    The Chairman. Great. Thank you for that.
    I have one final question here, and this is directed to 
both you, Mr. Nalley, and Mr. Turk. We have thrown some numbers 
out here and some percent of decline and some projections out 
there, but we recognize that the EIA and the IEA, you know, you 
come before this Committee quite frequently because the work 
that you do is really key to us understanding our global energy 
markets. It has been noted that there are, oftentimes, 
differences between the estimates, for instance, for declining 
U.S. oil production that are published in your respective 
agencies. The question is, what explains the differences 
between such estimates and what is the limitation in terms of 
the data that is available to you, specifically on the question 
of U.S. oil production declines?
    Mr. Nalley, if you want to take it first?
    Mr. Nalley. Well, I'd, I think we would actually have to 
get back to you, Senator, with the comparison of those numbers. 
I know IEA issued a report today in trying to take a look at 
those and what the differences are and particularly in those 
areas.
    The Chairman. And as to limitations in any data that you 
might have available to you, is that something that the 
Committee needs to be aware of or working on?
    Mr. Nalley. I don't think there's any limitations currently 
in comparison of the IEA's data, no.
    The Chairman. Okay.
    Mr. Turk, your comments?
    Mr. Turk. Well, first of all, let me certainly emphasize 
that we have a huge amount of respect for EIA. I worked at the 
Department of Energy for several years before taking up this 
post at the International Energy Agency, and our acronyms are 
quite similar and usually our data is very similar as well. 
There are some differences as you said, Madam Chair, Chairman, 
including our estimates for oil being slightly greater declines 
in 2020 compared to the EIA data. And when we look at the 
numbers, the real difference there in the forecast can be 
explained by various assumptions that we use, and EIA uses, on 
timing of the reversal of production, shut-ins, as well as 
investment levels and drilling completion activity going 
forward. So there are some differences there as we look at the 
numbers and crunch the numbers respectively.
    To your second question on the limitations in the data, 
coming from the U.S. side, the official consolidated monthly 
data for U.S. production is currently available only through 
March and certainly March was a long time ago. March seems like 
several lifetimes ago during this pandemic, at least to me, it 
certainly does and certainly one part of that is the complex 
nature of the U.S. oil landscape. So you've got numerous 
upstream, downstream, midstream players, expensive inter-
regional, international trade so the production estimates are 
certainly challenging, but certainly from our end, we're a data 
and a numbers organization, as you know, from the many times 
Dr. Birol has testified before your Committee and the better 
numbers, the more timely numbers policymakers can then base 
better decision-making on.
    So we'll continue to work with our EIA colleagues certainly 
and more than happy to continue being as helpful as we can to 
this Committee, in particular.
    The Chairman. Thank you, Mr. Turk, for your very helpful 
response there.
    Let me turn to Senator Manchin for any final questions that 
he might have.
    Senator Manchin. I just have one question, and this is to 
Mr. Turk or Mr. Nalley.
    Since nuclear power plants are still operating, the need to 
refuel these plants has not gone away. Refueling takes place 
about every 18 months and requires temporary crews of about 
1,000 traveling contract workers. Nuclear power plants in the 
U.S. have been taking steps to mitigate risks for their 
permanent staff by halting travel, expanding telework, 
canceling events and testing essential staff for Coronavirus. 
But for refuels, temporary contractor workers must work onsite 
and often perform functions that require close proximity to 
others. So my question would be what actions are other 
countries taking to mitigate risk associated with nuclear power 
plant refueling operations and have you seen any differences 
between countries, how they have safely dealt with refueling 
operations, particularly practices that appear to be working 
very well and being very effective?
    So Mr. Turk, if you might want to take that first?
    Mr. Turk. Thank you very much, Ranking Member Manchin, and 
certainly I know my boss, our Executive Director, Dr. Fatih 
Birol, enjoys his conversations with you as he enjoys his 
conversations with the Chairman as well. So whatever we can do 
to help you and your staff going forward, we're here for you.
    As we look at nuclear, we put out a piece not too long ago, 
in fact, just a week ago, last week, last Friday. Nuclear 
plants are performing quite well during the lockdowns from an 
operational viewpoint around the world. They have provided that 
electricity, that baseload electricity, the electricity that's 
so important for the medical responses, so important for 
teleworking, so important for this video conference capability 
as well. So from an operational standpoint, nuclear has 
performed quite well.
    The issue that we're particularly worried about and we've 
done some significant analysis of this last year and we're 
looking into this further as well, is really the decision of 
advanced economies for lifetime extensions. And I'll just leave 
you with one data point on that front. Without the investment 
to extend the life of the existing fleet, our analysis shows as 
much as two-thirds of nuclear power capacity in advanced 
economies could be gone by 2040. So that's a huge amount of 
baseload power, huge amount of carbon, low-carbon, carbon-free, 
baseload power as well and something that we've tried to bring 
attention to also.
    Senator Manchin. Mr. Nalley, if you have anything else?
    Mr. Nalley. I don't have anything else to add. I mean, we 
can take a look and we would be happy to work with your office 
and your staff to----
    Senator Manchin. Anything you can supply to us or give us 
information on what is happening around the world, we would be 
very much interested in and very helpful.
    Mr. Nalley. We certainly will.
    Senator Manchin. Thank you so much. Thank you all for your 
appearances today and your testimonies. Thank you.
    The Chairman. Thank you, Senator Manchin.
    I want to thank our witnesses. I think that this has been a 
good hearing. We had good input from members and good input 
from our witnesses.
    Mr. Nalley, you have indicated that you have some responses 
that you will get back to colleagues. We will look forward to 
that. I know several have asked that questions be submitted for 
the record, so we will await those responses as well.
    But know that as we move forward here in the Congress in 
addressing what this next round of relief might look like, the 
efforts to stimulate the economy and allow us to move to a more 
robust and healthier environment, we need everybody 
participating in this. So having this discussion, not only 
about the numbers, but what is happening in the industry and, 
certainly, the consumer view, has been good input for the 
Committee here this morning.
    I appreciate all that you have provided us and thank you 
for the contributions.
    With that, the Committee stands adjourned.
    [Whereupon, at 12:03 p.m. the hearing was adjourned.]

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