[Senate Hearing 118-288]
[From the U.S. Government Publishing Office]






                                 ______



                                                        S. Hrg. 118-288
 
                  OPPORTUNITIES FOR CONGRESS TO REFORM
                  THE PROCESS FOR PERMITTING ELECTRIC
                   TRANSMISSION LINES, PIPELINES, AND
                   ENERGY PRODUCTION ON FEDERAL LANDS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 26, 2023

                               __________
                               
                               
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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 
 55-570         WASHINGTON : 2025
   
        
        
        
        
        
               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon                    JOHN BARRASSO Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
MARTIN HEINRICH, New Mexico          STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii              LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine            JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada       BILL CASSIDY, Louisiana
MARK KELLY, Arizona                  CINDY HYDE-SMITH, Mississippi
JOHN W. HICKENLOOPER, Colorado       JOSH HAWLEY, Missouri

                      Renae Black, Staff Director
                      Sam E. Fowler, Chief Counsel
                       C.J. Osman, Senior Counsel
             Richard M. Russell, Republican Staff Director
              Justin J. Memmott, Republican Chief Counsel
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West 
  Virginia.......................................................     1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from 
  Wyoming........................................................     4
.................................................................

                               WITNESSES
                                Panel I

Stanek, Jason M., Former Chairman, Maryland Public Service 
  Commission.....................................................     5
Smyth, Antonio P., Executive Vice President, Grid Solutions and 
  Government Affairs, American Electric Power....................    14
Teply, Chad A., Senior Vice President, Transmission and Gulf of 
  Mexico, The Williams Companies.................................    33

                                Panel II

Milito, Erik G., President, National Ocean Industries Association    74
Obermueller, Pete, President, Petroleum Association of Wyoming...    87
Speakes-Backman, Kelly, Executive Vice President, Public Affairs, 
  Invenergy                                                          96

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Air Products and Chemicals, Inc.:
    Letter for the Record........................................   133
Barrasso, Hon. John:
    Opening Statement............................................     4
    Chart entitled ``Average Annual Acreage of New Federal Oil 
      and Gas Leases by President''..............................   108
Business Roundtable:
    Letter for the Record........................................   136
Dream.Org:
    Letter for the Record........................................   138
King, Jr., Hon. Angus S.:
    Mother Jones article entitled ``Yes in Our Backyards'' by 
      Bill McKibben, published May-June 2023.....................    63
Manchin III, Hon. Joe:
    Opening Statement............................................     1
    Chart entitled ``Transmission Permitting Reform: Eliminate 
      Duplicative Reviews by Consolidating at FERC''.............    44
    Chart displaying text from the Building American Energy 
      Security Act of 2023.......................................    46
Milito, Erik G.:
    Opening Statement............................................    74
    Written Testimony............................................    76
    Responses to Questions for the Record........................   127
National Association of Manufacturers:
    Statement for the Record.....................................   140
National Electrical Manufacturers Association:
    Letter for the Record........................................   143
NextEra Energy, Inc.:
    Letter for the Record........................................   146
Obermueller, Pete:
    Opening Statement............................................    87
    Map depicting lease ownership in a Wyoming basin.............    89
    Written Testimony............................................    91
Risch, Hon. James E.:
    Statement for the Record.....................................   131
Smyth, Antonio P.:
    Opening Statement............................................    14
    Written Testimony............................................    16
    Responses to Questions for the Record........................   124
Speakes-Backman, Kelly:
    Opening Statement............................................    96
    Written Testimony............................................    98
    Responses to Questions for the Record........................   128
Stanek, Jason M.:
    Opening Statement............................................     5
    Written Testimony............................................     8
    Responses to Questions for the Record........................   123
Teply, Chad A.:
    Opening Statement............................................    33
    Written Testimony............................................    35
United South and Eastern Tribes Sovereignty Protection Fund:
    Statement for the Record.....................................   148
Western Governors' Association:
    Letter for the Record........................................   153
    Policy Resolution 2023-10....................................   154
    Policy Resolution 2022-01....................................   157


                  OPPORTUNITIES FOR CONGRESS TO REFORM



                  THE PROCESS FOR PERMITTING ELECTRIC



                   TRANSMISSION LINES, PIPELINES, AND



                   ENERGY PRODUCTION ON FEDERAL LANDS

                              ----------                              


                        WEDNESDAY, JULY 26, 2023

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:30 a.m. in Room 
SD-366, Dirksen Senate Office Building, Hon. Joe Manchin III, 
Chairman of the Committee, presiding.

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

    The Chairman. The Committee will come to order.
    Today we continue the important work of considering reforms 
to our energy permitting system and the state of energy on our 
public lands and waters. Permitting reform is essential for 
more reliable and affordable energy and to make our country 
more secure and competitive. Congress took a meaningful step 
forward in June with the Fiscal Responsibility Act--the debt 
deal--with several common-sense reforms that I know had 
bipartisan support from our Committee members. That included 
firm deadlines to complete reviews, requirements that agencies 
work simultaneously on a single environmental review, and 
several others, but there is still much more to do. Our 
Committee is uniquely situated to be able to make real progress 
by coming together in a bipartisan fashion around a targeted 
set of top priorities for both Democrats and Republicans.
    We had a constructive hearing on overall energy permitting 
reform way back in May, and today we are going to drill deeper 
on some of our Committee members' top priorities based on the 
various permitting bills that have been referred to us. This 
includes responsibly addressing issues that are slowing down or 
blocking energy infrastructure critical for energy security and 
reliability, like pipelines and transmission lines. That 
discussion will be coupled with one on leasing and permitting 
of all types of energy on federal land and in federal waters, 
which is a tremendous energy resource and a critical piece of 
our jurisdiction.
    Let me begin with transmission. Over the last year, there 
has been an attempt to paint transmission permitting reform as 
just another subsidy for intermittent renewable energy. If that 
were the case, that would be very hard for a lot of us to 
support, but this is simply not true. And we should not 
politicize infrastructure that has long enjoyed bipartisan 
support. Here are the facts as I see them. Number one--big, 
interstate transmission lines just are not getting built. In 
2021, we had the lowest build-out of extra high voltage 
transmission construction in the last decade. Number two--the 
process of siting, paying for, and planning large, interstate, 
and interregional transmission is different from other types of 
infrastructure and requires unique fixes. Number three--
transmission is a key electric reliability tool, particularly 
during weather events that span hundreds of miles. Long-
distance transmission and interconnectivity enables power to 
move to where it's needed. As we have seen in Texas and other 
parts of the country, the areas that need the power aren't just 
blue states with aggressive climate targets that some of us may 
not agree with. Of course, transmission infrastructure alone 
isn't enough for reliability--we also need dispatchable 
generation like coal, natural gas, hydropower, and nuclear. But 
without transmission, that generation has nowhere to go and it 
cannot help the areas that need it.
    Let me be clear, states are currently in the driver's seat 
on transmission projects. And I believe, in most cases, that is 
where decisions should be made. But in the limited instances 
where there is a project that is in the national interest and 
it gets stuck at the state level, we need an efficient federal 
backstop to provide a pathway for the project to get the 
permits and be fairly paid for based on benefits received. The 
solution set for other types of energy projects looks different 
than transmission. One critical element which was not included 
in the debt deal that would benefit all types of energy 
projects--from pipelines to offshore wind, to mining projects--
are judicial reforms. In my home State of West Virginia, just 
one project--the Mountain Valley Pipeline--has faced dozens of 
lawsuits in the five-plus years since they received all the 
necessary federal permits. While the debt deal shrunk NEPA 
review timelines down to no more than two years, as we all 
know, litigation on the back end can add many more years to the 
permitting process after agencies have completed their work.
    There are three stages in the litigation process that we 
should look at streamlining--the filing, the case, and the 
remedy. On the first issue, right now, in many cases, parties 
can file suit and begin litigation up to six years--I repeat--
up to six years after a permit has been issued. Allowing three 
times as long to challenge a NEPA review as we are allowing for 
agencies to issue one makes no sense at all. The second issue 
is the length of the court case itself. Given how behind we are 
building the energy infrastructure this country needs for our 
security, Congress should direct the course to expedite 
proceedings for these projects. Third is what happens if a 
court sends a permit back to an agency for more work. Usually, 
when a court sends a permit back, it identifies a few specific 
issues that must be fixed, yet we have agencies taking almost 
as long on these fixes as it took them to write the whole 
permit from scratch. All of these parts of the judicial process 
can and should be structured so that everyone gets their day in 
court, but project developers of all kinds have more certainty.
    Our second panel today will discuss how we can bring some 
timelines, certainty, and efficiency to building and producing 
on federal lands and waters. We need to be clear about what we 
mean by permitting here because the conversation tends to blur 
two distinct steps. Whether it's an oil and gas well in New 
Mexico, a solar project in Arizona, geothermal in Nevada, 
offshore wind off the California coast, or an oil and gas 
platform in the Gulf of Mexico, the first step is to navigate 
the Department of the Interior's leasing and right-of-way 
process. Then there is the separate process of getting permits 
to build or drill on that particular lease. Both steps have 
environmental reviews and approval processes, each with 
litigation risk. Energy producers on federal lands and waters, 
like those on private or state lands, want legal certainty 
about their leases, a steady flow of future sales to justify 
long-term investments, and infrastructure and skilled 
workforces. Continued production of these federal resources is 
incredibly beneficial, not just to our energy security, but 
also to fund western state priorities like education, and 
national priorities like the Land and Water Conservation Fund.
    I have been concerned about efforts by the Administration 
to throttle back oil and gas leasing and production, so I made 
sure that the Inflation Reduction Act tied the ability to issue 
wind and solar leases to whether or not Interior is holding 
significant oil and gas lease sales, both on and offshore. And 
because that is now the law, the unprecedented delay in 
finalizing the next five-year offshore oil and gas plan is now 
putting both offshore wind and offshore oil and gas at risk.
    On top of that, just last week, the Administration and 
environmental groups released a voluntary settlement 
agreement--negotiated behind closed doors--that would take 11 
million acres in the Gulf off the table from leasing and impose 
restrictions that only apply to oil and gas leaseholders. If 
the settlement agreement goes through, you will have oil and 
gas vessels barred from operating at night or restricted to 
slow speeds, while commercial shipping, passenger vessels, and 
fishermen would be completely unaffected. I don't know if there 
is a better example of this Administration's targeting of 
American energy production than this--a domestic energy 
provider literally held back while a tanker ship importing 
foreign crude can cruise on by unrestricted.
    Onshore, while they still have work to do, I am glad to see 
that the IRA has pushed BLM to finally resume holding lease 
sales, including New Mexico's record-setting sale back in May. 
But as I said, once you have a lease, you have then got to 
permit the project itself. I am interested to hear from our 
witnesses how Interior's permitting process affects each of 
their industries. I imagine there are a lot of common 
challenges, regardless of the energy type. As the superpower of 
the world, with abundant natural resources, a strong workforce, 
and the ability to produce cleaner than anyone else, there is 
no reason for us not to have a robust energy production program 
on our federal lands and waters. As the Chairman of this 
Committee, I am committed to continuing to convene my 
colleagues for open dialogue and negotiations on how to make 
more progress on permitting this year.
    Let me end with some housekeeping, since we have two panels 
today with two separate topics. For the first hour and a half, 
we will have the opening statements and then ask questions of 
our first panel of witnesses on transmission lines and 
pipelines. Then, we will hear the opening statements and ask 
questions of our second panel on energy projects on federal 
lands and waters.
    With that, I am going to turn to my friend, Senator 
Barrasso, for his opening statement.

           OPENING STATEMENT OF HON. JOHN BARRASSO, 
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Well, thanks so much, Mr. Chairman. Thank 
you for holding today's hearing, and I am so grateful that we 
continue to pursue meaningful, bipartisan permitting reform in 
this Committee.
    Last month, Congress passed legislation to address spending 
and the debt ceiling. That legislation included important steps 
to expedite the review process under NEPA, the National 
Environmental Policy Act. It also authorized the Mountain 
Valley Pipeline. While the legislation was helpful, Congress's 
work is far from over. Congress still needs to fix the broken 
leasing and permitting process for oil, natural gas, and coal 
production on federal land, and we need to ensure that the 
Mountain Valley Pipeline is not the last major interstate 
natural gas pipeline ever to be built in America. Under federal 
law, the Secretary of the Interior is required--required by 
law--to hold quarterly lease sales in each state with federal 
oil and gas resources. Since President Biden took office, the 
Secretary of the Interior has held only two lease sales in 
these states. That is two lease sales in ten quarters. That 
means, when it comes to leasing, the Secretary of Interior is 
violating the law 80 percent of the time. It is a complete 
disgrace.
    Oil and gas production on federal lands employs tens of 
thousands of people in Wyoming and throughout the West. In 
Wyoming, it pays for K-12 public education and other essential 
services. It is central to the economics and the economies of 
rural communities. By failing to hold robust lease sales each 
quarter, Secretary Haaland is setting our states up for failure 
in the future. That includes her home State of New Mexico, 
which is among the poorest states in the nation. The 
Secretary's decision is having a similar impact on coastal 
communities. Under current law, Secretary Haaland was required 
to finalize a five-year offshore oil and gas leasing plan by 
June 30, 2022. We are now beyond that date of 2023. Instead, 
she issued a draft plan which included the option of ending all 
offshore oil and gas leasing altogether. Since then, this 
Secretary has dragged her feet on taking further actions. That 
almost certainly means that 2024 will be the first year without 
any offshore oil and gas lease sales in the United States since 
the mid-1960s.
    I do not support President Biden's radical and economically 
disastrous efforts to electrify everything almost immediately. 
One thing that is necessary is expanding transmission lines to 
improve the reliability of the electric grid. Such expansions 
will not happen without permitting. As I have told Chairman 
Manchin, I am willing to discuss changes to laws addressing 
interstate electric transmission lines. We must follow two 
principles. First, any changes to laws governing transmission 
must actually address electric reliability. The biggest threat 
to reliability is not the lack of transmission lines, it is the 
premature retirement of coal, natural gas, and nuclear power 
plants. That is what we heard in this Committee at that table 
from experts, including NERC--the North American Electric 
Reliability Corporation, and FERC--the Federal Energy 
Regulatory Commission.
    Second, any changes to laws governing transmission cannot 
be just another subsidy. Congress should not try to force 
electric customers in rural inland states, such as Wyoming and 
West Virginia, to subsidize ill-conceived policies of coastal 
states, such as California and New Jersey. If California, New 
Jersey, and New York want to rely on offshore wind, then their 
customers should pay for it. I suggest that we pursue 
permitting changes that actually put steel in the ground. We 
should pursue changes in law that will benefit all energy 
sources and projects, not just those favored by President 
Biden. And we should pursue changes that help ensure these 
projects are not defeated in the courts.
    Mr. Chairman, I look forward to continuing to work with you 
and other members of this Committee on permitting reform. 
Together, we can improve our nation's economy, restore American 
energy dominance, and reduce the high cost of energy for 
American families. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Barrasso.
    And I would like to welcome our first panel of witnesses to 
the Committee and thank you all again for coming today.
    First, we are going to have Mr. Jason Stanek. Jason is 
former Chairman of the Maryland Public Service Commission.
    Then, we are going to have Mr. Antonio Smyth, Executive 
Vice President, Grid Solutions and Government Affairs for AEP, 
American Electric Power.
    And then third, we are going to have Mr. Chad Teply, Senior 
Vice President, Transmission and Gulf of Mexico with Williams.
    So we will start with you, Mr. Stanek.

STATEMENT OF JASON M. STANEK, FORMER CHAIRMAN, MARYLAND PUBLIC 
                       SERVICE COMMISSION

    Mr. Stanek. Thank you.
    Good morning, Mr. Chairman, Mr. Ranking Member, and members 
of the Committee. As the Chairman just noted, I am the recently 
departed Chairman of the Maryland Public Service Commission. I 
appreciate the opportunity to testify today on an issue of 
critical importance. As both a former federal and state utility 
regulator, I offer you the perspective of one who has seen how 
the current permitting process impacts and then oftentimes 
challenges the development of needed energy infrastructure in 
this country.
    As our regional power grids face record demands, as our 
reliability incidents increase--seemingly weekly--and as our 
aging infrastructure nears the end of its useful life, 
attention to permitting reform can no longer wait. Whether it 
is developing offshore wind turbines or building new 
interregional transmission lines, the glacial pace of our 
approvals process is threatening the nation's ability to 
deliver reliable and affordable energy supplies to our 
citizens. Of course, when it comes to the permitting of large, 
major infrastructure projects, the federal and state 
governments have overlapping responsibilities. For its part, 
the state siting authorities have a responsibility to use best 
efforts to conduct a thorough review and to make a final 
determination within a reasonable time frame. Project 
developers, likewise, deserve to know that their applications 
and proposals will be processed efficiently and without delay. 
Fortunately, state regulators have tremendous experience with 
reviewing energy projects and should be viewed as partners when 
evaluating the need for and siting of energy infrastructure.
    In turn, it is equally important that federal authorities 
respect the state's jurisdiction and to provide deference to 
allow the state process to run its course, including electing 
not to exercise backstop authority or otherwise preempt the 
state from completing a review that is underway and moving 
toward a final determination. As I noted in my written 
testimony, if our reforms are to be successful, meaningful 
consultation and mutual respect between the state and federal 
regulators will best reflect the spirit of cooperative 
federalism. I think it will also be essential for permitting 
reforms to include clear language to include the roles of both 
the federal and the state regulator when reviewing proposals to 
site projects of national interest.
    Beyond streamlining the federal permitting processes, there 
are other issues that are either slowing or inhibiting the 
development of energy infrastructure--namely, how we plan for 
new electric transmission lines and how we decide who will pay 
for them. As the former co-chair of the Joint Federal-State 
Task Force on Electric Transmission, I can testify that the 
need to modernize the way in which we conduct transmission 
planning ranks very high. Going forward, we will need to employ 
planning practices that can better project future load growth, 
that could incorporate state policies from the outset, and 
anticipate severe and increasingly unexpected weather events 
and threats to the power system, both cyber and physical. 
Improving this framework within planning regions and requiring 
closer coordination between neighboring regions will result in 
the most efficient development of new transmission lines at the 
lowest overall cost.
    Equally important is answering the question of who is going 
to pay for these new projects. Determining which customers or 
which states should pay for a particular project has been a 
challenging exercise for many years. While cost-benefit reviews 
have historically focused on production cost savings, we now 
have experience in evaluating a range of other benefits, both 
broad and narrow, both quantifiable and harder to quantify. But 
by spreading those costs to a broader class of identified 
beneficiaries in a fair and equitable manner, I believe we can 
remove a formidable barrier to the development of needed 
transmission lines. I should also note that FERC has several 
rulemakings currently underway on all these issues and state 
regulators have participated at every stage of these 
proceedings.
    Ultimately, the bottom line is that the current regulatory 
environment facing energy infrastructure developers is 
challenging under the best of circumstances. With increasing 
demands on our energy delivery networks, permitting reform is 
the first step to ensure that our nation can make timely 
investments to access reliable, affordable, and abundant energy 
supplies. I emphasize timely because I believe we are running 
out of time based on current projections and trends. 
Ultimately, having Congress establish protocols that will 
facilitate state regulators and their federal counterparts to 
work cooperatively, while respecting each other's jurisdiction, 
will result in an efficient permitting process that will get 
projects built more quickly, while strengthening this nation's 
independence and energy security.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Stanek follows:]
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    The Chairman. Thank you, sir.
    Now, Mr. Smyth.

 STATEMENT OF ANTONIO P. SMYTH, EXECUTIVE VICE PRESIDENT, GRID 
   SOLUTIONS AND GOVERNMENT AFFAIRS, AMERICAN ELECTRIC POWER

    Mr. Smyth. Good morning, Chairman Manchin, Ranking Member 
Barrasso, and members of this honorable Committee. Thank you 
for the invitation to testify at today's hearing. My name is 
Antonio Smyth. I serve as Executive Vice President of Grid 
Solutions and Government Affairs at American Electric Power, 
which is one of the largest electric utilities in the United 
States. We serve 5.6 million customers across an 11-State 
footprint, and we develop, own, operate, and maintain the 
largest electric transmission system in North America.
    First, I want to thank you for your work to streamline and 
make our country's siting and permitting processes more 
efficient. We are grateful for your efforts. As you know, our 
nation's electric system is in the midst of a fundamental 
transformation, driven by an aging grid as well as changes in 
both the consumption and the production of energy. The 
confluence of these changes means far greater complexity for 
grid operators and planners as we seek to make long-term 
investments that balance system reliability with customer 
affordability and environmental sustainability. Maintaining a 
reliable electric grid is critical to the health and welfare of 
our customers, and affordable electric power is vital for 
economic growth and to uphold our nation's competitive 
advantage.
    AEP is experiencing significant increases in demand in 
different parts of our service territory, due in part to the 
location and performance of our transmission system. For 
example, we have agreements in place to interconnect customers 
in Central Ohio that would double the demand we currently serve 
with additional demand beyond this currently under study. When 
we connect the pending demand, Columbus, Ohio will surpass New 
York City in electricity consumption. In the race to capitalize 
on technological transformation, industrial customers cannot 
wait for us to modernize our energy policies, and more forward-
looking policies will allow us to make grid investments that 
will deliver value to all customers in the future.
    Today, it can take ten or more years to plan, permit, and 
build transmission projects, and sound transmission investment 
requires three key elements. We call them the three P's--
planning, paying, and permitting. We identify three priorities 
for Congressional action in these categories. First, Congress 
should encourage the Federal Energy Regulatory Commission to 
reform both regional and interregional transmission planning 
processes to (a) incorporate longer-term planning time 
horizons, (b) include more modern and expansive planning 
scenarios, and (c) incorporate a wider range of benefits over 
longer time frames to better reflect the true value of 
transmission investments to customers.
    Second, Congress should encourage FERC to ensure that the 
allocation of costs of transmission investments are 
commensurate with the distribution of benefits and that all 
appropriate benefits are carefully considered. Benefit metrics 
used for both regional and interregional projects need to be 
expanded to encompass all appropriate reliability, resilience, 
and economic benefits of the grid. In addition, benefits need 
to be measured over the useful life of assets, as opposed to 
the far shorter time periods used today.
    And third, Congress should streamline the process for using 
federal backstop siting authority under the Federal Power Act 
by eliminating the requirement to utilize national interest 
corridors designated by the Department of Energy for 
transmission projects that provide significant regional or 
interregional reliability benefits. States play a lead role in 
the siting of transmission facilities, and we believe that they 
should continue to do so. However, it is important for federal 
law to provide a workable backstop siting process for projects 
that deliver important grid reliability benefits in the rare 
instances where this may be needed. AEP has primarily focused 
our transmission siting and permitting efforts on partnering 
with our states to obtain necessary permits. For most of the 
transmission projects we have built, permitting has not been a 
challenge that could not be overcome, but it can be time 
consuming and litigious. For example, we were recently denied 
state authorization in Pennsylvania for an important congestion 
relief project that was approved by both the grid planner--PJM, 
in this instance--and the State of Maryland. The project is 
currently in litigation.
    In summary, more robust planning processes with better 
articulation of benefits, especially for multi-value 
transmission investments, could lead to better outcomes in the 
siting and permitting processes. If we proactively address 
these challenges with appropriate and targeted reforms, it will 
help us achieve a coordinated and reliable energy transition 
that benefits customers and advances our economy. We remain 
deeply committed to supporting this Committee's efforts in this 
regard and encourage you all to continue this important work.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Smyth follows:]
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    The Chairman. Thank you.
    Mr. Teply.

STATEMENT OF CHAD A. TEPLY, SENIOR VICE PRESIDENT, TRANSMISSION 
           AND GULF OF MEXICO, THE WILLIAMS COMPANIES

    Mr. Teply. Thank you, Chairman Manchin, Ranking Member 
Barrasso, and distinguished members of this esteemed Committee. 
Thank you for the opportunity to provide my testimony before 
you today. My name is Chad Teply and I work for the Williams 
Companies as a Senior Vice President responsible for overseeing 
our interstate natural gas transmission pipelines and our 
operations in the Gulf of Mexico. Williams builds and operates 
interstate pipelines and the associated infrastructure 
throughout the country, including many of the states that are 
represented here today. On any given day, we handle 
approximately one-third of all natural gas delivered in the 
United States. Today, I am here to emphasize the pressing need 
for targeted and pragmatic permitting reforms for interstate 
natural gas pipelines.
    I would like to highlight the following three reasons that 
pipeline infrastructure is critically important: First, 
interstate pipeline infrastructure delivers our nation's 
abundant natural gas supplies to millions of households across 
the country, providing an affordable and reliable source of 
energy. Second, pipeline infrastructure ensures energy security 
and emissions reductions abroad. With reforms, we can export 
more liquefied natural gas to our European allies to reduce 
their dependence on imports from Russia, and to Asian 
countries, to reduce their dependence on higher-emitting forms 
of energy. Third, pipeline infrastructure is necessary for our 
transition to a lower carbon economy here at home. As our power 
sector adds increasing amounts of intermittent energy 
resources, it needs dispatchable natural gas-fired power to 
ensure grid reliability and affordability. In addition, 
increased use of both hydrogen and carbon capture and 
sequestration in our lower carbon economy will not be possible 
without the development and construction of new interstate 
pipelines to transport hydrogen to facilities and carbon 
dioxide to storage and utilization facilities where it is 
needed.
    Currently, companies like Williams can construct an 
interstate, multistate pipeline in just six to nine months. 
However, the permitting for that set of pipelines and 
infrastructure takes approximately four years, and in some 
cases, can be halted completely. The flowchart attached to my 
written testimony illustrates the very extensive permitting 
review process and the requirements to construct an interstate 
natural gas pipeline. When Congress enacted the Natural Gas Act 
of 1938, it determined that when an interstate natural gas 
pipeline is deemed to be in the public interest, the permitting 
and review should be done at the federal level. Congress 
largely preempted state permitting over such projects, in part 
to ensure that one state could not block a pipeline project 
crossing its jurisdiction when that pipeline can serve and 
benefit a neighboring state.
    Several decades later, Congress enacted the Clean Water 
Act, which had the sweeping goal of eliminating pollution in 
our nation's waterways. One component of the Clean Water Act is 
the Section 401 certification process, which requires the 
developer of any project obtaining federal authorizations, such 
as an interstate natural gas pipeline, to obtain certification 
from a state that the proposed project will not violate water 
quality standards. For most states, this 401 certification 
process prompts a useful discussion between the project 
developer and the state about ways to site or design the 
project to mitigate or avoid water quality impacts. However, 
some states wield Section 401 as a one-state veto. For those 
states, there is no real discussion to be had about the design 
of the project or the siting. They are simply bent on rejecting 
it. This outcome is entirely inconsistent with Congressional 
intent and it has real consequences for energy affordability, 
reliability, and security, as well as for environmental 
protection.
    Fortunately, the SPUR Act, introduced by Ranking Member 
Barrasso, offers a solution. Section 3004 of the SPUR Act makes 
narrow but important reforms to restore state/federal balance. 
First, it directs any state that has water quality concerns 
about a proposed interstate natural gas pipeline to bring those 
concerns into the National Environmental Policy Act (NEPA) 
environmental review process. Second, having established that 
NEPA is the proper forum for the environmental impact reviews, 
Section 3004 removes such projects from the coverage of the 
Clean Water Act Section 401 certification process. Importantly, 
Section 3004 does not remove the interstate pipelines from the 
purview of the Clean Water Act, nor does it impact other types 
of projects covered under Section 401, just interstate natural 
gas pipelines.
    Section 3004 of the SPUR Act solves the one-state veto 
problem for interstate pipelines while still preserving 
critical environmental protections for all states and 
communities under both NEPA and the Clean Water Act. This is a 
common-sense reform we need. The SPUR Act also proposes 
unlocking some of the most abundant supplies of natural gas we 
have in federally controlled onshore and offshore regions, 
making it possible for gas to contribute to our energy 
affordability and climate mitigation as well. Williams 
appreciates the efforts of this Committee to apply its 
expertise in this area and we stand ready to be a resource for 
your work.
    Senators, thank you again for the opportunity to present 
here before you and I thank you for your time.
    [The prepared statement of Mr. Teply follows:]
    GRAPHIC(S) NOT AVAILABLE IN TIFF FORMA
    
    The Chairman. Let me thank all of you for being here today 
and sharing with us your challenges and your knowledge and some 
advice, maybe, in how we should go forward.
    Let me start our questioning now.
    We know the litigation process can create potentially 
endless delays of all types. You have been speaking about 
that--pipelines, transmission lines, and everything in between. 
Once a project has gone through years of federal agency 
reviews, Congress never intended there to be a review process 
in the courts that can take as long or longer than the overview 
of the project, whether this has merits or not. So I want to 
quickly ask each of you, and we will go through this very 
quickly, if you will, about the litigation reforms that we 
proposed, okay?
    Would it be helpful to limit the amount of time parties 
have to bring a case? Yes, no, whatever.
    Mr. Stanek. Yes, I think it's necessary, yes.
    The Chairman. To bring a case, okay, so we know that we can 
bring that.
    Would it be helpful to direct courts to set energy project 
litigation for expedited review?
    Mr. Teply. Yes.
    Mr. Smyth. Yes.
    Mr. Stanek. It is necessary.
    The Chairman. Okay.
    Would it be helpful to set hard timelines on how long 
agencies can take to fix permit issues identified by the 
courts?
    Mr. Teply. Yes.
    Mr. Smyth. Yes.
    Mr. Stanek. Most definitely.
    The Chairman. Now, I want to go to this chart up here. Let 
me show you what we are dealing with in America.
    [The chart referred to follows:]
    GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    The Chairman. Usually it's nine years--normally nine years 
right now if you go through this process, and the bills that we 
have been talking about and think that we should be passing 
would take us down to four years--cut it in half. It would be 
great for transmission. It would be great for all types of 
energy because you have got to move electrons, okay? People say 
they want transmission, but no pipelines. Some people say they 
want pipelines, but no transmission. We need everything. And 
this would give us a process of how we would do it more quickly 
and expedite things.
    So do you think we should consolidate a federal backstop 
siting process so there is a single environmental and national 
interest review at FERC?
    Mr. Stanek. Yes.
    Mr. Smyth. Yes, we do.
    The Chairman. And any comments on that would be welcome, if 
you have on that how some of your personal experiences--what 
you have run into and how we can cut this down.
    Mr. Stanek. I would say that currently, the process would 
entail two EIS reviews, two NEPA reviews, for conceivably the 
same project, and that is the understanding that the courts 
have explained out in the Ninth Circuit. Consolidating the 
process into one EIS, one NEPA review, just makes a lot of 
sense, saves a lot of time, and there is no redundant use of 
resources.
    The Chairman. Let me go through one more chart here that I 
have, and I want to show you--this chart here shows a portion 
of the transmission reform proposal that I put up, which 
specifies the benefits of transmission that FERC can require 
users to pay for.
    [The chart referred to follows:]
    [GRAPHIC] [TIFF OMITTED] T5570.033
    
    The Chairman. The goal was to include quantifiable electric 
system benefits that previously were accepted by FERC and 
supported by courts. The biggest thing, basically, is, who 
pays? So if you are coming through the State of West Virginia, 
we are a net exporter of power. We don't need any more power 
coming in, making us pay for reliability. You just need, maybe, 
to go through our state.
    So here, basically, if you can see this, it shows you what 
the bill does. Before there can be any cost allocations 
whatsoever, you have to show that it has improved reliability--
so if you didn't have a reliable system. You have to have 
reduced congestion, reduced power losses, greater carrying 
capacity, reduced operating reserve, and it requires an 
improved access to generation. Some states might not need any 
of this, but it has to have a pathway forward. Also, what we 
allowed in our bill is to have every state with a PSC, even if 
FERC requires it to be a national concern, or of national 
interest, to go one year to work with the PSC and the local 
provider, such as AEP. You would make a determination. Do you 
want that or not? Do you want to be part of it or just 
basically say no? But you have one year to work with your PSC 
to make sure that you're not burdening your customers or 
burdening your company and your bottom line, if you will, to 
make a decision--is that good for our business? Is it good for 
our customers, or not?
    We think that was a reasonable approach and we are trying 
to get that so that the cost allocation does not become a 
cumbersome thing to where everyone says, well, it has to be 
states' rights. You can't do this and that. John doesn't need--
Senator Barrasso doesn't need--he is a big powerful state with 
a lot of power. He is like my state. We produce a lot of power, 
but you might need our pathway through. So we are looking at 
some of that. So any comments you have on that, very quickly, 
of how that would work.
    Mr. Stanek. I would quickly say that that list of 
highlighted language reflects quantifiable benefits that are 
used by PJM and others. So that is a generally accepted list of 
benefits that we could put a price tag on with relative ease.
    The Chairman. Anybody else on that?
    Mr. Smyth. Yes, I mean, we are proponents of including all 
reasonable reliability and economic benefits when it comes to 
the allocation of cost. I think you have captured many of them 
there in your language today.
    The Chairman. Mr. Teply, of all that, same as transmission 
for gas lines and pipelines too, right?
    Mr. Teply. The timeliness of reviews and the timeliness 
uncertainty----
    The Chairman. Your biggest obstacle right now, I mean, I 
know with MVP.
    Mr. Teply. Yes.
    The Chairman. How that can--it's just unbelievable.
    Mr. Teply. Very much so correlated.
    The Chairman. So what is your biggest obstacle you have 
right now in any type of pipelines? What would you say is your 
biggest obstacle?
    Mr. Teply. Our biggest obstacle is permitting certainty and 
then the subsequent judicial reviews.
    The Chairman. Got you.
    Senator Barrasso.
    Senator Barrasso. Well, thanks so much, Mr. Chairman.
    Mr. Teply, just following, Williams transports natural gas 
produced in Wyoming all across the United States. So how 
important is it to your company and to you and to our nation to 
have a reliable source of production from federal lands in 
Wyoming?
    Mr. Teply. It is extremely important. Our operations in 
Wyoming, in particular, are in the Wyoming checkerboard that 
you are very familiar with. You know, efficient development of 
that resource drives--not only from a timeliness perspective, 
to certainty around project development, but ultimately also 
costs in the marketplace. Certainty around efficiencies in 
development in the federal land is extremely important.
    Senator Barrasso. So it seems to me that a few states have 
abused federal statutes to block the construction of new 
pipelines. The State of New York blocked the Constitution 
Pipeline and the Northeast Supply Enhancement Project. Both of 
these pipelines would have brought much-needed natural gas to 
New England. It seems every year we hear about how expensive 
natural gas is in New England. We have Senators on this 
Committee from those areas. New York blocked these pipelines, 
even though FERC, the Federal Energy Regulatory Commission, 
found that both projects were actually in the national 
interest.
    Can you expand on how New York abused its authorities under 
the Clean Water Act to halt these important projects that would 
be so helpful in bringing affordable energy to so much of our 
country?
    Mr. Teply. Thank you, Senator.
    The experiences we had in our Constitution Pipeline and our 
NESE Pipeline in particular were varied. With respect to the 
Clean Water Act permitting processes, the issues ranged from 
administrative requirements for completeness of application to 
short-term construction-type impacts that would not have 
carried through to the broader project's lifetime. The impacts, 
they are obviously from a constituency perspective. Disallowing 
those projects requires that the New England states that would 
have been served by these pipelines ultimately continue to burn 
heating oil. They are not only more expensive, but also have 
higher polluting characteristics than other sources of energy.
    Senator Barrasso. So worse for the environment because they 
blocked these things and higher costs for consumers. It seems 
like----
    Mr. Teply. That is correct.
    Senator Barrasso [continuing]. A lose-lose.
    So what impact did this decision have specifically on, say, 
natural gas prices and stability of the grid in New England?
    Mr. Teply. I think from a stability perspective, the issues 
that you see in New England--obviously, a lot of that energy 
served from LNG. Because of the lack of pipeline infrastructure 
in that area, causing significant concerns with respect to both 
reliability and cost on an annual basis as we, in particular, 
are heading into the heating seasons for that area.
    Senator Barrasso. I mean, sometimes you hear natural gas 
prices in New England at $18 versus Pennsylvania at $3, and 
they are not that far apart.
    Mr. Teply. That is correct.
    Senator Barrasso. Now, Mr. Smyth, the Committee has 
recently heard testimony about the increasing risks to electric 
reliability in the United States. From that table, we have 
heard from FERC, the Federal Energy Regulatory Commission, and 
also the North American Electric Reliability Corporation. They 
agree that the country is potentially running into a 
reliability crisis. They also agree that the principal reason 
for the problem is the premature retirement of coal, natural 
gas, and nuclear power plants before there are replacement 
energies available.
    Do you agree that the primary problem right now is the 
premature retirements, and not lack of transmission?
    Mr. Smyth. Yes, you know, I think as you look at the NERC 
data, that is what it will clearly tell you. Transmission does 
play an important part in this, and we would like to see more 
transmission developed. We think that can be, you know, very 
constructive insofar as, you know, solving some of these future 
potential reliability issues going forward.
    Senator Barrasso. So FERC has specific authority to site, 
Mr. Smyth, the interstate electric transmission lines within 
the national interest corridor. Corridors are established by 
the Department of Energy. Do you believe Congress can improve 
the Department of Energy's process for establishing a national 
interest corridor?
    Mr. Smyth. Yes. Yes, we do. In particular, for projects 
that provide significant reliability benefits, you know, we 
think that process can be streamlined to one set of processes 
without reducing the quality of the environmental reviews.
    Senator Barrasso. So should Congress ensure that states and 
regions and other experts have more of a say in establishing 
the corridors?
    Mr. Smyth. Yes.
    Senator Barrasso. Okay. So would improving opportunities 
for state input in streamlining the process remove some of 
these barriers that we talked about?
    Mr. Smyth. We believe so.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    And now we are going to have Senator Hirono.
    Senator Hirono. Thank you, Mr. Chairman.
    This hearing is happening when millions of people in this 
country, as well as around the world, are suffering through 
record-breaking heat, following on the hottest June ever 
recorded. And literally, when you see people being injured just 
by stepping on sidewalks, et cetera, you see the enormity of 
the concerns. So we are on a path towards even more intense 
heat, wildfires, and extreme weather unless we reduce our 
greenhouse gas emissions by shifting to solar power and other 
lower-cost, zero-carbon sources. Democrats in Congress passed 
the Inflation Reduction Act to help speed the transition to 
clean energy, and we need to build new clean sources of energy 
in a fair manner and at a pace that reflects the severity of 
the global warming we are facing. So I thank you, Mr. Chairman, 
for holding this hearing.
    For Mr. Teply, your testimony states your company ``is a 
strong believer in NEPA and the environmental impact statement 
process. We use the EIS process to engage with affected 
communities and understand their needs. And in our experience, 
the EIS process helps us identify modifications we can make to 
pipeline projects that will avoid or mitigate adverse impacts 
on the environment.'' My question to you--do you think Congress 
should consider federal grants to state, tribal, and local 
agencies and to community-based organizations to increase their 
capacity for completing state, tribal, and local environmental 
reviews?
    Mr. Teply. Thank you, Senator, for the question.
    At Williams, we are very focused on stakeholder engagement 
throughout our project development processes, including 
engaging our environmental justice community, our tribes in 
areas that we operate in and have infrastructure that affects 
those folks. We spend a lot of time through the early project 
development engaging, identifying potential workarounds, 
including re-siting where important or where possible and 
practical. So we do think that the engagement at the 
stakeholder level is extremely important, and we think that we 
are doing a good job of ensuring----
    Senator Hirono. Well, actually, the question was whether 
you think that these stakeholders should increase their 
capacity to engage in the process, because these are 
complicated issues. And in fact, Senator Carper proposed such a 
grant program to enable these stakeholders to better engage in 
the process. I think that that is probably a good idea.
    Mr. Teply. Yes, I think, as an example, we have engaged 
with the FERC Office of Public Participation, which is very 
similar to what you are describing, very early on, as that 
department was stood up with a keen interest in having a seat 
at the table with them as that process plays through FERC.
    Senator Hirono. And providing some funding for them could 
maybe even shorten the entire process of review.
    For Mr. Smyth, in Hawaii, we have smaller capacity 
transmission lines compared to your company's lines. How much 
benefit to the capacity and reliability of the grid can come 
from upgrading the lines and existing transmission pathways?
    Mr. Smyth. Yes, thank you for your question.
    I think that, you know, you can see benefits when you up-
size transmission lines, but you want to right-size 
transmission lines as well. So it really depends upon the use 
case, but generally speaking, as demand increases, and supply 
changes, up-sizing the capacity of transmission lines can drive 
good outcomes for customers.
    Senator Hirono. And then, to change the transmission lines, 
we are talking about a pretty expensive proposition. So do 
electric companies, utility companies, have the right 
incentives to invest in upgrading existing lines compared to 
building new lines?
    Mr. Smyth. Yes, we believe they do.
    Senator Hirono. You think that they currently have those 
kinds of incentives?
    Mr. Smyth. Yes, I do believe the incentives are there. I do 
believe that we need to modify the planning processes. We need 
to modify cost allocation. We need to do things that make it 
easier to move through the processes.
    Senator Hirono. So speaking of cost allocations, can you 
elaborate on how you think regulators should measure and 
determine the public benefit of new transmission lines and how 
that going to new transmission lines expenditure should be 
allocated to the ratepayers as opposed to the utilities?
    Mr. Smyth. Yes, you know, we believe that beneficiaries and 
payers should be aligned. We think that benefits should be 
calculated in a broad manner that includes all reasonable 
reliability and economic benefits and the cost should be 
distributed accordingly.
    Senator Hirono. That may be easier said than done, because 
Hawaii, for example, I think still pays the highest rates in 
the country for electricity. So anytime there is a potential 
for increasing those costs, there are going to be concerns 
raised.
    Mr. Smyth. Sure.
    Senator Hirono. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Lee.
    Senator Lee. Thank you. I am going to pass for now. Thank 
you.
    The Chairman. Okay.
    Senator Hyde-Smith.
    Senator Hyde-Smith. Thank you, Mr. Chairman and thank you 
to the witnesses for being willing to be here and serve in this 
capacity. It is truly appreciated and I know it's not always 
easy.
    But currently, the permitting process that we are all so 
concerned about is centered around the cumbersome bureaucratic 
process that delays and hinders so many energy products, as we 
are well aware, especially in Mississippi, in my Gulf State. 
The lengthy and unpredictable permitting procedures have led to 
increased project costs, which discourages investment, as we 
well know, and hampers the path to regain energy independence. 
In addressing these permitting reform issues, we will be 
crucially looking into unlocking the country's potential for 
sustainable growth and prosperity in domestic energy 
production. That is my goal, at least.
    Mr. Teply, this question is for you. Just a simple yes or 
no and any comments that you want to make. Do you agree that 
cutting red tape and enforcing strict timelines for permitting 
energy projects will help ensure electric reliability for local 
power companies in my State of Mississippi and across the 
country?
    Mr. Teply. Yes, and I will correlate that to the natural 
gas infrastructure that we would build to support those power 
projects. Ultimately, our goal there being certainty of 
outcome, understanding that the requirements of our permitting 
and review processes are thorough and we are willing to work in 
that environment, but the certainty of timing is critically 
important to getting these projects done and maintaining your 
investors' interest in such projects.
    Senator Hyde-Smith. And do you agree that a streamlined 
permitting process would provide more certainty for utilities 
and would therefore benefit customers and economic development 
as well as increase the safety and reliability of the natural 
gas industry?
    Mr. Teply. Yes, absolutely. And the streamlined permitting 
process, with respect to customer impacts, drives directly to 
cost. For projects that are stalled, delayed, and ultimately 
canceled, there is still a cost to that development activity. 
Over time, customers can bear that cost, whether that be from 
affordability, also reliability, and potentially safety.
    Senator Hyde-Smith. And natural gas and LNGs have emerged 
as critical energy resources that the United States can produce 
domestically on a large scale. Mr. Teply, how abundant is our 
domestic supply of natural gas?
    Mr. Teply. Yes, we definitely--thank you for the question. 
We definitely don't have a supply concern with respect to 
natural gas in the United States. What we have is an 
infrastructure problem--getting infrastructure built to tap 
into the abundant resources across our country to serve not 
only domestic loads affordably and reasonably and cost 
effectively, but also the potential to serve international 
loads, like I had mentioned earlier.
    Senator Hyde-Smith. A good position.
    Mr. Teply. Yes, a very good position.
    Senator Hyde-Smith. In light of the Administration's goals 
to decrease greenhouse gas emissions, do you consider the 
Administration a willing partner in permitting and developing 
the pipeline infrastructure necessary for maximizing production 
of our domestic natural gas supplies?
    Mr. Teply. Thank you for the question.
    I think right now we have challenges to production and 
infrastructure development across the country. Whether I would 
deem that a willing partner, that would be hard to say right 
now, but I would say with the permitting reforms that we are 
talking about, ultimately, those types of steps, taken by this 
body and others, can continue to move our country forward, as 
well as the globe forward. With respect to emission reductions, 
it can be supported by natural gas infrastructure.
    Senator Hyde-Smith. I want to transition to the importance 
of investments for the natural gas industry in these pipelines. 
What effects have the continuous delays due to the current 
permitting process had on the investment opportunities?
    Mr. Teply. Thank you for the question.
    The continuous delays, ultimately, since 2016, if you look 
at some of the major projects across the country, including the 
two that I used as examples in my testimony, resulted in 
cancellations. So ultimately, those are projects that were 
intended to provide benefits to certain constituencies and 
customer groups that were not delivered. So that increases the 
risk around reliability and service, particularly in heating 
seasons. It also impacts cost effectiveness of growth in those 
areas. So there are a number of different types of impacts that 
play through delays and cancellations of major infrastructure 
projects.
    Senator Hyde-Smith. Thank you very much. My time is up.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    And now, we will go to Senator Hickenlooper.
    Senator Hickenlooper. Thank you, Mr. Chair.
    Thank you all for your work and for being here today. Let 
me start with Mr. Stanek. I want to commend you for leading a 
diverse task force of ten state utility regulators from across 
the country in public dialogues with the FERC Commissioners on 
electric transmission over the last couple years. This concept 
of minimum transfer requirements, which would require regions 
to be able to move some share of their peak load with their 
neighbors, proved a popular idea among state regulators from 
Kansas to Arkansas, to your own Maryland. Can you speak to how 
minimum transfer requirements could help address current 
reliability shortfalls on the grid while maintaining autonomy 
for states to chart their own energy futures?
    Mr. Stanek. Thank you, Senator, and thank you for 
recognizing the good work of the 15 members of the Federal-
State Task Force. We advanced the dialogue, for sure.
    I had been on record as stating that having some minimum 
transfer capacity between regions is important, and it is 
important, not only for reliability and resilience, but it is 
important for assisting neighbors during times of need. We have 
seen the effects of Winter Storm Uri. We saw the effects more 
recently of Winter Storm Elliot, when PJM desperately relied on 
the assistance of one of our neighbors, New York ISO, to export 
power. The fact is, there is no minimum standard currently, and 
by including a minimum standard, we will ensure that, across 
the country, regions will be able to either import or export 
power to their neighbors.
    With respect to the role of the states, it is important 
that states have a say in the designation and selection of 
these transmission lines, but at the end of the day, the states 
also have exclusive jurisdiction over the siting of generation 
and determining what resources they would like to connect to 
those transmission lines. So I think it's an important issue. I 
know that FERC is looking at it now, but I am glad that this 
body is as well.
    Senator Hickenlooper. Right. The nice thing is, I think 
this--we talk a lot about making sure that our transition to a 
new energy system is as inexpensive and as reliable as our 
existing one--obviously, we want it to be cleaner. But I think 
that reliability and the ability to deal with extreme weather 
events and other intrusions into normal life, this notion of 
having some minimum level of transferability is important.
    Do you have a range of prices or a range of percentages of, 
like what percentage would make sense in something like that?
    Mr. Stanek. It would always be hard to determine a specific 
number, and you want to ensure that a number is not so high 
where you are going to be including additional costs and 
expenses. I view it very much as an insurance policy. You hope 
you don't need the transfer capacity from your neighbor, but in 
a desperate time or dark hour, you need that. I would be hard 
pressed--I am not a system engineer--to determine what a 
specific number is, but I do believe there is wisdom in picking 
a number as opposed to having a multi-year process at FERC to 
determine what that number should be.
    Senator Hickenlooper. Got you. I appreciate that.
    Mr. Smyth, AEP is the largest transmission-owning utility 
nationwide, so you know firsthand the challenges of getting 
large projects completed. As a matter of fact, in the last 
decade, all of North America has builders nearing completing 
just seven gigawatts of large-scale, interregional lines--seven 
gigawatts. In South America, over the same time period, it's 
not seven, that number is 22 gigawatts. In Europe, it's 44 
gigawatts. China recently built a single interregional 
transmission line that carries 12 gigawatts in one line, almost 
twice the figure for the entire North American continent. Do 
you think we would benefit from a minimum transfer requirement 
to jolt our system out of its current slumber, its lethargy? I 
mean, what's your sense on that?
    Mr. Smyth. Yes, thanks for your question. You know, and I 
agree with what Jason said, I mean, when regions get in 
trouble, they can borrow from each other and that can provide a 
great deal of help when it comes to system reliability.
    When it comes to a minimum bulk power, you know, transfer 
capability thresholds, that is something that I think can be 
very useful and supportive insofar as addressing reliability 
between regions. We do believe, though, that customization of a 
threshold is important just to really account for and make sure 
that we are aligning benefits and costs appropriately.
    Senator Hickenlooper. Got it. Well, I am out of time. Maybe 
I will come back. And this notion of--I always want to ask what 
is the cost of continuing to not build interregional projects, 
what's that going to cost us down the road--but we will worry 
about that later.
    I yield back, Mr. Chair.
    The Chairman. Thank you, Senator.
    And now, we are going to go to Senator Cassidy.
    Senator Cassidy. Thank you.
    Mr. Stanek, I don't expect you to comment on pending 
litigation, but I understand that the State of Pennsylvania is 
blocking a transmission line that would go from Maryland 
through Pennsylvania, despite being approved by everybody else. 
So let's not--and I only use that to set up that it is real 
life, but I am going to ask about the theoretical. The federal/
state management boards of which you speak and praise and say 
we need more of--what additional teeth do they need in order to 
avoid a theoretical situation where somebody may--or 
Pennsylvania may--approve a project and want to ship it into 
Maryland and Maryland says no?
    Mr. Stanek. Well, the board that I spoke of does not have 
any legal authority right now. It's a collaboration between the 
federal and state authorities. But the example that you speak 
to is a very important Transource transmission line where the 
Maryland Public Service Commission found a genuine bona fide 
need to bring power into Maryland and Washington, DC, the 
nation's capital, because of reliability violations that PJM 
has determined. Unfortunately, my colleagues north of the 
border in Harrisburg decided that the line was not needed. That 
is an example of an interstate line where states have come out 
on two totally different sides of whether or not the line is 
needed. And that is a situation where the Federal Government 
may need to step in.
    Senator Cassidy. So is that the solution? Because earlier, 
my Chair, Senator Manchin, spoke of judicial review--kind of a 
shot clock--you have got to finish, you can't go on forever. 
Are you favoring a solution like that, that would have, okay, 
circumscribed--we are going to complete the decision-making 
process by this time--would you be in favor of that?
    Mr. Stanek. I think a shot clock is important. Legal due 
process for the state who is out of favor--it is important to 
have their review reviewed by the court. But that should not go 
on ad infinitum, for potentially years at a time. So I think a 
statute of limitations is necessary.
    Senator Cassidy. Sounds good.
    Mr. Smyth, just for the record, I know AEP is attempting to 
lower their carbon footprint. How much--whatever unit you wish 
to express--has AEP lowered their carbon footprint by 
converting coal-fired plants to natural gas?
    Mr. Smyth. Yes, you know, we do have carbon reduction 
goals, as you mentioned. And you know, what is of first and 
foremost importance to us is balancing system reliability----
    Senator Cassidy. Got to hurry because I have limited time.
    Mr. Smyth. Sure, sure.
    Senator Cassidy. So how much have you all lowered your 
CO2 emission profile relative because of conversion 
from one type of fuel to the other?
    Mr. Smyth. I don't have a specific number with me today, 
but I am happy to circle back with you on that.
    Senator Cassidy. Now, in your testimony, you speak about 
having sensitivities. The more sensitivities you have, the more 
robust your analysis. But on the other hand, I could also see 
where you ended up sticking ratepayers--my constituents--with a 
lot of cost for theoretical things which may occur. It may be 
that Louisiana needs electricity, although, almost always we 
don't, but in that nth-degree possibility that we do, we are 
going to charge you for a potential of an interregional 
transmission line which principally is being built to benefit 
other people.
    Does that make sense?
    Mr. Smyth. Yes, your question makes sense. We are, you 
know, again, proponents of ensuring that reasonable benefits 
are included--known and measurable--more known and measurable 
benefits are included in those benefit calculations.
    Senator Cassidy. Now, you are also, as I understand, 
converting to a lot of renewables. In your testimony, you speak 
of renewable energy. In Mr. Stanek's testimony, one of his 
references speaks to the fact that it can cost more to have 
renewable energy, and you imply that it contributes, and we 
have seen other examples where it has contributed to so-called 
energy poverty. People are paying so much for their utility 
bill they don't have money for other essentials because of the 
increased cost of the renewables. How are you all balancing 
that in your portfolios? Is this all being driven by mandates? 
Is it--you know, I am representing people who, again, they 
don't have enough money to pay any bill. Inflation has been 
killing them. And inflation in the utility bill--as your 
testimony, Mr. Stanek, speaks to--is concerning. So how do we 
balance all these different factors so that the customer still 
can afford her bills?
    Mr. Smyth. Yes, you know, we go through an integrated 
resource planning process to determine what generation is most 
economic for our customers. And so, it is a least reasonable 
cost generation portfolio that emerges from that process, 
including in Louisiana, which we are going through that process 
now.
    Senator Cassidy. But I assume that at some point you accept 
the higher cost because of legal mandates.
    Mr. Smyth. No, I believe that we move forward with the 
least reasonable cost portfolio, notwithstanding, you know, any 
mandates. Of course, if there is a state that has a renewable 
portfolio standard that we have to meet, you know, of course, 
we comply with the law.
    Senator Cassidy. Sounds good.
    And then, just in my remaining time, Mr. Teply, you speak 
of the cost of initiating a project that is never completed 
because of litigation and other things that would either thwart 
or prolong, even if it is eventually done, and how that cost is 
passed on to the ratepayer. I presume that is a real cost?
    Mr. Teply. Thank you for the question. Yes, that is a real 
cost.
    Senator Cassidy. And one in the margin, in the aggregate, 
ends up making my patient just--my patient--I'm sorry, I am a 
doc, so it comes to mind. Methane means something different to 
a gastroenterologist, but nonetheless.
    [Laughter.]
    Senator Cassidy. The point being is that that marginal cost 
actually is more likely to contribute to the individual's 
propensity to go into energy poverty than if that cost actually 
was not there. I mean, it just kind of begs itself.
    Mr. Teply. In general terms, yes.
    Senator Cassidy. Yes, I yield. Thank you.
    Senator Cantwell [presiding]. Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Mr. Chairman, and the 
Ranking Member, thank you. Clearly, such an important 
conversation. Thank you to the panelists for being here. I am 
glad we are really continuing to work on and are addressing the 
permitting reform discussion.
    You know, I just had a subcommittee hearing here that I 
chaired and I talked about a perfect example of this. We have 
an industrial park in southern Nevada. We are trying to build 
out. We have companies coming there. Unfortunately, in Nevada, 
over 80 percent of the land is owned by the Federal Government. 
So for each company that wants to bring infrastructure to that 
site, they have to get a permit from the Department of the 
Interior, which takes at least three years. That is each 
company, including a utility to lay the same right-of-way, the 
same pipe, the same fiber. They each have to get it.
    I mean, we have gotten really out of control here when it 
comes to permitting. We need to streamline and we need to work 
together for the very reasons that we are talking about. And in 
Nevada, we need to work together so that we can continue these 
clean energy projects. Nevada is the number one solar economy 
in the country. We have the potential here to really lean into 
our clean energy and renewables and we can't really slow it 
down by not having this efficient permitting that is necessary 
and faster permitting. So I am all about having this 
conversation and I thank you all for being here.
    Mr. Stanek, let me ask you this. In your written testimony, 
you touched on your experiences with the Joint Federal-State 
Task Force on Electric Transmission. And stakeholders in my 
State of Nevada have spoken to the benefits of this 
collaboration and coordination and it has really produced 
efficiencies that we have all been talking about. My question 
to you is, as the permitting reform conversation continues, can 
you elaborate on further opportunities to ensure that states 
maintain a strong position in future transmission siting 
decisions?
    Mr. Stanek. Thank you, Senator, for that question.
    The state task force has made a lot of progress, and one of 
the charter members supporting it was your chairman in Nevada, 
the PUC there. This has been an issue where the states have 
historically had exclusive rights to site energy infrastructure 
projects, particularly electric transmission in their states. 
There is some concern that there is a potential power-grabber 
preemption of state authority. So it's a needle that state 
regulators are very sensitive to thread and be mindful of. I am 
a former regulator now by about four weeks, but it's an issue 
that I know they are thoughtful of. They are working with their 
counterparts at the Federal Energy Regulatory Commission to 
discuss these issues every couple of months. They just had a 
meeting last week on transmission technologies.
    So it's an active engagement. We all want the same goal--
more streamlined, efficient permitting processes of energy 
infrastructure because, as I stated at the outset, we can't 
wait anymore. This yellow flashing light is soon going to be a 
red flashing light.
    Senator Cortez Masto. Right.
    And while I have you, can you talk a little bit about--
elaborate on your scenario-based regional planning framework. 
What is that? What do you mean by that?
    Mr. Stanek. For too long, the transmission and grid 
operators have been planning just in time for reliability needs 
to make sure that the lights stay on, which is very important, 
but planning for a longer-term horizon--let's say 20 years, and 
looking at various options and scenarios that could occur based 
on a 100 percent clean energy environment, a 50 percent clean 
energy environment--is not what the RTOs, ISOs, and 
transmission authorities have generally done. We have 
discovered now that that is very important. FERC's current 
rulemaking is examining that. But looking at different 
scenarios and trying to pick the one that we most expect to 
occur on the horizon will allow us to be more efficient with 
the dollars spent where the projects are actually built.
    Senator Cortez Masto. Thank you.
    Mr. Smyth, you outlined some near-term steps that industry 
and policymakers should consider taking to accelerate the pace 
of new generation transmission. You talked about the three P's. 
Can you elaborate a little bit more on that and why that is 
important?
    Mr. Smyth. Yes, you know, and we think it all starts with 
permitting, and I agree with what Jason just said with respect 
to modernizing and expanding planning scenarios. We think that 
is important because of the changes in supply and the changes 
in demand that are occurring. Weather is changing. We need to 
include more expansive weather scenarios in this planning 
process. And you know, in the end, if we have a longer planning 
process, it will drive more efficient outcomes. Shorter 
planning processes tend and can result in a piecemeal grid, 
which, you know, if we are thinking about long-term investments 
and thinking about, you know, customer affordability in the 
long-term, it is important to lengthen that planning timeline.
    Senator Cortez Masto. Thank you.
    And then, very quickly, Mr. Teply, because you know the 
West very well. I am from southern Nevada, where temperatures 
are 114 degrees. What should we be thinking about in this 
extreme weather that we are seeing in the western states? How 
can we enhance that transmission planning or better thinking 
about the weather as it impacts what we need for our 
transmission needs?
    Mr. Teply. Unfortunately, Williams is not in the business 
of building electric transmission, so I am not sure that I can 
give you a good answer for that.
    Senator Cortez Masto. Okay. Thank you.
    Thank you, Mr. Chair.
    The Chairman [presiding]. We have some cool temperatures in 
West Virginia that we could help you with.
    [Laughter.]
    The Chairman. We now have Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman. Thank you and 
the Ranking Member for holding this hearing. I want to follow 
on my colleague from Nevada, because I, too, believe that we 
need to, as western states, as we look at new supply coming 
from many different directions, whether it is renewables, like 
wind and solar, or small modular reactors or just what might be 
coming with geothermal or other types of energy--we need to 
plan. What do you think is the best way for us to plan across 
the various RTOs? What would you suggest that we undertake here 
as a discussion point? I do want to follow up on smart grid 
technology in general because I also think as a part of the 
country that has very cheap electricity, and seeing it 
continuing to build over and over again, there are efficiencies 
in the system that, I think, the continued implementation of 
both transmission capacity, like we just saw with BPA's 
decision to build, and the technological implementations of 
things like middle-mile, where utilities and telcos are working 
together, are good things.
    But what do we need to do to plan across RTOs? What is it 
that you think needs to happen?
    Mr. Smyth. Yes, I can take a crack at that first. You know, 
I think integrating the planning processes a bit more is going 
to be really valuable and helpful, if today there is a 
commitment to coordinate, but the planning processes in regions 
are by and large very separate. And so, I think if you truly 
integrate those processes in each region to account for 
interregional planning, that will go a long way insofar as, you 
know, moving needed interregional transmission along.
    Senator Cantwell. And who do you think takes the lead on 
that?
    Mr. Smyth. I think the RTOs, ISOs, or the grid planning 
authorities should do that.
    Senator Cantwell. I'm sorry, you are saying inter or intra?
    Mr. Smyth. Yes, inter-regional, yes.
    Senator Cantwell. Okay.
    Mr. Smyth. So that the planning authorities, whether it's, 
you know, if you are in an area where there is an RTO or a 
balancing authority.
    Senator Cantwell. But if we are looking at this now as this 
really big and important opportunity for the United States of 
America to lead on grid technology, I just think of it almost 
as an operating system, coming from a software state too, that 
you realize the operating system can deliver you efficiencies. 
The grid is at this capacity where it can move power around, 
and we want it to. Recently, with these big heat waves, you 
could move electricity around, but you need to have that kind 
of grid built, which means it needs to be built across an 
entire system.
    So where do you think that discussion lies? Do you think we 
need somebody to lead that at the federal level?
    Mr. Smyth. Yes, we agree, and I think that would be led at 
FERC.
    Senator Cantwell. Okay.
    Mr. Stanek.
    Mr. Stanek. Senator, you raise a good point, because in 
this country we don't have a national transmission planner. DOE 
does not plan transmission. FERC does not plan transmission. 
They do have some oversight authority. So we leave it to the 
grid operators to work together between regions--interregional 
communications. And they have done that, but at the same time, 
they are running their own grids on a daily basis and they have 
a lot to do. Order No. 1000, which was FERC's attempt to 
promote competition between regions, has not worked. It has 
effectively been a failure over the past 12 years. There were 
some interregional requirements in that order, but they have 
not come to fruition. So there is some reform that is necessary 
there. I believe the current FERC Commission is looking at that 
right now and hopefully they will promulgate some new rules, 
but it is of critical importance that the regions work more 
closely together to transfer resources, to transfer 
technologies, to ensure reliability as well.
    Senator Cantwell. Well, let me be clear, I'm not a huge fan 
of RTOs in the context of like, yes, we are going to sell more 
expensive power onto the grid and whoever, you know, is the 
highest bidder gets to sell their power. I'm not for that 
because what we want to do is drive down electricity cost. 
That's what we really want to do. And again, as a state that 
has benefited from a great history there, but it seems to me 
your notion of a national transmission planner, if that's, you 
know, that isn't just at FERC, or maybe, maybe it is at FERC, 
but we need to have both the scope of what that gets us as we 
think about transmission capacity, and also the oversight at 
FERC.
    So it seems to me that we are still missing somebody in 
addition there, whether you think that that is at a White House 
Executive level or over at DOE. But I don't know if you have a 
comment on that.
    Mr. Stanek. There is one proposal out there coming from 
FERC determining whether or not we need something called an 
ITC, an independent transmission coordinator. That is currently 
under discussion. There are not a lot of details at this point, 
but there are supporters of the concept saying well, we do need 
one independent body, aside from FERC, to look at transmission, 
ensure that the regions are actually working together to build 
out transmission in a thoughtful fashion.
    Senator Cantwell. Well, I will just take a nod on this. I 
would assume everybody agrees that this is a huge opportunity 
and we need to have more planning and more coordination.
    Mr. Stanek. Yes.
    Senator Cantwell. Yes, okay. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
the panel here and just the opportunity for yet another round, 
a second opportunity, to be talking about permitting and 
permitting reform. We have made a little bit of headway, but we 
all know that there is so much more room and we need to get 
going yesterday.
    Mr. Stanek, I appreciate your mentioning of cooperative 
federalism in your written testimony, this idea that the state 
and federal agencies have overlapping responsibilities and 
functions and powers. One of the problems that we face in a 
state like Alaska, where we are not part of the Lower 48 grid, 
as you all know, we are our own islanded world up there, but 
oftentimes, we see the permitting process that contains Alaska-
specific requirements for regulatory agencies. This comes under 
ANILCA, the Alaska National Interest Lands Conservation Act, 
and they govern how the Transportation Utility Systems (TUSs)--
whether it's broadband powers--how they all proceed through the 
permitting process.
    So you have got ANILCA that sets aside lots of areas, huge 
sections of land for conservation, for parks and wildlife and 
the like, but it mandates these unique protections for access 
that all agencies are required to use. And you know, it's not a 
bad idea. You are trying to balance the conservation here on 
the one hand with the needs of those in these small and very 
remote villages that have significantly underdeveloped 
infrastructure. So given your focus on this, how do you propose 
permitting reform address some of these state-specific issues 
where you have federal agencies that are just--maybe they are 
dragging their feet, maybe it's non-compliance, but what 
effectively happens is, the projects are stopped or they are 
made so prohibitively cost-expensive that you just can't move 
forward. How do we reconcile this? Because it is a big, big 
issue in my state.
    Mr. Stanek. Well, we see that in every state. It is 
unique--obviously, yours is very different than those in the 
Lower 48. States obviously want to have the first and last 
opportunity to review any infrastructure project. They know 
their local communities best. They know their needs best. At 
the same time, if the process is open-ended and there is no 
time limitation, the state commissions or state siting 
authorities could either run out the clock or indefinitely 
delay the siting of a project.
    Senator Murkowski. Right.
    Mr. Stanek. Whether it be for local interest or national 
interest. We have never seen state backstop authority used in 
the past 18 years. And hopefully, going forward, if legislation 
is passed to provide some type of federal backstop, states will 
understand. There will be motivation for the states to 
officially process the permit, whether they approve or deny. 
But at the same time, it will give the states the respect of 
their jurisdiction to determine the needs for their citizens.
    Senator Murkowski. It is something that I think we talk 
about and we can make it flow on paper. It's just harder in 
practical application. I don't know whether this question has 
already been asked and answered, but you all are professionals 
in your areas, and have given a great deal of thought to how 
you could design a better permitting process throughout this 
country that would allow for the efficiencies and the 
protections that everyone is looking for. In your perfect plan, 
what's your number one--what is the number one thing that we 
could do to put into place, in terms of regulatory policy, that 
could make a difference when it comes to enhanced permitting 
for this country?
    And since I just picked on you, Mr. Stanek, let's start 
with you, Mr. Teply, and just go down.
    Mr. Teply. Thank you for the question.
    I think our number one priority--we touched on it today--
really is to find, to re-find that balance between state and 
federal permitting obligations as it relates to natural gas 
infrastructure, in particular. The Clean Water Act provisions 
that we talked about in the SPUR Act get us part way there. 
That becomes a very clear line of demarcation as to who is 
ultimately responsible for not only the timelines, but the 
reviews, and ultimately the success of that permitting process. 
So I think that is Number one for Williams.
    Senator Murkowski. I would agree.
    Mr. Smyth.
    Mr. Smyth. Yes, number one for us is getting the planning 
process right, getting the cost allocation right, and then we 
believe that permitting and siting become a lot easier when you 
get those first two steps right in the first place.
    Senator Murkowski. Yes, when people are not arguing over 
the cost allocation, that does allow for easier conversation.
    Mr. Stanek.
    Mr. Stanek. Limiting the timeline for environmental reviews 
without degrading them. I think it will be very important to 
get these EIS and environmental assessments issued by FERC and 
other agencies done quickly.
    Senator Murkowski. Okay. See, Mr. Chairman, Mr. Vice 
Chairman, here, it's really easy. We got three ideas. We just 
build the bill and we are done.
    Thank you.
    The Chairman. I agree.
    Senator King.
    Senator King. Yes, Mr. Chairman, I think it's important to 
begin to think about this issue from the point of view of 
environmental protection. And for years, the orientation of the 
environmental community is to say ``no.'' And in order to 
electrify the United States and develop a true green energy 
future, we are going to have to start saying ``yes.'' And I 
would submit for the record, Mr. Chairman, the article by Bill 
McKibben in a recent edition of Mother Jones. The title of the 
article is ``Yes in Our Backyards.'' Because he chronicles his 
journey from--he's one of the most outstanding 
environmentalists in the country--to the realization that in 
order to achieve the future we want environmentally, we are 
going to have to build things, including a lot of new 
transmission. So I think that's an important context to this 
hearing. This isn't just about getting rid of environmental 
regulations because we don't like them. This is trying to 
streamline a process, not the underlying policy, but the 
process in order to achieve the kind of future that we all 
want.
    [The article referred to follows:]
    GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    
    Senator King. The second suggestion I have is, we ought to 
have James Madison at this hearing because we are really 
talking about some very deep issues of federalism and the 
relationships between the federal and the state. Interestingly, 
as I have been listening--in both pipelines and transmission--
in pipelines we are talking about federal backstop authority on 
the state's ability to block a project under Section 401. That 
is a problem you just identified. On the transmission side, we 
are talking about states' ability to permit transmission, but 
there needs to be a federal backstop in order to be sure--your 
term I love, Mr. Stanek--motivation for the states to 
efficiently process.
    Mr. Stanek, do you agree that we have got to find--there 
has to be some federal backstop, I believe, in both cases, but 
we can't do it in just one and not the other.
    Mr. Stanek. There has to be a middle ground going back to 
cooperative federalism, where the----
    Senator King. That is a nice term. Madison would have liked 
that term, I think.
    Mr. Stanek. I think he would approve.
    And we are moving in that direction. We have had backstop 
siting authority since EPAct 2005. It has not been used for a 
number of reasons. Changes have been made in the recent IIJA 
legislation. But motivation is important, otherwise state 
agencies, like any other agency, have resource limitations, and 
these are very expensive, comprehensive reviews that need to be 
undertaken. Some agencies, like my former agency, only 160 
employees--it could take 6 months, 12 months, 18 months or 
longer to conduct a review. However, if there is a federal law, 
that would effectively allow this----
    Senator King. A year.
    Mr. Stanek. A year. It would depend on the project. If it's 
a simple solar project, we could get that done in 16 months. If 
it's offshore wind turbines or interstate transmission lines, 
it could take longer than a year, but at the same time----
    Senator King. Does the term cooperative federalism, to you, 
mean there would be a backstop at some point, whether we 
don't--whether it's a year, 18 months, two years, but there has 
to be some incentive to the state to do its duty on these 
projects?
    Mr. Stanek. As I stated a moment ago, the motivation needs 
to be there. So yes, I think a deadline needs to be in place at 
some point.
    Senator King. Thank you.
    Mr. Smyth, I don't want to spend a lot of time on this, but 
one of the delays now in developing the grid is not permitting 
reform, necessarily, but interconnection issues. I have talked 
to developers that are in line forever, not with the PUC or the 
FERC, but with the ISO. Is that an issue that you see, that 
something--I don't know whether we need to address it, but that 
is a bottleneck, is it not?
    Mr. Smyth. Yes, Senator, it is a major bottleneck that you 
have identified there. So in some regions there are, you know, 
hundreds of thousands of megawatts queued up seeking to 
interconnect and we need to move through those processes 
faster. In addition to that, you know, we would like to see a 
prioritization of projects in that queue for load-responsible 
entities such as ourselves who have an obligation to serve end-
use customers.
    Senator King. Thank you.
    Mr. Stanek, I am running out of time, but one of the things 
that bothers me is the incentive toward building as opposed to 
non-wires alternatives, or reconductoring--that is a wires 
alternative, but you know what I mean--storage, all the ways 
that we can minimize the capital cost. It bothers me that the 
incentive to a utility is to maximize the capital cost because 
they make a greater return on the invested capital. They don't 
make a rate of return on a demand-side management program. Talk 
to me about that.
    Mr. Stanek. Obviously, we have a lot of other technologies 
now, all these grid-enhancing technologies that could often 
come in as----
    Senator King. Here's one right here (the Senator holds up a 
small conductor in his right hand). This is a new conductor 
that will double the volume of power that will be carried. It's 
more expensive, but it would cut line losses, double the 
amount, you don't have to build new towers. That's the kind of 
thing that I am talking about.
    Mr. Stanek. And state regulators have been looking at that 
carbon core fiber technology as well. You could do it at a 
fraction of the cost of building a green line transmission.
    Senator King. Right.
    Mr. Stanek. So you take down the old lines. You put up the 
new line. At the end of the day, state regulators want to be 
cost-effective because I could tell you that the only thing 
customers hate more than their utility bill is not having 
reliable electricity.
    Senator King. Of course.
    But is there--should we be talking about a federal policy 
that says before you start talking about a major capital 
investment, you have to show us that you have exhausted your 
non-wires alternatives?
    Mr. Stanek. That has been in the discussion. I know FERC is 
currently----
    Senator King. Some states have that policy.
    Mr. Stanek. States do have that policy. We do review the 
transmission projects and we want to make sure they are cost-
efficient as well as delivering the reliability needs. So there 
is some oversight at the state level as to the need--do we need 
this project? And if so, what type of a project? What type of 
infrastructure? Obviously, the most intrusive is building a new 
green fill transmission line.
    Senator King. Got it. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Okay.
    The first panel discussion will come to an end now. I want 
to thank you all. It has been very helpful. We have got to do 
something. We all agree on that, and we are all trying to do 
something in a bipartisan way, working together, with the 
concerns we have, but also, the security of our nation's 
energy.
    So with that, I want to thank you all. This first panel 
will be adjourned.
    And the second panel, if they will come forward, we will 
get started.
    The second panel will come to order and we are going to get 
started again here. And I want to thank you all for being here 
and sharing with us your expertise, and we are going to start 
now with our opening statements. We will have Mr. Milito. He is 
President of the National Ocean Industries Association.
    Then, we are going to have Mr. Pete Obermueller, who is 
President of the Petroleum Association of Wyoming.
    And then, we will have Ms. Kelly Speakes-Backman, Executive 
Vice President--Public Affairs----
    Ms. Speakes-Backman. Invenergy.
    The Chairman. Invenergy. Invenergy.
    Okay, so first we will start with Mr. Milito.

            STATEMENT OF ERIK G. MILITO, PRESIDENT,
             NATIONAL OCEAN INDUSTRIES ASSOCIATION

    Mr. Milito. Thank you. Chairman Manchin, Ranking Member 
Barrasso, and members of the Committee, thank you for inviting 
me to testify today. My name is Erik Milito. I am the President 
of the National Ocean Industries Association, or NOIA. At NOIA, 
we represent all segments of the offshore energy industry. This 
includes oil and gas, wind, offshore minerals, and offshore 
carbon sequestration. Our membership includes energy 
developers, but also the entire supply chain of companies that 
make up the offshore energy system. This includes fabricators, 
vessel service companies, marine construction companies, 
offshore subsidy engineering companies, and many others. The 
offshore energy sector is a proven leader in solving energy 
challenges and delivering diverse sources of energy to the 
global economy. The offshore industry has unparalleled 
expertise and experience deploying and scaling technologies at 
levels necessary to produce foundational energy sources and to 
achieve decarbonization objectives.
    As we move forward and work together to build the energy 
system of tomorrow, we should focus on securing our oil and gas 
from low-emission basins, like the Gulf of Mexico, which has 
among the lowest carbon intensity barrels of the producing 
regions of the world; promoting a pathway for U.S. leadership 
in offshore wind; and removing roadblocks to investment in and 
the build-out of carbon capture and storage projects. One of 
the most promising opportunities for CO2 storage in 
the U.S. can be found in federal waters, particularly in the 
Gulf of Mexico. However, government policy out of Washington 
plays a central role in the ability of our industry to make the 
investments and build the projects to sustain the American 
economy. We appreciate the continued efforts of the Chairman, 
Ranking Member, and members of the Committee to work together 
and develop solutions to streamline the pathway for investment 
in U.S. energy and infrastructure projects, whether it's oil 
and gas, wind, or carbon storage, companies need certainty and 
predictability in leasing, permitting, and regulation in order 
to commit the funding and resources to projects that often cost 
billions of dollars to construct.
    Congress has a central role in helping to overcome the 
obstacles that often arise in a regulatory process and 
oftentimes in litigation for energy projects. For the 
foreseeable future, our economy will depend upon affordable and 
reliable supplies of oil and gas. The U.S. Gulf of Mexico oil 
and gas sector supports more than 350,000 good-paying jobs 
located throughout the country, and it produces among the 
lowest carbon intensity barrels in the world. For our energy 
security and national security, the Gulf of Mexico should be a 
no-brainer as a preferred choice for securing our oil and gas 
supplies. Unfortunately, in June 2021, the Administration 
implemented a pause in offshore oil and gas leasing that was 
contrary to law and served to block investment in U.S. energy 
projects. To compound things, the Administration allowed the 
leasing program for offshore oil and gas to expire at the end 
of June 2022, putting in place the first-ever gap in offshore 
leasing programs, further jeopardizing the long-term prospects 
for U.S. energy production.
    More recently, just five days ago, on Friday, July 21, the 
Administration entered into a settlement agreement with 
opponents of U.S. energy production that will remove ten 
million-plus highly prospective acres from the forthcoming 
offshore lease sale in the Gulf of Mexico. This is an apparent 
end-around of the requirements of the Inflation Reduction Act, 
and it completely circumvents the established regulatory 
process for governing the issues that were raised in 
litigation. Congressional efforts should be considered to 
restrict these types of sue-and-settle, or regulation-by-
litigation tactics that bypass Congress and the public process 
and jeopardize U.S. energy production. Also, under the 
Inflation Reduction Act, periodic offshore oil and gas lease 
sales are now required in order for Interior to issue offshore 
wind leases. Many of the same companies that built the offshore 
oil and gas sector are now participating in the build-out of 
the offshore wind sector. A steady stream of offshore oil and 
gas and offshore wind lease sales is needed for the supply 
chain to fully realize these incredible opportunities before 
us. We encourage this Committee to consider legislation that 
will serve to preserve the future of offshore leasing for both 
oil and gas and wind.
    The good news is that the members of this Committee have 
introduced and supported legislative proposals to help overcome 
the administrative roadblocks to energy investment. The 
Offshore Energy Security Act of 2023, the Building American 
Energy Security Act of 2023, and the SPUR Permitting of 
Underdeveloped Resources Act, are all examples of smart 
legislation that could help knock down barriers to investment. 
Whether it is in West Virginia, Wyoming, or the Gulf of Mexico, 
our future energy security depends upon a reasonable, workable, 
and streamlined federal regulatory framework for all forms of 
energy.
    Thank you for the opportunity to testify. I look forward to 
your questions.
    [The prepared statement of Mr. Milito follows:]
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    The Chairman. Now, Senator Barrasso.
    Senator Barrasso. Well, thank you, Mr. Chairman. And I 
would like to welcome to the Committee today Mr. Peter 
Obermueller, who is one of our witnesses at today's hearing. We 
have known each other a long time. His father is in the Wyoming 
Legislature. He represents my home community.
    Pete, thanks for traveling here from Casper. We were on the 
same flight yesterday. You were sitting next to Senator Risch, 
who wanted to stay here and listen, and unfortunately, had 
another engagement in the Foreign Relations Committee. We 
appreciate you being with us at the nation's capitol. You are a 
Wyoming native, attended Natrona County High School in Casper, 
went on to graduate from Concordia University in St. Paul and 
then received a Master's Degree in Public Policy from the 
University of Minnesota.
    Since 2019, Pete has served as the President of the 
Petroleum Association of Wyoming. For years, he served 
previously here on Capitol Hill as a legislative director to 
now-Senator Lummis, when she was in the House of 
Representatives, and prior to that he served as a staff member 
for Wyoming's Representative Barbara Cubin. Pete is an expert 
on issues facing oil and gas operators on federal land in the 
West. We are so grateful for the opportunity to hear from you 
today. Thanks so much for joining us. I look forward to your 
testimony.
    Thank you, Mr. Chairman.
    The Chairman. Mr. Obermueller.

STATEMENT OF PETE OBERMUELLER, PRESIDENT, PETROLEUM ASSOCIATION 
                           OF WYOMING

    Mr. Obermueller. Thank you so much, Mr. Chairman, Ranking 
Member Barrasso, members of the Energy and Natural Resources 
Committee, thank you for allowing me to speak with you 
regarding the leasing and permitting challenges on federal 
lands. I want to emphasize a few specific obstacles and policy 
prescriptions today, but it all boils down to one thing--
American energy producers can and will invest in federal land 
production, but to do so, they need predictability and 
reliability in our regulatory and judicial processes.
    In Wyoming, efficient and effective government oversight is 
not a theoretical question, because the Federal Government 
controls nearly three-quarters of Wyoming's mineral resources. 
In 2022, the oil and natural gas industry provided over $2.34 
billion in tax revenue to Wyoming. Now, Wyoming is a small 
state with a small budget. So to put that in perspective, that 
is 67 percent of the state's two-year general fund budget. Oil 
and gas is Wyoming's primary economic driver, but the Federal 
Government is in the driver's seat. It is no secret that the 
Biden Administration has severely curtailed leases of federal 
acres since 2021. But now that leases have at least nominally 
restarted, it is important that this Committee understand the 
ways that the BLM continues to minimize lease availability and 
avoid the issuance of permits.
    Even in the best of times, the BLM's decision-making 
regarding what leases are available is opaque. But the current 
process is even worse. After offering no leases at all in 2021, 
the BLM now is deferring leases in extraordinary numbers--462 
parcels, covering more than half a million acres have been 
deferred without reasonable explanations as to why and with no 
guidance on how to remove them from this limbo status. An 
egregious but not a unique example is depicted in this map of 
an actual project in Wyoming today.
    [The map referred to follows:]
    GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    Mr. Obermueller. The squares are, of course, one-mile 
sections containing 640 acres each. Every single acre in this 
map is already leased for oil and gas development, save the 
ones I will mention. Focus your attention on the yellow areas. 
These sections are leased for development from one single 
company, but note the two donut holes in the middle of the 
yellow block. These acres were deferred by the BLM in the most 
recent lease sale, making production in the surrounding yellow 
areas functionally unavailable. What compelling reason exists 
to prompt deferral of the donut holes in an already-leased 
field that does not exist elsewhere in the field?
    The BLM has denied requests to make those areas available 
under an agreement that there would be no surface disturbance 
at all. Neither has the BLM outlined a process to release those 
acres for bid. So a company now pays $5 an acre to nominate a 
parcel that may never be offered at all or put into deferral 
purgatory with no process for removal. Once these leases are 
secured, operators must then undergo lengthy and expensive work 
to meet all the requirements necessary to earn a permit to 
drill. Permits are an essential component of drilling programs, 
so efficiency and processing is always an issue. Lately, the 
BLM's performance has lagged, as processing times have 
increased 124 percent since 2018, rising to 271 days. What is 
new and alarming is the BLM, on its own volition, is 
withholding permits on acreage subject to litigation, even if 
the court has not enjoined the issuance of permits. 
Approximately two million acres are languishing in this self-
enjoined status.
    Now, self-enjoining is a real problem, but it is 
understandable in this one sense. The agency has an extreme 
bunker mentality resulting from the onslaught of litigation on 
their every decision that approves human activity on federal 
land. Nearly every lease in Wyoming and every single permit 
issued since 2021 is the subject of litigation. A recently 
completed resource management plan amendment in Converse County 
is an example. After nearly seven years of collaborative work, 
the BLM issued a decision that provides for careful protection 
of wildlife and sustainable energy development. It is clever 
and creative. These are two words not usually used to describe 
the BLM. But unfortunately, after inexplicably waiting for two 
years, notorious activist litigators have now filed to overturn 
that amended plan. But recent Congressional attention on the 
paralytic state of permitting is encouraging. But so long as 
policy decisions are made in the closed confines of a 
courtroom, instead of the halls of Congress, the job is not 
complete. The good news is, most of what I have discussed can 
be immediately corrected with passage of the SPUR Act. That 
legislation would restore predictability by making leasing and 
permitting more consistent, stable, and timely, and I urge its 
passing.
    Finally, Mr. Chairman, the development of affordable, 
reliable energy has done more to advance human flourishing than 
any other development in history. I am enormously proud of 
Wyoming's 100-year contributions to providing energy to all 
Americans. We all know that global production of oil and 
natural gas is going to continue for decades to come. I worry 
that Wyoming will be disallowed from playing its part. This 
Committee can help ensure Wyoming's energy future.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Obermueller follows:]

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    The Chairman. Thank you.
    Ms. Speakes-Backman.

              STATEMENT OF KELLY SPEAKES-BACKMAN,
      EXECUTIVE VICE PRESIDENT, PUBLIC AFFAIRS, INVENERGY

    Ms. Speakes-Backman. Hello and thank you, Chairman Manchin, 
Ranking Member Barrasso, and members of the Committee. Thank 
you for inviting me to testify today. Invenergy is a leading 
developer, owner, and operator of clean energy solutions and 
has led the clean energy transition and advanced American 
energy independence for more than 20 years. We have 
successfully developed more than 200 projects, 45 of which are 
in states represented by members of this Committee. We also 
have six projects currently under development on public lands 
and offshore.
    As one of the largest American clean energy developers, it 
will be no surprise to you when I say we need predictable and 
transparent permitting processes to build the next generation 
of clean energy projects. We therefore welcome the recent 
bipartisan efforts to examine this issue and identify needed 
reforms. As part of any legislative reform, however, we must 
also preserve and prioritize meaningful engagement with tribal 
nations, landowners, and local communities. Invenergy is a 
leader of robust community engagement approaches, and we look 
forward to answering any questions you might have about how we 
incorporate this engagement into our project budgets and 
planning. Now, given that the topic of this panel is permitting 
on federal lands, we want to identify what we found to be 
challenges in constructing energy infrastructure in federal 
public lands and waters and what we believe to be reasonable 
and practical solutions to enable implementation.
    So first, we support policies that encourage responsible 
renewable energy development on suitable Bureau of Land 
Management lands. For example, BLM's proposed renewable energy 
rule would ease the burden on energy developers by reducing the 
cost of leasing federal public lands. BLM could further spur 
development by taking common-sense measures, like revising its 
programmatic EIS for solar planning to prioritize siting 
projects on lands that are near planned or existing 
transmission infrastructure. In addition to these substantive 
reforms, agencies like BLM and BOEM--the Bureau of Ocean Energy 
Management--need sufficient and consistent resources to ensure 
that they can efficiently evaluate project authorization in a 
timely manner.
    Second, offshore wind developers and the offshore wind 
supply chain need greater certainty and predictability to be 
able to take on these major private investment risks. The 
offshore wind industry is expected to support up to 83,000 
American jobs by 2030, but only if offshore lease sales occur 
on a regular schedule and projects are permitted without delay. 
Companies must be able to plan and budget years in advance in 
order to make these massive investments, but it is not going to 
happen until lease sales are conducted on a consistent basis 
and the permitting process is efficient and predictable.
    Finally, we have to do more faster on interregional 
transmission. As we saw during Winter Storm Elliot and Winter 
Storm Uri and the multitude of summer and winter weather events 
before that, threats to our electric grid pose a risk to our 
homes, our hospitals, our military bases, and industries--and 
in extreme cases, to human lives. The most widely recognized, 
but underutilized major-scale solution is interregional 
transmission, which enables imports and exports across regions 
to move power from where it's available to where it's needed 
most. Unfortunately, today, federal policy does not adequately 
facilitate interregional transmission. Existing processes for 
planning have been largely ineffectual because they don't set 
meaningful and measurable targets, they don't require 
cooperation between regions, and they don't quantify 
reliability, resilience, and operational benefits.
    Fortunately, members of this Committee have proposed 
legislation to address these issues by providing a clear 
framework to value interregional transmission benefits through 
your bill, Chairman Manchin; to require FERC to develop 
planning processes for national interest transmission lines 
through Senator Heinrich's proposal; and third, to require each 
region to have a defined percentage of import and export 
capability with neighboring regions through Senator 
Hickenlooper's proposal. All of these are bipartisan solutions 
and should be on the table.
    So in conclusion, we are at an important inflection point. 
We have an opportunity to make the reforms and the investments 
necessary to maintain American energy dominance in the 21st 
century, creating millions of jobs here at home and ensuring 
that American companies like Invenergy can continue to lead the 
clean energy transition. So thank you for the opportunity to 
address you today. I am happy to answer any questions you may 
have.
    [The prepared statement of Ms. Speakes-Backman follows:]
   GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

    
    The Chairman. Well, let me thank all of you for being here. 
I appreciate it and your statements are well taken.
    As you all know, we passed the Inflation Reduction Act in a 
balanced approach, trying to look at how we could have an all-
in energy policy, but also have the security that we needed for 
the energy that we had right here in our backyard. We were not 
going in that direction. We think that bill, basically, was 
directing this government and this Administration to get back 
on track. So with that, I can't understand--it's pretty simple 
that solar and wind on federal lands and waters, they can't 
proceed unless we are holding meaningful oil and gas lease 
sales. They all go together. And if they think one without the 
other is going to happen, it won't. It appears that renewables 
and oil and gas both face the same challenges of not having 
consistent sales. Onshore, the Administration cannot sign 
agreements for more than 20 wind and solar projects currently 
under review because they haven't met the IRA's oil and gas 
lease sale requirements. We did this on purpose. We are all in 
this together. We have got to make sure we have reliable, 
affordable, dependable energy.
    And so, how important is it, I mean, to get off the dime 
here? Do you all work with both sides of the aisle here trying 
to figure, hey, we are all in this together? Have you had 
conversations with people who are protesting, objecting, 
stopping, and suing, that they are basically killing 
themselves--shooting themselves in the foot?
    Mr. Milito.
    Mr. Milito. Yes, we are constantly in conversation with 
members of both sides of the aisle--Senate, House.
    The Chairman. Do they know, I mean, the advocates who want 
no oil and gas leases at all, okay, or coal production 
whatsoever, do they know that basically it is all tied 
inextricably to----
    Mr. Milito. I don't believe there is that level of 
understanding of the provisions of the IRA and how they are 
going to impact the future wind leasing, both onshore and 
offshore. We are trying to make sure we educate everybody on 
that and we are trying to make sure there is some urgency 
around moving forward with the oil and gas sales so nothing is 
impeded as we move forward.
    These are projects that are--the competition for the money 
behind these projects is global. We don't want to lose that. We 
don't want to see that go to other parts of the world. We want 
that here in the U.S. and that is what we are trying to convey.
    The Chairman. What do you see, Mr. Obermueller?
    Mr. Obermueller. Yes, thank you, Mr. Chairman. I think, as 
you well know, we are actively in conversation with all sorts 
of people about these issues on federal lands----
    The Chairman. You all studied the bills. You three probably 
have studied that bill as well as anybody, you know, and it's 
pretty clear what the intent was of the Inflation Reduction 
Act. And it should, hopefully--do you all believe it was a 
balanced approach to how we produce energy in our country and 
having the results, basically, from an energy policy that would 
work?
    Mr. Obermueller. It was a balanced approach and it was a 
very good start, yes. I think I would divide the folks that I 
am talking about in my testimony into two camps, those that 
want to have a serious discussion about infrastructure for all 
sources of energy, of which Wyoming provides every source.
    The Chairman. Right.
    Mr. Obermueller. And those that don't. They just want to 
spend the time in the courtroom.
    Ms. Speakes-Backman. I believe that the Inflation Reduction 
Act was an amazing step toward creating more clean energy and 
being able to work on a bipartisan level to get that forward. 
Now, as Invenergy, we don't have oil and gas leases in mind.
    The Chairman. Right.
    Ms. Speakes-Backman. But we believe that we need to do 
everything----
    The Chairman. You understand you can't have what you want--
--
    Ms. Speakes-Backman. Absolutely.
    The Chairman [continuing]. Unless we are doing what we 
need.
    Ms. Speakes-Backman. We believe that it's critical to take 
all necessary steps to ensure continued offshore wind lease 
sales.
    The Chairman. I know producers in Wyoming are concerned 
about the Administration withholding some of the most 
productive areas from oil and gas leasing, and I share your 
concerns. At the same time, I am concerned about proposals that 
will restrict Interior from withholding any areas from leasing 
because many of our federal lands are managed for multiple use, 
which includes hunting, fishing, hiking, off-road vehicles, 
timber grazing, and more. There is a big difference between 
land being available for leasing versus land that must be 
leased upon request. So what are your suggestions for 
legislation that would ensure producers aren't only offered 
unwanted acreage, but also protects other uses of federal 
lands?
    Mr. Obermueller.
    Mr. Obermueller. Thank you for that question, Mr. Chairman.
    I think, again, to your point, we can strike a balance 
there. The Bureau of Land Management was created to provide----
    The Chairman. The donut hole you showed on your map was 
very, very compelling to me, and very interesting. They 
intentionally, cleverly did this, basically, to prevent, I am 
sure, what is going to be horizontal drilling. Correct?
    Mr. Obermueller. Correct.
    The Chairman. I know exactly what it was for.
    Mr. Obermueller. That is precisely why it becomes 
unavailable in those yellow blocks because you need the space 
to horizontal drill.
    The Chairman. I know. They've got you stopped completely.
    Mr. Obermueller. Right.
    So the SPUR Act does take care of some of this in the sense 
that it requires--it does not require 100 percent of ceding to 
what industry has asked for in terms of nominated acres, but it 
does ask for some sort of coherence in what industry thinks is 
a reasonable place to develop, and issuing leases, at least in 
part, based on that. And that is a reasonable balance I think 
we can find and there is legislation in front of you that does 
that.
    The Chairman. We might want you to keep that map or leave 
it here with us so we will bring BLM back in and let them 
answer that.
    No further questions.
    Senator Barrasso.
    Senator Barrasso. Thanks, Mr. Chairman.
    Mr. Obermueller, so the BLM has held just two oil and gas 
lease sales in Wyoming since Joe Biden took office. The Mineral 
Leasing Act requires quarterly lease sales, meaning there 
should have been ten sales under President Biden so far. So I 
have a chart up here that shows the average amount of acres 
leased, and it's in millions of acres, by previous presidents. 
Well, you can see Joe Biden, right there at the bottom, is 
defying the law and has wrecked the leasing process.
    [The chart referred to follows:]
    GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

    Senator Barrasso. Can you talk about the impact that this 
BLM refusal to follow the law has had on the State of Wyoming?
    Mr. Obermueller. Thank you, Senator Barrasso, thanks for 
the question. Happy to do so. I want to answer it in two ways. 
Number one, just the fiscal impact to the State of Wyoming. I 
mentioned how important oil and gas is to our economy and to 
Wyoming's revenues. The two lease sales that the Administration 
has offered, the first brought in $14 million, the second 
brought in $13 million. At that rate--you mentioned that they 
have missed ten--Wyoming and the Federal Government should have 
been receiving around $130 million. So there is a quantifiable 
dollar amount impact for sure.
    The second part that I want to emphasize, Senator, is that 
the issue of leasing for Wyoming has everything to do with the 
exploration, not necessarily the production. I was so 
encouraged to hear Senator Manchin differentiate between 
leasing and permitting in that way. Wyoming is an exploratory 
field still. It is different from other fields in that sense. 
We need leasing in order to explore for new fields. That is 
what attracts companies to Wyoming, is that exploratory nature. 
And as we cut off leasing and cut that down, we choke off the 
ability to explore for new resources, and that hurts us in the 
long term.
    Senator Barrasso. So the failure to lease federal lands 
resulted in less oil and gas production and simply caused 
companies to move elsewhere.
    Mr. Obermueller. Right. In terms of the expense and in 
terms of leasing, if companies have production in other basins, 
of course, Colorado or New Mexico or other places, they fight 
internally for capital, and the barriers that BLM puts in front 
of Wyoming puts us as a competitive disadvantage.
    Senator Barrasso. So Mr. Milito, do you see the same 
reaction from companies in offshore oil and gas sectors?
    Mr. Milito. Yes, the offshore sector is highly competitive. 
It makes up about 30 percent of total global oil production, 
which is 100 million barrels a day. And these are projects that 
are competing on a global level. You are looking at places like 
Guyana, Southeast Asia, the North Sea. It is very difficult and 
challenging to continue to make investments in a region like 
the Gulf of Mexico that is highly prospective when you have 
uncertainty and you don't have the predictability that you 
might have in another part of the world. So the money could 
definitely leave, and you know, you put those jobs at risk.
    Senator Barrasso. So Mr. Obermueller, you talked about 
activists having challenged essentially every oil and gas lease 
sale that BLM has held in Wyoming. They include lease sales 
held by, you know, even held by the Obama Administration. The 
lawsuits are often filed years after the leases have been 
issued. These groups ask judges to cancel leases that are 
valid--existing contracts between BLM and private companies. 
How do these lawsuits affect your members' ability to produce 
on federal land?
    Mr. Obermueller. In some cases, Senator Barrasso, it 
completely stops the ability to produce. Currently, there are 
2,573 leases under litigation in Wyoming. In some cases--in 
many cases--it has prompted the BLM to, as I mentioned before, 
self-enjoin, but perhaps one of the most egregious examples of 
that is, legally, the leases offered in the fourth quarter of 
2020, the legal process was completed. The leases were 
available, but for fear of litigation, the BLM has yet to 
actually issue those leases from Q4 2020 as a result of 
litigations.
    Senator Barrasso. So to make that point, since Joe Biden 
has taken office, BLM has decided to stop issuing permits on 
oil and gas leases that are under litigation, is what you just 
said.
    So often BLM has made this decision even though 
environmental activists have not actually won a ruling in 
court. So as a result, companies have not been able to develop 
hundreds of thousands of acres in Wyoming based on this 
decision. As a matter of basic fairness, should environmental 
activists get what they want without actually winning in court?
    Mr. Obermueller. Mr. Chairman, it does defy a little bit of 
explanation. You know, obviously, access to courts is very, 
very important, but the process should play out and there 
should not be an incentive to continually file lawsuits and 
then have an agency self-enjoin during that process. The 
process should play out and it should play out fairly.
    Senator Barrasso. So Mr. Milito, the Biden Administration 
set a goal to deploy 30 gigawatts of offshore wind by 2035. I 
will note that offshore wind requires over 33,000 pounds of 
minerals per megawatt of capacity. It's about 12 times the 
amount of minerals that natural gas needs per megawatt. Does 
the United States have policies in place to support the 
development of mineral resources that offshore wind energy 
needs?
    Mr. Milito. Well, we lack a comprehensive strategy for 
securing the critical minerals needed for our energy future. We 
need to work together to make sure that China does not remain 
the dominant player in this space. We have companies that can 
do offshore mineral mining, and they would be helped by the 
Administration if they stepped up and played a role in getting 
them access to some of these areas around the world where they 
are trying to deploy their technologies to have a U.S. company 
in that space.
    And you are very well aware that, you know, the State of 
Wyoming has various critical minerals, and BLM, of course, has 
a lot of jurisdiction over that that prevents that kind of 
development. But the SPUR Act has provisions in there to 
address a lot of this and we need to work together to develop 
this comprehensive strategy so that the U.S. becomes a leader 
in critical mineral mining.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Mr. Chairman.
    I am going to ask Ms. Speakes-Backman to focus on this for 
me and help me out here. So in Nevada there are 96 pending 
applications to deploy solar projects statewide. Fifty-one of 
them are in southern Nevada. There is a growing bottleneck. One 
of the things I constantly hear, and you touched on it a 
little--both from BLM officials and from Nevadans and those 
that are trying to do the project--is that the bottleneck is 
caused to some extent by understaffing, or a lack of staffing 
at our local BLM offices to be able to move the permitting 
along. Now, with that said, I also know that in the Inflation 
Reduction Act, Congress provided about $150 million to the 
Interior Department to support that environmental review and 
permitting to move it through quickly.
    My question to you is, what are we missing here? Is it an 
inability to hire these individuals? Because they have the 
money. BLM has the money to do it. Is it a lack of interest? Is 
it an inability to hire that workforce? What are you hearing 
and seeing on the ground when it actually matters to move these 
permits along?
    Ms. Speakes-Backman. Thank you so much for this question 
because I do believe, when it comes to federal land permitting, 
or permitting generally, really the biggest impediment that we 
have to this is staffing, is being able to get the right folks 
at their desks and working and the right training involved to 
make sure that that pipeline is involved. The renewable 
energy--the RECO offices that are throughout the United States 
are woefully understaffed, frankly, and I'm not sure that it is 
necessarily a lack of interest. It takes a long time to hire 
within the Federal Government, as I am sure you are very well 
aware.
    Senator Cortez Masto. Absolutely.
    Ms. Speakes-Backman. But it also takes a more steady level. 
As these agencies like BOEM and BLM and NOAA are working 
towards goals, such as 30 gigawatts or 25 gigawatts by 2025 on 
federal lands--as they are trying to work toward that, staffing 
takes a long time, and we absolutely--we have the funding there 
now, thankfully, through the leadership of this program.
    Senator Cortez Masto. Right.
    Ms. Speakes-Backman. We just need to be able to--for 
example, in the IIJA, there were creative ways of creating 
employment statuses where you could hire a lot faster. And it's 
simply--you have to be able to get these sorts of different 
types of hires, rather than just the federal employees, to get 
the hiring done faster.
    Senator Cortez Masto. Yes, and that is what I would be 
interested in hearing from our folks at Interior, is what can 
we do to streamline that process, because it is a challenge, I 
hear, because of the rules at the federal level, but if we are 
really--the funding is out there, they have the ability to 
actually make the hires, it's just getting through the process 
much quicker and moving it.
    Ms. Speakes-Backman. And perhaps some detailing, creative 
detailing. We have a number of ideas that I am happy to forward 
to you, afterwards, but you can detail from one agency from the 
other. And also, I would say that solar and wind, and I would 
suggest also for geothermal expertise throughout the country. I 
think that is a really important element as well.
    Senator Cortez Masto. And thank you, because I know, and 
this is something I have been pushing, again, to support, is 
really growing opportunities around geothermal, not just in 
Nevada, but across the country. There is so much potential. But 
as we continue these projects, as we are hearing, there is a 
backlog. And the first step for me is to start with the agency 
itself. The funding is there, but how do we make it easier for 
them to hire, and how do we get more people in the pipeline?
    Ms. Speakes-Backman. It is the number one impediment, in my 
mind, for clean energy development on federal lands, is being 
able to get the right people in the right place, to have the 
full resources and have steady resources across years to be 
able to retain that talent and to retain the processes keeping 
in time.
    Senator Cortez Masto. Thank you.
    And then, I only have so much time left, but I also picked 
up on your statement, which I think is important, thank you. 
Invenergy is in Nevada. Thank you. I was at one of the ribbon 
cuttings with MGM and one of the AEP renewables.
    But you talked about local community engagement--how 
important it is to have that community engagement--local, 
federal, and tribal nations. And I guess my question to you is, 
how can that be used for a model, particularly now that we have 
that new federal office within FERC, the Office of Public 
Participation? Can you talk a little bit about the importance 
of that community engagement and why it matters?
    Ms. Speakes-Backman. Yes, I mean, absolutely. It is 
incredibly important. And the success of our projects and any 
project depends on our ability to really build trust with those 
communities and not just tell them why we are in their town and 
why we are going to be doing good for them, but hearing from 
them--what are their needs, what are their priorities, how can 
we support both financially, but also getting the end goal of 
the project--getting, you know, making sure we are on the same 
page. It is incredibly important. And not only is it important 
to make sure that we are accepted, but it can help accelerate 
the permitting process and it can help accelerate--if you have 
the community behind you--it can help get those projects done 
more quickly.
    Senator Cortez Masto. Thank you.
    Ms. Speakes-Backman. Thank you.
    The Chairman. Thank you.
    Senator Lee.
    Senator Lee. Thank you very much, Mr. Chairman.
    President Biden, flanked by a veritable army of unelected, 
unaccountable bureaucrats, have made their goal very, very 
clear. Their goal is to hinder fossil fuel production on 
federal lands and in federal waters by any and every means 
necessary. And they are doing quite a job of it. In tandem with 
the climate provisions of the Orwellian-named Inflation 
Reduction Act, which Congressional Democrats passed last 
summer, new regulations are coming out of the Department of the 
Interior, the EPA, CEQ, and even agencies like the Securities 
and Exchange Commission chilled capital investment of oil, gas, 
and coal production. This, at a particularly inopportune time. 
You know, the Democrats' war on fossil fuels has only added 
more risk, more uncertainty, and more suffering to this process 
and to the countless permitting obstacles that energy projects 
were already facing. And this is contributing to a situation in 
which energy prices and inflation are making Americans even 
poorer, at the same time when they are suffering from the 
rampant inflation that we have faced over the last two and a 
half years because of excessive federal spending and excessive 
federal regulatory intervention.
    Instead of allowing American operators to produce 
domestically, the Biden Administration has done everything that 
it possibly can to slow domestic oil and gas production to try 
to appease the radical fringe elements of the environmental 
lobby while groveling to Venezuela and Saudi Arabia for more 
oil supply to try to bring down prices for a moment, for short-
term political gain. This strategy makes absolutely no sense. 
We have boundless domestic oil and gas reserves that are far 
better, environmentally speaking, and far better for Americans, 
economically speaking. Substantive regulatory and permitting 
reform is indeed long overdue. And so, I am glad we are having 
this conversation today, and I thank the Chairman for convening 
the hearing.
    Mr. Obermueller, I would like to start with you. As 
environmental groups have increased their opposition to the 
production of oil and natural gas on federal lands over the 
last 25 years, perhaps it comes as no surprise that in FY22, 
for the first time, 100 percent of the parcels posted for sale 
or for which there were leases going on were protested and 
litigated--100 percent. That had never happened before. This 
kind of litigation, of course, targets permits, leases, 
licenses, permits for drilling and so forth, and of course, 
NEPA analysis for wells, gathering lines, and pipelines.
    In a bill that I have called the UNSHACKLE Act, I tried to 
reform the NEPA process. It is a bill that I have introduced in 
the past and that I will be reintroducing in Congress again 
soon. And I proposed a uniform 150-day statute of limitations 
for all NEPA-related claims, along with tightening the 
requirements necessary in order to obtain prompt judicial 
review.
    Can you describe how these judicial reforms would add some 
more certainty to the permitting process for oil and gas 
projects?
    Mr. Obermueller. Certainly, thank you for the question.
    I think, as you pointed out in your remarks, that we need 
to acknowledge that we have, perhaps inadvertently, but we 
certainly have established a system that incentivizes and 
rewards driving policy changes through the judicial branch. And 
whether it's your act--I know that I have seen iterations of 
that and appreciate that work and other efforts, specifically 
regarding taxpayer funding of reimbursements for litigation. We 
have to find ways to curtail that incentive and reward 
structure for repeated litigation not intended to correct an 
injustice, necessarily, we all want access to courts for that, 
but to so-called correct procedural issues, really whatever you 
can come up with because there is no skin in the game to 
repeatedly, you know, file lawsuits on 100 percent of these 
projects.
    Senator Lee. Right. It is all gain at that point because if 
you file it, you will delay it. If you delay it, it may never 
happen. It might disappear. And in the meantime, BLM comes out 
and proposes this new rule, earlier this week, which would hike 
royalty and rental rates, increase the bond and minimum bid 
amounts, and then establish a new fee for expressions of 
interest. And while these cost increases are garnering most of 
the attention surrounding the rule, and rightly so, I am 
concerned about the preference criteria in the rule, which 
would give BLM even more discretion to direct oil and gas 
leasing toward areas that ``do not have sensitive cultural, 
wildlife, and recreation interests.''
    This worries me because it is going to create yet more 
discretion that will be used to discriminate even more at will 
against states where the President knows he is not going to 
lose many friends anyway because he does not have many, and 
where there happens to be a whole lot of federal land. And that 
description, that profile starts to look a lot like Utah and 
Wyoming and a handful of other states. This is worrisome to me. 
So how challenging will it be for producers, in light of this 
rule, with high development potential, that the BLM does not 
arbitrarily deem to have cultural, wildlife, or recreational 
resources?
    Mr. Obermueller. Senator, it is challenging, and I would 
add one more to that list that I think is important--one of the 
criteria that they are looking at, of course, is that the BLM 
would define what has high potential for development--low 
versus high potential. You know, in Utah, from the Uinta Basin, 
and we know, of course, in Wyoming, every single acre at one 
point was low potential until technology made it high 
potential. So having the BLM be the arbiter of what has low and 
high potential is not the path we want to go down.
    Senator Lee. Thank you.
    The Chairman. Thank you, Senator.
    Senator Hickenlooper.
    Senator Hickenlooper. Thank you, Mr. Chair. Thank you all 
for being here. I appreciate your putting in the time and the 
effort.
    Let me start with Ms. Speakes-Backman. Your company is 
building out a whole new energy generation that we are going to 
rely on for decades, I assume. Right now, new projects, though, 
are coming online. The new projects that are coming online face 
long studies, incredible costs to connect, sometimes into the 
hundreds of millions of dollars. Along with Representative 
Scott Peters, we have been working on a forthcoming bill, the 
BIG WIRES Act, which would require a minimum amount of 
transmission between regions. How would something like the BIG 
WIRES Act--that helps break that logjam--how would it add to 
kind of facilitating wind, solar, gas, and storage projects 
that are piling up in interconnection queues, and what would 
that mean for reliability and affordability?
    Ms. Speakes-Backman. Yes, well, first of all, thank you for 
your work and your leadership on the BIG WIRES Act. We at 
Invenergy are highly supportive of the bill, setting a minimum 
criteria for import and export capacity. You know, transmission 
helps accommodate new generation projects, which in turn help 
to strengthen the grid. It is a symbiotic relationship, if you 
will. An example of how transmission can really help to 
accommodate a new generation project is in Texas--the CRES 
program--where they constructed more than 2,000 miles of 
transmission lines in addition to the 18,000 megawatts of clean 
energy projects that they put together--new energy projects put 
together for consumers, which lowered prices. It helped 
reliability and resilience, and it is exactly the type of 
measurable, and I would say metric-driven transmission build-
out, as well as new technologies to make existing transmission 
more efficient, that is important to help spur more generation 
on the clean energy side, especially.
    Senator Hickenlooper. Exactly. Thank you.
    Mr. Milito, although Colorado is not a coastal state today, 
as a former geologist, I like to remind people that at one time 
we had prime coastal real estate. We certainly recognize that 
offshore resources like offshore wind are a big part of our 
country's energy future. Right now, we are losing that race to 
China. The statistics they gave to me was that China had 
installed more offshore wind capacity in 2021 than the rest of 
the world did in the previous five years. How can America 
better tap into its rich offshore resources to continue to 
diversify our energy mix?
    Mr. Milito. Yes, thank you for the question.
    One of the areas where we need increased certainty and 
predictability is in the ability to get acreage through 
leasing. Right now, there are some of the questions that were 
raised earlier about the tie between oil and gas and between 
offshore wind, so let's make sure we work together to create 
schedules for leasing for both oil and gas and wind so that we 
can continue to allow both to thrive. The Administration has 
done a strong job of pushing forward with the construction 
operation plan approvals for these projects that are coming 
online--they are still in the water, and we are beginning to 
see a lot of excitement around the prospects for continued 
approvals and for continued construction of these projects.
    I do think we do need to make sure we are keeping an eye on 
some of the Inflation Reduction Act incentives to make sure 
that they are being distributed and implemented in a way that, 
you know, we take full advantage of the ability to provide 
those incentives to this industry.
    Senator Hickenlooper. Great. Thank you.
    I will come back to Ms. Speakes-Backman. Recently, Senator 
Thom Tillis and I filed a bipartisan amendment to the NDAA, 
which would have had the Department of Defense investigate 
risks to mission readiness if we had an inadequate ability to 
move power between regions at home. So again, getting back to 
that, you know, the sense of large-scale transition. What role 
could that play in helping ensure power supply to critical 
infrastructure like our military bases at home?
    Ms. Speakes-Backman. Well, certainly, grid reliability 
impacts all aspects of our economy, but especially our security 
and our national security and defense. There was a statistic--I 
would have to look that up--something along the lines of 
6,000--let me make sure I have the right notes--it's something 
along the lines of 6,000 outages in the last two years at 
military facilities. And that is not acceptable. It does impact 
our national readiness, and that means we need a more efficient 
grid. We need more reliability, and we need measurable elements 
of the planning system that help us to figure out what the 
reliability and resilience levels need to be in order to 
protect our country.
    Senator Hickenlooper. Great. Thank you. And I guess I am 
out of time, so I will yield back to the--I had, as an 
exploration geologist, I had a couple good questions, but I 
will put them in writing. Back to the Chair.
    The Chairman. Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chair.
    Clearly, it's time to reform our broken federal permitting 
process. Delays and uncertainty drive up the cost of projects 
and opponents are exploiting a more and more complicated 
permitting process to the extent that--so to the point where a 
delay becomes defeat. And you have highlighted that very well. 
U.S. consumers pay the price for this regulatory uncertainty, 
particularly through higher energy costs. It affects everybody. 
Increasing supply is key to lowering energy costs and attacking 
inflation. And we need to empower our energy producers with a 
clear, consistent, and timely, federal permitting process.
    To that end, I have introduced three bills. One is the 
Bureau of Land Management Mineral Spacing Act, which would 
remove duplicative BLM permitting regs and better respect the 
rights of private mineral owners. Also, the North American 
Energy Act, which would prevent unnecessary delays for cross-
border pipeline and transmission line projects. And the 
Promoting Interagency Coordination for Review of National Gas 
Projects Act, which would streamline and set deadlines for 
multi-agency NEPA reviews of natural gas pipelines and LNG 
projects. And I appreciate our Ranking Member for including all 
of these in the SPUR Act, which I am also co-sponsoring.
    So Mr. Obermueller, for you, just starting with my BLM 
Mineral Spacing Act, again, the basic concept, and this 
Committee actually has passed the act through the Committee, 
but it would remove duplicative application for permit-to-drill 
requirements when the Federal Government owns no surface land 
and a minority of the mineral interest, right? And so, I mean, 
you know, you are the adjacent landowner, you own the minerals. 
You are being held up. You are the mineral owner in that 
parcel, right, or may share in it. You may be the landowner. 
The BLM has no surface ownership, yet they sit and hold it up 
with the federal requirements rather than allowing the state to 
move forward.
    Do you agree that removing this duplicative permitting 
requirement in states with a split mineral estate would help 
empower more energy development and enable BLM to better 
utilize its resources, and, frankly, bring some fairness to 
private owners who are disenfranchised unfairly by the Federal 
Government?
    Mr. Obermueller. Senator Hoeven, I really appreciate that 
question, and I mentioned earlier about technology making 
resources available that were not previously available. 
Horizontal drilling techniques have resulted in an issue that 
you just brought up that requires Congressional attention to 
fix. And that is precisely what you talked about. Drill pads 
and energy projects can be miles away from federal minerals, 
and the Federal Government cannot own the surface at all in any 
of it, and still from a minority of a nexus, dictate management 
prescriptions on private and state land. That is a dramatic 
expansion of the BLM`s authority beyond the lands that they 
own. It is very critical to Wyoming and to North Dakota, I 
know.
    Senator Hoeven. And it is absolutely unfair. And then, I 
mean, we have pads where you could have--they may be up to 24 
wells--but 16 or more wells on a pad and they drill out three 
or more miles in all directions underground, so there is no 
surface interruption whatsoever. Those kinds of things can be 
held up by the Federal Government in the kind of cases we are 
talking about where they don't even own surface acres, right?
    Mr. Obermueller. Absolutely can, and in terms of the 
litigation discussion we have been having before, there are 
litigators who are trying to force it the other way, to require 
the Federal Government to actually have management 
prescriptions and authority on private and state land----
    Senator Hoeven. Which actually empowers the kind of 
strategy you just talked about where they may take a section 
and actually prevent a much larger project, even though they 
only own a minority interest in a small part of it.
    Mr. Obermueller. Precisely.
    Senator Hoeven. And then, just recently--last week, BLM 
issued proposed regulations that would further limit oil and 
gas leasing and increase the cost of energy production on 
federal lands. Your testimony raises concerns that this 
proposal drives up the cost of energy production on federal 
lands and is layered upon a lengthy and uncertain federal 
permitting process already in place. Did the Administration's 
policies toward federal energy production encourage or 
discourage your members from increasing production, and at a 
time when everybody is fighting inflation and energy is a big 
part of that, won't this new regulation further hurt our 
ability to produce energy in this country versus getting it 
from other countries, who may be hostile to our interests and 
have much worse environmental stewardship? And does that make 
any sense whatsoever?
    Mr. Obermueller. Senator Hoeven, I appreciate that 
question. And I think you are referring to the new bonding rule 
that they proposed last week. And what I would say is, it 
absolutely does discourage, and in part because it's a one-
size-fits-all approach. In Wyoming, we basically have very 
small companies. A third of Wyoming's oil production is 
produced by 400 companies that individually produce less than 
two percent of the total.
    Proposals like the BLM's last week will hurt those 
companies the most. Very expensive, and there is no opportunity 
like we have in Wyoming to go into a regulated like I know they 
do in North Dakota and work on a cost-based bonding system, not 
a blanket bond where there is no room to talk about what it 
costs to reclaim a well at any depth.
    Senator Hoeven. Yes, and as you said, in many cases, these 
are small businesses, right, that are the most impacted?
    Mr. Obermueller. The impact of a lot of these regulations 
is further consolidation to the biggest oil and gas operators.
    Senator Hoeven. Thank you.
    Thank you, Mr. Chair.
    The Chairman. Thank you.
    Senator King.
    Senator King. Thank you, Mr. Chairman.
    Ms. Speakes-Backman, I want to talk about permitting, and 
we are talking about federal permitting and BLM and leasing and 
all of that. But a lot of the issues in energy development are 
local permitting, state permitting, and one of my observations 
is that often you will have a project, such as the ones you 
sponsor, that have a global benefit, but a local impact. The 
strategy that--I don't know if you are aware--but prior to my 
life here I was an energy developer in hydro, biomass, wind 
power, conservation. We tried to provide a specific local 
benefit to the people who bear the impact of the project. Talk 
to me about that concept.
    Ms. Speakes-Backman. Absolutely. As part of our early and 
often strategy for local interaction and community engagement, 
we very much look for not only how this project should be sited 
or how this project should be built, but what are the needs of 
the community either in conjunction with the objectives of the 
project itself, or what do the communities need that are not 
necessarily related to the energy project or the transmission 
project that we are building.
    And so we go through a very rigorous process of first 
planning community engagement and then executing on that 
community engagement.
    Senator King. And part of that is, as you say, determining 
what the community needs and if the project can meet those 
needs. I think that is an important concept, because saying 
this is going to benefit the earth doesn't help a resident of a 
community that is going to see or experience the project.
    I just want to emphasize something you talked with Senator 
Cortez Masto about, and that is the lack of staff, and that is 
throughout this process, whether it's at the state level, the 
national level, and a lot of these delays, they are not people 
who are sitting on their hands, they just--there is just too 
much. And I take it--you are nodding--but the record won't show 
you are nodding. I take it you agree?
    Ms. Speakes-Backman. I agree 1,000 percent. I have had the 
privilege to work with federal employees at the Department of 
Energy in my past and I have never seen a harder working set of 
folks to work toward the mission of the agency itself. And I 
think that is across all of government. This is why one of the 
primary issues for us or the priorities for us on when it comes 
to permitting, is really making sure that these folks are well 
staffed and consistently staffed.
    Senator King. Particularly if you are going to shorten 
deadlines.
    Ms. Speakes-Backman. Absolutely. Or if we are going to 
increase the scope. So as they have to do more work, we have 
got to make sure that, on a steady basis, so they are not--the 
few folks that are there in the office--are not spending time 
training the new folks coming in, right? We need to keep a 
consistent level of staffing.
    Senator King. Let me change the subject slightly, and Mr. 
Milito, you may want to comment on this. It has always bothered 
me that in NEPA and other kinds of environmental analysis, you 
are looking at the impact of the project, but there is no 
analysis of the benefit, the environmental benefit of the 
project. You can have a project with 100 units of environmental 
benefit and eight units of detriment, but that is all the 
focus. Do you think it would useful, important, and good policy 
to have NEPA and the other environmental laws that assess 
impact to assess the positive virtues of the project as against 
any detriment?
    Ms. Speakes-Backman. Absolutely. As a former state 
regulator, as well, it is the net benefits that really are what 
count, but you have to take a look at both sides of the ledger, 
but the net benefits really are something that you need to take 
a look at. It's not just what the impact is, but what are the 
positive outputs?
    Senator King. Mr. Milito, do you agree?
    Mr. Milito. Oh, absolutely. There are so many factors that 
should be considered in a decision like this--energy 
affordability, national security, employment. We oftentimes----
    Senator King. The world requires trade-offs, does it not?
    Mr. Milito. Absolutely. You need to balance all the factors 
and determine the best approach to moving forward with a 
project based on the consideration of those factors.
    Senator King. Mr. Obermueller, a question--we talked a lot 
about litigation. One of the things that was in discussion last 
year about these permitting reform proposals was shortening the 
period of the statute of limitations on these actions. Do 
litigants wait out the statute of limitations and then file at 
the end, therefore extending the period even further? What is 
your view on shortening the statute of limitations on appeals 
of administrative action?
    Mr. Obermueller. Senator, thank you for the question. I 
certainly support shortening the statute of limitations--bring 
that action closer to the final decision of the federal agency.
    Senator King. So we aren't talking about keeping people out 
of court, we are just saying you can't sit on your rights.
    Mr. Obermueller. That is correct.
    Senator King. And what about some provision to move these 
cases to an accelerated docket in the court system?
    Mr. Obermueller. Senator, any possibility of accelerating 
these decisions would help with the predictability question I 
talked about before, as would the ability to have these cases 
heard in the places where the project actually takes place.
    Senator King. So you are talking about geographic as well 
as temporal?
    Mr. Obermueller. That's right.
    Senator King. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Hawley.
    Senator Hawley. Thank you, Mr. Chairman. Thanks to the 
witnesses for being here.
    Ms. Speakes-Backman, if I could start with you. Your 
company, Invenergy, is planning a high-voltage transmission 
line across my state called the Grain Belt Express. You are 
familiar with this, I'm sure.
    Ms. Speakes-Backman. I am, sir.
    Senator Hawley. As I understand it, this line, if built, 
would carry electricity from western Kansas to Indiana. It 
would cut across, right across the State of Missouri, 200 miles 
from west to east, eight counties, and cover hundreds and 
hundreds of farms. I understand you are also now proposing a 
second transmission line called the Tiger Connector line, which 
would run north and south from Monroe County down to Callaway 
County. Farmers in my state have expressed a lot of concern 
with the Grain Belt Express and the use--your company's use--of 
eminent domain. So let me just give you a chance to say what 
your response is to farmers and rural homeowners in my state 
who don't want transmission lines running over their farms, 
preventing them from planting crops, or having their land taken 
from them for corporate use.
    Ms. Speakes-Backman. Sir, thank you for the question. I 
would say that community engagement is first and foremost in 
our mind when we are developing any type of project. And in 
addition, what we are thinking about is, what is the necessity 
to make sure that lights stay on and that we can improve the 
reliability and resilience of these communities, as well as 
across these communities, from one to the other. And that is 
why we find it very important that we look toward the larger 
view of what is necessary in the communities, but then at the 
state level, and what is in the national interest. And that is 
why we are continuing to work with communities to make sure 
that they understand what we are doing and that they give us 
feedback as to how we should develop these projects 
responsibly.
    Senator Hawley. You say the lights stay on. Are lights 
going to stay on in the State of Missouri from this project? My 
understanding is, as originally planned, the transmission line 
wouldn't benefit the residents of Missouri at all.
    Ms. Speakes-Backman. Lights staying on across the entire 
country. We are talking about----
    Senator Hawley. You are taking Missourians' land.
    Ms. Speakes-Backman. Sorry?
    Senator Hawley. You are taking Missourians' land from them.
    Ms. Speakes-Backman. We are working----
    Senator Hawley. And you have gone to--your company has gone 
to court and sued Missouri farmers to take away their land. 
Now, this isn't speculative. I mean, you have actually used 
this corporate power, which, frankly, I am not sure you should 
have, to seize land from Missouri farmers that has been in 
their families for generations.
    Ms. Speakes-Backman. Well, sir, I would actually say that I 
think about--we would have power that would go into communities 
in Missouri. So I would just--I am happy----
    Senator Hawley. That's the new Tiger Connector line. So 
after it was pointed out that your original Grain Belt Express 
did nothing for the State of Missouri, then you came back and 
said, well, we will add something more. So what commitments are 
you going to give the farmers and residents of Missouri today 
that they will actually benefit from this land grab?
    Ms. Speakes-Backman. Yes, sir. Since we, as Invenergy, have 
taken over this project, we have done an inordinate amount of 
community engagement. We will continue to do direct community 
engagement. This project did not start with us, but we took it 
on and we took it on with the objective to make sure that the 
communities are well spoken to and well heard from in order to 
make sure that----
    Senator Hawley. What are they going to get? Are Missouri 
farmers and residents, are they going to get lower energy 
prices out of this? What--how are they going to benefit? You 
are putting a huge transmission line across 200 miles of land 
in the State of Missouri. You have gone to court to seize the 
land from Missouri farmers. You are a private corporation, 
aren't you?
    Ms. Speakes-Backman. Yes, we are, sir.
    Senator Hawley. How much money are you making on this?
    Ms. Speakes-Backman. I would have to get back to you on 
that----
    Senator Hawley. Would you?
    I'm really curious because, you know, you have got Missouri 
farmers who, in many cases, these are small family farms. These 
are not massive corporate farmers. This land has been in their 
family for generations. They just want to be left alone and be 
able to farm and you are a major corporation who is coming in 
here and taking them to court, literally, to take their land. 
And then the benefit that they get from it is nothing. Nothing 
for the State of Missouri. And you talk about the national 
good. So your message to them is--give us, a big, rich 
corporation, your land, or we will take it from you and you 
should just live with it.
    Ms. Speakes-Backman. Sir, I am sure that's not the message 
that we are trying to----
    Senator Hawley. That's what they are hearing.
    Ms. Speakes-Backman. And I would say that since we did take 
it, since Invenergy took over this project, we have changed the 
direction of the project. We have changed the path of the 
project to suit the communities' needs and the communities' 
demand.
    Senator Hawley. So will you pledge not to exercise eminent 
domain in the State of Missouri?
    Ms. Speakes-Backman. I am not authorized to----
    Senator Hawley. That's a no?
    Ms. Speakes-Backman. I am not authorized to make that 
commitment, but I will certainly get back to you.
    Senator Hawley. You know, that, I think, would be the 
kind--if you want to talk about rebuilding trust here--I think 
if you as a corporation would say ``you know what, we are not 
going to take your land from you.'' You talk about outreach to 
the community and benefits to the community, why don't we start 
with ``we won't take your property?''
    Again, I'm not--it's not clear to me why you, as a 
corporation, should have the power to seize their property. I 
don't think you should. That, apparently, that decision has 
been made and I guess you do. But I would just say, if you want 
to rebuild some trust, number one, why don't you show something 
for the State of Missouri for the residents there that you are 
going to do for them, and number two, why don't you pledge to 
them that you won't take them to court to take away their land 
so that they can continue to farm and raise their families and 
have their livelihood? I am sure you will still find a way to 
make lots of money.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Well, let me thank all of you for your time and effort 
today to be here and sharing your knowledge with us. We 
appreciate it very much. And I think we all know it's a 
passionate plea, but the bottom line is we need dependable, 
affordable, reliable energy, and we can do it cleaner and 
better than anywhere in the world. And I appreciate it so much.
    So the members are going to have until the close of 
business tomorrow to submit additional questions for the 
record.
     The Committee stands adjourned.
    [Whereupon, at 12:00 p.m., the Committee was adjourned.]

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