corum being president of the subcommittee on western hemisphere will come to order it's my pleasure to welcome everyone to today's hearing intitled energy in the americas i'm pleased to have assistant secretary of state for economic energy columnist thomas friedman recently wrote an article entitled nine eleven and four eleven or nine one one and four one one in the this column friedman argues that since two thousand the united states has face two major crises nine one one and four one one we all know what nine one one is unfortunately i was just in my other committee and commerce and we were having  a health subcommittee hearing on nine one one with mayor bloomberg and and others talking about persistent health problems that first responders and and other i have as a result of the tragedy of nine one but for one one well that's he says mr friedman when gasoline prices in the united states crossed four dollars and eleven cents friedman contends that history judges us on how we respond to crises and whether we'll respond to the energy crisis today with gas prices so high even though it's dropped a pittance in the past week or so and consumers demanding answers i decided to hold this hearing to look at the role of the western hemisphere in the production and supply of energy and whether the region holds any of the answers we're seeking the most obvious feature of the energy profile of the western hemisphere is that it is the leading energy supplier to the united states most people think that we get most of our oil from the middle east it's not true comes right from the western hemisphere canada the number one export are to the united states supplies us more oil than saudi arabia who's number two on the list numbers three and four are mexico and venezuela respectively and they round up a list of nations which send the u s over one million barrels of oil per day combined with other countries our region supplies just above fifty percent of our total or oil imports that's right contrary to popular opinion i just mentioned the majority of our imported oil comes from the western hemisphere not the middle east our region also leads all others in the amount of natural gas imported by the united states while the united states has the largest share of proven natural gas reserves in the hemisphere canada supplies more than eighty percent of imported natural gas and trinidad and tobago supplies the majority of our liquefied natural gas or l and g our subcommittee just within the past a year took a trip to trinidad and tobago to speak with officials there about energy but traditional hydrocarbons are not the only energy products where the hemisphere is in the lead between the united states and brazil we produce the majority of the world's biofuels in the form of ethanol while there are questions about what is the right feedstock to produce ethanol and other alternatives the future for biofuels is bright and once scientists unlock the door to sell you all sick ethanol production could increase dramatically unfortunately as we look at energy in the americas there are many areas with which we should be concerned according to an excellent series on energy in the washington post this week output from existing or oil fields around the world is falling by as much as eight percent per year and our hemisphere or oil output is dropping substantially in two of the major suppliers to the united states mexico and venezuela in mexico oil output fail nine point seven percent in the first half of this year compared to the same period in two thousand and seven while second quarter profits fell fifty six percent at a time of record oil prices this was very shocking to me in april president philippe calderon proposed reforming pemex the mexican state owned oil company to give it more flexibility and hiring foreign and private companies to explore produce refine and transport oil although calderon's bill seem stuck there is hope that a compromise might still be found like mexico venezuela supply is more than ten percent of u s oil imports but unlike mexico our relations obviously with venezuela are not close these days obviously venezuela needs us and we need venezuela so despite lots of rhetoric we continue to to march in in lockstep as i mentioned at the recent hearing that we had here in just before this one on venezuela i'd like to see improve relations with venezuela but in the meantime we must be wary of heavy dependence on a country which apparently considers itself an opponent of the us furthermore the increasing natural nationalization of oil reserves by the chavez government is causing some multinational energy companies with the expertise to maintain venezuela oil infrastructure to flee leaving caracas without the ability to keep production of over three million barrels per day just as problems are mounting in the mexican and venezuelan sectors brazil is lining up to take their fields recently discovered off brazil's southeastern coast is thought to hold between five through eight billion barrels while it will take up to a decade to exploit this resource in may of this year brazil was actually one of the ten largest oil suppliers to the united states beating out of oil emirate kuwait yet unlike mexico and venezuela brazil is not burdened with a poorly managed and legally restricted state owned oil company petro brass is widely recognized as one of the best energy companies in the world but when you talk energy in brazil it is in biofuels and energy independence where brazil leads the world our subcommittee traveled to bizzle in the past year i've said many many times that brazil made itself energy independent decided thirty thirty five years ago that it would set itself on a course of energy independence and has essentially achieve that goal the united states can learn a lot from brazil in this regard and i would hope that the united states and we in congress would make a commitment so that the united states could follow brazil's lead and be energy independent everybody says it wants to be ended it penned it we want to be independent but somehow or other with bickering and partisan politics we never quite get there and the time i think is to put partisan politics aside and as americans we can follow brazil's lead in terms of being energy independent because i just believe that we can talk all we want about chile being free in our foreign policy but as long as we are dependent on oil from hostile regimes and questionable regimes we are never totally independent and free and that is why it's so important that the united states become energy independent like brazil so i take my hat off to resilin which made far reaching decisions thirty years ago to develop a domestic biofuels industry which allowed it to become energy independent imagine today what the united states would be like if we w addicted to oil from saudi arabia venezuela nigeria and any place else imagine further if the world could simply say to russia and iran thanks but no thanks we don't need your oil we could actually stop pouring money into the coffers unstable and unfriendly nations we have a great deal to learn from our friends in brazil because in the end the only real alternative for the united states is alternatives we must follow brazil's lead into alternative energy if we're going to break our addiction  and slow the production of greenhouse gases still if we have it bad countries in the caribbean and central america have an even worse in fact seventeen countries in our region are one hundred percent dependent on foreign sources of oil most in the caribbean and central america it's really shocking the u s brazil memorandum of understanding on biofuels is just the kind of policy to help promote alternatives to oil and i was delighted when president bush and president l a signed that understanding with brazil we have selected four countries dominican republic and just came back from dominican republic the other day a meeting with its president the president fernandez so we have four countries the dominican republic el salvador haiti and st kitts and nevis where we are trying to stimulate the development of a domestic biofuel sector now more than one year into the program i am concerned that this process is going much slower than we had hoped and i look forward to secretary sullivan's update on our joint efforts in particular i would like to hear more about the efforts to help haiti promote biofuels in particular the potential as a feeding feedstock for producing bio diesel the trophy which has historically been viewed as a weed is now seen as a possible trifecta for haiti it would provide domestic energy help it would help restore a forest barren hillside and employs thousands of people all things that haiti desperately needs this opportunity must be explored aggressively and i'd like to hear what we are doing to promote this resource for haiti there are opportunities for alternatives throughout the hemisphere and i'm glad that we are working with colombia perrault and other countries on biofuels we need to break our addiction to oil and as co chair of the house oil and national security caucus i think there's no better place to promote the search for alternatives than right here in the western hemisphere so in conclusion as we strive to deal with the crisis of four eleven let us not forget the importance of the western hemisphere to our country's energy profile i hope that we continue to work with our friends to the south as we strive to diversify our energy sources and most importantly develop clean alternatives to oil for the u s in the region i'm now pleased to call on ranking member burton for his opening statement thank you mr chairman mr chairman you're absolutely correct we get fourteen point five percent of our oil from saudi arabia we get four point eight percent of our oil from  iraq we get four point four percent of our oil from algeria we get ten point eight percent of all from nigeria and if you add all that up that means from that part of the world from africa and the middle east we're getting thirty nine point five percent of our oil if you add into that the eleven point five percent that we're getting from venezuela which is not a friend of the united states at least that's what we all think and m chavez seems to reinforce that that means fifty one percent of all the that comes from africa the middle east or from a hostile regime in latin america fifty one percent you know mr chairman i'm for biofuels and i'm for wind and i'm for solar and i'm for the transition to all these forms of energy but while we're doing that we need to drill for oil in the united states and off the continental shelf and elsewhere now you're absolutely correct we're not going to get anything done as we have bipartisan support for a program and my colleagues out the other end of the day is here he and i and neil abercrombie and mr peterson were working on a piece of legislation which is bipartisan in nature one of the things that's been controversial in this body has been whether or not we drill in the anwar and in the legislation that the way this bipartisan group drafted we left the anwar out and the reason we left the anwar out was because that was a controversial area but we did support drilling off the continental shelf and when you talk about drilling off the continental shelf there's a controversy about how far out you go and who should have control so twenty five miles out from the continental shelf we have prohibited in our legislation the drilling for oil then from twenty five to fifty miles out we have said that the governors in the states that are in question can also prohibit drilling in that area so if a state says they don't want drilling off the continental shelf in their area they can stop it from fifty to fifty miles out and it will be a  minimum of twenty five miles out before there be any drilling whatsoever not people we're concerned about looking at our own oil derricks you can't see them ten miles out and you sure can't see them twenty five miles out and there's huge reserve ores of oil twenty five miles out from the united states and the continental shelf the technology that we had ten fifteen twenty years ago which would only allow us to drill maybe three thousand feet under the surface of the ocean now they can go down five six thousand feet maybe even further and the oil der which cost two billion dollars the platforms out there to construct they're very safe when katrina hit there wasn't one drop of oil spills and so it can be done in an environmentally safe way mr chairman this is one of the most contentious issues we're dealing with right now and while we're dealing with it the american people are suffering brazil's economy is booming it's booming in part because of what you said because of their transition to all kinds of other fuel fuels but they're also drilling off of their shores and because of that their economy in part is because of that is because they're doing very well their economy is booming and it's really good because latin america needs that kind of enterprise and kind of economic expansion but here in the united states we're really suffering people are going to chairman and they're spending eighty nine hundred ninety eighty nine hundred dollars for one tank of gas and while while they're doing that we're sitting around here fiddling and it really bothers me if you go out to any gas station mr chairman and we talk to anybody filling up their gas tank they're going to be ticked off an example mr chairman i want to get gasoline the other day and it was a guy pulled up in a pickup truck he didn't know who i was i was standing there put my gas in and i heard him talking to his son and here's what he said you want to help me pump  the gas is paying for part of your way through a college education this is a guy who had a pretty nice pickup truck and nice area of this country the people of this country want us to drill in the united states while at the same time they're very much aware that we should transition as much as possible to alternative types of fuel and new types of energy they want to do that they understand that there's a limited amount of fossil fuels in this world but at the same time they don't want us to be depended on the rest of the world particularly the middle east africa and our friend in south america for fifty one percent of our energy anything could disrupt that in the straits of hormuz over off of iran if  we could have serious problems and i know the chairman took a little extra time so you have to forgive me for going on but i think it's extremely important on a bipartisan basis my colleagues on the other side of the aisle as well as us on our side of the aisle that make some concessions to one another this bipartisan group headed by abercrombie democrat of hawaii peterson republican of pennsylvania about fifteen or twenty of us have gotten together and we worked out a bill and i sincerely hope when we come back in september that we'll move that bill to the floor and i hope everybody will take a hard look at that bill and talk to the speaker about bringing more because it is bipartisan and if we do that and there may be to some disagreement on this i believe that to the price of oil will start to drop the speculators and there will be a movement on the part of the speculators to start dumping some of their their their their acquisitions and i think you'll see the price of oil dropping the price of gasoline drop when the president decided to do away with the prohibition on offshore drilling from the executive branch and price of oil drop pretty rapidly and i think if congress takes action on helping here as well i love you guys let's get together and solve this problem and i look forward to the test vote will  thank you mr burton and i certainly think that we should do this on a bipartisan basis and also look into why the all companies have plenty of areas that they can draw on now and have not i think that should be in the mix too and the well reserves we've seen gas can drop when the price of gas when they all reserves are released and i hope the president can be persuaded to do that as well but i do agree that we need to work in bipartisan fashion miss the serious any opening statements serves and before we get a drop out of it's going to be ten years so obviously when the same predicament here in this country if we start drilling now and also i want to learn a little bit about natural gas we had a meeting yesterday a world commodity and that in terms of brazil day i think you indicated it was a thirty year plan i think we all  regret that in the aftermath of the embargo back in the one nine hundred seventy s when the price of oil came tumbling down  political will if you political will just simply evaporated and we can't let that happen this time as we see the beginnings hopefully  significant decline over the close of the past several weeks in the price of oil i would put forth the concept that  a commodity in terms of particularly transportation fuels that has no competition or real competition at this point in time so the answer from my perspective is to provide those options in terms of how we produce energy to move trucks our planes and our cars and i think if we do that we will really have in place an opportunity for the wara of supply and demand to operate and i want to commend the ranking member too for his call for bipartisanship to solve this problem and i look forward to working with him and my ranking member over there mr roebuck that i owe back intrigued i think nationally in that states by brazil and by their interest and by their perseverance and following through on something that was important to them at that time of course we all recognize important here also echo the  sentiments of solution that american people are looking for and it is frustrating though when the debate goes into this all well if we drill we've solved the problem you know we've all been sort of listen to t bone pickens a little bit and is can't drill our way out of this problem he's absolutely right absolutely need to drill more we need to create more consumption and that's are mixing the more more supply but that is not the long term answer based on our reserves the united states and based on all the other reasons we're already know and pretty i'm from florida it's particularly annoying when i hear people talk about oh we're going to drill off we have to why don't we drill enough cuba or off the coast of florida as cuba's drilling through china that's not true it's been debunked so let's let's make sure we keep the facts on the table because we can work this out  in a very logical common sense let's get the true facts on the table recognize we're going to drill more but our national policy needs to be very much tied to incentives tax incentives and centers for business and entrepreneurs incentives for international environment we're working in here so we need to think that way we can't put up walls around the united states and say this is just our problem or where we make decisions can be limited by what happens within the fifty states we can control that we can control the fact that we do consume twenty five percent of the of the world's energy as on a daily basis right now voile energy but we can certainly recognize we have to do more both in transportation and power and energy sources so i think the gentleman for being here today and for helping us understand what's going on hemisphere so we can make sure that we make policy that is based on facts and will help us both short term and long term the energy is what we do and and i think brazil is a great example they are the world leader and ethanol from sugar based ethanol but they're also big explore and have found some of the that it's a pleasure to have you all right and with that said i am a senior member of science committee as well as being on the international relations committee and one of the arguments that i have found to be very disturbing about why america should not be moving forward full steam ahead in developing our oil and gas resources as well as all the other options i might add is that  it's going to be a long journey so why are we taking the first step in other words it's going to take ten years to develop this so it's stupid to start talking about it as a solution to our problems that is an absurd argument the fact is that everything we do will take time and there is no reason to say that because something that is valuable but it takes time to do that you don't move forward and start doing that  if ten years ago we would have started our oil and gas development offshore crisis that we are now and that is dramatically impacting in a negative way on the well being of the american people would be reduced the negative impact would be reduced the cost the supply would be higher of our own oil and natural gas and the prices would pressure on prices would be less we didn't do it ten years ago but we should make sure that ten years from now america isn't because we didn't do today what we should be doing we are the only country in the world that i know that has significant offshore oil and gas natural resources that have not put a full effort out to try to develop those resource so they can be put to use for the benefit of their own people rather than sending vast amounts of overseas to buy the oil or spill fifteen years ago from a tanker that befouled the entire beach so what we have had is an energy policy in this last thirty years it's been dictated by radical environmentalists so we have not developed hydro electric nuclear weapons and not our offshore oil natural gas or any of these alternatives that we've got in fact right now solar energy projects are being signed by radical environmentalist w know i've just been told by a member here that that's a myth that they have not started with china so that we might that relatively short period of time we might end up seeing the absurdity of having chinese offshore resources how absurd is it going to be or when gas is going to end up with the chinese so i'm looking forward to the testimony and this is an important hearing and it's an important issue because our people their lives their standard of living is going down our enemies are receiving vast amounts of wealth from the stupid policies we've had for the last thirty years which always said oh let's not step forward now because it's going to take ten for economic energy and business affairs and it's an honor to have you with us dan and you know one of the wonderful things about testifying is we get to hear your words of wisdom and one of the terrible things from your part is you have to listen to all of us before you can talk but here's the time and i look forward to the secretary to to hearing your testimony thank you mr chairman and ranking member burton honorable committee members it is a pleasure to be here today to testify in these important issues and to the contrary to the contrary mr chairman and i say this in all seriousness i often learn as much i think from testifying as the members do and so i plan on taking a lot of this back with me as well today but we're very about the attention to these issues that this committee has focused on  and we welcome and appreciate continued support of this committee in our efforts in the hemisphere on energy issues it's already been said it's noted but the united states is facing record high energy prices a drag on the economy a drag on consumer wellbeing and the administration is very concerned about this and i know that the congress as well in this challenge also extends to our partners in the hemisphere mr chairman as you noted particularly those in central america and the caribbean and this is of significant concern to us as well now the challenge of energy prices is rooted in very much a tight global energy market with regard to the fundamentals of supply and demand simply put the world economy with its global demand for oil has been growing rapidly in the supply of oil has not kept pace demand side rising price aspect has been related to a positive development and that has been the significant global economic growth that we have seen throughout the world over the last six to seven years for much of that period the u s has been the driver of that growth and is extended read about china and india but it's extended to latin america in a significant way five point six percent g growth for the region last year and so that in some ways that's a positive story so on the demand side we recognize the need to address demand president's call for greater conservation and take further steps to improve energy efficiency and acknowledge the important work of the congress in the recent energy independence and security act in that regard my testimony however today mr chairman i'd like to submit my written testimony for the record is focused more on the supply side increasing supplies and diversification which is what we see as one of the critical elements of our energy security in the hemisphere i won't go through the numbers mr chairman because you already did but i was very pleased to hear you  and congressman burton know how much of our energy we get from the hemisphere and that is an important very important element of our policy and it is something that i think you're very correct in noting this chairman that most americans do not know this and so i laid out some of the numbers our top suppliers canada mexico venezuela all of our top four total global producers but given the significant volumes as a starting point of our diplomacy is maintaining and expanding traditional sources of energy in the hemisphere and in this regard my testimony written testimony does this but i would briefly like to highlight the importance of our growing relationship with canada in this regard  faced with static production by opec and generally struggling not opec production canadian oil which is significantly increasing is becoming an increasing important component to us in global energy security markets and the administration the state department the department of energy has a very intensive dialogue with the canadians on a number of energy issues but as you also noted mr chairman we are increasingly focused on developing alternative energy supplies in the region particularly bio fuels and in this regard we have focused significant diplomatic efforts from the president secretary of state to many people the state department u s d a on our biofuels partnership that we have launched with brazil and we are very appreciative of this committee's interest and support for this initiative and i would agree with you mr chairman the the future of this initiative in biofuels in general is bright and one of the reasons i mention that is the numbers are starting to reveal the positive aspect of this since two thousand and five biofuels have contributed one million barrels the equivalent of one million barrels of oil per day to supply that's just the biofuels it would be produced in europe in the us not even brazil and the international energy agency has stated that given the poor performance of non opec production and relatively low spare capacity clearly much higher petroleum prices would be in place now if biofuels had not been available so it's an important aspect of our overall energy mix as you know our biofuels partnership is focused in three areas bilateral cooperation in the air of our r and d with the brazilians multilateral engagement and joint cooperation and third countries and i would be glad to go into different aspects of this partnership if the committee members are interested finally mr chairman i want to just mention one final thing and that is to note the importance of looking at energy policy in light of broader economic policies exist effective energy policies in the hemisphere do not exist in a vacuum they are most effective when integrated into broader economic policies transparent and open markets that are free from corruption and reinforced by strong protections for investment this we think will ultimately help reduce are countries in the hemisphere as well as consumer countries to benefit from lower energy costs as i mentioned earlier the u s canadian relationship is an important sample of the mutual benefits that can occur occur from open markets integrated markets and how free trade can help that efficient energy market and reliable supplies of energy by contrast some countries have emphasized status and nontransparent populist economic policies and output has suffered in decline so this is ministration with the strong bipartisan support of congress has made deepening our overall economic engagement with the hemisphere of top foreign policy priority we think continuing that in different areas one example with regard to the passage of the colombia free trade agreement will have a positive effect with regard to our free trade agreements our bilateral investment treaties and other economic initiatives with regard to more efficient energy markets in the hemisphere and will help both increasing production and consumers so mr chairman we are going to maintain our focus on energy diplomacy in the hemisphere i just want to give one final quote secretary rice's recent meeting at the oas general assembly in panama where she stated energy is a vital part of our hemispheric agenda and that we will work together to address the challenges of energy security climate change environmental stewardship and sustainable development in short in the hemisphere we seek to promote the democratization of energy in the americas increasing the number of energy suppliers expanding the market and reducing supply disruptions i would like again to thank the committee for its focus on these vital issues and i look forward to the opportunity to answer questions and also learn from the committee members thank you thank you very much mr secretary a appreciate your  i mentioned in my opening statement about the u s brazil and your cooperation i'm really very bullish on and i think it's something that we need to continue and enhance and as i mentioned i was delighted march of two thousand and seven when the u s and brazil signed a memorandum of understanding on biofuels it was a very important development politically between our two countries and raised hopes for expansion of alternate  sources of energy into arabian and central american nations which have no domestic energy supplies but if we look at what has happened since then it appears that progress with the agreement has been very slow the u s and brazil i'm told have only now exchanged visits of scientists that's about it more than one year after the signing and to date we've spent only a few million dollars to conduct a feasibility study i'm not sure if any production of bio fuels either ethanol of bio diesel have begun since the signing of the landmark agreement so i'd like to ask you about that do you think that the agreement to promote biofuels production in latin america will prove effective or why is it been so slow in getting off the ground what investments is the u s government making in support of the agreement and what obstacles exist to greater brazil us cooperation in the area and  let me add that it's my understanding that in the dominican republic and el salvador who are both as i mentioned participants in the u s brazil understanding and they are both countries with established sugar sectors it has been difficult in both the d r and el salvador to entice sugar producers to use some of their production for ethanol their sugar contracts are secure and predictable where switching to ethanol carry some risk so i'd like to hear you know your your opinion about is it true is there anything the u s in brazil can do about this sir thank you mr chairman and first again in all sincerity want to express our appreciation for your support of this initiative and and i can assure you that we want to move on this initiative as fast as we can and as in a compliment comprehensive way as possible and  the committee's interest the committee's even prodding on this issue is important and we will be responding to that but also we are committed to this just a few points on  that we think we have made significant progress although as i mentioned we are committed to making more progress and really in many ways accelerating progress i'm not trying to make excuses at all because it's been a huge  focus of the state department to this initiative however the initiative is about eighteen months old it's new we think rather innovative it involves a number of different partners which sometimes  not always the best way to accelerate things and what we do think that significant progress has been made and as i mentioned there are three areas  e r and d bilateral cooperation as you've noted we have an exchange of scientists that's a physical exchange but there's been a lot of discussion both from the diplomatic side private sector  interests so it's just it's it's broader than just simply the two the two exchanges that actually physically exchanges occurred multilaterally we have been working through the international biofuels forum to work on standards and codes between us and brazil and again this is a process that brings our our our standards bodies together to identify where we have similar  standards and codes where there's a divergence and we've actually made a it sounds technical mr chairman chairman but as you know that's an important element to the overall global commoditization of biofuels and we have made significant progress on that looking at areas where there's similarities and differences in starting to move forward in that regard and then finally as i know you're very interested is the work that we've been doing in the  with the third countries the first the first tranche of third countries and in that regard mr chairman one of the things that i want to emphasize here is that a lot of the work that has been that has been the focus of our efforts has been with regard  cooperation with the brazilians and the oas on technical studies that look at the legal and regulatory framework of these four countries and although that sounds somewhat technical and  at this juncture hasn't led to a dramatic increase in biofuels production we think that helping these countries get that right get the investment policies right is very very important  to move forward on future progress and so that's that has been where the focus has been and we think that focusing on that now will pay dividends in terms of future production but  chairman i appreciate your sense of urgency on this we hold it as well and we will be looking forward to updating the committee on ways that we can do that in the future tha ethanol by imposing a two point five percent duty plus fifty four cents per gallon on the fuel i personally think this is a serious mistake we have no tariff on the import of oil but a heavy duty on the import of ethanol this in my opinion only deepens our addiction to oil by blocking a key alternative so i'd like to ask you what is the administration's position on the ethanol tariff and is it time to eliminate the thank you mr chairman as i noted my testimony and i do want to note this again the importance in this is obviously a very important question i can say we have a very close working relationship with the brazilians on biofuels they've raised it with us not surprisingly although i do want to emphasize that the kind of government support that we have in the u s with regard to development biofuels industry is not unlike what you see what you have seen what you've seen in other countries including brazil which has over the years had significant billions of dollars of government support in terms of getting their industry up and started to a mature level similarly the e u has significant support as has significant government support with regard to with regard to its industry that being said as you mentioned it's an important issue and for right now the administration's position is that it's respectful of where the congress is on this course respect that decision that will be made by congress that being said it will be it will be important as the industry matures as the globalization and global trade of biofuels continues as the mandate of the energy independence and security act the outlook of meeting that mandate becomes more apparent obviously there will be to to shift and eliminate that let me ask one last question before i turn it over to mr burton and that is about haiti and i mentioned this also in my in my opening statement as you know haiti is the poorest country in the western hemisphere  i believe that we have of an opportunity now to save haiti if we don't i think haiti will once again become a failed state and it might be another twenty or thirty years before we can even do anything that's why i think it's so important to help haiti now but it's one of the countries in the western hemisphere which has no domestic energy resource and because it's so impoverished impoverished we should do everything possible to help them develop a biofuel sector i think that could be a very important in helping them go away from poverty and it would not conflict with food growing i believe if we do it correctly biofuel potential was recognized it does not require much water it can be grown on barren hillsides and will not therefore conflict with food growing and cultivation and industrialization its industrialization and cultivation can employ thousands if not tens of thousands so while we've funded a few studies i'm not convinced that enough is being done to promote a biofuel sector in haiti based on your trophy so let me ask you about that let me ask you about what will be needed in haiti to make this sector work have there been any projects that the u s and brazil has funded in haiti on biofuels under our u s brazil agreement is the o or any other group funding biofuels in haiti and how long will it take to develop the thank you mr chairman as you know the administration shares your concern about the economic and social political development of haiti and we've been very focused on that as you also know where the united states is the largest bilateral donor to haiti we also recently contributed significant emergency food aid to haiti during its recent and continuing problems with the increase in food and to answer your question directly the answer is yes we are looking at haiti as you know it's one of the four countries w the activities that we're interested in beginning and focusing on there have been difficult to cement given the transition of the of the government and but i wanted to lay out two areas that we are stand by in terms of readiness to fund both from the u s side and the oas side one with regard to what i mentioned earlier is the legal regime study technical assistance with regard to that is being prepared in terms of technical assistance for about three hundred thousand dollars from the oas that's one the second is another three hundred thousand dollar project that would come from the u s that would  focus in the area that i know is of interest to you and is of interest to the administration which is with regard to jatropha and it would be and again we are right we are ready for this and we've just are dealing with the short term challenge of the government in transition in terms of signing this study and moving forward with what we think would be a study that would be would reveal some of the potential  in haiti with regard to jatropha and as you mention we do see potential although in terms of cultivation it's not a large element of what they're trying to do yet but we think as you noted the you know one of the things that kind of bothers me about this place is i go to committee hearings that really don't amount to a darn and the media is there this is probably one of the most important hearings talking about energy in the future security of the united states from an energy standpoint that i've been to there's nobody here well there's a few media people here but the t v people are here i just don't understand how you watch all these television shows tonight and they'll be talking about somebody child was kidnapped or something the whole country is suffering from energy and the media is talking about kids someplace i mean i hate to see those kids kidnapped you know put on a boat and sent someplace by their father but you know we got three hundred million people here are suffering because of energy and there's no media here except that young lady over there how don't understand this place at the dawn of the one nine hundred seventy three and all my colleagues a list of this at the dawn of the one thousand nine hundred seventy three global oil crisis brazil whom we're talking about today imported nearly eighty percent of its oil and as much as forty percent of their annual exchange income went out of the country forty percent of what they made was spending being spent for imported oil today they're exploiting oil and while all remains the dominant source of transportation energy and right now even though we're talking about biofuels these other things are very important oil now remains the dominant source of transportation energy in brazil and while ethanol production has helped offset all imports so to have a major overhaul of the domestic petroleum industry and a massive yet this massive increase in production of oil from offshore drilling we're facing today the same thing that brazil faced in one thousand nine hundred seventy three one of the things we had those oil problems back into gasoline three and four blocks long because of opec migrated friend from massachusetts we remember that but because we had such a resilient economy we were able to survive that brazil suffered much more than we did because we didn't have as vibrant economy as we did so they decided back then they were going to do something about it and they looked at biofuels and alternative sources of energy but they also said we got to drill because the predominant source of energy is oil and while this transition is being made we're going to have to get energy we are not doing that and and and gas and electricity we need to look at all those but at the same time we can't keep our head stuck in the sand like an ostrich and let this country go down the tubes does anybody realize that we're paying over four dollars a gallon for gasoline and that the people of this country are suffering they can't afford it and that the cost of food is going up in the cost of everything else is going up because it's being transported by toil and it ain't going to change overnight and i just don't understand why this body can't understand it it's something that's kind of academic to me i just don't understand it anyhow now that i've been in my spleen let me talk to you mr sullivan real quickly what time i have left about and i talked to mr rohrabacher about this while ago about the intrusion into our hemisphere if you want to use that term maybe that's not the right term to use of china and india and gobbling up as much as possible our energy resources and how extensive is it mr rohrabacher and i were talking is there a contract assigned to do we anticipate there's a contract that's been signed between cuba and china to do or like for lay exploration off the coast of cuba so if you could give us some kind of an insight into whether or not we have a real problem down the road with china india and other countries that are very growing economies and taking our energy resources and other parts of the world  thank you congressman burton and what i wanted to first make a comment with regard to your earlier comments about the need to increase hydrocarbons and transition to alternatives i think in many ways that's the essence of what we're trying to do in the hemisphere and i tried to lay that out in my written testimony and so that is kind of the focus of what we're trying to do at least internationally in the hemisphere and with regard to china and india  i think i'd like to first know a few things one is in some ways they find themselves in a similar situation that we are in terms of significant china for example still a significant producer like we are but also significant consumer of oil coal gas way we are so in many ways  our interests on working together lie so one thing that we have done not necessarily within the hemisphere but in the international energy agency which is focused on consumer country interests have deepened our engagement with them in that in these organizations because there are some common interests and i think that's an important point to note in the hemisphere to the extent for example that there's chinese investment in the hemisphere that is helping produce increased supplies of energy for global market that is helping to increase employment in the h e and is done in a transparent manner which is something that we've emphasized with our chinese counterparts when they have made investments in places like latin america then that can actually in some way be constructive in terms of bringing more hydrocarbons to market or global commodity if there's more on the market it benefits us with with respect to your specific question of c hinese and gauge within the cuban energy sector we've noted media reports on this as well however we have no indication that china or sent a  package is engaged in such operations we do know that the chinese national oil company sent a package has rights to an onshore block in western cuba but that's that's the extent i know there was interest here that's the extent of the information that i currently have on that situation percent are used as a are used in transportation fuel is that accurate congressman i don't have the exact numbers on that but our power generation sector as you know is not primarily driven by oil or gas i'm here it's other things i feel rather confident in those and i can and we can get you the exact numbers if you like that right now i'm i'm rather confident in in  those figures at least as is reasonable as that so that as i said in my opening remarks is that it's transportation fuel in terms of our national interests and our dependence on oil that is of concern and that's why i find the brazilian  experience very informative for example in my home state of massachusetts we have about six million motor vehicles on the road today eighty thousand out of those six million a so called flex fuel vehicle eighty thousand out of six men now it's my understanding that in brazil at this point in time every car that is produced maybe the figures and eighty and ninety percent of so called flex fuel vehicles if i'm correct in those estimates and i feel rather confident that i am it's not just simply the energy source that is problematic but it's all the vehicle itself and here we have american automobile manufacturers for general motors that are producing in brazil and i'm don't have a similar production here in the united states in terms of that kind of capacity now as i travel and i  go from my home in quincy down to the cape i see more and more prius now i understand that that is a motor vehicle hybrid that is produced by toyota a japanese company when the other day i took a cab ride it was a prius i took a cab ride and i asked a cab driver what do you get i said about sixty miles ago i mean it's it's a broader problem i guess what i'm looking at from you in terms of the brazilian experience did they utilize the mandate  creating this diversity in terms of the a transportation fuel in other words did it automatically happen that they produce these kind of vehicles and we have failed here this is all congressman my understanding and we can we can provide you with actually more details on this what they actually did but is that that they did do that and i do want to make a point though that what we're doing domestically in some ways and again the energy independence and security act that was passed by this congress signed by the president at the end of last year has very very significant mandates on the production of biofuels and the likelihood of that helping to drive the market is probably pretty strong  a catalyst in terms of achieving diversification and i think that is the target that we need we need to have options to oil i mean in the end we're going to have  motor vehicles that are a hybrid they are plug ins and hopefully they have they have the capacity to be flexible in terms of the fuel that they use i'd like to just address the concerns expressed by the gentleman from california in the gentleman from india about cuba drilling off of the the coast of florida it's my understanding nations the corporations that are exploring in the optional waters off of cuba it's my understanding that it it it is the it is india i think that you thank you very much for five minutes mr chairman about the point that my colleague just made i noted the wording that you used in answering mr burton's contrary and again we can get back to you with a more detailed answer i think the answer i have presently is that the chinese national oil company has rights to an onshore block in western cuba if it's right so i would imagine there was some kind of contractual arrangement but i don't know but that is not encompassing the question of course and you're going to look into that whether or not there have been contracts with the chinese for or shore oil drilling in cuban waters because again whether or not they have a contract for on shore doesn't answer that and whether or not they are the extent of the information i have so i don't know anything right now about an offshore contract let me suggest that if we are that issue's been around now for a few months and that perhaps you should know about that because that's an important item i disagree with our my colleague it is the same as the indians are the others  i see china as a potential adversary not enemy of the united states in the long run now perhaps they'll have some liberalization of their political system some day and i won't say that because chinese people are friends it's just that their government has a you know it's the worst human rights abuse around the world and stamping out their democratic elements and their people who believe in religion so that would make a difference to me but let me know economically my colleague is correct economically it makes no difference whether the chinese or the indian or anybody else it is a travesty to have other countries drilling within  within eyesight or forty five miles off the coast of the united states because they happen to be cuban waters in that area but american companies are not permitted to do that and of course that oil and natural gas that they're drilling for is bound to be coming from a pool that actually americans should be participating and that will have a negative impact on our economy no matter what we're given to another countries companies so that would be a travesty but my friend  particular plant can be squeezed right into diesel fuel clean diesel fuel and the production of that plant on that diesel fuel than could be done by thousands and thousands of people would have jobs and employment as well as the benefit to their economy of producing their own plane of fuel right there in their own country so i and let me just recommend that you mention studies i would hope that the study  countries don't need studies what they need is investment and what we also need in this particular project is perhaps some research money into making sure that this plant that already offers a great deal of promise if genetically altered could even do a tremendous more for these countries and i would suggest that studies as to how to market it you don't need that three hundred fifty thousand dollars study maybe just you know not something that would be as valuable as trying to actually help the situation where they genetically altered the plant and finding ways of getting that invested there are people ready to invest in this throughout latin america we should be encouraging them your reaction that's all thank you congressman just a quick point on that just to reemphasize a point i made earlier i mean i know the word studies sounds a little bit bland but what they're really trying to do is look at the legal regime in these countries in terms of the best way to help set up and structure policies that will promote private sector investment so that we think is an important first step but we agree we agree with you fully that the focus has to be creating the environment to bring in the private sector and that's why we've had also outreach in our initiative with the private sector  well so the studies i know it sounds a bit bland but it's focused on a much larger more important objective and that is to increase private sector investment to increase domestic production and you're also  correct congressman when you when you know the transformative nature of what can happen with regard to biofuels in the hemisphere and that's why we're very excited about this initiative that's why you've seen support from the president  the secretary of state on down we are very very focused on this diplomatically and again we're just starting but we see it has a tremendous not only in the four countries that we're talking about but as you know there's countries throughout the hemisphere particularly in central america and the caribbean but once we move on to sell you law sic the potential for this in the hemisphere and even other countries in the caribbean basin is going to be significant so we really see this as a transform  way to move to the alternative while also working on increasing traditional  venezuela i'd be glad to talk about that i think at least from the public numbers we've seen in the international energy side of these numbers and i think was already cited earlier by one of the members of the committee we've seen the production declining in venezuela and again from a global energy security standpoint we would welcome a dramatic increase in terms of venezuelan production would have a moderating effect  on prices and it would also help some of the countries in the region that are particularly chairman engle noted are particularly vulnerable given their one hundred percent  nationalism i noted in my opening statement policies that are focused on state control nontransparent it doesn't bode well for a dramatic increase increase the policies at least what we're seeing in venezuela with regard to the industry don't bode well for such a dramatic increase in production  the case of mexico which is third largest supplier of crude the united states accounting for about fourteen percent all continue to be so important for the mexican economy and accounted for almost sixteen percent of overall  reasons for the production decline as you also know we have a strong relationship given nafta and others with regard to the mexicans on the number of economic issues including energy and you correctly point out that there is a  reform process being debated in mexico however i don't think it would be helpful as a u s government official to speculate on where that process may or may not go that's something that is going to be solely decided by the mexican government with all due respect i'd rather not comment on that well let me talk about the difference in one last question for our turnover the real chairman energy producing countries in latin american companies are forced to compete with the state owned companies well i think in some ways and it was noted earlier that you noted that certain countries are open to investment and brazil has  an example of one where they're managing their resources well and so one of the things that we have done and been focused on quite a lot throughout the hemisphere and i mentioned in my opening statement is we have been very focused on trying to set legal framework bilaterally through trade agreements whether it's free trade agreements and we have under this administration increase significantly in the hemisphere or even bilateral investment treaties we have a number of existing bilateral investment treaties and we have signed an additional one over the last two years in the hemisphere we think those are very important both in terms of creating the open market  environment that's important that can lead to investment but also with regard to protecting investment in american interests with regard to resource nationalization that does occur and  the state department takes any kind of dispute under those treaties or those bilateral investment or free trade agreements very seriously and we think that they both help protect investments but also  help increase production so that's an area where we focus with our colleagues at u s t r in the commerce department and we do think it helps and so that's another reason why i mention the colombia free trade agreement in my opening statement because it's hard to separate energy policy from broader economic policy in the hemisphere and the more we engage on deepening our economic engagement through agreements through bilateral investment i think the better in latin america but throughout the world because having knowing those are they actually help us businesses to both invest in for the benefit of not only their own profit but also for those countries so that effort is chairman thank you very much turn back t mr secretary let me just ask you one one final question  let me ask you a question about alternative energy crops as replacements for coca in peru and there's been some efforts to replace cocoa with ethanol producing crops and that's interesting to me this process has multiple purposes including reducing the amount of coca cultivated in the region obviously we're improving the livelihood of poor farmers and promoting alternative energy what can you tell us about what the united states is doing in supporting efforts in peru or other andean countries to help create biofuels industries in cocoa producing regions thank focus at least for the initial tranche of third countries has been in the caribbean basin we haven't focused on in terms of that partnership in the andean region nevertheless as  e in my exchange with congressman green we see that the potential for biofuels throughout the hemisphere is significant and one of the sayings that we one of the reasons why we believe it's so significant is because and secretary rice has used this term because we see it is the possibility of being transformative beyond just energy issues but with regard to economic development employment increasing production in agriculture sectors and so it's a very interesting question that you raise and given the however that my bureau does not directly deal with the cocoa production issue and the indian region that is quite an important one for the state department need ministration what i'd like to ask permission is to be able to return with a more detailed response to your question from r i n l bureau that  focuses on this issue on a daily basis thank  some questions if i could that would be we we would welcome that ok well both of our new jersey colleagues are are helping us along this morning mr secretary let me thank you for your testimony and is as always it's a pleasure  to work with you we appreciate everything and anything that you could submit to us in writing would be very much appreciated and i thank you very very much thank you mr chairman and thanks again for your interest it's very very important in the members of the committee to the work we do and we feel strong support from this committee and that's very helpful for us thank you very very much we'll have a one minute break and then i'll call our second panel say you are surrounded by mr martin's measures martin both so let me let me call on dr mendelson foreman about the issues of energy energy security in america is an important issue i also want to commend the committee and particularly the chairman for his longstanding interest in this job related to the caribbean to haiti and to the tireless work that he has done promote something so important to our own security and the security of the region i'd like to request that my written statement which i've submitted be entered in the record without objection let me let me add to to all of our witnesses that if you would summarize and just have your written statement entered into the record we'd be happy to do that and i think would be the most efficient way of moving along so without objection thank you and i want to make sure in doing the summary that we don't repeat many of the important facts which been said not only by the chairman and the ranking members and other members but i want to go forward to some of the specific questions that you raised when you were kind enough to ask me to appear before you  but i must just on a personal note say that thirty years ago when i finish studying latin american agrarian history the honor of doing something related to sugar and sugar plantations and i think that thirty years later that the same that i worked on in colombia would be the source of biofuels i was recently asked to return to the scene of the crime to cali that i had worked on one of the largest ethanol producers in the country of colombia so things come full circle and i think the way we learn from the past we can also apply it to the future so let me start with that we know we've already heard from the chairman and other members about the importance of the western hemisphere  supplying the united states with our oil i also want to mention that because of the diversity of the world diversity comes from latin america it's an extremely important area not only for petroleum but for other clean clean energy sources at a time of increased concern about climate change this is very important as we look at alternatives to think about the carbon footprint and particularly in countries of the caribbean island states close to our own border population growing and the number of people being thrown into poverty because of the petroleum costs that we must do something and providing the long term into stable alternative something that members of this committee have talked about certainly not the answer to this problem even though right now there are sixteen countries that subscribe to it and get a reduced rate on oil we cannot look at that in any way as a way to solve the energy security of the region latin america is really production one percent of the arable land this is clearly a success story country the largest the united states that certainly can be emulated and obviously the cost is very reasonable and we know that this is one of the reasons why the rising economic power of brazil is continuing to rise the front page of the new york times today had a wonderful story about progress and i think we know that part of the answer comes from renewable energy raised a few questions about the u s brazil energy chairman's concern because even if we were to if we want to meet the goals of the energy security act we have to have other sources and we're going to need all the ethanol we can get not only from our own domestic producers but from the taking the technology that they learned in brazil and helping the other large sugar producer in this hemisphere be able to convert an industry into something that could down the road be a very important platform for us energy security the politics energy puzzle energy supply puzzle and what i'd like to do quickly right now is offer some berther insights on several of the most important producing nations in the region their production outlook geopolitics i want to do this through three main points the first point is that not all countries are the same it is important distinguish between a growth above ground and below ground issues secondly the region short term outlook is one of pervasive uncertainty and turbulence in several key countries but on the other hand my third main point the region's long term outlook is a glass that i would say is at least half full when you start getting into a little bit of what i call not all countries are the same when i was asked to testify to the production profile and investment climate of the major oil and gas producing nations in latin america i thought about it a bit on how i could try and quickly summarize it so in order to do so i think it is important to distinguish between above ground and below ground issues and that is to say in many cases a country's oil and gas in oil in the ground may be less important than what is occurring above ground in the halls of government and in the geo politics of the day in many cases poor policy planning regulatory hurdles changing rules of the game and other issues can be more important than the geology of a given country whereas i like to say not all countries are the same nor do they act the same way so let me quickly run through some of the countries that i think we should call attention to in latin america and i'll do that alphabetical order so and so no one's nose gets put out of shape bent out of shape your start with two thousand and six however and i'd like to add this to this question this morning it's important to note when we talk about brazil's oil self sufficiency vs of the united states the difference in market size brazil's daily consumption is just over two million barrels a day so extremely important what happened in brazil but i think you have to know the difference in size of market these of the united states so tremendously important everything they've done by did want to make that point as before i went forward in moving back to the success and where they how they got to where they were for our picture process which is become one of two largest companies in latin america and certainly one of the largest oil company oil companies in the world and increasingly a dominant player in our hemisphere for  grass and i also want to reiterate the statements made earlier today about the potential for brazil the two b field five to eight billion barrels of oil equivalent as well as the jupiter gas field the carioca field which they're analyzing now to determine the potential of those fields to be looks like it'll be the largest offshore discovery in the americas since the cancer oil field in mexico in one thousand nine hundred seventy six so while tremendously important for the reasons energy balance these huge discoveries have in fact cause increasingly debating an increasing debate in brazil  how to move forward with increasing our additional oil and asked exploration blocks there are a myriad of opinions and ideas within the government but changes to the current market friendly risk contract bidding process seem possible down the road or at least some sort of reconfiguration of the way the system is run now concessions so again my point what occurs above ground may be just as important as the huge news coming out of brazil in terms of its discoveries and potential ascension to the ranks of one of the world's largest oil producers and let me also now move to colombia we haven't really talked much about colombia in terms of one of the nations producing oil in the hemisphere and i'd like to also call the attention of a success that's happening in colombia so successful moves by the government faced with the planning production colombia began a major revamp of their orly gas sector in two thousand and three under president uribe the reorganization of government agencies in colombia has been touted and created some of the most attractive investment terms in the region investment more than tripled since two thousand and three reaching almost two billion dollars in two thousand and six war over oil production is slightly recovered in recent years to about five hundred thirty four thousand barrels a day and this is effectively pushing out the timeline for colombia's switch over to an energy importing nation what i think it is also important at this is significantly still down from the eight hundred twenty one thousand barrels a day that they peaked at in one thousand nine hundred ninety one i also want to call attention to the efforts in colombia as part of this government reorganization eco patrol the national oil company eco patrol quiting contrary to the what's going on elsewhere in the region initial public offering in late two thousand and seven that raise over two point eight billion dollars for the company and they've also announced in september they will go to an a d r in the new york stock exchange that brings me to mexico and i think we spent a good bit of time this morning again and on focusing on mexico's production but i think the point is that mexico's production is declining and that is a key element to look at in terms of what's happening in mexico and since a peak in two thousand and four three point four million barrels a day mexico's production looks like it'll drop to about two point eight million barrels a day by the end of this year and that is largely to do due to the client in the massive cancer will feel and the fact is that mexico's oil exports united states have drop by nineteen percent from june of two thousand and seven to june of two thousand and eight and again that is because their counter oil field is declining by something like thirty five percent and i think it's also important to note in mexico with the role of pemex the national oil company and i think somebody mentioned the role of the golden goose and that is in that is exactly what pemex is in mexico what accounts for about forty percent of the federal budget and largely  takes care of the federal treasury and that is in fact why the issues that pemex are the core of reform legislation introduced by president calderon's government this past april and being furiously debated currently in mexico and it looks like there is no exact outcome yet in this as to how that reform proposal will be handled by congress what it will finally look like and in fact is very unclear as to the role of the private sector eventually in mexico and the reforms that pemex will undergo but it is very obvious that the evolution of pemex and their future role is the linchpin to mexico's long term energy help in coming back to my point i think that nowhere else in the hemisphere is it more emblematic than mexico as to the role importance of aboveground issues and in fact the above ground issues in mexico date back over seventy years i think we talked about the role of trinidad to boggle the our number one and you supplier they are a tremendous success story in how they've turned a commodity into an added value in terms of developing l n g industry in the country for export my written testimony or statement for more on that let me let me go through just venezuela real quickly and i just want to make the point that there's lots of different numbers on the table as to the production and i'll leave that in my written statement as well but let me just say that nowhere is the intersection of politics and energy more acute than in venezuela president chavez has been very clear as to the role of the new pet of the nation social development agenda as well as in terms of regional geopolitics and region relations and their approach to a new aboveground paradigm for oil producing nations and national oil company how venezuela balances is tremendous below ground potential with the above ground issues facing its oil and gas sector will be critically important for the long term outlook  let me make a couple quick points as to how i see the region short term outlook and i think just for the sake of an analogy the best way to sort of look at is a roller coaster and there are several issues causing the up and down ride of the region's energy rollercoaster political and economic crises the trend in some countries to greater state control and participation in the energy sector renegotiating energy contract terms changes in government this idea of an energy rollercoaster refer to the current a short term situation facing the region and while mexico bolivia ecuador venezuela seem to be a clo fit for the rollercoaster analogy in today's latin america in ground potential of each nation is significant and demands a long term outlook and do so indeed i think the long term outlook in view is that latin america does not lack potential or the requisite reserves to greatly aid our entire hemisphere energy balance as recent discoveries in brazil underscored the status quo is changing is not just a question of the region's potential but how all countries and companies can best work in a cooperative collaborative manner to assure the long term development of this distain ability of oil and gas without question the opportunities are complex but given the potential latin american energy glass is at least half full the long term and some final thoughts i'd like to say coming back to this discussion earlier about national oil companies in what we can do and i'd like to suggest we focus on the positive partnership and cooperation not competition there should be a shift in focus i think in how we work and how we work in concert how to partner how to find win win opportunities and i'll give some examples that i think point to how this can be done  colombia patrol which i noted is undergoing important evolution as teamed up with shell to win a block in the u s gulf of mexico offshore in colombia eco patrol is teaming up with petrobras and exxon mobil to develop an offshore project in their waters and there are myriad examples of petro bra's working in brazil with foreign oil companies international oil companies to develop their massive reserves and even in venezuela chevron partnership with pet of acer remains strong and latin america portfolio in critical to venezuela desire to export natural gas perhaps most stunning is the possibility for mexico's pemex to move outside of mexico for exploration and production of oil and natural gas they've been approached by petrobras with an offer for a project in the u s gulf of mexico so again latin america is a region with huge needs huge needs an investment in energy and infrastructure and an importance for us market i think is right with opportunities in two critical for us not to i think the success so far of the us issue don't you think or don't you and i ask this of all of you don't you think that from a security standpoint as well as an economic standpoint we should be completely or as dependent on foreign oil as we have been and should we be doing more drilling here  off the continental shelf or wherever so we can move toward at least toward energy independence while we look at these other sources of energy and try to transition so i'll start with you mr martin i would i would agree with what i think the point that's been made several times that no option should be off the table i think this is this is a problem today's oil crisis energy crisis is a problem that's taken thirty years and it's something that can't be dealt with with a silver bullet all options should be on the table so to answer the question offshore drilling should be one of those options on the table i think one thing i'd also like to suggest is we be careful as we talk about energy independence i think as i noted the difference between brazil and the united states is stark in terms of size of markets i think we sometimes fall prey to this idea that we can be energy independent brazil is not energy independent their oil self sufficient so i think we would like i'd like to distinguish between those points but yes all options should be on the table offshore drilling i just hope you're one of the leaders in the black caucus one of the leaders and democrat caucus i hope you'll look at mr have a problem and mr peterson's compromise bill that has bipartisan support it will they took anwar off the table because that was one of the controversy let's use even though i'm for it i understand it we've got to get the votes necessary to pass a bill therefore drilling on the continental shelf there for the other forms of exploration there's a lot of compromise in that bill and i would hope that the democrat caucus my democrat leadership would look at it and i'm going to talk to our republican leadership because this is an issue as mr martin as well as mr martin's instrumentalists has said is a national security issue as well as an economic issue and if we don't get on with what you know i'm really worried about not only the the economic impact but also the security impact this is going to have on the united states without your background my time thank you very much  me ask a question i've heard for those of us who feel that at this time drilling at this particular time should or should not areas where drilling can can happen that licenses that the companies are not drilling with now does anyone know about that issue and and if why the oil companies maximizing the licenses that they have already before talking about opening up new areas unfortunately i would take a crack at it i think that there was a lot of oil there to be brought to market that the price of oil today i don't think there's a lot of oil there that's available certainly on the short term there is not is taken meetings on this issue with experts from the industry and they say that if the geological and studies show that there's oil there and the test will show there's oil there they will drill it cost about two billion dollars for each one of those platforms to be built and so they have to make sure it's economically feasible before they'll start that kind of drilling and so they if there's oil there as mr maher just said they want to get it and they just feel like there's not enough areas that are developing you know controversy about the i guess the amount of negative impact on the environment that this process does i don't know if any of you have any expertise in that area  enables these kinds of projects these kind of extremely capital intensive long term projects to actually be feasible in economic terms so i would add that and i would also add that the carbon footprint that has to be  much much less expensive in the short run i'm very glad to hear someone talk about the fact that you know perhaps we need to really invest and seriously and alternatives i i'm one and don't believe that you can drill out of it either i mean we have a drilling all of the atlantic coast and finding nothing or spills coming up on our jersey shore's and florida sure of course in european country or the u s and do the extracted processes i guess just almost finally sometimes here i'm not sure if i want may want to make this my last question on that but i probably will just the used to be chairman right when i was down the hill i mean look at what happened in venezuela but i have a question about venezuela you know the with the you know the s you know they don't like the government there however what i have heard is that chavez sort of discovered that there was a lot of profit in oil i guess it wasn't as great then as it was now but it was always doing ok but the previous governments that you know we had good great relations with did very little with the profits to assist the people now  i wonder you know if a person from what i've read about chavez that they've opened health clinics brought a lot of cuban doctors to open up schools and so forth using some of the petrol money for those purposes do you know have any idea why previous governments didn't do that when it seemed like real populist kind of thing to get the people behind you and his leadership in the country president chavez was elected has been reelected and stays in power is because of some of the faults in up shortcomings of those previous governments and as we see in other countries around the region the election of some of these what we're calling populist leaders is in fact because  day it is a national oil company and it does need to explore for produce refined petroleum gas thank you are are they doing exploration are they putting money into you know new equipment  just going along you know they are and i think there was reference to the presentation and there has been tremendous amount of investment that continues to be a tremendous amount of investment there have been some pick ups that have been noted by discard the long term potential especially as they move forward certifying the or which is going to be potentially dangerous for our energy balance and we love mexico they have the same kind of national oil company are they building schools and open up health centers and are they putting the money into the people because they must be doing the right thing for the u s is that we love mexico and we what that is a real problem i guess some of the places that are really have a tremendous amount of funds like to buy making plans for when they run out but of course that's really kind of an anomaly when small generally the success of the industry starts to wane and the production of the industry starts to fail and i think that one of the reasons why venezuela's production has gone down it's not necessarily because the resources aren't there it's because me just say sir in the in the abstract absolutely i agree that the private sector can be much more efficient at the oil business than a state run enterprise but i think what we need to get to is one of the points i made and that is not all countries are the same nor do they act the same way and i think we need to look at it how this happens where we can get into those myriad details but the fact is that each case is very very unique  run by the government i don't know they hire private people to run their government i mean government run and they're pumping oil everywhere they can and  and then it even it seems as though i don't know how those middle east companies work but i count on them by you know some families and not necessarily shares on the stock exchange you know from what they tell me in dubai or saudi arabia so this whole industry i guess a country is different is much of it seems to be the same now but i guess these other companies find mexico the reform legislation coming up short because it doesn't concessions are terms for offshore mara for blocks that would allow for risk contract which is an international company seeking out so i think  the beaches of venice of of your state in the last five six seven years even with katrina all of there's not been one drop of oil that's been spilled from offshore drilling yet just last week in the mississippi river two weeks ago a tanker going there split the two and all went everywhere the main threat to environmental problems as far as oil is concerned and pollution is concerned right now is the tankers bringing on oil in from other parts of the world when you have a huge storm at sea those tankers have a tendency to founder or break up whereas the oil rig even in katrina as bad as it was didn't didn't spill wonderful well double i just want calling for him to be truthful but although i do find this interesting and so you know back to the chairman city september eleventh the health crises obviously since i represent a district in new york city and its suburbs i'm very concerned about that so i i do apologize let me just wrap up a couple of questions let me let me first ask dr foreman because you mentioned in your testimony you talked about eighty and you referred to some of the things that i had said in my opening operation than conversion to biofuels and that incentive program change this dynamic of sugar imports to the us to encourage renewable energy development so i'm wondering if you could just expand on that in this because more sugar that is produced that could also go for domestic industry and perhaps one policy recommendation would be to encourage at the current time given that a place like the dominican republic has already passed partnership but he's also threaten to build refineries in china and ship is heavy oil there so i'd like to hear from any of you of what concerns you have about these periodic threats by venezuela's president to cut oil exports of the united states what concerns you have any about ben as well as efrat efforts to increase its oil exports to china we had a hearing at this committee about china and china's interference in the western hemisphere so much is directly tied to that decision to build refineries in china and ship oil from to china from venezuela be economically efficient what's your assessment of the outlook for venezuelan oil production and finally the venezuelan oil minister rafael ramirez yesterday rejected an increase in opec production quotas ramirez says it would be and i quote him a mistake to inundate the market with oil unquote in order to increase supply and lower prices so i'm not sure how it would would be possible to inundate a market already squeezed by skyrocketing demand from china and india but i'd be interested in hearing  is actually if it does well it will be able to do what is said likely in presentations and that is get to five million barrels a day production by two thousand and twelve that's a good thing in addition as part of that business plan as i understand it they are talking about increasing refining capacity in venezuela which is a good thing for our entire hemisphere so i'd like to focus on hoping that the pet evasive business plan comes to fruition in terms of going up to five million barrels a day in two thousand and twelve i tend to be the has a vested interest right now and not going along with opec price production price reduction or because if the price of oil goes down per barrel they're going to make less money and they don't like the united states and they want to put as much heat on us as they possibly can by keeping the price of oil at the higher level so they've got a twofold reason in my opinion to keep the price of oil up one it helps them because they get more revenue coming in from and number two it keeps the heat on us as long as we don't have independent production and we can we have to import oil and the price stays up there and opec doesn't you know collectively lower the price then it's going to hurt us in our economy and he doesn't like us very much on mexico and what's going on there if you deal more time i agree with you but we ought to focus more on united states and production here so we don't have to worry so much about mexico venezuela saudi arabia nigeria or any of the rest of them the more we produce in the united states the less dependent we are on other foreign sources and i and i know did you guys are for more drilling as well as looking at other sources of energy so we all agree on that but while we're concerned about mexico and venezuela i think the number one focal point right now production ought to be the united states of america because we're just too darned on the rest well with that thank you well i thank you mr burton i don't know if i should let that be the last word or not but you certainly got your point across in this hearing let me thank our panelists that i do absolutely agree with you on mexico not only in terms of being our partner in terms of oil but in being our partner in so many things you know this subcommittees had hearings on merit and the merit initiative the whole situation of drugs and crime and everything else i think that mexico is just such an important partner in the but bilateral relationship that we have with mexico is just so important for us to  sustain and nurture and it's not just something that happens there that only affects people there what happens there affects us here and vice versa so i want to thank the three of you very very much you know usually pretty much we do i want to